LOI: The Letter and the Spirit

A letter of intent (LOI) is a nonbinding but authoritative document that defines the terms under which the purchase of one company by another will proceed. When a buyer and a seller reach the LOI stage, they'll have agreed that the potential fit looks good and that due diligence—the research phase that structures and certifies the transaction—can begin. In this post, we'll review the steps the seller should take once both parties have signed the LOI. The buyer's post-LOI agenda will be the subject of the next installment.