The earlier in the process, the better positioned: Our vendor due diligence builds trust among potential investors, accelerates the sales process, and can help achieve a higher company valuation.
We provide targeted preparation for sellers in the machinery and plant engineering sectors, as well as in related service and software businesses, for the transaction process—whether they are private equity funds seeking an exit or industrial companies undergoing a carve-out. By systematically organizing relevant market and company information, we create transparency, reduce uncertainties, and enable a more efficient sales process.
Structured Preparation of Sales Processes
Vendor due diligence makes it possible to compile all information relevant to decision-making at an early stage and to actively manage the sales process. Potential buyers receive a consistent and reliable data foundation, which reduces the need for follow-up questions and allows the due diligence process to be conducted efficiently.
Transparent Presentation of Opportunities and Risks
As part of our vendor due diligence process, we analyze the company’s market environment, competitive position, business model, and performance. The goal is to provide a transparent presentation of opportunities, risks, and value potential to serve as the basis for well-informed acquisition decisions.
Accelerating the Transaction Process
By systematically organizing all relevant information, we build trust with potential investors and can streamline the due diligence process for buyers. This increases planning certainty and supports a structured sales process.
Our approach
Buyers trust a sales process when the numbers and the story align. That is exactly what we focus on when preparing each vendor due diligence—at the sub-segment level, not just at the industry level. Since we’re already familiar with the market environment and competitive dynamics in many relevant segments, we can compile information more quickly and accurately than providers who first have to familiarize themselves with the market and segment.
Together with our clients, we compile market and company information in a structured manner. If necessary, we further validate the narrative through our network of more than 100 senior industry experts, including former CEOs and engineering directors—thereby creating an additional, robust foundation for potential buyers.
In doing so, we work closely with all parties involved to support a coordinated approach that builds trust and facilitates the transaction process.
Context within the Transaction Process
Vendor due diligence prepares the ground for the sale and lays the foundation upon which the commercial due diligence conducted by the buyer is based. Just as the pre-acquisition strategy on the buyer’s side, it establishes transparency early on and supports structured preparation for the transaction.
Frequently Asked Questions About Vendor Due Diligence (VDD)
What is Vendor Due Diligence?
Vendor due diligence is a due diligence process commissioned by the seller and conducted in the run-up to the sale—typically by a fund preparing for an exit or by the portfolio company itself. It provides potential buyers with a consistent and reliable factual basis regarding the market, the company’s competitive position, and its performance, and enables the seller to establish the equity story on an externally verified foundation at an early stage.
Why Conduct Vendor Due Diligence During an Exit?
If each bidder initially conducts its own commercial analysis of the target, this leads to repeated reviews and differing perspectives on the market and the equity story. A vendor due diligence establishes a shared, externally verified factual basis regarding growth, competitive position, and revenue quality before the process begins. This reduces the need for follow-up questions, eases the burden on management, and gives the seller the opportunity to present solid arguments early in the process.
How does vendor due diligence streamline the sales process?
Vendor due diligence shortens the process because key market questions are answered before bidders enter the process. Competitive position, market growth, and revenue quality have already been verified, which makes the buyer-side confirmation due diligence more focused and faster. Fewer inquiries to management also mean less of a drain on leadership capacity during ongoing business operations.
How does vendor due diligence lead to a robust equity story?
The equity story is derived from the findings of the vendor due diligence, not the other way around. Market growth, position in the sub-segment, customer loyalty, and pricing power are triangulated externally—at A&P through a network of more than 100 senior industry experts. A story derived in this way stands up to scrutiny by bidders because every argument is backed by a verifiable source.
What happens if vendor due diligence uncovers weaknesses in the company?
They are identified and, whenever possible, accompanied by a concrete solution—which is precisely why vendor due diligence is conducted early in the process. A weakness that is identified and addressed early in the sales process costs less than the same weakness that a bidder discovers later and uses as a bargaining chip. A&P therefore presents opportunities and risks transparently, rather than selectively optimizing the equity story.
At what point in the exit roadmap should vendor due diligence begin?
Early enough that significant findings can still be addressed before the final positioning—typically before the teaser and information memorandum are finalized, so that their arguments are based on the audited results. If vendor due diligence does not begin until the process is underway, it remains merely a document, and its ability to influence the equity story and the field of bidders is lost.