Vendor Due Diligence (VDD)
A due diligence report commissioned by the seller and made available to potential buyers, designed to accelerate the sale process.
Also known as: VDD, Sell-side due diligence
One-line definition
In a VDD, the seller's advisers produce a full financial (and sometimes commercial) due diligence report before buyers submit bids, allowing a faster, cleaner process.
Why sellers use it
- Reduces management disruption (one set of Q&A instead of many).
- Gives buyers confidence, supporting higher bids.
- Allows deal to close faster once exclusivity is granted.
Limitations
Buyers know the report was commissioned by the seller, so they apply their own judgement and often run a focused confirmatory review on top.
Related terms
Financial Due Diligence (FDD)
An independent review of a target company's historical and projected financials, conducted for a buyer or lender before completing a transaction.
Quality of Earnings
The TS work-product that bridges reported EBITDA to a defensible run-rate figure a buyer can underwrite.
Data Room
A secure (typically virtual) repository of documents about the target company, made available to potential buyers during due diligence.