October 22, 2026 | By: Colin Schmidt Partner & Head of Infrastructure, Energy & Renewables Financial Advisory

Over the past year, our Financial Advisory team has supported what we believe is among the highest volumes of infrastructure and energy transactions in the market. That vantage point gives us a unique perspective: we regularly advise both buyers and sellers, work on domestic and cross-border transactions, and see processes through North American and European lenses. One observation that consistently stands out is the disconnect between what many international bidders expect vendor due diligence to look like and what they encounter in North American sale processes.

We frequently see inbound investors from Europe and other mature auction markets asking where the rest of the diligence is, whether reliance will be available, and what documentation constitutes the definitive basis of bid. The questions themselves often reveal a meaningful expectation gap.

Vendor due diligence has become a standard feature of most large European sale processes. Yet in North America, despite the increasing complexity of transactions and the desire for efficient auctions, we often see vendor diligence that feels more like a teaser than a tool.

Our take: much of what passes for vendor due diligence in North America isn’t accomplishing the objectives it was intended to achieve.

In many European processes, vendor diligence is comprehensive, covers a broad range of topics, and can often be relied upon by the successful bidder through a formal reliance framework. That creates a common fact base, reduces duplication of effort, and allows buyers to focus on value creation rather than rebuilding the diligence process from scratch.

In North America, however, vendor diligence is frequently limited to an adjusted EBITDA analysis or excel databook, and a handful of quality of earnings observations. Useful? Certainly. Sufficient? Rarely.

In many European processes, vendor diligence is comprehensive, covers a broad range of topics, and can often be relied upon by the successful bidder through a formal reliance framework. That creates a common fact base, reduces duplication of effort, and allows buyers to focus on value creation rather than rebuilding the diligence process from scratch.

In North America, however, vendor diligence is frequently limited to an adjusted EBITDA analysis or excel databook, and a handful of quality of earnings observations. Useful? Certainly. Sufficient? Rarely.

As a result, the 4 benefits vendor diligence should deliver often go unrealized:

    1. Lower pursuit costs? Not really. Buyers still need to perform much of the work themselves because the scope is incomplete, and reliance is unavailable.
    2. Less management disruption? Not really. Management teams still endure waves of buyer questions because key diligence areas were never addressed upfront or because of continuity issues between deal team members in what can be high turnover environments of some VDD providers.
    3. A clear basis of bid and “single source of truth”? Not really. If critical operational, accounting, tax, working capital, cash flow, commercial, HR, IT, environmental, and separation issues sit outside the report, everyone is operating from a different set of assumptions.
    4. Early identification of the boogeymen and an ability to “get out in front of the issues”? Not really. Risks that could have been uncovered and addressed before launch instead emerge during exclusivity when they are more expensive, more disruptive, and more likely to impact value.

Why does the gap persist?

Part of it may be cultural – European sell side processes generally last longer as bidders have a culture of seeking more comfort than many do in North America. And candidly, part may stem from increasingly conservative risk postures among advisors, the absence of industry depth and a deferred focus on the issues that matter, and the absence of reliance.

Our view is that vendor diligence is at its best when it is comprehensive, supportable, and capable of serving as the foundation for the entire process. It should identify issues early, establish a robust fact base, reduce duplication, minimize management burden, and accelerate execution. Done properly, vendor diligence shouldn’t just support a process. It should shape it.

Too often, North American processes settle for something less.

Sound familiar? If so, whether you’re preparing an asset for sale or assessing a transaction, our team can help you build diligence that serves as a true foundation for your process.