A Confidential Information Memorandum (“CIM”) is an important, detailed document created during the mergers and acquisitions process by investment banks to create a memorable first impact on potential buyers. It is an integral part of sell-side M&A. A CIM may also be referred to as the Offering Memorandum (OM), the Information Memorandum (IM), or simply, “the book.” A CIM is not legally binding, but rather a marketing document highlighting the key aspects of a business and its operations.
CIMs are created in the first phase of the M&A process by collecting detailed information from the selling party, such as financial records, product lists, capabilities, team, and market data – everything that is necessary to tell the story of the business. M&A firms will then compile this information into the CIM in a logical, concise format, ensuring it is detailed enough for a potential buyer to make a decision, while not risking the seller’s business by divulging too much information.
Importance of CIMs in Mergers & Acquisitions
CIMs are an incredibly important part of the sell-side M&A process, serving as a tool to help maximize the overall value of a client’s company. CIMs are the first (and often only) opportunity a seller has to tell their company’s story and make a lasting impression on potential buyers. M&A experts spend significant time writing CIMs and potential buyers spend significant time reading them. A well-written CIM should streamline the process and provide potential buyers with enough information to decide whether to pursue the M&A opportunity further.
What is Included in a Confidential Information Memorandum?
CIMs can vary from business to business but are always custom-made for the seller’s company.
Most often CIMs contain the following:
- Summary of Key Highlights: A high-level summary that showcases what is to come for the target company.
- Products and Services: An outline of the specific products and services that the target company is selling.
- Company Overview: An important area where M&A experts can tell the story of the target company’s culture, history, management structure, and much more.
- Growth Opportunities: These points outline major opportunities for the company, such as global expansion and an increased online presence.
- Industry Overview: This section describes the industry, its size, its players, and growth opportunities.
- Financial Overview and Projections: This section outlines the historical and projected financial performance of the company.
M&A is not just a numbers game, the story of your business is so much more than the cash flow it produces. At Persient, Our method of storytelling allows us to present your business to potential buyers and highlight the key aspects that separate you from others in your industry.
Choosing to work with us at Persient means you are choosing to exit on your terms. We are based in San Diego and serve clients across California and nationwide.
Investment banking services and securities offered through Independent Investment Bankers Corp., a registered broker-dealer, Member FINRA / SIPC. Persient LLC and Independent Investment Bankers Corp. are not affiliated entities. FINRA Broker Check.
