Indication of Interest (IOI)

An Indication of Interest (IOI), also called a non-binding offer or lettre d'intention in French, is a preliminary, non-legally-binding expression of an acquirer's interest in a target company, submitted after initial review of limited information (typically the teaser and IM). The IOI outlines the proposed price range, the transaction structure envisaged, financing sources, key conditions, and the acquirer's identity. It allows the seller to screen acquirers and select those invited to the next process phase (management presentation, data room access) without any legal commitment.

The IOI is distinguished from the binding offer (offre ferme, term sheet): the IOI is non-binding and subject to confirmatory due diligence, while the binding offer (typically submitted after full due diligence) is legally binding subject to MAC clauses and regulatory conditions. In a structured M&A process, IOIs are submitted at the end of the first phase, binding offers at the end of the second phase, with SPA signing and closing following. The progression IOI → Binding Offer → SPA represents the formalization of the acquirer's commitment and the narrowing of price uncertainty.

In the Franco-Swiss market, IOI price ranges for mid-market transactions (VE CHF 5–50 million) are typically based on EBITDA multiples communicated in the IM. A well-structured IOI process managed by Hectelion generates competitive tension among acquirers, maximizing seller value while ensuring only serious, qualified buyers proceed to the resource-intensive second phase.

At Hectelion, we manage structured M&A processes from IOI to closing, ensuring competitive tension and optimal valuation for sellers in our M&A advisory mandates.