Letter of Intent Template for Acquiring a Radon Testing & Mitigation Business

Parties and Business Identification

Identifies the buyer entity, seller entity, and the specific business being acquired. In radon acquisitions, it is critical to name all operating entities, DBAs, and state-licensed business names, since many operators hold licenses under slightly different entity names across service states.

💡 Sellers often operate informally under multiple names or have let certain state entity registrations lapse. Require the seller to represent in the LOI that the listed entities capture 100% of the business's operating activity and revenue. If there are multiple state licenses held under different entity names, flag this early — it will affect how the Purchase Agreement is structured and how licenses are transferred.

Purchase Price and Valuation Basis

States the proposed acquisition price and the financial basis on which it was derived. For radon businesses, price is typically expressed as a multiple of Seller's Discretionary Earnings (SDE) or EBITDA, adjusted for owner add-backs and normalized for real estate market conditions in the service area.

💡 Radon businesses tied heavily to real estate transaction volume may show revenue swings of 20–35% in years with rising interest rates. Push to use a 3-year average SDE rather than the most recent trailing twelve months if the market was unusually hot or cold. Also confirm whether the seller has included personal vehicle expenses, home office deductions, or family payroll in the books — all common add-backs that inflate stated SDE and should be documented before you agree to a multiple.

Deal Structure and Payment Terms

Defines how the purchase price will be paid, including any down payment, seller financing, SBA loan proceeds, earnout provisions, and equity rollover arrangements. Radon acquisitions frequently use SBA 7(a) financing combined with seller notes and earnouts tied to referral network retention.

💡 Sellers in radon businesses often resist earnouts because their referral relationships are personal and they cannot guarantee that agents will continue sending work to a new owner. Frame the earnout as a bridge that protects both sides — if relationships transfer cleanly, seller gets paid in full. If they don't, buyer is not overpaying for value that didn't survive the transition. Earnout measurement periods of 12 months post-close are standard; avoid going beyond 24 months as disputes become difficult to adjudicate.

Assets Included and Excluded

Specifies what is being purchased — typically all operating assets for asset deals — and explicitly excludes personal assets, retained receivables, or liabilities the seller is keeping. For radon companies, this section must address equipment inventory, vehicles, and the assignment of referral agreements.

💡 Equipment condition is a significant variable in radon deals. Fans and suction pit hardware degrade over time, and replacement costs can run $50,000–$150,000 for a mid-size operation. Request a full equipment list with purchase dates and current condition ratings during the LOI stage so you can negotiate a price adjustment if significant capex is needed within 12 months of close. Also confirm that continuous radon monitors meet current EPA protocol — outdated units can trigger compliance issues.

Due Diligence Period and Scope

Establishes the length of the due diligence window and the categories of review the buyer will conduct. Radon business due diligence requires specialized review of technician certifications, state licensing, EPA compliance records, and referral partner verification — all of which take longer than standard financial due diligence.

💡 Forty-five days is typically the minimum viable due diligence window for a radon business operating in multiple states. If the seller has technicians whose NRPP certifications are expiring within 6 months of close, or if state licenses are held in the owner's personal name rather than the entity, you may need additional time to resolve those issues before committing to close. Do not waive or compress this window at seller request without a corresponding price reduction or indemnification clause.

Exclusivity and No-Shop Provision

Prevents the seller from marketing the business or entertaining other offers during the due diligence period. This is standard in LOIs and protects the buyer's investment of time and legal fees during the review process.

💡 Radon business sellers who are working through a broker sometimes resist long exclusivity windows if they have multiple interested parties. Hold firm on matching your exclusivity window to your due diligence period — you should not be in due diligence while the seller is shopping other offers. If the seller pushes back, offer a shorter exclusivity window but make it renewable by mutual agreement if due diligence is progressing constructively.

Transition and Seller Involvement Post-Close

Defines the seller's role after closing, including a transition consulting period and any non-compete or non-solicitation obligations. This section is critical in radon acquisitions because referral relationships and operational knowledge are often held entirely by the selling owner.

💡 The transition period is arguably the most value-protecting clause in a radon LOI. A seller who built referral relationships with 20 top-producing real estate agents over 15 years cannot hand those over in a closing document — they need to physically introduce the buyer to each partner and actively endorse the transition. Sellers sometimes resist long non-competes if they are planning to stay in adjacent services like home inspection. Negotiate narrowly on geography and scope if needed, but do not waive the non-solicitation provision covering referral partners.

Conditions to Closing

Lists the conditions that must be satisfied before the transaction can close. In radon acquisitions, this includes licensing, certification transfers, and lender approval in addition to standard legal conditions.

💡 State licensing transfer timelines vary significantly — some states process radon contractor license transfers in 2 weeks, others require 60–90 days and may require the buyer to independently qualify. Research your specific operating states before agreeing to a closing date. If licenses are held in the seller's personal name and are not transferable, build in a bridge operating arrangement or factor reissuance time into your projected close date.

Confidentiality

Obligates both parties to keep the terms of the LOI and all due diligence materials strictly confidential. This is especially important in radon businesses where news of a potential sale can trigger technician departures or damage referral relationships.

💡 Technician retention is the top operational risk in a radon acquisition. If field staff learn the business is for sale before the deal closes, you may lose the only NRPP-certified technicians in the company — effectively destroying the value you are paying for. Maintain a strict information barrier within the seller's company until closing is imminent, and coordinate a joint communication plan for notifying employees as part of the transition planning process.