Letter of Intent

Definition

A Letter of Intent (LOI) is a non-binding document in which a buyer outlines the key terms of a proposed acquisition — including purchase price, deal structure, financing, and timeline. Signing an LOI typically grants the buyer an exclusivity period to conduct due diligence before negotiating the definitive purchase agreement.

Context

The LOI stage is implied in Ep. 23 discussions of M&A process dynamics. It sits between the management presentation stage and full due diligence. A buyer's willingness to submit a strong LOI — and then honor those terms without re-trading — is a key factor in how boutique bankers evaluate reliability.

Related Terms

• Due Diligence — the investigation phase that follows LOI execution
• Retrade — when terms change after an LOI is submitted
• M&A Process Dynamics
• Enterprise Value — the LOI specifies the proposed valuation