Vendor Due Diligence (VDD) vs. Vendor Assistance (VA): What are the differences and advantages?
In the world of mergers and acquisitions (M&A) the sales process of a company can be quite complicated. Being well prepared is thus critical. As corporate finance professionals, we assist the vendors with 2 important services, being Vendor Due Diligence (VDD) and Vendor Assistance (VA).
These services are often confused with each other. Yet each has its own purpose and offers unique benefits depending on the needs of the vendor. In this article, we will discuss the differences between VDD and VA, the benefits of both and how they help you make a transaction process run smoothly.
What is Vendor Due Diligence (VDD)?
Vendor Due Diligence (VDD) is a comprehensive and independent analysis of a company’s financial and tax situation. The investigation is conducted on behalf of the vendor, but with the expectations of potential buyers in mind. The aim is to provide an objective, reliable report that investors can use in their decisions.
VDD: in practice
A medium-sized manufacturing company was preparing for a sale to a private equity firm. As the corporate structure was complex and several international tax jurisdictions applied, a VDD report was prepared to provide a thorough financial and tax overview.
This thorough approach accelerated the transaction by about two months. Without VDD, the buyer would have had to undertake a lengthy and extensive due diligence process, which might have led to delays or renegotiation of the price.
What is Vendor Assistance (VA)?
Vendor Assistance (VA) helps vendors sort out financial and operational issues before starting a company’s sales process. As opposed to VDD – which produces an official report – VA focuses on internal preparation and process optimisation.
VA: in practice
A family-owned retail business was “put up for sale” but had limited experience with financial reporting. Through VA, we worked closely with their finance team to normalise EBITDA by adjusting one-off costs and inconsistencies in revenue recognition. We also helped them refine their working capital strategy by aligning it with industry standards.
As a result, the company presented a much stronger financial profile when it entered the market, generating several competitive bids and a higher valuation than originally expected.
VDD versus VA: which service suits you?
Both services add to a successful sale but have different applications. The choice between VDD and VA depends on the vendor situation and the complexity of the transaction.
Summary:
| Feature | Vendor Due Diligence (VDD) | Vendor Assistance (VA) |
|---|---|---|
| Purpose | Deliver an independent, buyer-ready due diligence report | Prepare a vendor for transaction by resolving financial issues |
| Range | Comprehensive, including financial, tax and legal aspects | Flexible, depending on vendor needs |
| Portée | Complet, incluant les aspects financiers, fiscaux et juridiques | Flexible, en fonction des besoins du vendeur |
| Result | Formal due diligence report trusted by buyers | Internal readiness and improved deal positioning |
| Influence on transaction | Accelerates deal execution and reduces due diligence burden for buyers | Minimises buyer concerns and improves financial transparency |
Conclusion
Understanding the difference between VDD and VA is crucial for any vendor looking to optimise their M&A transaction. While VDD provides independent, buyer-focused analysis that streamlines the due diligence process, VA ensures internal readiness and risk management before entering the market. By choosing the right approach – or a combination of both – as a vendor, you can maximise deal certainty, reduce transaction risk and achieve a more favourable outcome.
As experienced corporate finance professionals, we help companies safely navigate the complexities of the sales process. Whether you need a structured due diligence report or practical help preparing for a sale, our expertise will ensure you are in pole position for success!
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