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Letter of intent (LOI)

Letter of intent (LOI): A letter of intent (LOI) is a largely non-binding document in which buyer and seller set out the key terms of a proposed practice sale, such as price, structure, timing and conditions, before definitive agreements are drafted.

A letter of intent (LOI) is a largely non-binding document in which buyer and seller set out the key terms of a proposed practice sale, such as price, structure, timing and conditions, before definitive agreements are drafted.

An LOI typically covers price and how it is paid (cash at close, earn-out, holdback, rollover equity), deal structure (asset or stock purchase), any working capital peg, the seller’s work-back, and exclusivity. Exclusivity and confidentiality clauses are often the binding parts. Have counsel review any LOI before signing.

Part of the DDSIntel glossary. See how the figures are built in the methodology. Markdown version: /glossary/letter-of-intent.md.

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