ShareVault Glossary

What Is an Indication of Interest (IOI)?

An Indication of Interest (IOI) is a preliminary, nonbinding proposal submitted by a prospective buyer that expresses interest in acquiring a company. It typically follows an initial review of the Confidential Information Memorandum (CIM) and provides the seller with an estimated valuation range and the buyer’s proposed transaction structure.

An IOI helps sellers identify the most qualified bidders before advancing to the next stage of the sale process.

What Does an IOI Typically Include?

An Indication of Interest often contains:

• Estimated purchase price or valuation range
• Proposed deal structure (asset purchase, stock purchase, or merger)
• Source of financing
• Key assumptions behind the valuation
• Preliminary due diligence requirements
• Expected timeline for completing the transaction
• Conditions that must be met before submitting a final offer

Because an IOI is nonbinding, the proposed terms may change as the buyer conducts additional due diligence.

What Happens After an IOI?

Once the seller reviews all Indications of Interest, a shortlist of buyers is typically invited to continue in the process. These buyers often receive expanded access to the virtual data room, participate in management presentations, and conduct more detailed due diligence before submitting a binding Letter of Intent (LOI).

A secure virtual data room like ShareVault helps manage this process by controlling document access, tracking buyer activity, and ensuring confidential information is shared only with approved parties.