The Role of Due Diligence in Non-Core Disposals

When a company decides to divest or sell a non-core subsidiary or business division, due diligence plays a critical role in ensuring value, certainty, and credibility throughout the process.

Unlike the sale of an independent trading company, a non-core disposal often involves complex integrations, shared assets, and interdependencies. Effective due diligence allows both the seller and buyer to clearly define what’s being sold, mitigate risks, and move confidently toward completion.

At Divestable.com, we specialise in helping corporate and private group owners prepare, market, and manage non-core disposals. Here’s how due diligence fits into that process — and why it’s central to achieving a clean, value-optimised transaction.

1. What Is Due Diligence in a Divestment Context?

Due diligence is the structured process of reviewing, verifying, and analysing the information relating to a business or division being sold. It’s designed to confirm what the buyer is acquiring — and what risks or obligations might accompany it. In a non-core disposal, due diligence typically covers three key perspectives:

• Financial due diligence – validating revenue, profit, and working capital trends.

• Operational due diligence – examining people, systems, processes, and dependencies.

• Legal and compliance due diligence – ensuring contracts, IP, and liabilities are clearly defined and transferable.

The goal is to create transparency and certainty — for both sides.

2. Why Due Diligence Matters More in Non-Core Disposals

In many divestitures, the business being sold has operated as part of a larger group rather than as a fully standalone entity. That means:

• Shared systems or infrastructure (e.g. IT, HR, or finance).

• Group-level contracts and suppliers.

• Common branding, trademarks, or intellectual property.

• Centralised cash management or intercompany loans.

Without careful due diligence, these shared elements can become deal-breakers. Sellers must identify and separate what belongs to the divested unit and what remains with the parent group — before going to market.

3. Seller Due Diligence: The Smart Approach

Many successful vendors now conduct vendor due diligence (VDD) before launching a sale process. VDD involves preparing your own due diligence report (or summary pack) to anticipate buyer questions, identify issues early, and present information professionally. It demonstrates control and confidence, helping maintain deal momentum. Key benefits of vendor due diligence include:

• Reducing surprises during buyer reviews.

• Increasing buyer confidence in financial and operational data.

• Shortening transaction timelines.

• Supporting stronger valuations by minimising perceived risk.

At Divestable, we help clients prepare clear and well-organised information packs tailored for prospective acquirers — without disclosing unnecessary commercial detail too early.

4. Key Areas of Focus in Non-Core Disposal Due Diligence

While every transaction is unique, the following areas almost always require particular attention:

Financial Clarity

Ensure accurate management accounts and adjusted EBITDA figures. Clearly separate group-level charges or overheads to show standalone profitability.

Contracts and Customers

List all key contracts, renewal terms, and dependencies. If customers are shared within the group, establish transition plans and disclosure protocols.

People and TUPE

Employee transfers are critical. Identify staff directly linked to the division and confirm TUPE (Transfer of Undertakings) applicability and obligations.

Intellectual Property

Clarify ownership of any brands, domains, or trademarks used by the division. In many cases, shared IP will require licensing or rebranding agreements.

Systems and Infrastructure

Document any shared software, CRM, or ERP systems. If separation is required, define migration plans and costs.

Regulatory and Legal Compliance

Ensure all licences, certifications, and filings are current. Any non-compliance identified later can reduce value or delay completion.

5. Managing Transitional Service Agreements (TSAs)

In many non-core disposals, the buyer may need Transitional Service Agreements (TSAs) — temporary support from the seller post-completion to ensure business continuity.

Due diligence helps identify where TSAs will be required, covering services such as payroll, IT, or finance. Well-defined TSAs protect both parties: the buyer gains stability, while the seller limits ongoing liability and provides clarity on cost recovery.

6. The Role of Advisers

Managing due diligence for a divestment is complex. The seller must balance disclosure with confidentiality, separating relevant information from wider group operations.Specialist advisers — like the team at Divestable — coordinate this process by:

• Defining the scope of sale and assets to be included.

• Preparing pre-sale due diligence documentation.

• Managing buyer Q&A and information flow.

• Supporting negotiations and data room organisation.

This proactive approach protects the seller’s position and ensures smoother progress through to completion.

7. Turning Due Diligence into a Value Driver

While due diligence is often seen as an administrative burden, it can be a powerful value driver when handled correctly. Comprehensive preparation sends a clear message to the market: the business is well-managed, risks are understood, and the seller is serious about achieving a fair transaction. This professionalism not only attracts better-quality buyers but also supports faster, cleaner deals with fewer last-minute surprises.

In non-core disposals, due diligence is far more than a box-ticking exercise — it’s a vital process that underpins credibility, value, and successful separation. By taking a proactive, transparent approach, sellers can control the narrative, manage buyer confidence, and achieve stronger outcomes.

At Divestable.com, we help corporate and private group owners plan and execute non-core disposals with clarity and precision — from strategic review and preparation to marketing, negotiation, and completion.

Next Steps

If you’re considering divesting a non-core division or subsidiary, speak with Divestable.com about how to prepare and manage due diligence effectively. We’ll help you define your sale scope, protect your value, and deliver a clean, efficient transaction.