Letter of Intent Template for Acquiring a Courier & Last-Mile Delivery Business

Parties and Transaction Overview

Identifies the buyer entity, seller entity, and the legal structure of the proposed transaction. For most courier acquisitions under $5M revenue, this will be an asset purchase — not a stock purchase — to allow buyers to exclude undisclosed liabilities, including driver misclassification exposure or DOT violation history.

💡 Sellers often prefer a stock sale to achieve capital gains treatment and simplify the transfer of contracts and licenses. Buyers should push firmly for an asset purchase to avoid inheriting DOT compliance history, worker misclassification liability, and undisclosed vehicle liens. If a seller insists on stock, the buyer should require enhanced indemnification provisions with an escrow holdback specifically covering driver reclassification exposure and regulatory fines.

Purchase Price and Valuation Basis

Establishes the total proposed consideration, the valuation methodology applied, and how the price will be adjusted based on due diligence findings. Courier businesses in the $1M–$5M revenue range typically trade at 2.5x–4.5x EBITDA, with multiples at the high end reserved for businesses with multi-year contracts, specialized niches like medical or pharmaceutical delivery, and a modern, low-maintenance fleet.

💡 In courier deals, EBITDA is often overstated due to personal vehicle expenses, owner-family salaries, and fuel costs run through the business. Buyers should normalize EBITDA carefully during due diligence and reserve the right to reduce the purchase price if fleet replacement costs are material or if one or more anchor customer contracts cannot be confirmed as transferable. Sellers should document all add-backs clearly before LOI execution to avoid renegotiation after exclusivity begins.

Deal Structure and Payment Terms

Details how the purchase price will be paid across multiple tranches — typically a combination of buyer equity, SBA financing, seller note, and potential earnout. Structuring in layers protects the buyer against post-close revenue risk while giving the seller a path to full consideration if the business performs.

💡 Sellers should negotiate earnout measurement criteria carefully — insist that earnout calculations exclude any revenue decline attributable to buyer operational decisions, pricing changes, or failure to service existing accounts. Buyers should tie earnout milestones to customer contract retention rates rather than gross revenue alone, since revenue can be temporarily inflated or deflated by route changes. SBA lenders will cap seller note terms and subordination requirements; confirm lender parameters before finalizing the structure in the LOI.

Assets Included in the Purchase

Defines the specific operating assets transferring to the buyer, with particular attention to fleet vehicles, customer contracts, technology systems, and any specialized equipment for niche delivery services such as temperature-controlled or medical courier operations.

💡 Fleet vehicle inclusion is frequently a source of negotiation. Buyers should insist on a pre-closing independent fleet inspection and reserve the right to exclude or discount vehicles that fail inspection or have outstanding liens. If the business operates medical or pharmaceutical delivery routes, confirm that specialized equipment certifications and regulatory approvals transfer with the asset purchase. Sellers should clarify upfront which vehicles are leased versus owned to prevent last-minute title complications at closing.

Customer Contract Assignment and Consent

Addresses the process for transferring customer relationships to the buyer, including which contracts require formal assignment consent and the consequences if key customers decline to assign their agreements. This is often the single highest-stakes provision in a courier business LOI.

💡 Many courier operators run their largest accounts on handshake relationships or annually renewing service agreements rather than multi-year contracts. Buyers should require a full contract inventory during due diligence and flag any accounts without written agreements as elevated risk. Sellers should be prepared to personally introduce buyers to key customer contacts — particularly in medical or time-critical delivery niches where trust is a primary retention driver. If a major customer represents more than 25% of revenue, buyers should consider making their consent a hard closing condition rather than a best-efforts obligation.

Driver Classification Contingency

Establishes a due diligence contingency specific to driver classification risk — one of the highest liability exposure areas in courier acquisitions. Misclassified independent contractors can create retroactive payroll tax, benefits, and workers' compensation liabilities that materially impair business value.

💡 California, Massachusetts, New York, and Illinois apply the most aggressive driver classification standards and represent the highest reclassification risk for courier operators. Buyers acquiring businesses operating in these states should engage employment counsel early in due diligence. Sellers who have proactively remediated classification risk — by converting contractors to W-2 employees or restructuring IC agreements — should document this work clearly as it directly supports valuation and reduces buyer leverage to renegotiate price.

Due Diligence Period and Access

Defines the length and scope of the buyer's due diligence investigation, including access to financial records, fleet documentation, customer contracts, DOT compliance files, and driver qualification records.

💡 Sellers should negotiate the restriction on direct customer contact carefully — buyers legitimately need to verify contract transferability, but unsolicited buyer outreach to drivers or dispatchers can destabilize operations mid-process. A structured introduction protocol, where the seller facilitates key conversations with buyer present, protects both parties. Buyers should request CSA scores from the FMCSA portal independently and not rely solely on seller-provided summaries.

Exclusivity and No-Shop Provision

Grants the buyer an exclusive negotiating period during which the seller agrees not to solicit or entertain offers from other potential acquirers. Exclusivity is standard once an LOI is signed and protects the buyer's investment of time and due diligence costs.

💡 Sellers should limit exclusivity to 45–60 days maximum and require the buyer to demonstrate SBA pre-qualification or proof of funds before granting exclusivity. Buyers should negotiate extension rights if due diligence is delayed by seller document production. In competitive courier markets, sellers sometimes receive multiple LOIs simultaneously — sellers who disclose competing interest prior to signing can often negotiate higher purchase prices or improved terms before granting exclusivity.

Transition Services and Non-Compete

Outlines the seller's obligations to support business continuity after closing, including a post-closing transition period and a geographic non-compete agreement restricting the seller from re-entering the delivery market in the same territory.

💡 Non-compete geography and duration must be reasonable and specific to be enforceable — courts have invalidated overly broad courier non-competes. Buyers should define the restricted territory by specific counties or delivery zones, not by overly broad radius measurements. Sellers who are retiring should negotiate for consulting compensation during the transition period rather than providing free labor post-close. Sellers retaining an equity rollover stake should ensure the non-compete carves out their ongoing role in the business.

Confidentiality

Requires both parties to maintain strict confidentiality regarding the existence and terms of the transaction, protecting the seller's customer relationships and employee stability and the buyer's deal strategy.

💡 Confidentiality is especially critical in courier businesses where key drivers and dispatchers are difficult to replace. Premature disclosure of a pending sale can trigger driver departures or customer anxiety about service continuity. Buyers should be particularly cautious about conducting fleet inspections or site visits without a credible cover story agreed upon with the seller in advance.