Setting an IOI Deadline and Holding It

The process letter: what it says and when it goes

The process letter goes to each buyer with the CIM, immediately after the NDA is signed. It is one to two pages and it is the same for every buyer. It states the date and time by which indications of interest are due, the address they go to, and the form they should take. It describes what will happen after the deadline: that the seller will review indications, select a group of buyers for a second round, and open additional data room access and management meetings for that group. It states that the seller reserves the right to change the process, negotiate with any party, or withdraw at any time, and that no obligation arises until a definitive agreement is signed.

The form matters. The letter should ask for a specific set of items so the indications can be compared. Enterprise value or a range, with the basis for it. Proposed structure: cash at close, seller financing, earnout, rollover, and escrow. Source of funds and whether the buyer has committed capital or needs to raise it. Key assumptions, such as working capital or the treatment of debt. Diligence required and expected timeline to close. Any conditions, including financing. The buyer's prior transactions of this type. The decision-maker at the buyer and the approvals required.

A buyer that submits a one-paragraph email with a number has not followed the letter. The attorney can either request the missing items before the deadline or treat the indication as incomplete. The process letter should make that choice predictable rather than leaving it to a last-minute conversation.

Choosing the date

Four to six weeks is a useful planning window between the CIM going out and the IOI deadline. It gives a private equity firm time to review, model, and seek internal approval while keeping the process moving. The right interval depends on the buyer group, the complexity of the business, and the information already available. It is a planning recommendation, not a universal market rule.

Within that window, the attorney should pick a date that does not fall near a holiday, a quarter-end, or an industry conference that the strategic buyers on the list will attend. A Tuesday or Wednesday can give a buyer that needs a final internal approval more working time than a Friday. The attorney should ask active buyers about known conflicts before the date is put in the process letter.

The deadline should also account for the waves. If the second wave of outreach goes out two weeks after the first, the attorney should either set the deadline from the second wave's CIM date or tell the second wave that its period is tighter. The attorney should not set a deadline that the first wave can meet and the second wave cannot without a stated reason.

Tell the client the date before it goes in the letter, and tell the client what the date means: from the day the letter goes out until the deadline, the attorney will be answering questions and the client will be approving answers. No decision about buyers will be made until the agreed review point, except for process decisions the client has authorized in advance.

Managing the weeks before the deadline

The weeks between the CIM and the deadline are active. Buyers ask questions, request calls, and test whether the deadline is real. The attorney's job is to answer questions on the schedule the process letter set, to hold calls with buyers who request them, and to say the same thing to every buyer about the deadline.

Buyer calls in this period are typically with the attorney or the associate, not the owner. A buyer wants to hear the story from someone who knows it and to ask the two or three questions that will decide whether it bids. The attorney who ran the questionnaire interview and edited the CIM can answer most of these. Questions that only the owner can answer go to the owner through the attorney, and the answer comes back through the attorney.

About a week before the deadline, the attorney should check in with every buyer that has signed the NDA and has not yet passed. The check-in is short: a reminder of the date, an offer to answer anything outstanding, and a request to confirm whether the buyer intends to submit. The answers indicate how many indications may arrive and let the attorney prepare the client. They are not commitments, so the attorney should still plan for late submissions and passes.

The exceptions, decided in advance

A buyer will ask for an extension. The attorney should decide before the process letter goes out which requests will be granted, and the answer should be almost none unless the client has approved a different policy.

A short extension for a buyer that has been actively engaged, has asked substantive questions, and needs its investment committee meeting on a date just after the deadline may be a reasonable exception. It should be granted only if the same extension is offered to every other active buyer, unless the client has a documented reason to take a different approach. An extension for a buyer that signed the NDA late and has not engaged is harder to justify. A buyer that asks for two more weeks may submit what it can by the deadline and refine it in the second round, if the seller's process allows that.

The client should know the exceptions policy and should agree to it. When a buyer the client likes asks for an extension, the attorney can point to the policy rather than argue about the buyer. A written record of the decision also helps the attorney explain the same treatment to other active bidders.

The day after

On the day after the deadline, the attorney should have every indication in one place, in a format that allows comparison, and should have told every buyer that submitted that the indication was received. The seller should also state when it expects to respond. The response period may be one to two weeks, but the attorney should set it with the client based on the number and quality of submissions. Buyers that did not submit should be asked whether they are passing, and the reason recorded.

The attorney's note to the client that day should list how many indications arrived, the range of headline values, and the date of the meeting at which the client and the attorney will review them in detail. That review is its own phase, and it works because every indication arrived on the same day with the same requested information. In a live process, the attorney should also record which indications were incomplete and which assumptions could change the headline value.

A deadline does not remove judgment from the next phase. The client and attorney still decide which bidders advance, what additional information to share, and whether to change the process. In a public-company context, an auction record can also matter to fiduciary-duty analysis, which is another reason to document the process and the seller's decisions. [2]

One thing to do this week: draft a process letter template for your firm. It is two pages, it is reusable, and having it ready means that the next client who launches gets a disciplined deadline from day one.

How Acquivo Pro fits

Acquivo Pro manages NDA, IOI, and LOI flow for every client in a single pipeline, so during the weeks before an IOI deadline the attorney can see at a glance which buyers have signed, which have the CIM, which have asked questions, and which have confirmed they intend to submit. As indications arrive they are logged against the buyer that submitted them, ready for the comparison that follows. The attorney sets the deadline, writes the process letter, makes every buyer contact, and decides on every exception with the client. To walk through a process on a client you have in mind, request a demo through the Contact page.