The confidential information memorandum is the document a seller sends to buyers who have signed confidentiality and shown genuine interest. What is a cim doing: telling the story of the business in enough detail that a serious buyer can decide whether to make an offer, without giving away so much that a competitor gains from reading it.
A CIM example: what goes in one
A cim example generally runs: an executive summary, what the business does and how it makes money, its market and position in it, customers and their concentration, operations and facilities, the team, three years of financials with an explanation of anything unusual, adjusted earnings showing owner add-backs, and a forward view with its assumptions stated. What is a cim in investment banking is the same document produced to a house style, usually longer and more formally presented, for larger deals with several bidders.
CIM mergers and acquisitions practice: why writing one is worth the effort
Cim mergers and acquisitions practice treats this as a marketing document, and it is, but its more valuable function for a seller is internal. Writing it forces you to answer, in advance and calmly, exactly the questions diligence will ask under pressure: why did margin move in that year, why is that customer so large, what happens if that contract ends. Every one of those answered well in the cim m&a document is an answer you are not improvising later when the cost of a poor one is much higher.
What to hold back from an M&A CIM
The m&a cim goes to people who may be competitors and will certainly be talking to others. Customer names, detailed pricing, employee identities and anything that would let a reader replicate the business are normally held back until later stages, described in aggregate rather than named. The judgement is between enough detail to attract a credible offer and little enough that a failed process leaves you no worse off. Erring toward aggregate early and detail later is the safer order and costs almost nothing in interest.
Questions people ask about confidential information memorandum
What is a CIM in investment banking, or a confidential information memorandum?
The document sent to buyers after confidentiality is signed, describing the business in enough detail for them to decide whether to make an offer.
What goes in a CIM M&A buyers read?
Executive summary, the business model, market and position, customers and concentration, operations, team, three years of financials with adjustments explained, and a forward view with stated assumptions.
What should be held back from a CIM?
Customer names, detailed pricing, employee identities and anything letting a reader replicate the business. Describe them in aggregate early and disclose specifics at later stages.