Learning to Write an LOI: The Basics

The LOI (Letter of Intent) is the non-legally binding contract that appears when the buyer and seller are becoming more serious on closing a deal. This document indicates the specific agreed upon price and terms. The writing of the LOI generally occurs when the buyer and seller have agreed to exclusivity. While this document is not written by lawyers, it is a contract (written by the buyer) that brings the buyer and seller to an agreement. After the LOI is written and signed, the due diligence process can begin. It is important to include all necessary aspects of the M&A deal in this document to create a smooth process.

While many LOI templates are floating around on the web, it is important to remember to include a few key points when writing your own:

What is being purchased

The purchase price and how it will be paid


Confidentiality and exclusivity

Non-legally binding agreement

If you keep these points in mind while writing your LOI, you will have covered all important subjects. Missing these points during the LOI can often complicate the entire M&A deal.

Once the LOI has been written and signed, it is time to move onto the due diligence process. An M&A intermediary can aid in this process. Contact one of our advisors today.