Vendor Due Diligence
A comprehensive technical evaluation and preparation of a company for an acquisition
What Is Vendor Due Diligence (Sell-Side Due Diligence)?
Vendor Due Diligence (VDD) is a process where a business or entity conducts a comprehensive assessment and evaluation of its own operations, financial health, and other relevant aspects in anticipation of a sale or partnership.
The purpose of Technical Vendor Due Diligence is to provide potential buyers or partners with a transparent and detailed understanding of the selling company's technical strengths, weaknesses, opportunities, and threats.
Buy Side vs Sell Side
Unlike traditional due diligence, which is typically performed by the acquiring party, vendor due diligence is initiated by the entity preparing to sell its business or enter into a significant business transaction.
Our Proactive Approach
Streamlines the due diligence process for potential buyers.
May result in the buyer bypassing buy-side due diligence.
Enhances the credibility of the selling company and lead to a better valuation.
Vendor Due Diligence Services
We strive to provide an end-to-end, 360-degree overview and strategic direction taken by the asset to ensure sound positioning in key diligence areas:
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Establish a firm understanding of the strategic asset positioning guiding the exercise throughout
03
Evaluate intrinsic risks and opportunities with cost and time estimates
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Provide an external detailed report ensuring sound positioning within key diligence areas
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Prepare the asset for a seamless buy-side diligence process, including establishing a virtual data room
02
Learn about the target business and evolution of the technology and team
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Provide an internal report to prompt answers to key questions
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Be very efficient with minimal time impact on the target team during the exercise
Vendor Due Diligence Checklist
Unsurprisingly, the scope of sell-side technical due diligence is similar to buy-side tech due diligence, including the foundational scope as well as a set of add-ons that can be applied per the nature of the deal. Thanks to Intium Platform, we are able to collect and assess thousands of markers defined by our methodology and compare them against similar companies on the market.
Foundational Scope:
Strategy & Roadmap
Leadership & Organization
Architecture & Infrastructure
Process & Quality
Security
The following areas are explored additionally when applicable to the thesis:
Code Deep-Dive Analysis
Cybersecurity and Open Source
AI/ML Practices and Pipeline
Customer Service Excellence
Professional Services
Companies with a Portfolio of Products
UI/UX & Design
Carve-Out Situations
Corporate IT and internal line of business tools
Portfolio Strategy and Planning
IT Vendor Due Diligence
Not all companies have software at their core. Many companies are tech-enabled conventional businesses that innovate by streamlining business processes and building a comprehensive enterprise architecture comprising an integrated set of enterprise tools. This allows companies to enrich their offerings and create economies of scale via process automation.
Intium’s Approach to IT Vendor Due Diligence
The approach to IT vendor due diligence is, hence, slightly different, concentrating on enterprise IT architecture. We’ve developed a bespoke practice allowing us to effectively assess the capabilities of companies utilizing technology as an enabling function.
An in-depth analysis of the company’s line-of-business software, IT systems, and their interrelationships will, among other things, help you position the asset for possible integration strategies, evaluate bolt-on tactics, and understand the general ability of the company to support the business plan indicated to buyers.
Hardware & Semiconductors Vendor Due Diligence
Technology companies are not all software-based. A company may concentrate on hardware and semiconductors innovation. We’ve devised a specific practice for hardware and semiconductors sell-side due diligence and can effectively assess and represent assets active in the semiconductor, photonic, radio communications, and electronic industries.
A semiconductor business requires a different approach compared to a software or tech-enabled company.
Our process concentrates on gaining clarity in the asset’s supply chain resilience, quality controls, compliance and intellectual property governance, as well as technology vision and strategy, market fit, and people capabilities. Our extensive hands-on experience allows us to dive deep into each area while retaining a business-oriented mindset, presenting the business plan strategically to potential buyers.
Hardware Diligence Foundational Scope:
Product, IPR & Design
Leadership & Organization
Development & Operations
Support & Quality
Security
Sell-Side Due Diligence Timeline
3-6 Weeks End-To-End Process
TARGET NEEDED
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KICK-OFF
Kick-Off Meetings
Introductions
Confirm Thesis
Info Requests
Output Needs
Project Plan
PREPARE
Data Room
Info Request Gaps
Key Questions
RESEARCH
Data Room Review
Industry Research
Understand Target
Explore Outside-In
Remote Meetings
SESSIONS
Target Meetings
Initial Observations
ANALYZE
Data Analysis
Benchmark Data
Automatic Scans
Thesis Analysis
INTERNAL REPORT
Roadmap Alignment
Internal Discussion
Coaching
INTERNAL READOUT
Roadmap Alignment
Internal Discussion
Coaching
VDD
REPORT
Follow-up Mtgs
Report Writing
Conclusion
Advisory
TEAM PREP
Coaching
VDR support
Who Is Technical Vendor Due Diligence for?
If a company is planning a divestiture or a carve-out of a part of its business, vendor due diligence would be a suitable exercise for strategic investors:
