Vendor Due Diligence|
Why Is A Vendor Due Technical Due Diligence Important?
The sell-side vendor due diligence (VDD) report facilitates the sales process, enhances buyer confidence, streamlines due diligence, and improves negotiations and valuation.
It provides potential buyers or investors with a comprehensive and transparent assessment of the company's technical landscape, enabling them to make informed decisions and move forward with the transaction more confidently.
It can also outline opportunities for the buyer during their value creation period. This externally focused VDD report is recommended to be produced ~1-3 months before the sale and takes ~3-4 weeks to conclude.
Technical Due Diligence Capabilities
At RingStone, we take a pragmatic and strategic 360 holistic approach to Vendor Due Diligence. This allows us uniquely positioned to uncover risks early in full collaboration with the team and help them mitigate potential concerns earlier. We also emphasize readiness to help them prepare and reduce the overhead and stress from a potential buy-side technical due diligence.
The end-to-end diligence comprises business and technology strategy, roadmap, architecture, code health, team capabilities, deployment setup, IT infrastructure, security, and leadership.
What Makes Us Different?
At RingStone, we run sell-side diligence with technology guided by a business lens with an eye for what investors look for, such as revenue increase, EBITDA margin and efficiencies, and a view to creating a more valuable company.
We take a friendly, pragmatic, and strategic 360 holistic approach to help prepare a company for a potential buy-side technical due diligence. The process is structured to cover hidden concerns and outline a stack-ranked set of optimizations for better readiness while we’re helping the team prepare.
The process is efficiently structured to ensure minimal impact on the team in the least amount of time.
The due diligence and reports are data-driven, with quantifiable benchmarks and dual benefits. On the one hand, they provide concrete and comparative data for the company to understand its current state. Conversely, the data is presented in a VDD report, allowing the acquirer to get a measurable and healthy view of the company.
The exercise thoroughly examines the overall suitability and health of the technology and its ability to evolve to accommodate the company's business strategy and technology landscape changes.
It explores the business and technology strategy, roadmap, software architecture, code health, team capabilities, software development lifecycle, deployment capabilities, IT infrastructure, security, services, and leadership.
Our approach combines human, machine, and tools using senior technology practitioners and CTOs with solid business acumen. Benchmarks are provided throughout proprietary software for industry and best practices comparisons. We focus on partnering with the company and providing them with clear, pragmatic guidance, practical risk mitigation, and preparedness for potential buy-side diligence.
Years of execution and experience working with investors and companies and hands-on with teams globally provide us with the experience to make the process painless for the team while providing them the most value.
When To Kick Off a Vendor Due Diligence (VDD)?
We advise starting the Vendor Due Diligence process as early as possible, 3-6 months before a potential sale, to get maximum benefits. However, it can also be as late as 1-3 months if needed. We’re happy to move fast with a dedicated senior team and accommodate aggressive timelines.
Vendor Due Diligence - VDD (~ 3-4 weeks)
Conduct technical due diligence and produce a VDD report suitable for investors and strategic buyers.
When to Consider?
Not expecting significant risks, but I would like to be prepared.
Need a VDD report ready for potential buyers.
Need a comprehensive VDD to share with potential investors.
Free Soundboard Sessions: Chemistry has to work, and you and your team must have confidence in our execution. We offer a no-strings-attached session to discuss potential acquisitions and deals at no cost to you. Contact us to book a session.
Attend RingStone Academy: Our team shares insights and experience about technology best practices, technical due diligence practices, software architecture, AI, cloud, and security topics.
Custom Education Sessions: We offer sessions to help deal with teams and operating partners in Private Equity with technology best practices for technical due diligence execution and what to look for in the early exploration stages. Contact us to discuss availability.