Vendor Due Diligence Hero Image

Vendor Due Diligence and the Road to Value Creation

Vendor due diligence turns traditional due diligence on its head. By applying rigorous analysis to assets destined for sale from the perspective of the buyer, BCG’s vendor due diligence consulting services help companies minimize risks, speed the sales process, and maximize value creation.

Vendor due diligence, also known as commercial vendor due diligence, suffers from a common misperception: that it’s just a market study collating data on competitors and markets for corporate sellers. It’s not. Vendor due diligence is a comprehensive, objective assessment of the positioning and prospects of a subsidiary, business unit, or line of business. The process creates a compelling story line and enables potential buyers to jump-start their own due diligence processes.

Vendor due diligence, unlike traditional due diligence, gives sellers a head start by adopting a buyer’s perspective. Prospective buyers can grasp precisely why an asset is valuable and how that business meshes with their current strategy and operations.

BCG’s vendor due diligence consultants help clients anticipate risks and address business issues that otherwise might drive down valuations or prompt buyers to walk away.

How BCG Enhances Vendor Due Diligence

BCG’s vendor due diligence consulting combines deep industry expertise with rigorous analyses to boost value and pare sales-process risks. We go beyond obvious approaches and metrics to uncover value creation possibilities, chart strategic opportunity, and present that story in compelling ways.

We have a track record in successful vendor due diligence across regions, industries, and disciplines. Our knowledge of divestitures, private equity, and vendor due diligence best practices enables us to anticipate investors’ requirements and identify potential issues you may not have considered.

We focus on what buyers care about, tailor your sales approach to their needs, and help you repair value leaks. And as with all our transactions consulting, we work shoulder-to-shoulder with you and your other advisors from the outset, enabling you to focus on what matters most: your ongoing business.

The BCG Transaction Center deploys a practiced, customized process—the antithesis of the standard vendor due diligence checklist—that includes:

  • Assessing market attractiveness, margins, growth, market share, and related areas
  • Reviewing the asset’s strategy and potential paths forward
  • Crafting a consistent, comprehensive equity story supported by factual proof points
  • Validating the business plan rigorously and objectively
  • Collecting and developing supporting information, including strong digital analytics
  • Preparing a scenario-based financial model

The outcome: a buyer-centric, fact-based assessment showcasing strategic fit; a conceptual framework to execute the deal; upsides beyond business-as-usual; and quantitative answers to “what if” questions. Highly valued by bidders and commercial banks, our independent, unbiased opinions raise buyers’ and lenders’ confidence—and often the price buyers are willing to pay.

Vendor due diligence creates substantial value on a standalone basis or as part of our end-to-end divestiture consulting. Our comprehensive process supports you at every step, from reviewing your portfolio and formulating an exit strategy through executing and closing the best possible deal.

Our Work with Clients on Vendor Due Diligence

Vendor Due Diligence Impact Story

BCG’s vendor due diligence experts helped a private equity firm position one of its portfolio companies, Antelliq, a traditional agricultural business that had embraced big data, as a disrupter with the ability to transform global farming. Following a fierce bidding war, the private equity owner received a significantly higher price than it would have on the basis of its initial premise of incremental digital innovation.

Meet Our Vendor Due Diligence Consultants

BCG’s vendor due diligence consultants help clients realize the benefits of vendor due diligence and, more important, maximize the value of their deal. Here are some of our vendor due diligence experts.

transaction-center-hero-tcm9-234347.jpg

M&A, Transactions, and PMI Services

BCG has deep expertise in a multitude of industries, with comprehensive knowledge of all aspects of M&A activity and post-merger integration, to help you realize the full value of your transaction.

Learn More About Vendor Due Diligence

protected by reCaptcha

Subscribe to our M&A and Divestitures eAlert.

M&A, Transactions, and PMI

SUBSCRIBE