IOI (Indication of Interest)
IOI (Indication of Interest) an IOI is a preliminary, non-binding document where a potential buyer expresses initial interest in acquiring a company and outlines basic deal terms.
It serves as the first formal signal of a potential business acquisition, providing a framework for initial negotiations.
| Category | General |
| Related |
How IOI Works
An Indication of Interest represents the opening move in the mergers and acquisitions process, typically submitted after reviewing a company's Confidential Information Memorandum (CIM). It provides potential buyers an opportunity to express preliminary interest without making a binding commitment.
Unlike a formal Letter of Intent, an IOI is deliberately lightweight and strategic. Buyers use it to gauge seller interest and test potential deal parameters, while sellers leverage IOIs to create competitive tension and identify the most serious potential acquirers.
The document typically includes a proposed valuation range, potential deal structure, preliminary terms, and a rough timeline for further investigation and potential transaction completion.
Key Points
- •Non-binding preliminary document in M&A transactions
- •Includes proposed valuation range and basic deal terms
- •Used to create competitive tension among potential buyers
- •Precedes more formal Letter of Intent (LOI)
- •Helps both buyers and sellers assess initial transaction viability
Frequently Asked Questions
Related M&A Concepts
Letter of Intent
A formal document indicating intent to complete a business transaction
Learn moreConfidential Information Memorandum
A detailed document providing comprehensive information about a company for potential buyers
Learn moreBusiness Valuation
The process of determining the economic value of a business
Learn moreTalk to an Expert
Get a free preliminary assessment of your business's market value and acquisition readiness.