Letter of Intent

Letter of Intent
For Business Acquisitions

Your Letter of Intent is a document that frames the transaction you are willing to pursue for an acquisition of a business.This letter, the “LOI” is typically provided after you have had a chance to visit with management, possibly hear a formal presentation, and poke at some general due diligence items.

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Usual and customary terms addressed in the LOI will include, but not be limited to:

  1. Purchase price, including whether payment is 100% cash or some mixture of cash, seller notes, and/or contingent payments.


  2. You’ll want to be clear whether you are acquiring stock or assets; and if stock, whether you are purchasing 100% or some lesser amount.


  3. Discuss who is responsible for the debt of the company and what happens to the cash on the balance sheet (make sure you distinguish between restricted cash and non-restricted cash).


  4. Discuss senior management’s role going forward, and whether they’ll have the opportunity to participate in the equity of the Company.


  5. Discuss how the transaction will be financed.


  6. Targeted closing balance sheet items.


  7. Identify your expectations on reps and warranties, including escrow, baskets and claw-backs.


  8. Discuss your process and your expectations on a closing date.


Don’t guess what goes in your LOI.
Buy it once and use it over and over again.

Want to see samples? Go To Our Sample Page

The Templates
Indication of Interest Template – $17
Indication of Interest, or IOI, is used when first presented with an acquisition opportunity. Typically required by the seller’s broker or investment banker, it is used as a screening process to get to serious buyers. It is a unilateral agreement that presents an initial indication of purchase price and deal structure.

Letter of Intent Template – $27
Also know as the LOI, it is the next step in proceeding to completing an acquisition. The LOI is used to define the terms of your offer with the benefit of having completed some preliminary due diligence. It will have more meat than the Indication of Interest since the IOI will typically be provided without the benefit of management presentation or plant/facility tours. While not binding as a whole, there are certain provisions that you, as the acquirer will want to make binding.

Form of Transaction Summary – $17
The Transaction Summary is a quick way to gather your preliminary thoughts about a transaction and communicate them with your lenders, partners or prospective investors. If the Indication of Interest expresses your initial interest in a transaction with the seller, the Transaction Summary does the same thing with capital partners. Easy to read and format, the Transaction Summary gets right to the points of the transaction from 20,000 feet.

Form of Executive Summary – $37
The Executive Summary is a great document to use when you need to communicate your transaction with your banker or your institutional investor. Coming to the table with a well-prepared Executive Summary sets the stage for your funding request. Each section of this Executive Summary template prompts you with issues to address – it couldn’t be any easier.


Template

Option A

Option B

Option C

Transaction Templates

Indication of Interest &
Letter of Intent
Financing Templates


Transaction Summary &
Executive Summary
Special Price $44 $54 $67

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Any Questions?
If you have any questions that have not been adequately answered, please email me directly and let me know how I can help. I’d also be interested in any feedback.

All the best,
Nick