process-letter

Process Letter

Workflow

Step 1: Determine Letter Type

• Initial process letter: sent with teaser/CIM to outline process and IOI requirements
• IOI instructions: first-round indication requirements
• Second round / final bid letter: binding-offer instructions after diligence
• Management meeting invitation: logistics for in-person management presentations

Step 2: Initial Process Letter / IOI Instructions

Header: date, deal code name, "Confidential", addressed to prospective buyer.

Sections:

1. Introduction: brief overview of opportunity and seller's objectives
2. Process Overview: timeline, key dates, expected number of rounds
3. IOI Requirements:
   • Proposed valuation range (enterprise value)
   • Consideration form (cash, stock, earnout, rollover)
   • Financing sources and certainty
   • Key due diligence requirements (for healthcare services: reimbursement, CON/licensure, Stark/AKS; for healthcare AI: HIPAA/SOC 2, FDA pathway where relevant)
   • Indicative timeline to close
   • Conditions or contingencies
   • Brief description of the buyer and strategic rationale
4. Submission Details: where to send, deadline (date and time), format
5. Confidentiality Reminder: NDA reference, data room access
6. Contact Information: CrowTech banker contacts for questions

Step 3: Final Bid / Second Round Letter

Additional requirements beyond IOI:

1. Markup of purchase agreement — provide draft SPA/APA and request markup
2. Detailed financing commitments — committed financing letters required
3. Remaining diligence items — specify expected confirmatory diligence
4. Exclusivity terms — duration and conditions
5. Regulatory analysis — antitrust filing (HSR) requirements and timeline; for healthcare, also CON filings and state licensure transfer timelines
6. Key personnel terms — employment agreements, compensation, rollover equity
7. Binding vs. non-binding — clarify what is binding at this stage
8. Evaluation criteria — price, certainty, speed, fit

Step 4: Management Meeting Invitation

1. Logistics — date, time, location (or video link), duration
2. Attendees — company presenters and expected buyer attendees
3. Agenda — overview, financials, operations, growth, Q&A
4. Ground rules — no recording, confidentiality, questions format
5. Materials — presentation deck, data room access
6. Follow-up — process for additional questions after the meeting

Step 5: Output

• Word document (.docx) with professional letter formatting
• CrowTech letterhead placeholder
• Track changes version for client review

Important Notes

• Process letters set the tone — be clear, professional, organized
• Deadlines firm but reasonable — typically 2-3 weeks for IOIs, 3-4 weeks for final bids
• Always include evaluation criteria — buyers want to know how they'll be judged
• Coordinate with legal on any representations or commitments
• Client should review and approve before sending
• Keep a log of who received each letter and when — it becomes the process tracker