It is not only the investor who should be interested in knowing as much as possible about the state of the business being bought.
Also, the selling party, seeking to achieve the best possible terms of the transaction, should undergo due diligence to adequately prepare the company for sale. Vendor Due Diligence is used to identify the problems that may be encountered by the seller of a business.
Why Vendor Due Diligence?
Properly conducted Vendor Due Diligence minimises the risk of transaction failure, leads to the achievement of the most favourable conditions for the selling party and speeds up the entire process of selling the business. By performing Vendor Due Diligence, the seller can protect itself from being surprised during negotiations by facts describing risks of which it was not aware, and which affect the price. By performing Vendor Due Diligence, the seller can present normalised company results and show the full potential of the company.