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The Clean Room
Leveraging Transparency, Ensuring Confidentiality
ContextThe success of a post-merger integra-tion hinges on the acquirer being able to analyze target companies to gain a valid assessment of their economic situation. Therefore, in M&A trans-actions – whether acquisitions, auction processes, or mergers – a data room is set up to accomplish the disclosure of documents and to share information between parties in a controlled environ-ment, typically during the due diligence process. Confidentiality is paramount and strict controls for viewing, copying and printing are imposed.
Our Clean Room is an enhanced version of a data room with a further purpose. In addition to being a tool for due diligence, a Clean Room is used to advance the release of information needed for integration work or other post-deal activities.
For this critical step, Capgemini Consulting has proven methodologies and capabilities supporting an in-depth planning of the transaction, thus accele-rating the time to capture synergy benefits of the integration once the deal is closed.
Independent Consultant 1
Independent Consultant 2
Independent Consultant 3
Figure 1: Layout of a physical Clean Room
Room: A room located at one of the
sites Security access by card reader
People: Independent consultants to
analyze companies Lawyers representing both
companies to manage legalramifications
Independent security guard tomonitor people and data entry
Technology Setup: Server and VPN access limited
to people in clean room only Printer and shredder located
within room to keep data fromleaking out
LawyerCompany 1
LawyerCompany 2
Server VPN Shredder Printer
IndependentSecurity Guard
Security / Access
12'-
0"
15'-0"
2'-6"
Concept and Purpose of a Clean RoomThe Clean Room ensures the secure exchange of information in the context of an anticipated transaction. Moreover, it functions as an interface between the companies and regulatory bodies as well as further company stakeholders. Capgemini Consulting offers at the core of the Clean Room a strong Program Management Office, which concep-tually develops and manages project plans, oversees the delivery of key milestones and identifies and manages risks. Specific tasks of the Program Management Office include: Management of transaction
information, Further development of transaction
synergies, Support of the transaction, as well as Planning of post-deal activities.
Capgemini Consulting’s Clean Room service offering details for each task a set of specific activities and deliverables to be achieved by a specific deadline.
Virtual Clean RoomFor reasons of cost, efficiency and security, Virtual Clean Rooms have widely replaced the more traditional physical data room. Although similar in many ways to its predecessor the Physical Clean Room, for example in allowing the buyer/ third party involved to conduct an organized assessment, the Virtual Clean Room also represents an enhanced version:
Better organized access to documents: 24/7/365 service hotline Q&A func-
tion increasing the comprehensibilityof documents
Text recognition enabling a quickand effective searching of documents
© Capgemini Consulting 2016
More reliable and intelligent adminis-tration of documents: Audit trail function allowing to
monitor the use of documents andthus track the potential buyer’sinterest in specific sections of thetarget’s documents
Dynamic indexing of documents Flexible management of access rights Watermarking of documents Compatibility with a variety of file
formats
Platforms for Virtual Clean Rooms (VCR) are offered by specialized pro-viders and can be adapted to specific needs of the client. Hereby, Capgemini Consulting leverages its group capabi-lities in information security and data processing. Setting up a VCR usually takes 1 to 2 weeks, depending on the time needed for selecting and prepa-ring the actual content and documents.
Benefits of a Clean RoomOur experience shows that using a Clean Room offers a number of benefits and can enable implementing cost savings and synergies from day 1 after deal closure. Key benefits of a Clean Room are: Compliance with regulations –
Capgemini Consulting will monitorthat the negotiating parties do notshare information about operations,trade secrets, and pricing for custom-ers as prescribed by Department ofJustice, Federal Trade Commission,or European Commission regulations
Resolving organizational issues ofintegration planning – CapgeminiConsulting will support executivemanagement in integrating anoperation by diminishing uncertaintyabout the deal closure
Increased likelihood of successin integrating two companies –Capgemini Consulting will providea plan for how to start the integra-tion of multiple organizations atclosing, thereby providing a betterunderstanding of cultural issues andtaboos that could hinder cost savings
Identification of additional oppor-tunities for savings and syner-gies – Capgemini Consulting hasexperience in identifying cost savingsbeyond traditional M&A foci suchas HR, IT, and operations on balancesheets, by deploying focus groups oninternal and external relationships
Accelerated realization of sav-ings and synergies – CapgeminiConsulting will timely plan thenew organizational design andimplementation in the Clean Room,renegotiating contracts to be effectiveon closure day and pre-establishingmetrics to measure implementationprogress, triggering cost savings andsynergies on day 1
Confidentiality and security –Capgemini Consulting will ensuredata confidentiality by imposingstrict controls for the viewing, copy-ing and printing of documents
© Capgemini Consulting 2016
Figure 2: Concept and tasks of a Clean Room
Interaction withregulatory bodies
Third party = Capgemini Consulting
Secure exchange of information
Interaction withstakeholders
Capgemini Clean Room
Regulatory bodies (e.g., Competition Bureau,international jurisdictions, OSFI)
Other stakeholders (e.g., employees, shareholders,public / local community, etc)
Company A Company B
Management of transactioninformation
Facilitate the collection andcustody of information
Sanitize data for use
Maintain confidentiality while validating data source and consistency
Proactively manage Competi- tion Bureau requirements
and filings
Further development oftransaction synergies
Further analyze contributionsand expected benefits /
synergies
Assess value impact ofCompetition Bureau remedies
Support of the transaction
Support development andnegotiation of deal structure
Support due diligence
Manage tax requirements
Oversee regulatoryrequirements
Planning for post-mergerintegration
Design organization
Develop: asset rationalization strategy, product / customerrealignment strategy, core /support process realignmentstrategy, systems integration,& communication plan
Develop and manage project plan Oversee delivery of key milestones
Program Management Office
Identify and manage risk
Respecting these success factors is a prerequisite for reducing confidentiality risks, fostering transparency and realizing cost savings and synergies early on. Leveraging our broad net-work of international experts and our ready-to-use tools and checklists, we will ensure an efficient and effective Clean Room management throughout your integration challenge.
The Clean Room as part of our complete Transaction Services offeringCapgemini Consulting is known for its delivery excellence in the arena of transaction services. Establishing the Clean Room in the course of a due diligence is a vital component of our comprehensive Transaction Services offering, because we understand our clients’ need for both data confiden-tiality and transparency. Capgemini Consulting can draw on broad experience and references in a national and international context from projects with corporate and private equity clients, leveraging our international network of sector-specific and functional experts.
Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group. The information contained in this document is proprietary. Copyright ©2016 Capgemini. All rights reserved.
About Capgemini Consulting Capgemini Consulting is the global strategy and transformation consulting organization of the Capgemini Group, specializing in advising and supporting enterprises sformation, from innovative strategy to execution and with an unstinting focus on results. With the new digital economy creating s nt disruptions and opportunities, our global team of over 3,600 talented individuals work with leading companies and governments to master Digital Transformation, drawing on our understanding of the digital economy and our leadership in business transformation and organizational change.
Find out more at:
www.de.capgemini-consulting.com
About CapgeminiWith almost 180,000 people in over 40 countries, Capgemini is one of theworld’s foremost providers of consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.9 billion.Together with its clients, Capgemini creates and delivers business and technology solutions that their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.
Learn more about us at
www.de.capgemini.com
Rightshore® is a trademark belonging to Capgemini
Contact: Dr. Christoph StichHead of Transaction Services PrincipalLoeffelstrasse 44-46D-70597 StuttgartMobile +49 151 4025 [email protected]
Igor BarkalovPrincipalBerliner Strasse 76D-63065 Offenbach am MainMobile +49 151 4025 [email protected]
