Make Letter of Intent
Include Certain Items

After the owner of a publishing business signs a letter of intent to sell his or her business, though the letter of intent is mostly non-binding, his leverage drops significantly. A prospective buyer may want certain items binding.

Therefore, before signing the letter of intent, the seller should make sure it addresses as many critical points for him or her as possible.

Basic deal terms that should be resolved at the letter of intent stage include the following:

1.	Method of payment-cash, notes, stock, etc.
2.	Price to be paid, assets to be acquired, and liabilities (if any) to be assumed.
3.	Structure of the transaction.
4.	The financial extent and survival period of representations and indemnities.
5.	The size of a holdback (if applicable) from the purchase price (to secure representations).
6.	Any purchase price adjustments for changes in book value between signing and closing.
7.	Employment terms, if any, of seller.
8.	Nature and duration of non-competition provisions of seller.
9.	Any conditions to the buyer's obligations, such as financing, board approval, etc.

A good mergers and acquisitions adviser (or broker) and later a transaction attorney can help seller anticipate any potential problems. They should advise the seller and consider the proper approach to discussing those problems with the prospective buyer.

A good adviser will maintain and accelerate the momentum when it starts. Serious stalls can be fatal.

The advisor should set a positive tone with everyone involved in the transaction. Cooperation and communication are the keys to getting the transaction completed.

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Market Outlook contains general information with respect to the publishing business. It is not intended as a substitute for specific professional advice or opinion. Rickenbacher Media assumes no responsibility for errors or omissions.

Make Letter of Intent Include Certain Items

Make Letter of Intent
Include Certain Items