Vendor Due Diligence

If you are selling your company, or part of the business, a sales process which allows you to control the flow of information and the timing of the sale can be key to achieving the best result. Our sell-side due diligence advisory services enable you to do just that.

Sell-side due diligence can typically be divided into two types:

• Vendor Assistance, and
• Vendor Due Diligence.

Vendor Assistance

Vendor assistance involves collaborating with advisors to prepare essential financial analyses, identify risks, and focus areas for potential buyers to ensure transparency in the sale process. Vendor Assistance can enhance data credibility and address issues proactively. The resulting report is generated for the benefit of the pool of buyers to refer to when bidding on the business, however, this process doesn’t usually negate the need for the traditional, more extensive, due diligence process that buyers will conduct once they achieve preferred bidder status, as they will appreciate the Vendor Assistance report was commissioned by the sellers.

In Vendor Assistance, we work alongside senior management and the finance team of the business to assist in the preparation of key financial analyses, the early identification of risks and potential areas of focus to a buyer. Our aim is to ensure that there are no surprises once the Information Memorandum (“IM”) and Vendor Assistance report has been issued to short-listed potential purchasers, and that all bidders take this information into consideration when making their final offers. The intention is that the vendor selects their preferred bidder from a pool of well-informed buyers and that any subsequent, more in-depth DD undertaken by the chosen bidder using their own independent advisers is less likely to identify any significant areas of concern.

Vendor Due Diligence

VDD can also support a controlled sales process where a number of seriously interested potential purchasers have been identified. The process of undertaking VDD adopts a buyer’s perspective as VDD reports are produced by independent advisers and are typically relied upon by the successful buyer in a controlled sales process, enabling the identification and resolution of potential risks before they become deal breakers. The report, demonstrating the independence and credibility of the advisor’s findings, is shared with potential purchasers and the duty of care is owed to the buyer, not the seller, with the successful purchaser typically covering the costs of producing the VDD if they wish to rely upon it as part of their own DD.

The benefits of Vendor Due Diligence and Vendor Assistance

Both Vendor Assistance and Vendor Due Diligence offer various benefits. By leading the dialogue throughout Vendor Assistance or Vendor Due Diligence, sellers can identify and address potential issues before reports are released, providing all bidders with identical information during the competitive bidding stage. This proactive approach enhances negotiation positions and keeps more potential buyers engaged, fostering increased competition and potentially leading to higher bids.

The value we provide

We can add real value to you at each stage of the process by not only offering you the benefit of our extensive sell-side experience, but also the advantage of valuable insights acquired through our buy-side experience to anticipate and proactively address issues, and improve the price you achieve. We help to ensure that the financial information you present to third parties is accurate, credible, and will stand up to scrutiny during any subsequent financial due diligence the chosen buyer might choose to commission.

We offer our experience of working on both buy and sell-side transactions with UK & International trade buyers, Private Equity buyers on sales and leveraged buyouts, as well as banks’ pre-lending reviews on transactions across a wide range of industry sectors and transaction types.

To protect your interests and secure the best outcome during the sale process, consider leveraging the benefits of Vendor Due Diligence and Vendor Assistance. Engaging with experienced advisors like us will provide you with the insights and support necessary to navigate the complexities of a business sale successfully.