The benefits of vendor due diligence when selling a business
Rahid Rashid, 28 August 2026
Rahid Rashid, 28 August 2026
Due diligence has traditionally been something buyers commission on their own terms.
Increasingly, sellers are commissioning it themselves before going to market, which is proving a powerful way to keep deals moving.
Could vendor due diligence be the right approach for you? Our team consider the rise of this new trend in corporate finance.
Vendor due diligence, often shortened to VDD, involves appointing independent advisers to carry out a thorough review of the business on the seller's behalf.
This review may cover financial, tax, commercial and operational matters, providing a detailed assessment of the business and identifying potential issues before buyers begin their own investigations.
For business owners preparing for a sale, vendor due diligence can provide greater visibility over the strengths and risks within the business before entering formal negotiations.
Market data suggests vendor due diligence is now used in the majority of mid to large private equity exits and its use is spreading further down the market.
Sellers are recognising that presenting buyers with a credible, independently produced report shortens the time buyers need to reach an offer and reduces the scope for last-minute renegotiation.
Where multiple bidders are involved, a single vendor due diligence report can be shared with each of them rather than each buyer commissioning its own separate review.
This avoids the disruption of repeated information requests and site visits and allows a sale process to run to a much tighter timetable.
A well-prepared VDD report gives sellers the chance to identify and address issues before a buyer finds them, rather than reacting defensively once negotiations are underway.
It signals to the market that the business is well run and ready for sale, which in turn tends to support a stronger price and a smoother path to completion.
As buyers continue to take longer over due diligence and demand more evidence before committing, vendor due diligence is fast becoming less of an optional extra and more of a standard feature of a well-run sale process.
If you are preparing your business for sale and would like to discuss vendor due diligence, please speak to our Corporate Finance team.
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