Letter of Intent Template for Acquiring an Email Marketing Agency

1. Parties and Transaction Overview

Identifies the buyer entity (or entity to be formed), the seller, and the business being acquired. Specifies whether the transaction is structured as an asset purchase or stock/membership interest purchase — a critical distinction for email marketing agencies where client contracts, Klaviyo/HubSpot platform accounts, and employee agreements may need to be individually assigned in an asset deal.

💡 Sellers often prefer a stock sale for tax efficiency (capital gains treatment on the full amount), while buyers — especially SBA borrowers — typically prefer an asset purchase to avoid inheriting unknown liabilities and to achieve a stepped-up tax basis. For a Klaviyo Elite Partner agency, confirm early whether the platform partner status transfers under an asset deal or requires a new application, as this can affect deal structure preference.

2. Purchase Price and Valuation Basis

States the proposed total enterprise value and the EBITDA or SDE basis on which it is calculated. For email marketing agencies, the LOI should explicitly reference the trailing twelve-month (TTM) adjusted EBITDA, the multiple applied, and the revenue quality assumptions underpinning the valuation — particularly the percentage of revenue classified as recurring retainer versus one-time project work.

💡 Email marketing agencies frequently present EBITDA add-backs that include founder compensation above market rate, personal vehicle expenses, and non-recurring software investments. Scrutinize each add-back. If the agency derives meaningful revenue from performance-based or one-time campaign launches, insist on a separate revenue quality schedule before finalizing the multiple. Sellers will push for the high end of the 3x–5.5x range by citing net revenue retention above 110% — require documentation before accepting that claim.

3. Deal Structure and Payment Terms

Outlines how the purchase price will be paid, including the cash at close, SBA loan proceeds, seller note, and any earnout component. For email marketing agency acquisitions, earnouts tied to client retention over 12–24 months post-close are standard because the primary risk is client attrition following a change in ownership.

💡 Sellers will resist earnouts tied to revenue thresholds they feel are outside their control post-close. Negotiate a shared-risk framing: the earnout protects the buyer if clients leave due to transition disruption, but the seller should have no earnout exposure for client losses attributable to the buyer's operational decisions. If the seller will be actively involved post-close as a consultant, tie part of the earnout to their specific client retention performance rather than aggregate agency revenue. SBA lenders will require the seller note to be on full standby for 24 months — factor this into seller cash flow expectations.

4. Due Diligence Scope and Timeline

Defines the categories of information the buyer requires access to, the timeline for completing due diligence, and each party's obligations during the process. For email marketing agencies, due diligence must go beyond financials to include client contract review, platform account access verification, team retention risk assessment, and deliverability/performance metric analysis.

💡 Forty-five days is the minimum reasonable timeline for an agency acquisition of this complexity; push for 60 days if the deal involves an SBA loan, as lender processing adds time. Require the seller to provide a data room within 10 business days of LOI execution — delays at this stage often signal disorganized financials or undisclosed client issues. If Klaviyo or HubSpot agency partner status is material to the deal thesis, confirm transferability directly with the platform before the LOI is signed, not during due diligence.

5. Exclusivity Period

Grants the buyer an exclusive negotiating window during which the seller agrees not to solicit, negotiate, or accept offers from other potential buyers. This protects the buyer's investment of time, legal fees, and due diligence costs.

💡 Sellers represented by M&A brokers may push back on exclusivity periods longer than 45 days, particularly if they are fielding competing interest. Sixty days is reasonable and defensible for an SBA-financed deal. If the seller insists on a shorter window, negotiate a built-in extension mechanism as described above. Confirm that the exclusivity clause covers the seller's business broker or advisor — some deals have fallen apart because the broker continued shopping the deal while the buyer was in due diligence.

6. Transition, Non-Compete, and Consulting Agreement

Outlines the seller's post-closing obligations, including a transition consulting period to introduce the buyer to clients and transfer institutional knowledge, as well as non-compete and non-solicitation covenants that protect the buyer's investment in the client relationships and team.

💡 For email marketing agencies where the founder owns key client relationships, the transition consulting period is arguably the most deal-critical clause in the entire LOI. Ninety days is the floor; if the founder is the primary strategist on accounts representing more than 50% of revenue, negotiate for 6 months with a tiered wind-down. Non-competes in the 3-year, national-scope range are standard and generally enforceable in asset deals — sellers may push back on national scope, but given the remote-first nature of email marketing, geography restrictions are largely meaningless without national coverage.

7. Confidentiality and Employee/Client Communication

Establishes mutual obligations to keep the transaction confidential until closing, protecting the seller from premature disclosure to clients or employees and protecting the buyer's competitive position and negotiating leverage.

💡 Email marketing agencies are particularly vulnerable to confidentiality breaches because their client and employee communities are small and interconnected — a whisper in a Klaviyo Slack community or a LinkedIn message can trigger client inquiries or employee anxiety within days. Establish a clear, joint communication plan before any information is shared beyond the core deal team. The buyer's due diligence calls with the seller's team should be framed as 'operational review' conversations until a definitive agreement is signed.

8. Conditions to Closing

Lists the material conditions that must be satisfied before the transaction can close, including financing approval, satisfactory completion of due diligence, execution of definitive agreements, and any third-party consents required for contract assignments.

💡 The SBA financing condition is non-negotiable for most lower middle market buyers and should be stated plainly. Sellers should be aware that SBA approval typically adds 60–90 days to the timeline post-LOI. For agencies with a Klaviyo Elite or Premier Partner designation, treat the platform partner transfer as a hard condition to closing — losing that status post-close could eliminate a meaningful lead generation and co-marketing channel that the buyer may have paid a premium to acquire.

9. Binding vs. Non-Binding Provisions

Clarifies which LOI provisions are legally binding on both parties immediately upon execution and which are expressions of intent subject to negotiation in the definitive agreement.

💡 Never allow the purchase price, earnout structure, or deal terms to be characterized as binding at the LOI stage — doing so removes your leverage to renegotiate based on due diligence findings. The only sections that should be binding are exclusivity, confidentiality, governing law, and the binding/non-binding clause itself. Some sellers' attorneys will try to make the 'no material adverse change' or 'good faith negotiation' language binding — resist this.