Seller Due Diligence List
FedEx contractors who are in the market to sell their routes will inevitably be asked to provide a number of due diligence items for the buyer. Buyers ask for this information as a way to validate the information that has been presented to them in the preliminary stages of discussion.
This information is often requested from the selling contractor after an offer has been made based on preliminary information they have received. Generally speaking, the seller is asked to provide this information over a “due diligence” period of 2-4 weeks.
With that said, every buyer is different and will require varying levels of due diligence information before executing the purchase of your routes. Those buyers who may be seeking bank financing will have bank(s) which will require this information in order to secure a loan for the purchase of the routes.
We have compiled a list of due diligence requests from a number of buyers in an effort to help you better prepare for the sale of your routes. Our firm works with selling contractors, as well as their legal, accounting and financial advisors, to help prepare the information requested below. Below is an abbreviated list of information buyers will often ask for during their due diligence period:
Corporate
• Review incorporation documents of the company
• Obtain certificate of good standing for the company
• Review partnership / joint venture agreements, if any
• Review of any current/pending legal issues
• Schedule of shareholders and percentage owned by each person/entity
• Copy of contract with FedEx, including all amendments
Employees
• Obtain a list of all active and inactive employees
• Obtain copies of any employment agreements
• Obtain copies of any non-compete and/or confidentiality agreements
• Obtain copy of manager resume, if applicable
• List of employees’ start dates, compensation, bonus or incentive-based pay, benefits, tenure in industry, etc.
• Obtain copy of payroll reports for the last 2 years
• Obtain copy of all employee handbooks and personnel policies
• Summary of employee vacation plan, overtime pay, bonus plans, etc.
Financial
• Bank statements for previous year and any YTD activity
• 3 years corporate tax returns
• 3 years of profit and loss statements
• Current YTD profit and loss statement
• Current balance sheet
• Asset list
• Payroll reports
• Summary of all deposit accounts, savings accounts and other accounts
• Review of all applicable insurance policies (vehicle, workman’s comp, health, etc.)
• Copies of any leases and loans, including stockholder loans and notes payable
• Copies of all vehicle maintenance reports
• Last 12 months of FedEx settlement statements
