Letter of Intent Template for Acquiring a Same-Day Delivery Company

Parties and Transaction Overview

Identifies the buyer entity, seller entity, and the legal structure of the proposed transaction. In same-day delivery acquisitions, this section must also specify whether the deal is structured as an asset purchase or stock purchase, which has significant implications for fleet title transfers, DOT authority continuity, and assumption of driver-related liabilities.

💡 Asset purchase is strongly preferred by buyers in this industry due to the risk of inheriting driver misclassification liabilities, unreported accident claims, or outstanding DOT compliance issues that attach to an entity in a stock deal. Sellers may push for a stock sale to achieve capital gains treatment — negotiate carefully and involve tax counsel early. Confirm whether the seller's DOT operating authority transfers with the entity or requires a new application, as this affects deal structure choice.

Purchase Price and Valuation Basis

States the proposed purchase price, the valuation methodology used, and how the price was derived from the business's financial performance. For same-day delivery companies, buyers typically apply a multiple of 2.5x–4.5x SDE or EBITDA, with the multiple driven by contract quality, fleet condition, client diversification, and owner dependency.

💡 Sellers with strong multi-year commercial contracts in healthcare, pharmacy, or legal verticals should push for multiples at the higher end of the 3.5x–4.5x range. Buyers should insist on a fleet condition adjustment clause — it is common to discover $50,000–$150,000 in deferred maintenance that was not reflected in the asking price. Tie the stated purchase price explicitly to the SDE add-back schedule and require the seller to represent that no material client contracts are under cancellation notice at LOI signing.

Deal Structure and Financing

Outlines how the transaction will be financed, including the allocation between SBA 7(a) loan proceeds, seller note, earnout, and buyer equity injection. Same-day delivery companies are SBA-eligible, and most lower middle market deals in this segment are structured with SBA financing covering 80–90% of the purchase price.

💡 SBA lenders will scrutinize driver classification status and fleet condition as collateral. Prepare a clean fleet list with titles and mileage before submitting to lenders. Sellers should understand that the standby seller note means they will not receive those payments for 24 months post-close — factor this into your cash flow planning. Earnouts in this industry should be tied to specific, measurable metrics such as monthly contracted delivery revenue from named clients, not vague 'business performance' language that invites disputes.

Earnout Provisions

Defines the structure, metrics, and payment schedule for any contingent consideration tied to post-close performance. Earnouts are common in same-day delivery acquisitions to protect buyers against client churn or revenue deterioration during ownership transition, especially when one or two anchor clients represent a significant share of revenue.

💡 Sellers should negotiate hard on the carve-out for client losses caused by buyer's service failures — this is a legitimate protection. Buyers should specify that earnout revenue must come from clients named at close, not replacement clients, to prevent the seller from claiming credit for new business the buyer developed. Avoid earnouts exceeding 20–25% of total purchase price, as they complicate SBA financing and create ongoing disputes. Consider a hybrid structure: smaller earnout tied to top 3 client retention rather than aggregate revenue.

Assets Included and Excluded

Explicitly lists the assets being transferred, including fleet vehicles, client contracts, route documentation, dispatch software licenses, DOT authority, and trade names, as well as assets the seller is retaining. Specificity here prevents costly disputes at closing in same-day delivery deals where fleet composition and software access are material to operations.

💡 Do not leave fleet composition vague. Attach a signed vehicle schedule as Exhibit B at the LOI stage and confirm that all vehicles on the list have clean titles — lien searches are cheap and critical. Confirm whether the dispatch software is owned, licensed, or a SaaS subscription and whether the license is transferable. DOT authority transfer is a nuanced process — the buyer may need to apply for new authority or update the existing registration, which takes time and should not delay close.

Liabilities Assumed and Excluded

Specifies which liabilities, if any, the buyer is assuming post-close and which remain with the seller. In same-day delivery acquisitions, this section is especially critical for addressing driver classification exposure, outstanding insurance claims, and any pending DOT violations.

💡 Driver classification indemnification is non-negotiable for buyers in this industry. The AB5-style regulatory environment at the state level creates material exposure even for sellers who believe their contractor relationships are compliant. Request copies of any IRS or DOL correspondence, prior audits, or legal opinions on driver classification before removing this as a contingency. Sellers should cap indemnification obligations at the purchase price and negotiate a survival period no longer than 36 months with a basket and deductible.

Due Diligence Period and Access

Establishes the length of the due diligence period, the scope of information the buyer will receive access to, and the process for requesting additional documentation. Same-day delivery due diligence is operationally intensive and typically requires 45–60 days to properly assess fleet condition, driver files, client contracts, and DOT compliance.

💡 45–60 days is realistic for this industry — do not let a seller pressure you into a 30-day window for a fleet-heavy business. Insist on a physical fleet inspection by a qualified mechanic, not just a review of maintenance logs. For businesses with medical or pharmacy courier contracts, verify that all HIPAA-related driver certifications and chain-of-custody documentation are current. Red flag: sellers who resist providing driver classification documentation or DOT driver qualification files are hiding compliance gaps.

Exclusivity and No-Shop Provision

Prevents the seller from soliciting or entertaining competing offers during the due diligence and negotiation period. Standard exclusivity periods in same-day delivery transactions run 45–60 days, aligned with the due diligence timeline.

💡 Sellers should not grant exclusivity without a clear LOI that specifies a realistic purchase price and deal structure — exclusivity without a firm price is a negotiating disadvantage. Buyers should use the exclusivity period productively: begin SBA lender engagement, fleet inspections, and client contract review in parallel to compress the timeline. A 45-day exclusivity window aligned with a 45-day due diligence period is appropriate for most same-day delivery deals in the $1M–$3M range.

Conditions to Closing

Lists the conditions that must be satisfied before the transaction can close, including financing approval, due diligence completion, third-party consents, and regulatory approvals specific to the delivery industry.

💡 Client contract assignment consent is a real closing risk — some commercial contracts, especially in healthcare and legal verticals, have anti-assignment clauses. Identify these contracts early and begin consent conversations before finalizing the definitive agreement. The MAC clause should be defined narrowly to avoid sellers walking deals over minor revenue fluctuations. The Transition Services Agreement is critical in delivery businesses where the owner handles dispatch and client communication — negotiate minimum 90-day seller support with defined daily involvement hours.

Confidentiality and Non-Disclosure

Confirms that the terms of the LOI and all information shared during due diligence will remain confidential, and establishes the relationship of the LOI to any previously executed NDA.

💡 Driver and client notification timing is operationally sensitive in delivery businesses. A premature announcement can trigger client cancellations or driver departures before close. Plan a joint communication strategy with the seller as part of the transition plan — ideally announcing to clients only after close with the seller personally introducing the buyer. Do not allow the seller to notify anchor clients without buyer present.

Non-Compete and Non-Solicitation

Establishes the geographic scope, duration, and prohibited activities of the seller's post-close non-compete and non-solicitation obligations. This section is especially important in same-day delivery, where a seller could rapidly rebuild a competing operation using existing driver relationships and client contacts.

💡 Three years and 50 miles is standard for same-day delivery acquisitions. SBA lenders require the non-compete to be documented and allocated a portion of purchase price for the agreement to be enforceable and deductible. Sellers should negotiate carve-outs for passive investments and ensure geographic scope is defined by city or county rather than radius if they have family members operating in adjacent markets. Non-solicitation of drivers is often as important as client non-solicitation in a tight labor market.

Governing Law and Dispute Resolution

Specifies the state law governing the LOI and the method for resolving disputes arising from its terms or the proposed transaction.

💡 Choose arbitration over litigation for faster and lower-cost resolution of post-close disputes, which are common in earnout-heavy deals. Sellers should ensure the governing state is their home state of operations if possible, as familiarity with local courts and labor law can be advantageous. Buyers using SBA financing should confirm that their lender does not have specific requirements around dispute resolution language in acquisition agreements.