Confidential information Memorandum is a document used in M&A deals to collaborate sell side clients to market their business to prospective buyers. It is prepared by Mergers & Acquisitions Advisory firms or Investment Banks. At Veristrat, we have a seasoned professional team which understands the implications involved in preparing an ideal CIM for our client. We prepare CIMs with comprehensive due diligence and analysis. We include not just the right information in the CIM presentations but also present it in a way to make it a powerful marketing tool which a company can use to get the right price.

The summary of a CIM

  • Executive Summary: It is basically a 1-2 page summarized report of the entire Memorandum. This includes at least the below mentioned points:
    • Key Business Products and Services provided by the Company
    • Financial Overview – Revenue, EBITDA Margins, Cash Flow, profitability
    • The type of the Transaction
    • Investment summary
  • Investment Description: It is the section which covers the CIM details like the investment summary in detail, i.e. why would the “target company” be an excellent fit for the acquirer. Typically, it must involve the following:
    • The organization acts as a podium for market access and growth
    • The type of association it has with emerging players, providing best-in-class services and the opportunity to make on them for the acquirer.
    • The topmost opportunity from process expansion, cross-selling, reduction of cost, automation, etc.
    • Blue chip clients and longstanding relationship with them
    • Strong Order Book
    • Experience of the management and strong capabilities in business expansion
    • Strong position locally with international foothold
    • Potential for synergies
  • Overview of the Market: It is imperative for the acquirer to know the market size and current market trends. This is the obligation of the banker to give a summarized overview of the market and make the organization’s case stronger. The information it contains:
    • Market size
    • Key Topmost players in various business areas
    • Trend of various product lines
    • Growth trends in the market and the driving factors behind them
    • Mapping of the competitors with the “target’s ranking”
  • Overview of the Target Company: It contains basic details of the company such as:
    • Year of establishment
    • Company description
    • Business segments and its capabilities
    • Revenue, EBITDA and net income
    • Employee details
    • Representative set of customers
    • Place of headquarters with different office locations
    • Recent news about the company
  • Products and Services: This section contains a detailed analysis of the products and services offered by the company in its day to day business operations.
  • Revenue Profile: It shows the revenue profile of the company from different aspects, which is very important for the acquirer. It shows the revenue mix according to Geography, Product, Business Segments, etc.
  • Employee Profile: Division of the employees is shown so that acquirer has a reasonable idea of current personnel mix and can plan changes that will help them attain cost optimization, or whatever plan they plan to finalize it.
  • Customer Profile: The buyer would be interested to know what type of customers they would be serving in future.
  • Financials – previous and after: It is the most essential section from a valuation perspective, as it gives a summarized analysis of the income statement. It includes actual financial information from previous years, as well as financial projections by the management of the seller company. The hypothesis of such projections are also well defined so that the acquirer recognize the rationale for such projections.
  • Management Structure: A brief profile about key personnel of the company, highlighting their role(s) in the company, years of experience, previous work experience, etc.

How we support you?

  • Presenting how the company is an excellent fit for the acquirers and how it could create synergies for them.
  • Assisting our clients to get a summarized overview of the market and make the organization’s case stronger.
  • By providing basic details of the company such as required in overview of target company.
  • Analyzing the customer base of the company and represent the extent of diversification of the customers.
  • Performing comprehensive financial statement analysis.

At Veristrat we provide CIM services to clients across the globe. We provide a detailed analysis of each and every section discussed above. We have a learned and experienced team which assists our clients in preparation of CIM editorials and presentations.