THE OFFERING MEMORANDUM: FRAMING THE STORY

The mergers and acquisitions (M&A) sales process begins with the preparation of a thorough Offering Memorandum (OM). This critical document provides the framework for profiling a company and positioning it for sale.

An effective OM requires collaboration between the Sellers and the M&A advisor to capture the essence of the business. These conversations will include:

• Company overview – history, who we are, what we do
• Define the core business – processes, technologies
• Strengths and weaknesses – success factors, opportunities, challenges, shortcomings
• Description of the industry & competition – market analysis
• Financial and/or contractual obligations
• Description of the work force – key executives/managers, backgrounds, personnel
• Major contracts and customers
• Normalized and recast financial statements – including original statements prepared by an independent CPA

A properly prepared OM should summarize essential business information with the intent to engage numerous prospective buyers in a negotiated sale of the business. The OM will serve as the backbone of the negotiations process; providing a clear and detailed story, ensuring a successful transaction.