Vendor Due-Diligence

Vendor Due-Diligence

Time will come for every private investment to culminate in an exit - sale of the asset or business to another company for instance - which, if successful, will realize - or exceed - the value private investors expected when injecting cash originally.

But value creation does not end after founders, private equity firms or other shareholders have decided to launch the selling process. It continues during the process and it comes with an independent third-party advisor who assesses the asset, just as a buyer would, and provides bidders with an educational support that makes the process more attractive and easier.

Our industry is entering a new era, shifting profit sources and distribution along the value chain and reshuffling cards between winners and losers.

Vendor Due-Diligences in the Pharma and Biopharma space are crucial to jump-start a successful auction process.

Done correctly, Vendor Due-Diligences tells an exhaustive, fact-based and data-driven story, that greatly simplifies the work of buy-side due diligence teams, especially when combined with an educational approach.

We could observe that educational vendor due diligences emerged as a major success factor in the BioPharma industry as buyers - mostly private equity firms and other financial players - felt more comfortable with a better understanding of all the industry intricacies. It consequently made them more attuned to business upsides and value creation potential, making the deal value higher.

Last but not least, Vendor Due Diligences should provide potential buyers with a full-potential vision of the business, highlighting all the interdependencies and synergies between strategic, commercial, technical operations and organization capabilities.

In the meantime, Integrated Vendor Due Diligences - commercial, technical and operational - position the seller for the best deal possible. Aggregating commercial, technical, organizational and regulatory data allows to gauge how pulling a lever in one specific area of the business will affect all other operations, assumptions and opportunities within the whole organization.

Thereby, the seller can anticipate any issues that could either kill a deal or lead to a discount on the final price. Seller can also transform organizational and operational weaknesses into value creation potential for the future buyers, providing solutions for possible process improvement, pricing structure enhancement or vendor base consolidation. It aligns the management business plan with the seller's organization abilities to catch market opportunities against competition.

Larka embarks all the key success factors within its Vendor Due Diligences - whether it is commercial, technical, operational or integrated VDD - for the sellers to confidently pursue the highest deal value:

For over a decade, Larka's vendor due-diligences have encouraged more buyers, shortened due-diligence periods and obtained higher multiples for the seller, offsetting the cost of VDDs to a great extent.

Our Integrated Due-Diligence solution provides buyers and sellers with both, a full appreciation of the capabilities, synergies and risks involved and a full-potential vision for the business, along with the capital, time, resources and organization it will take to run the optimal post-acquisition plan that will justify the highest price for the asset.