Thoughts on a Indication of Interest (IOI)

by a searcher from Iowa State University of Science and Technology

7 months ago

I am speaking with a seller that his company does around 80 million in revenue. I have not used a indication of interest (IOI) document before, is it worth reaching out to my law firm for that form or does any template suffice? If anyone does have a template that I am able to use that would be great!

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searcher from Rice University - Jesse H. Jones Graduate School of Business

I can’t advise on the legal, but I think if there’s a template you use just make sure it states, “this does not mean I’m buying the company” in whatever legal terms or language needs to be there. I use IOIs to get a better understanding if im
in the range from a valuation perspective and as a starting point to deal structure…

7 months ago | like reply | 1 like

searcher from Georgetown University - The McDonough School of Business

IOI’s in my experience are only used if a broker or representative is running a very formalized process, so I would be direct and ask the seller what the deal process is. If it’s not formal, then skipping the IOI and discussing details of the LOI via drafts is easier. Either way, do not spend money on legal hours to put together an IOI.

7 months ago | like reply | 2 likes

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