Today, almost no business is acquired without due diligence investigation conducted on the account of a buyer. Therefore, usually in M&A transactions, buyers would commission finance, tax and legal due diligence investigation to be conducted by professional advisors. Additionally, in case of larger transactions due diligence investigation will likely encompass commercial and HR due diligence, and in case of manufacturing companies, technical and environmental due diligence.
Besides, buyers also expect that vendors shall present credible financial projections, preferably in form of a well-prepared, complete business plan.
Having participated in many M&A deals, we realise how important it is to be well prepared and not taken by surprise – therefore with our holistic and comprehensive approach to M&A transactions, we ensure business owners and management teams get well prepared and ready for a transaction before it has begun, with view to increase its speed, efficiency and to safeguard transaction becomes a success.
Vendor due diligence ("VDD") - Project Management
VDD is commissioned by vendors with external, specialist advisors who conduct financial, tax or legal investigation of a company that is up for sale or another form of equity transaction. Upon completion of VDD investigation, vendor receives VDD reports that provide independent view on company’s affairs by describing facts & figures and outlining risks and issues that will affect purchase price, transaction terms or in rare cases which may have impact on the prospect of a transaction. VDD reports provide many benefits to vendors, especially such as:
- Shortening of the M&A transaction, because qualified buyers will receive a professional and coherently prepared package of information (VDD reports) instead of raw data that requires time-consuming analysis,
- Quick start by buyer into buyer’s own due diligence – raw data that buyers will want to see has already been composed and deposited in a virtual data room (“VDR”),
- Reduction of overall transaction risk – thanks to VDD reports, vendor has learned much earlier about key risks and issues identified by his own advisors and has taken necessary steps and actions to solve or mitigate identified problems. This enables avoiding surprises at a later stage when transaction is ongoing; vendor is well prepared to provide buyer with necessary explanations when asked, which keeps away unnecessary actions and reactions to be undertaken, usually under time pressure and high stress,
- Building buyer’s trust – time-consuming and unnecessary loops in communication between buyer and vendor can be prevented or avoided, possible loss of buyer’s trust due to risks and issues identified is not an issue that otherwise may have led to identifying a deal breaker that would end up a transaction process.
Should a vendor choose to commission VDD investigation, we are ready to provide necessary support to a business owner and to a management team – as part of our service we will provide guidance on how to appoint advisers, we will engage in ongoing dialogue with advisers during VDD process, especially we will participate in expert sessions and Q&A process and upon finalization of VDD we will comment and provide recommendations with regards to VDD reports taking into consideration implications of VDD findings on a future transaction. However, we do not stop there, because during the course of VDD review we work closely with a business owner and a management team, who are engaged in the VDD investigation and who are requested to provide documents and information to advisers – in substance we are acting as VDD project manager.