LOI, due diligence and warranties:
securing every stage of your M&A deal

Two business owners who have agreed on a price often think the hardest part is over. Experience teaches the opposite: this is when the deal is really decided. A poorly calibrated letter of intent locks the seller into a long exclusivity period with a buyer who takes their time — or leaves the buyer with no framework while the seller keeps playing other bidders off against them. Due diligence that is endured rather than prepared turns every finding into a reason to renegotiate. And a badly negotiated warranty and indemnity package can follow a seller for years after the sale, for amounts that seriously erode the proceeds of the deal. None of these subjects is so technical that it lies beyond the business owner; all of them deserve to be understood before they are signed.

The letter of intent (LOI) sets the framework: indicative price and structure, scope, timetable, exclusivity — limited in time —, conditions precedent and confidentiality. The art lies in saying enough to frame what follows without prematurely fixing what must remain negotiable. Due diligence comes next: financial, tax, employment, legal and sometimes IT. For the buyer, it verifies; for the seller, it is anticipated — a well-prepared data room and, on significant deals, a vendor due diligence carried out upfront turn this testing phase into a confirmation phase. Finally, the warranty and indemnity package (in French, garantie d’actif et de passif or GAP) turns the residual risk into contractual clauses: scope of the warranties, caps, de minimis and basket thresholds, claim periods, and the guarantee backing the warranty, which ensures the seller’s commitment is actually worth something. Every parameter is negotiated; none is standard.

A deal that drags is a deal that dies — teams lose interest, the market moves, doubts set in. Our first role is to hold the timetable: sequencing the phases, coordinating the due diligence providers and advisers, and keeping momentum between the parties. The second is preparation: on the sell side, we build the data room and anticipate the awkward questions before they are asked; on the buy side, we focus the due diligence on what really matters for price and risk. The third is negotiating, alongside your lawyers, the economic parameters of the warranty and indemnity package — caps, thresholds, claim periods — which we systematically translate for you into concrete scenarios: if a given dispute arises in two years’ time, what happens, who pays, and how much? A business owner who understands their LOI, due diligence and warranties signs with confidence — and sleeps better in the years that follow.