Sell-side due diligence

Approach and deliverables

We reconcile the sale narrative with financial records, ownership documents and known compliance gaps. The aim is a clear account of the business and its limitations, supported by an organised disclosure process.

The engagement can produce a vendor issue register, data-room index and response protocol. Remediation items are distinguished from matters that should be disclosed or addressed in transaction documents.

1. Define the sale perimeter and the information the seller intends to present.
2. Reconcile that information to underlying records.
3. Identify evidence gaps, inconsistent explanations and known exceptions.
4. Prepare the organised disclosure pack and response responsibilities.

Keep a clear distinction between correcting a record and explaining an unresolved issue. The response protocol should preserve the history of questions and answers.

Information to prepare

• Historical accounts and management adjustments
• Ownership and material contract records
• Known disputes and compliance exceptions
• Proposed sale perimeter and draft information materials

Provide the bridge between management reporting and statutory accounts, with supporting evidence for proposed adjustments. Include contractual dependencies and arrangements shared with businesses outside the sale perimeter. Identify the owner who can substantiate each part of the sale narrative.

A practical example

An adjusted earnings figure should have a bridge to the accounts and an explanation of each adjustment. A buyer should be able to distinguish recurring costs from genuinely exceptional items.

For an earnings adjustment described as exceptional, retain the supporting transaction and explanation, and show whether related costs continue after the proposed sale. Do not remove recurring expenditure solely because it makes the presentation more attractive.

Scope and responsibilities

No assurance opinion is implied unless separately commissioned. Seller preparation must not conceal adverse facts or present unresolved issues as completed remediation.

The engagement letter records the workstreams included, client decisions and external professional costs. New transaction steps or material changes are assessed before the scope is extended.

The handover identifies the data-room index, supported schedules, known issues and open remediation actions. Documents uploaded after the agreed cutoff should be tracked as updates. Negotiated disclosures and transaction-document advice require the separately defined legal work.