DorisMorris CVA

M&A Indication of Interest: Your First Move

Master the art of initial deal communication with strategic IOI guidance and best practices

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Essential IOI Elements

Strategic Rationale

• Why this acquisition makes sense
• Expected synergies and benefits
• Strategic fit explanation
• Market opportunity alignment

Preliminary Valuation

• Indicative price range
• Valuation methodology basis
• Key assumptions underlying value
• Potential structure considerations

Process Framework

• Proposed next steps
• Due diligence expectations
• Timeline considerations
• Key stakeholder involvement

Buyer Credentials

• Company background and experience
• Financial capability demonstration
• Previous M&A track record
• Management team credentials

IOI vs LOI: Key Differences

Aspect	IOI	LOI
Purpose	Express initial interest	Outline detailed terms
Detail Level	High-level, preliminary	Detailed, comprehensive
Binding Nature	Non-binding entirely	Selective binding provisions
Timing	Very early stage	After initial screening
Length	1-3 pages typically	5-15 pages typically

IOI Best Practices

Do's

• Be specific about strategic rationale
• Provide credible valuation range
• Demonstrate financial capability
• Show genuine commitment and interest
• Propose realistic timeline and process
• Address key seller concerns proactively
• Include relevant deal experience
• Request appropriate level of information

Don'ts

• Make unrealistic or lowball offers
• Request excessive confidential information
• Be vague about acquisition rationale
• Fail to demonstrate financial capability
• Ignore obvious deal challenges
• Promise what you cannot deliver
• Rush the seller into quick decisions
• Overlook cultural and integration fit

IOI to Transaction Timeline

Week 1-2

IOI Preparation & Submission

Week 2-3

Initial Response & Information Exchange

Week 3-4

Management Presentations & Meetings

Week 4-6

LOI Negotiation & Execution

Month 2+

Due Diligence & Closing

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