Virtual Data Room Blog

Virtual Dataroom in Spain. Our 8 year experience

14-Apr-2014 09:00:00 / by Francisco Lorca

We started providing virtual data room services in Spain from our Madrid office in 2008. Back then, most of our efforts were aimed at “educating” 

Spain Virtual Data Room

the market and potential users of the benefits of datarooms versus traditional paper datarooms (like with this very succesful dataroom whitepaper). Our effort paid off and the adoption of virtual datarooms in Spain to run M&A and other corporate transactions grew significantly in our first years there.

However, this growth came to a halt when the economic crisis in Spain deepened and the market almost froze.  Investors and trade buyers became “allergic” to the word “Spain” and very few transactions took place. There was then a period of 2-3 years where M&A activity was very low. During that time the Spanish virtual dataroom projects that we worked on were launched for restructuring, bankruptcy process or real estate portfolio sales.  On the flip side, some of those datarooms were among the largest projects we have undertaken in the last seven years with page counts in the hundreds of thousands and even millions. 

Things have changed (or are changing). Investors and industry players seem to think that the worst has happened and are now actively looking for investment opportunities in the market.  Their interest focused originally mainly in real estate assets but is gradually widening to include other sectors and opportunities.

The last 9 months have seen a resurgence in overall M&A activity in the market, with a very robust foreign interest in Spanish assets.  What is very interesting is that this time around, deal makers and companies have embraced the fact that a virtual dataroom makes a transaction much simpler and fast. The level of adoption of virtual data rooms has jumped to the same levels found in markets such as the United Kingdom or Germany. There are now very few times when we have to convince a potential client of the benefits of virtual dataroom versus paper.

But there are some factors that are still particular to providing data room services in Spain. Here are some:

  1. Service. Service is important in all markets, even more so in the Spain. Clients and advisors want to focus their time making the transaction successful.  Our approach of having our deal coordinators take care off ALL the aspects related to the dataroom (index creation, preparing documents, uploading documents, sending invitations, running permissions) as a core component of our offering included in our base fee has been very succesful in this market. 
  2. Document quantity.  In general, the transactions in the Spanish market are more document intensive than in other markets.  We are not sure if this is caused by the level of disclosure required by investors or by the different legal structure in the market.
  3. Importance of being local.  Having a local team serving the transaction is key.  Many business aspects are unique to the Spanish market. Some of these aspects would include the different business culture, how processes are run, and how users require support. Having project managers (or deal coordinators as we call them in EthosData) that understand the market is key.
  4. Language. To make the dataroom experience simple it is key for the platform to be in Spanish and for the deal coordinators to be native speakers.  Speaking the local language is important in all markets, in Spain even more.  
  5. Data privacy.  Most Spanish companies that understand technology and the regulation related to data privacy do not feel comfortable with servers located in the “cloud” or outside the EU.  In our case, having our resilient infrastructure located in the UK is proving to be a key winning point.
  6. Contracting and invoicing.  Payments terms changed widely from one market to another.  In the Spanish case, normal industry payment terms are much longer than in other markets. Flexibility in this aspect is key to be successful and be seen as local.

We are very positive about the outlook of our Spanish dataroom activity.  In the last few months we increased our presence in the market by appointing a new country manager (José Miguel Sarrate) and including Spanish and Catalan as part of our core offering.   This will allow us to build our leadership position in the market.

Please contact us if you want to hear more about our presence in Spain!

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Topics: Spain Dataroom