We want to help you in structuring your vendor due diligence plan. What is vendor due diligence? A good vendor due diligence review is prepared by an experienced team. This will give you the comfort that your company is well positioned for a business sale. Here is an overview of the vendor due diligence page:
Vendor due diligence (VDD) is a different term for sell-side due diligence. It is similar to buy-side due diligence but is originated by the seller. Hence, it is often also called sell-side due diligence. In the end, it is a full and independent review of a company before it will come up for sale. In the past, this used to be done by each buyer independently. However, over the last few years, sellers have learned it can be useful to do their own due diligence on their company. By doing VDD, the seller learns a lot about their company. Vendor due diligence can be described as the investigation and analysis of the seller's company. A strong focus is on the financial business drivers that determine the future results. For this reason, the investigation can help with increasing the sales price for the company. In practice, most often the people that do the vendor due diligence also defend and explain the due diligence performed to the buyers. We are able to help you with vendor due diligence in Europe.
Vendor due diligence is important and can be very useful. As a business owner, you can benefit tremendously by having VDD done. This process can provide valuable information to a seller which can sometimes be the difference between a successful or failed business sale. At the minimum, it can help in support of the proposed acquisition and possibly a better price. In a nutshell, vendor due diligence has the following objectives:
The vendor due diligence process is essentially sell-side due diligence. In Europe, the process where a seller starts due diligence is normally called vendor due diligence (vendor DD), whereas in the US it is often called sell-side due diligence (sell side DD). Sell-side due diligence can bring issues to light that a seller can still repair. Further, it will give a serious impression to buyers and ensure the due diligence process is run efficiently and in a concise time period. The difference between vendor (or sell side) due diligence and buy-side due diligence is simply about who commissioned the assignment. For more information on buy-side due diligence, please read about buy-side due diligence.
Normally, it's best to start the vendor due diligence process early on. This can be just before the business sale process starts. If major material issues are found, they can be repaired first before the business sale is being kicked off. If the investigation brings up no material items, the process of the sale can begin. It is good to start the sale of the business straight after the vendor due diligence as the VDD team will also be involved in any pitches and presentations to defend the business in front of interested buyers. On the page selling a business, you can get a better idea when the VDD is normally conducted.
Please get in touch for a free brainstorming session and feedback on your vendor due diligence plans. We can discuss how the vendor due diligence process can best be organized. We are open to giving you clear feedback on how to structure your vendor due diligence process in your industry or country of choice. Further, we are also open to supporting you in the actual process and investigations.