Maximizing your leverage at the LOI stage

Updates and insight from the Nixon Peabody team of Private Equity and M&A legal talent. This edition is curated by Greg O’Shaughnessy.

Tip of the Week: As a seller, you will never have more leverage at any point in a sale process than you have at the letter of intent (LOI) stage. Once you sign an LOI (which usually comes with a period of binding exclusivity with a single buyer), the leverage flips.

It is critical that you maximize your leverage at this stage in the process. You and your team of advisors should focus on these keys to doing so successfully:

• Using your leverage to push potential buyers to do as much work (i.e., financial and legal due diligence) as possible pre-LOI so that you can minimize the time to closing post-LOI when you go exclusive and lose leverage
• Negotiate as many of the key business and legal issues as possible and document your understandings in the LOI. There is so much more to a deal than top line valuation, so use your leverage to settle the issues that are important to you in the LOI and avoid discovering surprises or misalignment later in the process.

Upcoming Event: Interest Rates and Derivatives Panel

• Panel discussion on important issues to be resolved when considering the documenting, pricing, transfer, and termination of interest rate derivatives.
• Monday, February 26, 2024 at Nixon Peabody's New York City office

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• Hear from industry leaders on the latest trends and predictions for 2024
• Wednesday, February 28, 2024 at Nixon Peabody’s Boston office

Insight: State AGs Emerge as New Antitrust Hurdle for Healthcare Mergers (Law.com)

• Concerns that transactions raise consumer prices and reduce access to care have sparked state-level scrutiny, a new headache for dealmakers already facing headwinds at the federal level.
• More states are passing laws requiring that their attorney general or another regulator conduct premerger antitrust reviews of healthcare transactions.
• You want to build in extra time and add this to your strategic considerations.

Insight: Investors Have Got Your Number: Navigating the Data-Driven Shift in Venture Capital (Forbes.com)

• The venture capital landscape historically has been governed by personal networks, insider insights, and a significant degree of intuition.
• By 2025, data, analytics, and AI are expected to inform over 75% of VC deal analyses.
• The strategic use of data extends beyond mere investment decisions.

This newsletter is intended as an information source for clients and friends of Nixon Peabody LLP. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel. This material may be considered advertising under certain rules of professional conduct. Copyright ? 2024 Nixon Peabody LLP. All rights reserved.