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Confidential Information Memorandum Template
Confidential Information Memorandum Template
[Logo of Company]
Copy Number __
[Date]
[LOGO of Company]
Table of Contents
1.0 INTRODUCTION........................................................................................................................ 1
2.0 EXECUTIVE SUMMARY.............................................................................................................. 2
3.0 INVESTMENT THESIS................................................................................................................ 3
4.0 OVERVIEW OF THE MARKET..................................................................................................... 4
5.0 OVERVIEW OF THE COMPANY................................................................................................. 5
6.0 PRODUCTS AND SERVICES....................................................................................................... 6
7.0 REVENUE PROFILE.................................................................................................................... 7
8.0 EMPLOYEE PROFILE................................................................................................................. 8
9.0 CUSTOMER PROFILE................................................................................................................. 9
10.0 FINANCIAL HISTORICAL & PROJECTIONS.............................................................................10
11.0 MANAGEMENT TEAM............................................................................................................. 11
12.0 APPENDIX............................................................................................................................... 12
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1.0 INTRODUCTION
A few years ago, Google bought Motorola. So what were the kind of information Google received
that it decided to purchase Motorola for a whopping $12.5 billion. What are the things that are not
known in the public domain, but are very important for any company to know is put in a document
called Confidential Information Memorandum.
In any M&A deal, once the buyer and seller enter into transaction mode, they sign a NDA, which
restricts either party from using confidential information they are supposed to receive through CIM.
The information contained in the document is confidential as it gives a “detailed insider analysis” of
the company, hence the document is called “Confidential Information Memorandum (CIM)” or
“Offering Memorandum” or “Information Memorandum (IM).”
Contents of CIM:
1. Executive Summary
2. Investment Thesis
3. Overview of the Market
4. Overview of the Target Company
5. Products and Services
6. Revenue Profile
7. Employee Profile
8. Customer Profile
9. Financials – Historical and Projections
10. Management Structure
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This one provides a summary of the entire CIM. It contains the following:
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It contains the investment rationale in detail, i.e. why would the “target company” be a
great fit for the acquirer. It will show the USPs of the company. Typically, it may include
the following:
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Year of establishment
Company description
Business segments and its capabilities
Revenue, EBITDA and employee details
Representative set of customers
Place of headquarters with different office locations
Recent news about the company
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This section contains detailed analysis of the products and services offered by the
company in its day to day business operations.
For the product categories, the company will include a list of the products it offers
under various segments, the differentiating factors of the products, the target
segment of each product, etc.
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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 Geo, Product,
Business Segments, etc. By showing the information in this manner, buyers can see
where the major revenue comes from and if it is aligned with their business strategy.
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Segregation of the employees is shown so that buyer has a fair idea of existing
personnel mix and can plan changes that will help him achieve cost optimization.
Employee profile can be shown in several ways, including by way of Function,
Qualifications, Age, Geo, Designation Pyramid, etc.
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For any acquirer, it would be important to know what kind of customers the company
would be serving in future. Some of the popular questions the acquiring company
would be interested in includes: Will the customers be large enterprise customers or
too many small customers, years of relationship with the customers, revenue
contribution from Top 5 or 10 customers, etc.
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This is perhaps the most important section from a valuation perspective, as it gives a
detailed analysis of the profit and loss account. It contains actual financial information
from previous years, as well as financial projections by the management of the target
company. The assumptions of such projections are also written so that the buyer
understands the rationale for such projections.
Since the target company is preparing the projections, it will try to show the
company in a very positive position and make it attractive in order to achieve a
higher valuation.
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A brief profile about key personnel of the company is shared below, highlighting their
role(s) in the company, years of experience, previous work experience, etc.
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12.0 APPENDIX
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This document is for educational purposes only and should not be used for any other reason.
https://corporatefinanceinstitute.com/
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