Vendor due diligence (VDD): preparing your SME sale to de-risk and accelerate the transaction

Auditing your own company before selling it

Introduction: why audit your own company before selling it

Why would a business owner about to sell their company have an interest in auditing it themselves, before any buyer does? Because whoever controls the information controls the negotiation. Vendor due diligence (VDD), or sell-side due diligence, consists of having an independent financial audit of the company for sale carried out on the seller's initiative and on their behalf, the report of which is then made available to buyers. Where classic financial due diligence is conducted by the buyer to uncover the target's risks, VDD reverses the logic: it is the seller who takes the initiative, anticipates the questions and presents verified information.

In 2026, VDD is no longer reserved for large transactions. It is becoming a standard step in preparing the sale of SMEs and mid-market companies, as the major transaction advisory firms observe.

"Vendor due diligence services can accelerate the divestiture process and preserve valuable management time.", KPMG, sell-side transaction services.

Three forces converge to make it a market reflex. First, the M&A market has tightened: buyers are more selective, timelines are lengthening and funds are struggling to exit, as PwC documents in its mid-2026 private capital outlook. Second, in this context, every seller has an interest in de-risking their file and shortening the process to capture the attention of overstretched buyers. Third, VDD has become the tool that objectifies normalised EBITDA and defends the price before the buyer pulls the restatements downward. This article defines VDD, traces its origin, explains why and how to run it, who to entrust it to, its advantages and limits, illustrates the mechanics with two worked France-Switzerland cases, then sets out five mistakes to avoid, a ten-question FAQ and a summary.

Secure your company's sale price before opening the data room

Before going into detail, keep the essential in mind: a well-run VDD turns a sale that is endured into a sale that is steered. It gives you the initiative over the financial narrative, reduces the risk of downward renegotiation and shortens the time between going to market and closing.

If you are preparing the sale of your SME or mid-market company, or the exit of an investor, book a 30-minute conversation with Hectelion to frame the scope of a VDD that is useful, proportionate and defensible before demanding buyers.

Our work draws on rigorous financial due diligence and on a France-Switzerland reading of risk, in full independence from traditional financial intermediaries.

Definition: what is vendor due diligence (VDD)?

Vendor due diligence is an independent financial audit of a company for sale, commissioned by the seller and intended to be shared with potential buyers. Its deliverable, the VDD report, presents a structured analysis of the target's performance, quality of earnings, cash, debt and working capital, based on verified and restated data. It is a reference document that serves as a common basis for the discussion between seller and buyers.

VDD differs from buyer-side due diligence on three counts. By initiator, first: it is the seller who commissions it, not the buyer. By purpose, next: it prepares and smooths the sale rather than seeking grounds for a discount. By distribution, finally: a single report is made available to several buyers, often in a competitive process. It does not eliminate the buyer's due diligence, who keeps their own analysis, but it reduces its scope, cost and duration.

One framing point is essential. VDD here concerns unlisted companies, within the remit of an independent valuation and advisory firm. Hectelion is not FINMA-licensed and does not act on listed transactions; for listed companies, preparing a sale falls to licensed experts under a distinct regulatory framework.

Origin: from buyer audit to sell-side due diligence

Due diligence was born on the buyer side. In Anglo-Saxon M&A practice, the buyer was long the only party to commission an audit of the target before committing, in order to verify the reality of the figures and identify hidden risks. This asymmetry placed the seller in a defensive position, forced to respond under pressure to successive requests and to accept the restatements imposed by the buyer.

Vendor due diligence took hold from the 2000s onward, first in deals run by private equity funds, then in competitive mid-market sale processes. The idea is simple: by presenting audited, homogeneous information to all candidates from the outset, the seller saves time, preserves confidentiality and keeps control of the narrative. The movement then spread to SMEs, as buyers, funds and corporates alike, made the quality of information a condition of their interest. Today, as Deloitte highlights in its work on sell-side advisory, a sell-side diligence report demonstrates the seller's maturity and accelerates responses to buyers.

Why carry out vendor due diligence

Carrying out a VDD answers five converging motivations.

First, it secures the price. By objectifying normalised EBITDA and the restatements before the negotiation, the seller defends their value rather than seeing it eroded by the buyer's adjustments.
Second, it accelerates the process. A homogeneous report, handed to every candidate, shortens the buyer audit phase and reduces the time between going to market and closing, a decisive advantage in a market where buyers are solicited from all sides.
Third, it reduces the risk of renegotiation. By addressing sensitive topics upfront, non-recurring charges, customer dependencies, quality of cash, the seller deprives the buyer of pretexts for a last-minute discount.
Fourth, it preserves confidentiality and management time. Rather than answering each candidate individually, the management team relies on a single document and stays focused on operations.
Fifth, it broadens and disciplines the buyer pool. A de-risked file attracts more serious candidates and sustains the competitive tension of a structured process.

How vendor due diligence is built

VDD follows a six-step methodology that combines the rigour of financial audit with the logic of preparing for sale.

Step 1: frame the scope. With the seller, you define the breadth of the review, financial, tax, social, operational where relevant, and the period analysed, generally the last three financial years and the latest interim position. The scope must be proportionate to the size of the transaction.

Step 2: rebuild the quality of earnings. This is the heart of VDD. You analyse how the result is formed, identify non-recurring items and reconstruct a normalised EBITDA representative of recurring performance, in a quality of earnings approach.

Step 3: analyse cash, debt and working capital. You rebuild net debt and normative working capital, two parameters that directly determine the move from enterprise value to equity value, and therefore the price received by the seller.

Step 4: identify and address the points of attention. You list the red flags liable to worry a buyer, customer concentration, litigation, off-balance-sheet commitments, and prepare a reasoned response for each, before they become discount arguments.

Step 5: link the analysis to value. You compare normalised EBITDA with observed sector multiples and clarify the chosen price mechanism, locked box or completion accounts, so the seller negotiates in full knowledge.

Step 6: produce a shareable report. You write a clear, factual and defensible report, designed to be shared with buyers, sometimes accompanied by a reliance letter allowing them to rely on it. The quality of this deliverable conditions its credibility.

The key financial restatements: from accounting result to value

The technical core of a VDD lies in three restatements that bridge the published accounts and the price actually received by the seller. Regular accounting does not, on its own, say what the company is worth: you have to rebuild a recurring performance, a representative working capital and an exhaustive net debt. These three bridges, adjusted EBITDA, normative working capital and net financial debt, determine enterprise value and then equity value, and concentrate the bulk of the negotiation.

From accounting result to adjusted EBITDA

The first bridge leads from accounting EBITDA to adjusted EBITDA, sometimes called normalised EBITDA. The aim is to isolate recurring profitability, the kind a buyer can realistically reproduce after the takeover. You first remove the non-recurring items that artificially inflate or depress the result: exceptional income and charges, litigation costs, restructuring indemnities, fees tied to the transaction itself, gains or losses on disposals. You then restate the items linked to the owner or shareholders that will not recur in a market operation: above- or below-market remuneration, personal benefits, rent paid to a related company outside arm's-length terms. You finally normalise scope effects, presenting on a full-year (pro forma) basis the impact of an acquisition or disposal occurring during the year. This quality of earnings approach results in a quantified, line-by-line bridge that justifies each restatement with supporting evidence. It is this documented bridge, and not the final figure alone, that wins the buyer's acceptance, because enterprise value is calculated as a multiple of this adjusted EBITDA.

Normalising working capital (WC)

The second bridge concerns working capital. WC measures the cash immobilised in the operating cycle, between inventories and trade receivables to be financed on one side, and trade payables that finance the activity on the other. At the time of the sale, the buyer expects the company to be delivered with a normal level of WC, that is, enough to operate without an immediate cash injection. Yet WC varies with seasonality, growth and, sometimes, last-minute optimisations. Normalisation consists of determining a normative reference WC, generally a twelve-month smoothed average that neutralises seasonal peaks, against which the actual WC delivered at closing will be compared. Any gap translates pound for pound into the price, via the chosen adjustment mechanism, locked box or completion accounts. VDD must also detect misleading optimisations, such as an artificial lengthening of payment terms to suppliers or destocking just before the sale, which degrade the real situation delivered to the buyer. Rebuilding this normative WC directly protects the sale proceeds.

Restating net financial debt

The third bridge links enterprise value to equity value, that is, to the price actually paid to shareholders. You start from enterprise value, equal to the multiple applied to adjusted EBITDA, from which you deduct net financial debt. The latter is not limited to bank borrowings less cash. A rigorous VDD lists all debt-like items: finance-lease commitments, shareholder current accounts, pension and social provisions, litigation provisions, declared but unpaid dividends, overdue tax and social liabilities, earn-outs and factoring. It symmetrically distinguishes genuinely available cash from trapped cash, unavailable because it is needed for operations or pledged. Each item requalified as debt reduces the price received, each surplus cash item increases it. This is why net debt, alongside WC, is the most disputed negotiation ground after the multiple: a seller who has not anticipated it in their VDD lets the buyer dictate its scope.

What a vendor due diligence report must contain

Beyond method, a useful VDD report is recognised by the completeness of its content. It is not about stacking up tables, but about methodically covering the areas every buyer will examine, in order to address them first. The sections below form the backbone of a shareable report, applicable to a French target and a Swiss target alike.

The framework, rationale and scope of the engagement

A good report opens by setting its own framework. It recalls the rationale of the transaction, what the seller is seeking to do and why, then precisely delimits the scope: entities and activities covered, period analysed, workstreams addressed (financial, tax, social), basis of preparation of the accounts and explicit limits of the review. This framing protects both the seller and the valuer: it fixes what the report commits to, prevents misunderstandings and conditions the reliance letter through which buyers will be able to rely on the work. A blurred scope is the first weakness a buyer will exploit.

The business model and the formation of margin

The report then describes the company's business model: how it creates value, where its revenues come from, what share is recurring or contractual, their seasonality and exposure to the cycle. It analyses the formation of margin by activity, segment or geography, in order to show where profitability really sits. This economic reading gives meaning to the figures: it explains performance before normalising it and lets the buyer judge the robustness of the model, not just the level of an EBITDA.

The top 10 customers and top 10 suppliers

Analysing concentration is an obligatory step. The report presents the top 10 customers, as a share of revenue, their seniority and the contractual nature of the relationship, in order to measure commercial dependency and the risk of losing a key account. It symmetrically presents the top 10 suppliers, to assess supply dependency, single-source situations and the company's bargaining power. High concentration is not disqualifying, but a buyer will always value it lower: better to objectify and explain it than let it be discovered.

Trade receivables and trade payables: analysing payment terms

The report examines the customer position from the ageing balance: average payment period (DSO), delays, overdue receivables, unpaid items and provisions for doubtful customers. It likewise examines the supplier position via the supplier ageing balance: average settlement period (DPO) and any delays, knowing that an abnormal lengthening of supplier terms often signals cash tension or a WC optimisation before the sale. These terms are assessed against the applicable framework, a sixty-day legal cap in France under the economic modernisation law, and a generally shorter commercial practice in Switzerland. The quality of receivables and the regularity of payments say a great deal about the real health of operations.

Analysing cash and its variations

The report reconstructs cash and its variations over the period. It measures EBITDA-to-cash conversion, that is, the company's real capacity to turn its result into liquidity, after investments and change in WC. It analyses the seasonality of cash, intra-year debt peaks, the level of recurring investment (capex) and distinguishes surplus cash from cash needed for operations. This cash analysis is decisive: two companies with the same EBITDA can generate very different cash flows, and it is cash, not the accounting result, that repays debt and rewards the shareholder.

Adjusting net financial debt: current accounts, leasing and provisions

The report finally details, item by item, the bridge that links enterprise value to equity value, because that is where the last points of price are won or lost. Shareholder current accounts must be treated according to their direction: a current account on the liabilities side is a debt of the company toward its shareholder, treated as debt and generally repaid at closing; a current account on the assets side is a receivable of the company from the shareholder, akin to cash to be recovered. Leasing calls for the same rigour: a finance lease in fact funds the acquisition of an asset and must be reintegrated as debt, whereas under French local GAAP (PCG) or Swiss accounting (Code of Obligations) it often remains off-balance-sheet, unlike the IFRS 16 framework which brings most contracts onto the balance sheet; a purely operating lease, by contrast, falls within operating expenses, save for a specific restatement agreed between the parties. Provisions are sorted according to whether they cover a near-certain future liability, pension and retirement commitments (occupational pension in Switzerland, end-of-career indemnities in France), probable litigation, major maintenance, in which case they are treated as debt, or a mere contingency, in which case they remain in working capital or equity. To these items are added declared but unpaid dividends, exceptional tax and social liabilities, non-recourse factoring and derivative instruments. Detailing this bridge in the report deprives the buyer of the ability to requalify these items unilaterally in their favour.

The documents to gather in the data room

A solid VDD rests on a complete data room. On the French side as on the Swiss side, the minimum documentary base to assemble comprises around fifteen items, without which the analysis remains fragile:

Audited or reviewed annual accounts for the last three financial years, with their detailed notes
General ledger and customer and supplier sub-ledgers
General balance and customer and supplier sub-balances
Ageing balance of trade receivables, with detailed schedule
Ageing balance of trade payables, with detailed schedule
Most recent interim accounting position, balance sheet and income statement
Tax return package in France, tax filings and VAT statements in Switzerland
Detail of financial debt: loan contracts, finance leases, shareholder current accounts and covenants
Cash statements and bank reconciliation statements
Contracts of the main customers and suppliers, with durations and terms
Headcount and payroll table, key employment contracts and pension commitments (occupational pension in Switzerland, retirement in France)
Investment plan, fixed-asset and depreciation schedule
Commercial leases, rental contracts and off-balance-sheet commitments
Status of litigation, provisions and insurance policies
Management reporting, budgets and forward business plan

On the Swiss side, the accounts follow the Code of Obligations and come with VAT statements and pension attestations (occupational pension, old-age insurance); on the French side, the tax return package and social filings play that role. Gathering these documents upfront, in an orderly data room, is in itself a sign of maturity that accelerates buyers' confidence.

When to launch vendor due diligence

VDD is called for in several triggering situations. In a voluntary sale, when the owner decides to sell all or part of their company and wishes to control the timetable and the price. In a family transfer or a management buy-out, where verified information secures the relationship between the parties.

It is particularly useful in a fund exit from private equity, where the professional seller seeks to smooth a competitive process and maximise the sale proceeds, in the continuity of an LBO-type structure. VDD is also relevant before a capital opening to a minority investor, or ahead of an auction process bringing together several buyers. Conversely, for an over-the-counter sale to a single, already identified and trusted buyer, a lighter VDD may suffice, the stake of competition being lower.

Who to entrust your vendor due diligence to

Entrusting your VDD requires bringing together three qualities rarely found at once. First, technical mastery of financial audit and valuation, to rebuild a defensible normalised EBITDA and net debt, and link the analysis to value. Second, credibility with buyers: the report only has value if candidates trust it, which presupposes an independent and recognised third party. Third, an understanding of the sale process, to produce a document that is both rigorous and useful to the negotiation, and not a mere accounting audit.

Hectelion brings together this dual France-Switzerland expertise and conducts its engagements in full economic independence from traditional financial intermediaries. We act on transactions from 2 to 500 MCHF, drawing on an IVSC-aligned valuation methodology, rigorous financial due diligence and, for sale transactions, M&A advisory that places the VDD within the overall sale strategy.

Advantages: control of the narrative, acceleration and transparency premium

The first advantage of a VDD is control of the financial narrative. By presenting verified information and a reasoned normalised EBITDA from the outset, the seller sets the frame of the discussion. The debate no longer bears on the reliability of the figures, but on value, which is a considerable negotiating advantage.

The second advantage is the acceleration of the process. A single report, handed to every candidate, avoids the multiplication of buyer audits and clearly shortens the time to closing. The third advantage is the transparency premium: at equal quality, a company whose information is audited and structured inspires more confidence than an opaque target, which translates into a better-defended price and a reduced risk of renegotiation. As Deloitte recalls, a sell-side diligence report enables faster responses to buyers and demonstrates the seller's maturity.

Limits: cost, perceived independence and scope

The first limit relates to cost. A VDD represents an investment, from a few tens to a few hundred thousand francs depending on size and complexity, which the seller commits without absolute certainty of selling. This cost is justified by the expected gain in price and time, but it must remain proportionate to the transaction.

The second limit is perceived independence. As the VDD is commissioned by the seller, some buyers relativise its conclusions and still conduct their own review. The credibility of the report therefore depends heavily on the reputation and real independence of the firm that produces it. The third limit is scope: a VDD that is too narrow leaves zones of uncertainty the buyer will exploit, while one that is too broad inflates the cost without always creating value. Finally, VDD does not replace a sale strategy: it prepares the file, but dispenses with neither the choice of the right moment nor M&A advice to lead the negotiation.

The 5 mistakes to avoid

Mistake 1: Launching the VDD too late

The most costly mistake is to commission the VDD once the process is already under way, when the first buyers have begun their own audit. The VDD then loses its main interest, which is to set the frame before the negotiation. A VDD is prepared upstream, ideally six to twelve months before going to market, to leave time to correct the weak points identified and optimise working capital.

Mistake 2: Confusing VDD with a sales pitch

A VDD is not a sales brochure. Presenting embellished information or hiding the points of attention destroys the report's credibility at the buyer's first check, and backfires on the seller. The strength of a VDD comes from its honesty: it addresses sensitive topics head-on, with reasoned answers, rather than masking them.

Mistake 3: Neglecting working capital and net debt

Many sellers focus on EBITDA and forget that the price received depends just as much on the net debt and normative working capital retained at closing. A VDD that does not rigorously rebuild these parameters leaves the buyer free to adjust them in their favour, eroding the sale proceeds without the multiple having moved.

Mistake 4: Choosing a provider without credibility with buyers

Entrusting your VDD to the usual accountant or to a provider unknown to buyers amounts to producing a report no one will recognise. Yet the value of a VDD lies in the confidence it inspires. An independent third party, technically solid and identified by the market, is the condition for buyers to genuinely rely on the report rather than redo it.

Mistake 5: Calibrating the scope at random

A generic VDD, neither adapted to the size of the transaction nor to the genuinely material topics, wastes resources without reassuring the buyer. The scope must be designed according to the risks specific to the company and the expectations of the targeted buyers, funds or corporates. A well-calibrated VDD concentrates the effort where uncertainty weighs on the price.

Case 1: VDD before the sale of a France-Switzerland industrial SME at 25 MCHF

A France-Switzerland industrial SME, generating 25 MCHF of revenue, is preparing its sale to a strategic buyer. Its reported EBITDA comes out at 3.0 MCHF. The VDD conducted on the seller's behalf highlights several non-recurring items that unduly weigh on the displayed performance: a one-off commercial dispute, owner remuneration above market price and exceptional fees linked to a reorganisation. After restatement, normalised EBITDA stands at 3.5 MCHF, that is, 0.5 MCHF more than the gross result.

The effect on the price is direct. On the basis of a sector multiple of 6.5 times EBITDA, enterprise value moves from 6.5 × 3.0 = 19.5 MCHF, calculated on reported EBITDA, to 6.5 × 3.5 = 22.75 MCHF on normalised EBITDA, a gap of 3.25 MCHF, of the order of 17 percent. By objectifying this normative figure before the negotiation, with supporting documents, the seller has it accepted by the buyer, whereas they would have struggled to impose it during the buyer's due diligence. For a VDD cost of around 70 KCHF, the value defended bears no comparison with the expense.

Case 2: VDD of a services mid-market company exiting an LBO

A French services mid-market company, owned by a private equity fund preparing its exit, generates 8 M EUR of EBITDA. The fund launches a competitive process and commissions a full VDD, with a quality of earnings component, to smooth the sale and reassure a panel of buyers, corporate and financial. The report, distributed to all candidates with a reliance letter, addresses the points of attention upstream and demonstrates the recurrence of contractual revenues.

The effect is measured on price and on time. Without a VDD, a prudent buyer would have applied an uncertainty discount of around half a multiple turn, bringing the multiple from 9.0 down to 8.5 times EBITDA, that is, an enterprise value of 8 × 8.5 = 68 M EUR. Thanks to a de-risked file and audited information, the seller defends the full multiple of 9.0 times, taking enterprise value to 8 × 9.0 = 72 M EUR, that is, 4 M EUR more. The VDD also shortens the buyer audit phase, bringing the time to closing from about six to four months. The cost of the VDD, of the order of 200 K EUR for this size, is very largely covered by the gain in price and the reduction of execution risk.

A word from the founder

"In the engagements we support, the seller who arrives prepared negotiates as an equal, the one who arrives bare endures. Vendor due diligence is first of all this: taking back the initiative on your own file before the buyer writes it in your place."

"My conviction is that a sale is won upstream. Rebuilding a solid normalised EBITDA, securing working capital and addressing the points of attention head-on means turning discount arguments into price arguments."

"Our role as an independent valuer is to produce a report that buyers respect, because it is rigorous and honest. It is this credibility, at the crossroads of audit and valuation, that accelerates transactions and protects the seller's value."

Aristide Ruot, Ph.D.
Founder | Chief Executive Officer, Hectelion SA

FAQ: the 10 essential questions on vendor due diligence

Introduction: what to keep in mind before the questions

The questions below cover the most frequent concerns of owners and shareholders preparing a sale. The guiding idea is simple: VDD moves the initiative to the seller's side, objectifies value before the negotiation and shortens the process. The rest is a matter of calibrating the scope and the credibility of the provider.

Q1: What is the difference between vendor due diligence and buyer-side due diligence?

Buyer-side due diligence is commissioned by the buyer to uncover the target's risks and justify any discounts. Vendor due diligence is commissioned by the seller, to prepare the sale, objectify the information and distribute it to all buyers. Same analytical rigour, but opposite initiator, purpose and distribution. The two approaches are complementary, the VDD reducing the scope of the buyer audit.

Q2: Does VDD replace the buyer's due diligence?

No, but it reduces it. A serious buyer almost always keeps a review, if only for confirmation. However, a credible VDD report, with a reliance letter, allows the buyer to rely largely on it, which shortens and lightens their own audit. The challenge is to produce a document the market recognises.

Q3: How much does vendor due diligence cost?

The cost depends on the size and complexity of the company, as well as the breadth of the scope. It is measured from a few tens of thousands to a few hundred thousand francs or euros. This cost must be set against the expected gain, in defended price and shortened time, which generally exceeds it as soon as the transaction is competitive.

Q4: When should the VDD be launched?

Ideally six to twelve months before going to market. This timeframe leaves room to correct the weak points identified, optimise working capital and build a solid report. Launching the VDD too late, once the process is under way, makes it lose its main interest, which is to set the financial frame before the negotiation.

Q5: Does VDD guarantee a better price?

It guarantees nothing, but it protects value. By objectifying normalised EBITDA and addressing the points of attention upstream, it deprives the buyer of pretexts for a discount and gives the seller the arguments to defend their price. As our worked cases illustrate, the gap between a price endured and a price defended far exceeds the cost of the VDD.

Q6: What does a vendor due diligence report contain?

A VDD report covers the formation of the result and normalised EBITDA, cash, net debt and working capital, the points of attention and how they are addressed, and the link to value. It is designed to be factual, defensible and shareable, and not to be a sales argument. Its quality conditions buyers' confidence.

Q7: Does an SME really need a VDD?

Increasingly, yes. VDD is no longer reserved for large transactions. As soon as an SME targets a competitive process or demanding buyers, funds or structured groups, a proportionate VDD secures the price and accelerates the sale. For an over-the-counter sale to a single, trusted buyer, a lighter version may suffice.

Q8: What is the link between VDD and normalised EBITDA?

Normalised EBITDA is the heart of VDD. Rebuilding recurring performance by neutralising non-recurring items is what allows a price to be defended, since enterprise value is calculated as a multiple of this EBITDA. A VDD without rigorous normalisation misses the essential and lets the buyer impose their own restatements.

Q9: Does VDD also cover legal and tax matters?

Financial VDD forms the base, but it is often accompanied by tax, social and legal, even operational, workstreams, depending on the company's risks. The scope is calibrated case by case. The essential is that the topics material to value and to the buyer's security are covered, without needlessly burdening the file.

Q10: Who should carry out vendor due diligence?

An independent third party, technically solid and credible with buyers. Entrusting your VDD to your usual accountant or to a provider unknown to the market reduces its reach. An independent valuation and advisory firm, which links audit to value and understands the sale process, is best placed to produce a report buyers will genuinely rely on.

Conclusion: making preparation a negotiating advantage

Vendor due diligence is not one more audit, it is a reversal of stance. By auditing their own company before selling it, the owner stops enduring the negotiation and starts steering it. They set the financial frame, objectify normalised EBITDA, address the points of attention head-on and present verified, homogeneous information to all buyers. In doing so, they turn discount arguments into price arguments and shorten the path to closing.

In a more demanding M&A market, where buyers are selective and processes long, VDD has become a standard step in preparing the sale of SMEs and mid-market companies. The two worked cases demonstrate it, from a value gain of around 3.25 MCHF for an industrial SME whose normalised EBITDA was defended, to 4 M EUR and two months saved for a mid-market company exiting an LBO. It still takes launching the VDD at the right moment, calibrating it accurately and entrusting it to an independent, credible third party. That is precisely the craft of an independent valuer at the crossroads of financial audit and valuation.

Article summary

Vendor due diligence is an independent financial audit, commissioned by the seller and intended for buyers, that reverses the logic of classic due diligence. Where the buyer audits to uncover risks, the seller audits to prepare their sale, objectify the information and distribute it. VDD does not eliminate the buyer's review, but it reduces, shortens and lightens its cost.

Applied to a sale, VDD acts on three levers: it secures the price by objectifying normalised EBITDA, net debt and working capital; it accelerates the process thanks to a single, shareable report; it reduces the risk of renegotiation by addressing the points of attention upstream. Its success presupposes launching it early, six to twelve months before the sale, calibrating its scope and entrusting it to a third party credible with buyers.

The two practical cases quantify the stake: 3.25 MCHF of value defended for a France-Switzerland industrial SME whose normalised EBITDA was rebuilt, and 4 M EUR of price preserved plus two months saved for a services mid-market company exiting an LBO. The five mistakes to avoid recall the necessary discipline: do not launch the VDD too late, do not confuse it with a sales pitch, do not neglect working capital and net debt, choose a credible provider and calibrate the scope. Hectelion, an independent France-Switzerland firm, supports these sale preparations on transactions from 2 to 500 MCHF.