Vendor due diligence
Keeping control over the divestment process
If you expect several prospective purchasers to be interested, it is advisable to perform a vendor due diligence. The due diligence report gives prospective purchasers thorough and objective information about the business for sale. This enables prospective purchasers to produce high standard and comparable bids without doing extensive research themselves.
More vendor due diligence has more advantages
The business only has to undergo one thorough investigation; this is efficient and it reduces the need to grant exclusivity to one prospective purchaser at an early stage. In addition, you the vendor get to know the due diligence findings first. This means that there will be no unpleasant surprises for you in the form of new facts unearthed by the prospective purchasers.
Prospective purchasers require extensive information
The vendor due diligence report should meet the information requirements of all stakeholders connected with the prospective purchasers (such as management teams, shareholders, financiers and advisers). For that reason the report provides information about many aspects of the business, such as:
- The commercial environment and the position of the company
- Products, clients and suppliers, organisation, important processes and IT
- Financial situation, forecasts, opportunities and risks
- Tax situation and risks
- Pension schemes
- Property situation
- Treasury and risk management
The vendor due diligence investigation concludes with the production of a comprehensive report of findings.
How can you get the most out of vendor due diligence?
You will get the most out of vendor due diligence if you also engage the specialists of Deloitte to provide other forms of support, such as: preparation of the information memorandum, valuation of the business, the sale and purchase agreement and (where the business is to be separated from a group) the phased post-transaction plan.
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