A buyer-originated document through which the buyer expresses its intent to buy the subject business.
When signed by the buyer and seller, an LOI should provide: a written expression of the parties’ intent to enter into a deal; an outline of an agreement in principle for the buyer to purchase the seller’s business at an offered price or range and under certain terms; confidentiality protection for the seller; an outline of the buyer’s financing; a timeline for due diligence and closing; and, in most cases, the buyer’s exclusive right to purchase the company during a specified time period.