The Netherlands
We note that the preparation by sellers of VDD reports is becoming less popular. Typically, as it is not required for taking out a W&I insurance.
Sellers may, however, draw up a proper VDD as part of the auction to speed up the auction process and allow bidder to conduct a focussed top-up DD only.
When sellers do expect potential purchasers to conduct a full-fledged DD then sellers often do prepare specific deal memos regarding specific issues to keep momentum throughout the DD process.
Poland
There is a noticeable tendency to increase the number of auctions at vendor led processes.
Germany
Our experience is that vendor led processes dominate at the moment.
France
Auctions are very common in big M&A transactions. VDD is often carried out to optimise the sale process (preparation of the data room, control of the level of information provided to the bidders, etc.), allow the sellers preparing the negotiations with the potential bidders on the key findings (level of cap, existence of specific indemnities, etc.) and to try to limit the involvement of the management of the target during the Q&A/expert sessions.
Belgium
We have noticed a decrease in auctions due to the evolution towards a more pro-buyer terms market.
Spain
There has been an increase in the use of indemnities for identified contingencies during DD.
Italy
Auctions are quite common, in particular in case of divestments by financial investors.
United Kingdom
Competitive auction processes are still the primary source of new platform investments for PE, although they prefer a bilateral, off-market deal. For larger or very competitive deals, commercial and financial vendor due diligence is usual, but on smaller deals this is not the case.
We rarely see vendor legal due diligence, save for on very high-value transactions. It can cause some issues with W&I cover as the underwriter wants to see that you have interrogated the report in order to provide cover and so you have to do top-up due diligence thereby reducing the time and cost savings that vendor due diligence may otherwise provide.
