Process letter

The ideal structure of a procedure letter

A well-written procedure letter should include a clear, complete and homogeneous structure.
It is used to guide investors while protecting the interests of the seller.

For reference, here are the main sections that are generally found in such a document:

1. Introduction and purpose of the transaction
   Presents the context, the project, the parties involved (sellers, company, financial advice) and the purpose of the letter.
2. Confidentiality agreement and documents provided
   Recalls the signing of the NDA and the availability of the Information Memorandum describing the company.
3. Submission of the Indicative Offer
   Details the deadline for sending, the contact details of the advisor in charge and the methods of sending the offers.
4. Expected content of the indicative offer
   That is the heart of the letter. Buyers must provide:
   
   1. Information on the purchaser (identity, structure, beneficial owners)
   2. Prices and valuation assumptions (methods, multiples, rates, reference period)
   3. Payment terms (structure and deadlines)
   4. Asset and liability guarantees (ceilings, duration, amounts)
   5. Financial capacity (sources of financing, conditions of provision)
   6. Integration and recovery plan (strategic vision, staff continuity, role of current managers)
   7. Due diligence envisaged (scope of the audit and the need for additional information)
   8. Internal prerequisites and constraints (internal approvals, decision deadlines)
   9. Primary contact (name, function, phone, email).

• Continuation of the procedure
  Specify the following steps: selection of selected offers, opening the data room, meetings with management and access to the draft sales contract (SPA).‍
• Important notice
  Essential clause: it recalls that sellers reserve full freedom of choice, suspension or modification of the process, without obligation to explain or justify.
  This section legally protects the parties and frames the liability of the seller and his advisor.‍
• Contacts
  Clearly identify authorized contact persons for any questions related to the transaction.
  Example:
  Aristide Ruot, Founder — CEO | Hectelion.

Finally, it is recommended to adopt a Professional and Uniform Format for the presentation:

• “Personal and Confidential” mention
• Full Seller and Advice Letterhead
• Date, container, clear object

Mistakes to Avoid in a Procedure Letter

An incomplete or incomplete procedure letter generates misunderstandings, slows down the process and weakens the seller's position.

The most common mistakes are:

• The absence of a specific timetable for the submission of tenders
• Insufficient Information About the Seller's Expectations
• Ambiguous formulations about the scope or conditions of the transaction
• Multiple Communication Channels, Creating Leaks or Misunderstandings

Another Classic Mistake Is To Copy and paste a standard template without adapting it to the project.
Each process is unique: the tone, expectations and clauses must be adjusted to the reality of the transaction, to the profile of the targeted purchasers and to the complexity of the company concerned.

Words from the manager

A well-constructed procedure letter is the invisible framework for a successful transaction.
It reflects the rigor of the seller, the clarity of his advice and the respect of the process.
When accurate, it creates a framework of trust even before the first offer.

Synthesis

Yes, the procedure letter should be Structured with Method, as it serves as a compass for all stakeholders.

But no, it should not become a bureaucratic document: its objective is above all to provide a framework without constraining, to provide a framework without hampering the fluidity of dialogue.

A good balance is to write a complete, but intelligible letter, where each section has a function and each word has weight.

In essence, the procedural letter is not just an administrative letter: It is the first act of governance of the sales process.
It sets the tone, discipline and professionalism that buyers will find throughout the transaction.

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