What is an Indication of Interest?
Indication of Interest...AKA IOI
Presented by a buyer, prior to the LOI, indicating they are interested in pursuing the business further. Documents includes:
- range of anticipated valuation,
- rough outline of anticipated structure,
- expectation of timeline from LOI acceptance to close, and sources and uses of funds.
Site visits are usually done after IOIs are submitted. This is generally kept to a small number of buyer groups. Most sellers do not want to parade buyers through their facilities, interrupting their workforce. We have had buyers pretend to be bankers, insurance agents, etc. to not alert the employees to the pending sale.
Why it Matters to You
IOIs give a good indication as to how many buyers we have in the pool and where the initial offers are coming in at. Does the advisor need to continue looking or are we confident we have our buyer?