What is the difference between and IOI and an LOI?

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April 09, 2024

by a searcher from Tulane University - A. B. Freeman School of Business in New Orleans, LA, USA

Thanks in advance. I've only submitted LOIs. A deal is asking for an IOI first. What is the difference between an IOI and an LOI?

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Reply by a searcher
from University of Victoria in Vancouver, BC, Canada
Good comments above. I would just add IOI's are typically non-binding whereas LOI's get closer to being binding (or at least have a number of binding provisions such as confidentiality, exclusivity, break-up fees in the rare case, etc.). Each process is different depending on the process letter that advisers set, but typically IOI's will include a wider range of valuation and high level terms whereby by the time LOI's come around, the valuation will be set (or at least within a precise range) and terms are often defined in much more detail.
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Reply by a searcher
from New York University in New York, NY, USA
https://www.linkedin.com/pulse/ioi-vs-loi-what-difference-dr-allen-nazeri-dds-mba-ficoi-micoi/

Most of the brokers I deal with don't ask for IOI, however, if there is no asking price it seems they do ask for one. It seems its just a way for the broker and potentially the seller to get a sense of what the market is willing to pay (just my opinion and what Im sensing)
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