A full VDD package for a mid-market SME typically comprises: a Quality of Earnings report (prepared by an accounting firm, addressing EBITDA normalization, working capital, and net debt); a commercial due diligence report (market sizing, competitive positioning, customer analysis); and sometimes a technical or IT review for technology businesses. The QoE is the most universally expected component — buyers and their lenders typically require it for deal financing.
The economics of VDD are compelling for competitive processes. Without VDD, each buyer conducts their own diligence sequentially — creating a 12–16 week diligence period per buyer. With VDD, all buyers work from the same baseline simultaneously. This typically saves 6–10 weeks of elapsed time and allows the seller to run a tighter, more competitive process. The cost (€80–150k for a full VDD package) is typically recovered many times over through better price tension.
A common concern about VDD: 'won't it reveal problems we'd rather hide?' The answer is that professional buyers will find the same issues through their own due diligence — the difference is whether you control the narrative. A well-prepared VDD can contextualize issues (a customer loss two years ago that has been replaced; a one-off legal charge that has been settled) rather than letting buyers discover them mid-diligence and apply maximum risk pricing.
VDD vs no-VDD process comparison
Business A (no VDD): LOI to close 22 weeks. Buyer requested 8 weeks of buy-side QoE, found NWC issue, re-traded price by €800k. Business B (with VDD): LOI to close 13 weeks. VDD pre-answered all buyer QoE questions. No re-trading. Business B received equivalent quality bids but closed 9 weeks faster with higher price certainty.
Frequently asked questions
Is VDD mandatory in French and Swiss M&A?
Not legally, but increasingly expected in competitive mid-market processes. For businesses above €1m EBITDA targeting multiple bidders, buyers' financing banks typically require a QoE report — and it is faster and less disruptive to have a sell-side version available than to have each buyer run their own. Below €500k EBITDA, VDD is rarely proportionate.
Can the buyer rely on the seller's VDD report?
This depends on whether the VDD provider grants reliance letters to buyers. Most accounting firms that prepare sell-side QoE will grant reliance to shortlisted bidders for a fee — this gives buyers legal recourse against the VDD advisor if findings are materially misleading. Without a reliance letter, buyers view VDD as informational only and typically conduct their own complementary work.
When should the VDD be commissioned?
Ideally 8–12 weeks before process launch — enough time to receive draft findings, address issues, and finalize the report before buyers access the data room. Commissioning VDD while already in process is sub-optimal: buyers may complete their own diligence before the VDD is available, eliminating its time-saving benefit.