An offer to buy a business should outline the proposed purchase price, what is being acquired, how the transaction will be funded and any conditions that must be satisfied before completion. Providing clear terms helps the seller understand your proposal and creates a starting point for negotiations. The level of detail will depend on the stage of the acquisition.
An offer should generally cover three key areas:
- Purchase price and structure: State the amount offered, whether you intend to purchase shares or assets, and whether the price includes any deferred payments or earn-out arrangements.
- Funding and conditions: Explain how you intend to finance the acquisition and identify any conditions, such as satisfactory due diligence, obtaining funding or securing necessary approvals.
- Proposed timeline: Include an indicative completion date, any requested exclusivity period and the next steps for progressing the transaction.
For example, a buyer might offer £500,000 for a business, with £400,000 payable on completion and £100,000 deferred, subject to satisfactory due diligence and agreed contractual terms.
Once both parties agree on the principal commercial terms, these can be documented in Heads of Terms before formal legal agreements are prepared.
Read more: Heads of Terms in a Business Sale
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