Before the Letter of Intent

Pat Trysla has been doing deals for forty years, the first stretch as a mergers and acquisitions attorney and the last twenty-two as founder and CEO of Frontier Investment Banking. His firm is referral only. Its clients have run as large as $75 million EBITDA, and one of them sold to a Berkshire Hathaway company last year. In this conversation with John Christensen, JD, CFP®, and Cameron Bond, CFP®, Pat describes what a competitive process actually looks like at that scale. On one recent recapitalization his firm took the company to more than 1,500 potential buyers, drew roughly 200 interested parties and over 75 offers, and worked the field down to three finalists. He also walks through arithmetic most owners have never seen: a $100 million valuation, an 80/20 structure, $80 million to the owner at closing, and, because of leverage and tax-deferred rollover treatment, 30 to 35 percent of the go-forward company still owned by the family. For a family whose net worth sits almost entirely inside one operating business, that arithmetic is the center of the conversation because a sale does not simply convert a company into cash. It permanently restructures the family balance sheet, resets who owns what across generations, and closes a set of planning options that cannot be reopened once a letter of intent is signed. The through-line is that LOI signature. Before it, nearly everything is still available: price, terms, structure, how the family holds ownership, and what has been committed to charity. After it, though, the list of what can be changed is short.