Glossary
Data room
The data room is the repository in which the seller makes available to shortlisted buyers the documents that allow them to verify the asset before committing. Today it is almost always virtual: named access, logged activity, restricted downloading and printing, and a recorded question-and-answer log.
In a transaction
The data room opens after the NDA, the delivery of the information memorandum and, as a rule, the site visit. It prepares the letter of intent (LOI), followed by confirmatory due diligence. For a hotel, it is organised by section:
| Section | Contents |
|---|---|
| Company and governance | Company registration extract, articles, minutes, group chart, beneficial owners |
| Property | Title deeds, lease and amendments, plans, floor areas, co-ownership, planning |
| Technical and safety | Fire safety committee reports, surveys, maintenance contracts |
| Operations | Accounts and tax returns for three years, monthly reporting, statistics, budget |
| Contracts | Franchise or management, key suppliers, distribution, insurance |
| Human resources | Anonymised staff register, collective agreement, company agreements, disputes |
| Tax | Returns, tax audits, latent tax position in a share deal |
| Legal | Permits, litigation, trademarks, domain names |
Staff data appears without names or individual details, and only at an advanced stage.
In practice
An incomplete data room lengthens the timetable and opens the door to renegotiation. It is prepared before the sale is launched, alongside the EBE normalisation adjustments, each backed by a document. The information disclosed, and the answers given, may then be taken into account when the warranty and indemnity package is negotiated.
The information memorandum is a written summary. The data room holds the documents that support it.
For a sale documented to institutional standards: selling a hotel.
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