I've tried to look for more concise opinions on this topic, but I'm looking at a deal where the broker says they don't do LOIs because they are non-binding and they only do APAs (Asset Purchase Agreement). Curious to know if anyone has experienced this because I've read about and heard the exact opposite. I really like the broker and trust his guidance. I'm just wondering who has run into this and how you all think about it. Thanks!
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On sell-side, the LOI has not only price and terms but also many deal-critical details (capital stack, price allocation, non-compete, seller role, conditions to close, etc. My goal is 80% discovery/20% verification pre-LOI. Post-LOI 80% verification/20% discovery. With this approach we eliminate APA surprised pre-LOI. Seller attorney often wants APA first. If so, I convince him/her why that can put the seller at risk. Of course, the attorney makes more money with APA first, even though they convince the seller that APA first will cost them less.