Letter of Intent Template for Acquiring an Equine Services Business

Buyer and Seller Identification

Clearly identify the acquiring entity (or individual buyer) and the selling entity, including the legal name of the business, its primary operating location, and whether the transaction will be structured as an asset purchase or entity acquisition. For equine businesses, note whether real property is included or will be handled under a separate agreement.

💡 Clarify early whether the real property is included in the purchase price or is being acquired separately. Many equine sellers own the land personally, not through the business entity, and will want to sell it in a separate transaction or lease it back to the buyer. Getting this structure agreed upon in the LOI prevents major surprises during due diligence. If the seller intends to retain the land and lease it, ensure the LOI specifies minimum lease term, renewal options, and rent escalation caps — a barn without land security is a fatal flaw for any buyer.

Purchase Price and Valuation Basis

State the proposed purchase price, the valuation methodology used (typically a multiple of EBITDA or seller's discretionary earnings), and what assets or liabilities are included. For equine businesses, specify whether horses owned by the business, tack, trailers, vehicles, and equipment are included in the stated price.

💡 Equine businesses frequently have blurred lines between personal and business assets — a seller's personal horses may live on the property, personal vehicles may have been expensed through the business, and tack rooms may contain a mix of business and personal inventory. Push for a detailed asset schedule as part of your LOI exhibit or as a condition of moving to exclusivity. EBITDA multiples for equine services typically range from 2.5x to 4.5x depending on revenue mix, real property inclusion, and client contract strength. Lean toward the lower end of that range if the business has high owner dependency or informal client agreements.

Deal Structure and Financing

Outline the proposed financing structure, including equity, SBA debt, seller financing, and any earnout component. SBA 7(a) loans are commonly used for equine business acquisitions and require the seller to carry a subordinated note if the business is below SBA's full collateralization threshold.

💡 Sellers in equine services are often emotionally attached to their clients and will resist earnouts tied to client retention if they feel it punishes them for something outside their control after closing. Frame earnout provisions around mutual success — the seller stays on, makes introductions, and earns the upside only if the transition succeeds. Also be prepared for SBA lender scrutiny around equine businesses: lenders will want to see documented contracts, not handshake boarding agreements, and may require the seller's note to be on full standby for 24 months. Confirm your SBA lender has experience with agricultural or equine businesses before submitting.

Assets Included and Excluded

Provide a clear delineation of what is and is not included in the transaction — particularly important in equine businesses where personal and business assets are frequently intermingled on the same property.

💡 Request Coggins records and registration papers for every horse on the property early in due diligence to establish which animals are business assets versus personal. Some sellers use business accounts to pay for personal horses' care and vet bills — this inflates expenses and distorts EBITDA. Conversely, some sellers keep horses off the books entirely to reduce apparent income. Either way, a clean asset and animal inventory is non-negotiable before you finalize price.

Due Diligence Period and Access

Define the length of the due diligence period, what information the seller must provide, and what physical access the buyer requires to the facility, animals, and staff.

💡 Sixty days is often insufficient for equine facility acquisitions because you need a qualified equine facility inspector, a review of zoning and agricultural permits, and ideally at least one visit during peak operational hours (early morning feeding, afternoon lessons) to observe actual operations. Push for 75–90 days if the facility includes owned real property. Also request a list of the top 10 boarding clients by monthly revenue — not their names, but their revenue contribution and contract length — before you enter exclusivity. Client concentration is the single biggest risk factor in most equine acquisitions.

Exclusivity and No-Shop Provision

Establish the period during which the seller agrees not to solicit or entertain offers from other buyers, giving the buyer time to complete due diligence and negotiate a definitive agreement.

💡 Sellers in the equine world frequently have informal conversations with neighboring farm owners, trainers, or equestrian community members who express interest in buying. Make exclusivity a binding, signed commitment. Sixty days is standard but often not enough given the complexity of equine due diligence; negotiate 75–90 days. If the seller pushes back, offer a $5,000–$10,000 earnest money deposit held in escrow as consideration for the longer exclusivity window.

Transition and Seller Involvement Post-Closing

Define the seller's expected role after closing, including consulting period, client introduction plan, and any non-compete or non-solicitation obligations. This is especially critical in equine businesses where the seller's personal relationships with horse owners are the foundation of the revenue base.

💡 The transition period is the most important post-closing protection in an equine acquisition. Horse owners are loyal to people, not facilities — if the seller disappears immediately after closing, expect meaningful client attrition within 90 days. Structure compensation for the transition period at market rate for a trainer or manager role, not as a favor. A seller who is fairly compensated is more likely to show up, engage clients genuinely, and protect the business's reputation. Non-competes in equine services are generally enforceable when tied to a geographic radius that reflects where clients actually travel from; work with local counsel to define appropriate boundaries.

Conditions to Closing

List the material conditions that must be satisfied before the transaction can close, including financing approval, satisfactory due diligence, regulatory or licensing transfers, and key client retention thresholds.

💡 Condition (iv) — disease quarantine — is unique to equine operations and often overlooked by first-time buyers. An EHV-1 or strangles outbreak can shut down a facility for 4–6 weeks and result in significant client attrition. Request a full disease history for the facility going back at least 3 years. Condition (v) — written contracts from boarding clients — is the most contentious but most important closing condition. Many sellers run entirely on verbal agreements and will resist formalizing them pre-close. Offer to help draft simple boarding agreements you can send together, framed as something that protects both parties and makes the transition cleaner.