By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-07-21
Every issue in your business will be found eventually. Found early by your own advisers, it is fixable. Found late by the buyer's, it is a price reduction. Why sellers above roughly AED 5 million commission due diligence on themselves, what the report covers, and the proportionate version for UAE SMEs.
A serious buyer's advisers will reconstruct earnings, test debt, comb contracts and stress working capital; nothing material stays hidden through a competent process. The real choice is timing: surface issues yourself months early, when the fixable can be fixed and answers prepared, or let the buyer surface them mid-negotiation, when every finding arrives with a price chip attached.
Quality of earnings normalised to the true run-rate; net debt including the debt-like items sellers forget (accrued end-of-service benefits, related-party balances); a normalised working capital target so the completion adjustment is agreed on evidence; cash conversion; and the risk map of customer concentration, key contracts and contingent liabilities. The buy-side mirror of the same work is financial due diligence.
Bidders move faster from a professional report than raw ledgers, keeping a competitive process competitive; the data room is assembled once, properly; management answers questions once instead of repeatedly mid-sale; and the asking price arrives pre-evidenced, far harder to chip than an owner's spreadsheet.
Full vendor due diligence is a mid-market instrument, but the principle scales: a focused sale-readiness review of earnings quality, net debt and the top five risks, delivered in one to two weeks, captures most of the value. If the likely sale price exceeds AED 5 million, the cost is trivial against a single point of price erosion.
What is vendor due diligence?
Vendor due diligence is a due diligence report commissioned by the seller before going to market, rather than by the buyer after an offer. An independent firm examines the business the way a buyer's advisers would, covering quality of earnings, net debt, working capital and risk, and the resulting report is shared with serious bidders. It surfaces problems while the seller can still fix them and keeps control of the narrative with the seller.
Why would a seller pay for due diligence on their own business?
Because surprises kill deals and discounts. Issues discovered by a buyer's advisers late in a process become price chips or walk-aways; the same issues found early by the seller's own advisers can be fixed, explained or priced in from the start. Vendor due diligence also speeds the process, since bidders start from a professional report instead of digging from zero, which matters when running several bidders in parallel.
Is vendor due diligence worth it for an SME sale?
For a business likely to sell above roughly AED 5 million, usually yes, in proportionate form. A focused sell-side review of earnings quality, net debt and the top risks costs a fraction of the price erosion a late surprise causes. For smaller deals a lighter sale-readiness review achieves most of the benefit: the point is to see your business through a buyer's eyes before a buyer does.
What does a vendor due diligence report cover?
The same ground a buyer's report would: quality of earnings with owner and one-off items normalised, net debt and debt-like items, a normalised working capital view, cash conversion, customer and supplier concentration, related-party arrangements and contingent liabilities. The difference is timing and control: the seller sees the findings first and goes to market with answers prepared.
How long does vendor due diligence take?
A proportionate sell-side review for a UAE SME typically takes one to two weeks from complete information; fuller vendor due diligence on a larger business takes two to four. Done before the process launches, it costs no deal time at all, which is precisely the point.