Selling a private school is one of the most important decisions an owner will ever make.
You negotiated hard. You signed the Letter of Intent (LOI). It feels like the deal is done. In reality, you are only at halftime. Most deals that fail do so between LOI and closing, not in the initial negotiation.
This is where process, preparation, and experienced M&A guidance make the difference between a smooth closing at full value or a painful re-trade, delay, or collapse.
In this article, we will walk through what happens after you sign an LOI to sell your private K-12 school, boarding school, or career college, and how to navigate each step so you actually close on the terms you agreed.
1. Understand What You Really Agreed To In The LOI
The LOI sets the framework for the entire transaction. It is usually non-binding on most points, but it is binding on some critical ones, such as exclusivity and confidentiality.
Key points to review carefully once the LOI is signed:
Valuation and structure: Purchase price, cash at closing, vendor financing, earn-outs, and any equity rollover.
Assets versus shares: Are you selling the operating company, the assets, or both the school and the real estate?
Working capital: How much working capital must you leave in the business at closing? Many owners are surprised here.
Exclusivity period: How long have you been prevented from talking to other buyers?
Conditions precedent: Regulatory approvals, lender consent, landlord consent, board approvals, and other conditions that must be satisfied before closing.
After the LOI, everything you and the buyer do must be consistent with these terms or explicitly renegotiated. This is where having an experienced M&A advisor on your side helps you avoid “creep” that quietly erodes value.
2. Prepare For Buyer Due Diligence
Once the LOI is executed, buyers move quickly into detailed due diligence. Their objective is simple. Confirm that what they are buying matches what was presented and paid for in the valuation.
2.1 Build A Proper Data Room
For a private school, a well-organized virtual data room is essential. It should typically include:
Historical financials and tax returns
Enrollment trends, retention, and waitlist data
Tuition schedules and discounting policies
Payroll and staffing schedules, faculty contracts
Key policies, handbooks, and risk management documents
Accreditation reports and Ministry or regulatory correspondence
Lease agreements and any real estate-related documents
Licenses, approvals, and program registrations
Material contracts. transportation, catering, IT, outsourced services
If you do not control the flow and context of information, you increase the risk of misunderstandings, delays, or unnecessary price chips. An M&A advisor who specializes in schools knows in advance what an institutional buyer will request and how to present it.
3. Manage Educational Licensing And Regulatory Approvals
Unlike many conventional businesses, private schools operate in a regulated environment. The share sale may be legally straightforward, but regulators and ministries still expect proper notification and, in some cases, formal approval.
Typical issues for private school transactions include:
Provincial Ministry of Education recognition and private school registration
Credit-granting authority and the ability to issue high school diplomas
Designation for student aid or international students (for example, DLI, EQA, state and federal approvals, SEVP in the U.S.)
Professional and program accreditations for career colleges and specialized programs
Immigration and visa implications for international students
Missing a regulatory step can delay closing or even trigger a renegotiation if the buyer has to carry the risk. Early planning, clear communication with regulators, and an agreed change-of-control plan are crucial.
4. Coordinate With Your Legal And Tax Advisors
Once the LOI is signed, your lawyers and tax advisors move into the foreground.
They will:
Draft and negotiate the share or asset purchase agreement
Address representations, warranties, indemnities, and survival periods.
Structure the transaction to minimize tax leakage.
Deal with consents from lenders, landlords, and other counterparties.
Ensure non-compete and non-solicitation covenants are appropriate
For school owners, the challenge is often not understanding each clause in isolation, but understanding how all these pieces affect risk, net proceeds, and what can come back on you years after closing. An M&A advisor who understands education deals can translate between “legal” and “commercial” and keep everyone focused on the real issues.
5. Protect Value Around Working Capital, Normalized EBITDA, And Re-Trades
One of the most common frustrations for school owners is the “price chip” that appears late in the process. Often it shows up as:
New adjustments to normalized or adjusted EBITDA
Disputes over what constitutes “normal” working capital
Requests for larger holdbacks or longer earn-outs
Buyer concerns about enrollment, staffing, or regulatory risk
Many of these disputes can be managed or avoided if the LOI and financial materials are properly prepared before going to market. However, even with good preparation, buyers may still test the boundaries after due diligence.
From LOI to closing, you need someone at the table whose only job is to protect the economic value of your deal, challenge unfair adjustments, and keep the discussion grounded in facts. That is the role I play for school owners.
6. Plan The Closing And Transition Early
Experienced buyers care as much about the first 12 months after closing as they do about the closing date itself. A credible transition plan reduces perceived risk and supports the price you negotiated.
For private schools, transition planning should address:
How and when parents, students, and faculty will be informed
Continuity of leadership and key staff retention
Branding and reputation. will the school name and ethos be preserved?
Integration of systems, policies, and reporting
Owner’s ongoing role, if any, after closing
A thoughtful plan reassures the buyer, protects your legacy, and instills confidence in your community that the school is in good hands.
7. Common Reasons Deals Fail After The LOI
Many school owners are surprised by how fragile a deal can be after the LOI. Common reasons for failure include:
Incomplete or disorganized information in due diligence
Unexpected issues in financials, enrollment, or compliance
Regulatory approvals are taking longer than expected
Misalignment on working capital or earn-out metrics
Breakdown in communication or loss of trust between parties
Most of these issues can be anticipated. With a disciplined process, deals that should close, do close.
8. How An M&A Advisor Specializing In Private Schools Keeps Your Deal On Track
Selling a private school is not the same as selling a generic business. The mix of regulation, reputation, community, and emotion is unique.
From LOI to closing, a specialized advisor can:
Coordinate and manage the entire due diligence process
Anticipate buyer questions and position your school positively
Lead value-critical negotiations on working capital, EBITDA adjustments, and earn-outs
Work with your legal and tax advisors so that commercial and legal terms align
Keep momentum when buyers, boards, and regulators move slowly
Act as a buffer under challenging discussions so relationships are preserved
My role is to protect your valuation, manage risk, and increase the likelihood that your deal actually closes on the terms you agreed to.
9. FAQs. What School Owners Ask After Signing An LOI
What happens after I sign an LOI to sell my private school?
You enter a period of exclusive negotiation with the buyer. During this period, buyers conduct detailed due diligence, draft the purchase agreement, organize financing, and seek regulatory and third-party approvals. You and your advisors work to provide information, negotiate final terms, and plan closing and transition.
How long does it take to close a private school sale after an LOI?
Timelines vary, but many transactions take three to six months from LOI to closing. Regulatory approvals, lender and landlord consents, and the complexity of the deal can extend that timeline.
Can the price change after LOI?
Yes, buyers sometimes attempt to adjust price based on due diligence findings, working capital, or updated financial performance. Strong preparation and experienced M&A representation are key to defending the value agreed in the LOI.
Do I really need an advisor once I already have a buyer and an LOI?
This is when an advisor is most valuable. The LOI sets the outline. The true economics, risk allocation, and closing certainty are determined in due diligence and the final agreements. An advisor who specializes in private school M&A knows the pressure points and how to navigate them.
10. Next Step. Talk With An Advisor Before You Move Beyond The LOI
If you have signed an LOI to sell your private school or you are considering offers, you are at a critical stage. The decisions you make in the next three to six months will determine:
Whether the transaction closes
How much do you actually receive after all adjustments
How protected you are from future claims
What happens to the school community you spent years building
Our firm, Halladay Education Group, focuses exclusively on M&A advisory for private schools, boarding schools, and career colleges in the U.S., Canada, and internationally. We have guided owners through this process many times and understand the unique dynamics of education deals.
If you would like a confidential discussion about your LOI, deal terms, or next steps:
Call: 1-800-687-1492
You do not need to navigate the LOI-to-closing process alone. A focused, disciplined approach can protect your legacy and maximize the outcome from the sale of your school.
