Case study
How sale readiness saved the deal
A Perth-based furniture and commercial fit-out business. An unsolicited approach. And a platform that put the seller back in control.
The situation
A buyer approached the owner of a Perth-based furniture and commercial fit-out business directly. Even though the business wasn’t listed for sale, the seller decided to engage. After signing a term sheet, the buyer retained legal advisors, Piper Alderman. The seller decided not to retain legal representation or appoint a broker.
In a well-run sale process, the seller is given the chance to upload information in an RFI (or “Request for Information”) list, before the buyer’s team gain access.
As the seller hadn’t appointed a broker, the buyer’s lawyers stepped in and issued the RFI list, costing the buyer time and money, only to find out the seller didn’t have most of the requested information, bringing the buyer’s due diligence to a standstill. This proved problematic for the buyer as the bank required a legal due diligence report before they could assess whether it was prepared to fund the deal.
How we helped
Piper Alderman asked us to support the seller respond to the RFIs. This was a challenge as the seller didn’t have a lot of the requested information. For the buyer to start due diligence, we needed to fill these gaps which was mostly undocumented or informal contractual relationships with customers, suppliers, the landlord, and employees.
Rather than leaving undocumented arrangements to surface during buyer due diligence, the seller used our legal templates to summarise key terms. This allowed due diligence to resume without waiting for formal contracts to be put in place at this stage.
What does this mean for business brokers?
This deal happened without a broker; however, the same readiness problem exists in listed sales. Businesses come to market without organised records, without formal contracts for key relationships, and without a data room. Brokers who use Due as part of their process can address this before it becomes the buyer’s discovery:
- Sellers arrive at the market with a structured data room already in place
- Documentation gaps are identified and resolved before the buyer sees them
- The RFI process is owned by the sell side
- Less back-and-forth between lawyers over missing documents.