Vendor Due Diligence: Enhancing Company Sales by Addressing Buyer Concerns Early

Vendor due diligence is a strategic inspection conducted by company owners before entering a sale process to proactively resolve potential buyer questions, thereby streamlining the transaction. Gustav Sjödin, a financial due diligence expert at OWL, explains that this analysis culminates in a detailed report outlining the company's financial health — covering historical earnings, future projections, tax risk evaluations, and capital commitments. This report not only presents the business attractively to potential buyers but also simplifies the due diligence performed by buyer advisors.

OWL, an independent and nimble advisory firm serving primarily small and mid-sized companies, provides these vendor due diligence services. While commissioned by the seller, OWL maintains independence to ensure buyers can trust the accuracy of the financial information disclosed. This process allows business owners to identify and address issues that might otherwise depress the company's valuation, making the business more appealing to prospective buyers. Additionally, OWL collaborates closely with investment banks, M&A firms, and private equity firms managing company sales.

In essence, vendor due diligence enhances transaction efficiency and valuation by preemptively clarifying financial and operational questions, reducing uncertainties that can delay or complicate deals. This proactive approach is becoming increasingly important in Sweden’s competitive market for small and medium enterprise sales, demonstrating how thorough preparation benefits both sellers and buyers in complex transactions.