Letter of Intent Template for Acquiring a Medical Staffing Agency

Parties and Transaction Overview

Identifies the buyer entity, seller entity, and the legal structure of the proposed acquisition — whether an asset purchase or stock purchase. In medical staffing, asset purchases are most common because buyers want to avoid inheriting undisclosed wage-and-hour liabilities, worker misclassification claims, or prior licensing violations.

💡 Sellers should push back on blanket exclusions of liabilities and request a schedule of assumed liabilities be attached at LOI stage. Buyers should confirm whether Joint Commission accreditation, state staffing licenses, and MSP participation agreements are transferable under an asset structure, as some agreements require health system consent to assign.

Purchase Price and Valuation Methodology

Establishes the total enterprise value and how it was calculated, typically as a multiple of trailing twelve-month or trailing three-year average adjusted EBITDA. In medical staffing, EBITDA normalization must account for owner-operator compensation, personal vehicle and phone expenses, and any one-time pandemic-era revenue spikes from crisis-rate travel nurse contracts that are not representative of normalized operations.

💡 Sellers should provide a detailed addback schedule at or before LOI signing to prevent buyers from renegotiating the multiple after due diligence. Buyers should specify whether the stated multiple applies to a normalized margin that excludes pass-through payroll — a common inflator in staffing agency revenue — and confirm the EBITDA basis reflects gross profit on staffing spreads, not total billings.

Deal Structure and Consideration

Defines how the purchase price will be paid — including cash at close, seller note, earnout, and any equity rollover. Medical staffing acquisitions frequently include earnout provisions tied to the retention of named hospital system clients or aggregate gross margin performance, given the risk that client contracts may not survive an ownership change.

💡 Sellers should negotiate earnout measurement metrics that are within their control during a transition period, such as gross profit per named account rather than aggregate EBITDA, which can be affected by buyer overhead allocations. Buyers should define 'active and in good standing' with specificity — including minimum monthly billing thresholds — to prevent disputes over whether a dormant hospital account qualifies for earnout credit.

Exclusivity and No-Shop Provision

Grants the buyer an exclusive negotiating window during which the seller agrees not to solicit or entertain competing offers. This is critical in medical staffing deals because sellers often receive inbound interest from roll-up platforms and should not be locked into exclusivity before a buyer has demonstrated financial capacity and familiarity with healthcare compliance requirements.

💡 Sellers should resist exclusivity periods exceeding 90 days without a clear milestone schedule tied to buyer deliverables. Buyers should include a provision allowing them to terminate exclusivity and walk away without penalty if material undisclosed liabilities — such as a pending wage-and-hour claim or licensing violation — are discovered within the first 30 days of due diligence.

Due Diligence Scope and Access

Defines the categories of information the buyer is entitled to review and the process for accessing sensitive materials including credentialing files, client contracts, and recruiter compensation agreements. Given the regulated nature of medical staffing, due diligence scope should explicitly include compliance documentation that goes beyond standard financial review.

💡 Buyers should request a compliance summary memo from the seller's healthcare attorney before signing the LOI to surface known issues early. Sellers should limit physical site visits and direct recruiter interviews until later in diligence to reduce staff disruption and minimize the risk of premature sale disclosure to key employees.

Representations and Conditions to Closing

Outlines the seller's material representations that, if breached, give the buyer the right to renegotiate or terminate. In medical staffing, standard representations should be expanded to cover compliance-specific matters unique to the industry.

💡 Buyers should add a representation confirming that no key recruiter or account manager has given notice of resignation or been solicited by a competitor within the prior 90 days. Sellers should negotiate a materiality qualifier on the client concentration representation to avoid a technical breach if a hospital system temporarily increased utilization near the measurement date.

Confidentiality and Employee Notification

Addresses how the transaction will be kept confidential and when and how employees — particularly recruiters and account managers who are critical to agency value — will be informed of the pending sale.

💡 Buyers should insist on identifying key personnel by name in a confidential exhibit and tying seller note payments to minimum retention rates through the earnout period. Sellers should ensure the communication plan respects their relationships with long-tenured recruiters and avoids creating anxiety that triggers voluntary departures before close.