Letter of intent (LOI)
A letter of intent sets out the price, structure and key terms a buyer and seller have agreed before due diligence and the final purchase agreement
A letter of intent, or LOI, is a short document in which a buyer and seller record the main terms of a proposed deal before they spend money on due diligence and legal drafting. It usually states the price and how it is paid, whether shares or assets are being bought, the working capital assumption, key conditions, the diligence period, exclusivity and the target closing date.
Most of a letter of intent is non-binding, but certain clauses, such as confidentiality and exclusivity, are typically binding. In BC transactions the LOI is where the real negotiation happens, because once it is signed the buyer gains exclusivity and the seller's bargaining position weakens. Terms left vague at this stage, such as how working capital is calculated or what the seller's transition role is, become the subject of renegotiation later, usually in the buyer's favour.
We help sellers and buyers draft and negotiate the commercial content of the LOI, model what each term means in cash and risk and make it specific enough to survive diligence. Your lawyer reviews the document before signature and later turns it into the definitive purchase agreement. A good LOI makes the lawyer's job faster and the closing more likely.
Start with a confidential conversation.
Tell Ali where the business is and what you want to happen next. You leave with a straight read on value, timing and the two or three moves that matter, whether or not we work together.