Some interesting commentary on vendor due diligence and virtual data rooms in the latest Mergermarket publication on “Sell-side success”.  Please click here to obtain a copy of the report.

We recommend that if you are proposing to sell your business, proper planning and preparation before entering into any discussions with potential buyer(s) will assist you in obtaining the best possible price for your business, limit delays and reduce exposure to risks.  Such preparation can include a vendor undertaking their own due diligence by considering and collating the documents/information that a potential buyer will want to see when conducting its due diligence.

It is important to get everything in order before entering into discussions with a potential buyer to determine whether there are any gaps or errors in the information (or documentation which can be corrected before due diligence commences).  If you are able to give a potential buyer correct and up-to-date due diligence documents, this is likely to help give the potential buyer comfort, enhance value and lessen the severity of warranties and indemnities that may need to be agreed with the ultimate buyer.  Missing documents (or gaps in information) can have the reverse effect.

Please get in touch with one of the Sierra Legal team if you need any assistance with vendor due diligence.  We also have a template checklist of documents that a potential buyer is likely to want to review during due diligence that can assist you with the process.  Please get in touch with us to obtain a copy.