A typical sale moves from an anonymous teaser to a signed NDA, a confidential information memorandum, non-binding indications of interest, management meetings, a letter of intent with exclusivity, confirmatory diligence and a definitive purchase agreement. Most of the early documents are non-binding except for provisions such as confidentiality and exclusivity. Many deals sign first and close later, after approvals and closing conditions are satisfied.
In this lesson you will
- Sequence the main stages of a sell-side M&A process.
- Explain what a teaser, NDA, CIM, IOI and LOI each do and which provisions are binding.
- Describe how exclusivity shifts negotiating leverage toward the buyer.
- Distinguish signing from closing and explain what happens in between.
Preparation
A well-run sale begins months before any buyer is contacted. The seller and its advisers clean up financial statements, often commission a quality-of-earnings review, organize contracts and corporate records into a data room, identify likely buyers, and decide whether to run a broad auction or approach a few parties directly. Akerman's overview of the acquisition process distinguishes auctions from proprietary deals and notes that a proprietary process usually has no CIM unless an earlier process failed, moving instead directly to a letter of intent and exclusivity [2].
Teaser and NDA
The first outreach is usually a teaser. IMAP, an international M&A advisory partnership, describes the teaser as a short, anonymous overview designed to generate initial interest without disclosing the company's identity, typically one to two pages and distributed to a broad buyer list [1]. Because the teaser does not name the company, no non-disclosure agreement is required at that stage [1].
Interested parties then sign a confidentiality agreement. These agreements define what counts as confidential information and commonly exclude information the recipient already had, developed independently or obtained publicly [2]. They often add non-solicitation provisions covering employees and customers, and in public company deals they commonly include standstill provisions [2].
The confidential information memorandum
Once a buyer has signed an NDA, it receives the confidential information memorandum, or CIM, a structured document prepared by a sell-side adviser that presents the business to qualified buyers [1]. The CIM's purpose is to give buyers enough organized information to evaluate the opportunity, including historical financials, key performance indicators, margins and working capital considerations [1]. Akerman's materials stress that the CIM is a marketing document rather than a legal one, and that buyers use it to identify risks early and shape a bid strategy [2].
Indications of interest and management meetings
In an auction, interested parties submit indications of interest. According to Akerman, an IOI typically describes the bidder and its industry experience and offers a range of values without specifics about the amount or composition of the price, and it is non-binding [2]. The seller uses IOIs to narrow the field and invites a smaller group to management meetings, which Akerman describes as a mutual interview for buyers and sellers [2].
Letter of intent and exclusivity
Final-round bids usually take the form of a letter of intent. An LOI sets out the initial agreement on material terms and is typically non-binding except for certain provisions, most importantly exclusivity [2]. Akerman lists exclusivity, confidentiality, expense provisions, governing law and an obligation to run the target in the ordinary course among the provisions parties often make intentionally binding, and notes that buyers often seek exclusivity of 60 to 90 days, sometimes with an automatic extension [2]. The same materials caution that, because of certain Delaware case law, an LOI should state clearly whether any obligation to negotiate in good faith exists [2].
Confirmatory diligence and the purchase agreement
During exclusivity the buyer completes confirmatory due diligence. Akerman describes staging diligence across industry, quality of earnings and legal workstreams [2]. In parallel, lawyers negotiate the definitive purchase agreement, which contains the price and adjustment mechanics, representations and warranties, covenants, closing conditions, indemnification and termination rights. Points that seemed settled in the LOI are often re-opened if diligence finds problems.
Signing versus closing
Signing is when the parties execute the purchase agreement; closing is when ownership transfers and the price is paid. A practitioner article on seller tips notes that most deals are of the sign and close later variety rather than a simultaneous sign and close [3]. During the gap, the seller typically agrees to operate the business only in the ordinary course [3]. Closing is usually conditioned on the seller's representations remaining true, on the receipt of necessary authorizations and consents, and often on the absence of a material adverse change in the business [3].
Regulatory approvals are a common reason for the gap. When a deal is reportable under the Hart-Scott-Rodino Act, the FTC explains that the parties must wait 30 days, or 15 days for a cash tender offer or a bankruptcy, before closing, and that a request for additional information extends the waiting period [4].
- Preparation: financial clean-up, data room, buyer list.
- Teaser: anonymous, no NDA needed.
- NDA, then CIM.
- Indications of interest: non-binding value ranges.
- Management meetings and data-room access for a shortlist.
- LOI with binding exclusivity and confidentiality.
- Confirmatory diligence and purchase agreement negotiation.
- Signing, then approvals and conditions, then closing.
Key terms
- Teaser
- A short, anonymous summary of a business sent to potential buyers to gauge interest before any NDA is signed.
- Non-disclosure agreement (NDA)
- A confidentiality agreement that lets a potential buyer receive non-public information while restricting its use and disclosure.
- Confidential information memorandum (CIM)
- A detailed marketing document prepared by the sell-side adviser describing the business for buyers who have signed an NDA.
- Indication of interest (IOI)
- A non-binding first-round bid, usually expressed as a value range, that helps the seller narrow the field.
- Letter of intent (LOI)
- A document setting out the main proposed deal terms, usually non-binding except for provisions such as exclusivity and confidentiality.
- Exclusivity
- A binding commitment by the seller not to negotiate with other buyers for a set period.
- Signing and closing
- Signing is execution of the purchase agreement; closing is the later transfer of ownership and payment, after conditions are met.
Check your understanding
Sources
- [1]IMAP, “CIM vs. Teaser: What Goes In Each and Why It Matters,” Accessed November 2026.
- [2]Akerman LLP, “Private Equity Mergers and Acquisitions, Session 1: Acquisition Process,” March 24, 2021.
- [3]Strictly Business Law Blog (Riggs Davie PLC), “Selling Your Business – Practical Tips for Sellers – Part 8: Pre-Closing Covenants and Conditions,” April 4, 2013.
- [4]Federal Trade Commission, “Premerger Notification and the Merger Review Process,” Accessed November 2026.
Educational content only — not legal, tax, or investment advice, or an offer to sell or a solicitation of an offer to buy any security. Rules and data are described as of November 2026 and may change. Securities offered through Umergence LLC, Member FINRA/SIPC.