Letter of Intent Template for Acquiring a Fence Installation Business

Parties and Transaction Overview

Identifies the buyer entity, the seller, and the business being acquired. For fence companies, this section should clarify whether the acquisition is structured as an asset purchase or a stock purchase, since most SBA-financed fencing deals are asset purchases to avoid inheriting legacy liabilities such as OSHA violations, subcontractor misclassification claims, or warranty disputes on past jobs.

💡 Sellers often prefer a stock sale to reduce personal tax liability, but buyers using SBA financing almost always require an asset purchase. Clarify this early. If the seller pushes back, engage a CPA to model an asset sale with an adjusted gross-up purchase price to compensate for the seller's tax differential — this can resolve many early-stage disagreements before they stall the deal.

Purchase Price and Consideration

States the proposed total enterprise value, how it is calculated (typically a multiple of trailing twelve-month EBITDA or seller's discretionary earnings), and how the consideration will be structured across cash at close, SBA loan proceeds, seller note, and any earnout component. Fence companies typically trade at 3x–5x EBITDA depending on customer diversification, revenue stability, and equipment condition.

💡 Sellers will often have a higher number in mind based on gross revenue rather than EBITDA. Come prepared with a clear add-back schedule and walk the seller through your EBITDA calculation before the LOI conversation. If there is significant equipment value — post drivers, augers, trucks, trailers — make sure the LOI specifies whether equipment is included in the purchase price or allocated separately in the asset schedule, as this directly affects how the SBA lender structures collateral.

Earnout Provisions

Defines any portion of the purchase price that is contingent on post-close business performance. Earnouts are common in fence installation acquisitions where the seller is the primary estimator and relationship holder, and the buyer needs assurance that revenue will transfer. They are typically tied to revenue or EBITDA targets in the 12–24 months following close.

💡 Earnouts are a negotiating lever, not a guarantee. Sellers should push for revenue-based triggers rather than EBITDA-based, since buyers have more control over expense recognition post-close. Buyers should insist on clearly defined measurement methodology and audit rights over the earnout period. If the seller will stay on in any operating capacity — especially running estimates — tie the earnout to their actual performance milestones, not just business-wide revenue, to avoid disputes.

Assets Included and Excluded

Specifies which assets transfer with the business. For fence companies, this is one of the most operationally critical sections. It must enumerate the vehicle fleet, equipment inventory, material inventory, customer contracts, supplier relationships, trade names, website, phone numbers, Google Business Profile, and any existing warranty or maintenance service agreements. Personal vehicles and non-business property used by the owner must be explicitly excluded.

💡 Google Business Profile and phone number transfers are frequently overlooked and can cause serious problems post-close. Confirm that the seller owns the Google account credentials and that the business profile is listed under the business entity, not the seller's personal Google account. Request access verification during due diligence. For equipment, require a fleet inspection and service record review before close — deferred maintenance on vehicles and post drivers is a common value trap in fence company acquisitions.

Due Diligence Period

Defines the length of the due diligence period, the scope of review the buyer is entitled to conduct, and conditions under which the buyer may withdraw without penalty. Fence installation acquisitions typically require 45–75 days for thorough due diligence given the need to inspect equipment, verify job costing records, and assess labor compliance.

💡 Sellers often push for a 30-day due diligence window to minimize disruption and keep momentum. Buyers should resist this for fence companies specifically — equipment inspections, subcontractor audits, and SBA lender timelines often require more runway. A 45–60 day period with a defined extension mechanism tied to SBA processing is a reasonable compromise. Use the due diligence period to verify crew composition: are the key installers W-2 employees who will stay, or 1099 subs who work for multiple contractors?

Exclusivity and No-Shop Clause

Prevents the seller from soliciting or entertaining other offers during the due diligence period. This protects the buyer's investment of time and resources in conducting due diligence on the fence business while negotiations progress toward a definitive agreement.

💡 Sellers working with a business broker may resist a long exclusivity window. A 45–60 day exclusivity period tied directly to the due diligence window is standard and defensible. If the seller insists on a shorter window, consider including a mechanism to extend exclusivity by 15 days upon mutual written agreement — this preserves flexibility without creating open-ended exposure for the seller.

Transition and Training Period

Defines the seller's post-close obligations to support knowledge transfer, introduce the buyer to key customers and subcontractors, and assist with estimating during the handover period. This section is especially critical in fence company acquisitions where the owner is often the sole estimator and primary relationship manager for general contractors and HOA clients.

💡 Sellers often underestimate how long a real knowledge transfer takes in a trade business. Buyers should be specific about deliverables — estimating training, customer introductions, supplier relationship handoffs — rather than leaving transition support open-ended. If the seller plans to retire and move out of the area, negotiate a video-call availability schedule into the consulting agreement rather than assuming in-person access will be available post-close.

Confidentiality

Obligates both parties to maintain the confidentiality of all information shared during due diligence and LOI negotiations, and prohibits disclosure to employees, subcontractors, suppliers, or competitors without mutual consent. Confidentiality is particularly sensitive in fence installation businesses where employees and subcontractors may exit if they learn of a pending ownership change.

💡 Crew retention is one of the biggest risks in fence company acquisitions. Even a rumor of a sale can cause experienced installers to take calls from competitors. Sellers should be especially careful about who they tell internally. Buyers should agree on a joint communication plan for announcing the transition to staff at or just after close, rather than allowing news to spread informally during due diligence.

Conditions to Closing

Lists the conditions that must be satisfied before the transaction can close, including SBA loan approval, satisfactory due diligence, execution of a definitive asset purchase agreement, obtaining any required licenses or permits in the buyer's name, and the absence of material adverse changes in the business.

💡 The SBA loan approval condition is non-negotiable for most buyers, but sellers sometimes worry it gives the buyer an indefinite exit ramp. To address this, include a specific SBA application submission deadline — typically within 10 business days of LOI execution — to demonstrate good faith. Also confirm early whether any state-specific contractor licensing requires a waiting period or examination, as this can delay closing timelines by 30–60 days in some markets.