Broker refusing to share financials Pre-LOI
I’m an engineer looking to acquire my first business, and I’ve been searching for about a year. I recently found an HVAC company very close to my home. It’s at the top end of my budget with an asking price of $2.7M.
When I initially spoke with the broker I asked for some basic financials, just P&L's to start. He deflected and said I should talk with the owner in person and set up a meeting.
The meeting went great. He mentioned that the business has been on the market for 6 years because the brokers keep sending him "hedge fund types" who he doesn't want to sell to. He seemed to prefer an individual buyer like me.
After the meeting, I reached out to the broker and asked for the Add-back to verify the claimed $700k SDE, as well as lease details. The broker is now pushing back, claiming I must sign an LOI and put down a refundable escrow deposit before they release any further info. He keeps emphasizing that the LOI is non-binding.
I’ve dealt with many brokers over the last year, and they've all eagerly shared P&L's before an LOI. I plan on telling him next week that I cannot make a formal offer or valuation without seeing at least one year of P&Ls and the Add-backs.
Am I in the wrong here? Is this a common or is the broker just being difficult?