Process Letter

Process Letter

Workflow

Step 1: Determine Letter Type

• Initial process letter: Sent with teaser/CIM to outline the process and IOI requirements

• IOI instructions: Specific requirements for first-round indications of interest

• Second round / final bid letter: Instructions for submitting binding offers after diligence

• Management meeting invitation: Logistics for in-person management presentations

Step 2: Initial Process Letter / IOI Instructions

Header:

• Date, deal code name

• "Confidential"

• Addressed to prospective buyer

Sections:

1. Introduction: Brief overview of the opportunity and the seller's objectives

2. Process Overview: Timeline, key dates, expected number of rounds

3. IOI Requirements: What to include in the initial indication:

   • Proposed valuation range (enterprise value)

   • Consideration form (cash, stock, earnout, rollover)

   • Financing sources and certainty

   • Key due diligence requirements

   • Indicative timeline to close

   • Any conditions or contingencies

   • Brief description of the buyer and strategic rationale

4. Submission Details: Where to send, deadline (date and time), format

5. Confidentiality Reminder: Reference to NDA, data room access

6. Contact Information: Banker contacts for questions

Step 3: Final Bid / Second Round Letter

Additional requirements beyond IOI:

1. Markup of purchase agreement: Provide the draft SPA/APA and request markup

2. Detailed financing commitments: Committed financing letters required

3. Remaining diligence items: Specify what confirmatory diligence is expected

4. Exclusivity terms: Duration and conditions of any exclusivity period

5. Regulatory analysis: Antitrust filing requirements and timeline

6. Key personnel terms: Employment agreements, compensation, rollover equity

7. Binding vs. non-binding: Clarify what is binding at this stage

8. Evaluation criteria: How bids will be evaluated (price, certainty, speed, fit)

Step 4: Management Meeting Invitation

1. Logistics: Date, time, location (or video link), duration

2. Attendees: Who from the company will present, who from the buyer should attend

3. Agenda: Typical management presentation agenda (overview, financials, operations, growth, Q&A)

4. Ground rules: No recording, confidentiality, questions format

5. Materials: What will be distributed (presentation deck, data room access)

6. Follow-up: Process for submitting additional questions after the meeting

Step 5: Output

• Word document (.docx) with professional letter formatting

• Firm letterhead placeholder

• Track changes version for client review

Important Notes

• Process letters set the tone for the entire deal — be clear, professional, and organized

• Deadlines should be firm but reasonable — typically 2-3 weeks for IOIs, 3-4 weeks for final bids

• Always include the evaluation criteria — buyers want to know how they'll be judged

• Coordinate with legal on any representations or commitments in the letter

• Client should review and approve before sending — they may want to adjust tone or terms

• Keep a log of who received each letter and when — this becomes the process tracker