The Confidential Information Memorandum

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

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