Signing a Letter of Intent (LOI) is a milestone, but it’s not the finish line. Sellers often think the hard part is over once they “have a deal.” However, the next 60-90 days will determine whether the transaction actually closes, and at what value.
What really happens in that window?
- Confirmatory Diligence: Buyers dive deeper into financials, contracts, and compliance. Every discrepancy between the confidential information memorandum and the diligence becomes leverage to renegotiate.
- Buy-side Quality of Earnings (QoE): Third-party accountants dissect EBITDA, working capital, and adjustments. Negative surprises here almost always reduce the purchase price.
- Legal: Definitive agreements, reps & warranties, and escrow terms are negotiated. This is where “fine print” can meaningfully impact net proceeds.
- Third-Party Consents: Customer approvals, landlord sign-offs, and regulatory authorizations (ITAR, CFIUS, etc.).
The LOI sets the framework, but the buyer still controls the pace and tone of diligence. Sellers who prepare for the usual 60–90-day sprint with organized data rooms, clear working-capital schedules, and proactive communication are far more likely to preserve value and close on time.
Have a great day,
Max McFarland
Associate
