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Confidential Information Memorandum (CIM)

After creating the teaser, the investment banker goes into greater detail in a marketing document called a CIM. This document is distributed to buyers after the teaser and is for the serious buyers to do an in depth analysis of the target.

The CIM is the primary marketing document associated with sell side M&A. The document is filled with information on the target company including products/services, financials and markets. The teaser comes before the CIM and the NDA must be signed in order to get the CIM.

The typical breakdown of a CIM goes along the following lines:

1) Overview and Key Investment Highlights

2) Products and Services

3) Market

4) Sales & Marketing

5) Management Team

6) Financial Results and Projections

7) Appendices


As an investment banker, you are going to want to demonstrate the following:

The company’s best days lie ahead of it. There are strong growth opportunities, plenty of ways to improve the business, and right now is the best time to acquire the company.

The company’s sales are growing at a reasonable clip (an average annual growth rate of at least 5-10%), its EBITDA margins are decent (10-20%), and it has relatively low CapEx and Working Capital requirements, resulting in substantial Free Cash Flow generation and EBITDA to FCF conversion.

The company is a leader in a fast-growing market and has clear advantages over its competitors. There are high switching costs, network effects, or other “moat” factors that make the company’s business defensible.

It has an experienced management team that can sail the ship through stormy waters and turn things around before an iceberg strikes.

There are only small risks associated with the company – a diversified customer base, high recurring revenue, long-term contracts, and so on, all demonstrate this point.

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