Expressions of interest: what happens when a buyer is interested in your agency

What is an expression of interest?

An expression of interest is a buyer's first signal, usually in writing, that it wants to look seriously at acquiring your agency. In home care it typically arrives after the buyer has seen an anonymous summary or had a first call, and before it has seen your claims, payroll or payer contracts. It can be a one-page letter, an email with a price range, or simply a request to learn more.

The names vary and mean roughly the same thing. Bankers running larger sales say indication of interest, or IOI. Others say expression of interest (EOI) or non-binding proposal. What matters is what the message says about price, structure and conditions, not what it is called.

What does a buyer's interest commit either side to?

Almost nothing. Price, structure and timing in an IOI are non-binding, and either side can walk away without owing the other anything. The one thing that does bind is the NDA the buyer signed to see your information, and it keeps applying whether or not the deal goes ahead.

Watch for a buyer that tries to attach obligations at this stage. The common one is exclusivity. In the sale of Enhabit, a public home health and hospice operator, the eventual buyer asked for exclusive talks again and again over 13 months, starting at $9.00 per share. The board never granted it, kept other bidders in the process, and signed at $13.80. The same logic holds for a $3 million agency: exclusivity belongs in an LOI, after you have compared buyers, not in an IOI.

Not binding

The price range, the structure, the timeline, and what the buyer says about your staff and your role.

Binding

The NDA already in place, and any clause the IOI expressly calls binding. Read the last paragraph for these.

Should not be there

Exclusivity, a no-shop promise, or a fee you owe if you sell to someone else.

How is an IOI different from a letter of intent?

An IOI says the buyer would pay something in a range if what you have told it holds up. An LOI names a price and structure and asks you to deal only with that buyer while it confirms them. The LOI comes after the buyer has reviewed your data room and met you. Its price and structure are still mostly non-binding, but its exclusivity, confidentiality and expense clauses usually bind. Our letter of intent guide covers those clauses one by one.

Formal IOIs are mostly a tool of banker-run sales with many bidders, where they are used to narrow the field. In smaller home care deals it is common for a buyer to go from an anonymous summary, an NDA and two or three calls straight to an LOI, especially for a personal care agency with a few million dollars of revenue. That is normal. The questions below still apply to whatever the buyer says about price before the LOI, written or spoken.

What should you do when a buyer expresses interest?

Answer promptly, ask what the price range is based on, and share nothing that identifies your agency until an NDA is signed. Then give every serious buyer the same documents on the same day, so their numbers are comparable and nobody pulls ahead because they saw your payer mix a week earlier.

Keep your own notes on each buyer: which home care segments and states it already operates in, how it plans to pay, and what it said about your caregivers, your office staff and your role after closing. Those notes will matter more than the first number it quotes.

What a sample IOI for a home care agency looks like

A useful IOI answers six questions: how much, based on what, paid how, funded how, subject to what, and how fast. The sample below is written for a fictional Ohio agency with personal care and Medicare home health lines and $500,000 of adjusted EBITDA. The next section takes it apart line by line.

What each line of the sample tells you

Read an IOI as a list of assumptions, each of which can move the price later. The table pairs each part of the sample with the question to put back to the buyer.

IOI vs. LOI, side by side

The two documents can look alike on the page. The differences are in timing, precision, and which clauses you can be held to.

How to read an IOI critically

Start with the width of the range. A buyer that writes $2.0 million to $2.5 million has not yet decided what your agency is worth, which is normal at this stage. With only one buyer at the table, diligence findings usually pull the final price toward the bottom of the range, so judge the letter by its low number, not its high one.

Then find the earnings figure underneath. "As presented" means the buyer used your add-backs without testing them. Its quality of earnings review will test them later, and every dollar of EBITDA it removes comes off the price at the multiple. In home care the usual targets are family members on payroll, owner pay normalization, caregiver overtime, and paid time off that was never accrued.

Next, list the conditions that can move the price later. Home health agencies in Illinois, Ohio, Texas, North Carolina, Florida and Oklahoma are in Medicare's Review Choice Demonstration, so buyers will ask for your affirmation rate; CMS relieves agencies from most reviews once they reach a 90 percent full provisional affirmation rate. Open additional documentation requests, Medicaid recoupments and state survey findings come up in the same way.

Check change of ownership timing. For a Medicare home health agency or hospice, if majority ownership changed within the last 36 months, or the agency enrolled less than 36 months ago, the provider agreement and billing privileges do not convey to the new owner, who must enroll as a new provider and pass a new survey or accreditation. The main exception is two consecutive years of full cost reports. A buyer that has not asked about this has not done many home health deals.

Finally, look at certainty. A buyer paying with equity from a current fund or cash on hand is more likely to close at its number than one that still needs a lender's approval. Ask which home care agencies it has bought in your state: a buyer that already holds a license there knows the licensure steps, the Medicaid waiver programs and the wage rules.

What a real home health sale shows about IOIs

Public companies must disclose the history of their sale, which makes them one of the few places you can read IOIs in writing. Enhabit, a home health and hospice operator, described its process in its April 2026 merger proxy. The numbers are per share, not multiples, and your agency is far smaller, but the pattern is the one owners see.

On January 30, 2025, Kinderhook, the eventual buyer, sent a non-binding indication of interest at $9.00 per share with a request for exclusive discussions and an expiry date. Another bidder told Enhabit's bankers in June that it intended to offer about $12.00 and never submitted a formal offer. After CMS released proposed home health payment rates on June 30, 2025 that investors read as a cut, Kinderhook came back at $8.75, again asking for exclusivity, and the board rejected it. After CMS released more favorable final rates on November 28, 2025, indications came in at $12.00, $12.25 and $13.00. In February 2026 Kinderhook offered $13.35 and asked for exclusivity once more; the board refused while another bidder was still in diligence, and the merger agreement signed on February 22, 2026 paid $13.80 in cash per share. Part of the late increases reflected Enhabit's pending lawsuits, which have no counterpart in a small agency sale.

Three lessons carry down to a small agency. Early numbers move with Medicare and Medicaid rate news, in both directions. A stated intention to offer is worth nothing until it is on paper. And exclusivity requested at the IOI stage is a request, not a requirement: Enhabit's board never granted it while other buyers were active, and the price rose.

What to ask the buyer before you send more

Reply to an IOI with questions before documents. Good buyers answer these in a call or a short email, and their answers tell you more than the range.

What to share once an NDA is signed

A buyer moving toward an LOI usually needs three years of financial statements plus the current year to date, revenue by payer and by referral source, monthly hours or census, caregiver headcount and turnover, licenses and accreditation, Medicare and Medicaid enrollment details including the date of any past ownership change, and any open audits or additional documentation requests. Put them in one data room and give every buyer the same version.

To keep several buyers moving at the same pace, answer questions in writing so everyone gets the same answer, and give one date by which you want each buyer's view of price and structure. You do not need a formal auction for this; you only need to stop one buyer from getting a month ahead of the rest. Have a healthcare M&A attorney read any IOI that asks for exclusivity or contains binding clauses, and every LOI before you sign it.

How buyer interest works with Lartico Capital

With Lartico Capital, a buyer's first step is an introduction you approve, not a priced IOI. You decide which buyers to meet. A buyer signs an NDA before it learns who you are, then reviews the details you choose to share.

From there you talk with buyers directly, and a buyer that wants to go further sends you an LOI. Lartico Capital does not run auctions, does not negotiate for you, and charges you nothing; the buyer pays the fee at closing. The questions in this guide are the ones to ask each buyer you approve.