I Need a “CIM” to Sell My Company, But What Is It?

Twenty years ago, a “book” – now generally referred to as a Confidential Information Memorandum (“CIM”) - would be something very much like a book, and could be 75 to 100 pages or more, describing in excruciating detail the business being offered. For better or worse, in the past 10 to 15 years, CIMs have morphed into 10 to 15-page slide decks providing a broad outline of the business being offered.

Large companies will still often prepare 25- to 50-page decks, but you just don’t see those in M&A transactions involving small companies. The typical sections, and now they nearly constitute all the pages in the deck, are as follows:

·      Brief overview of the company

·      The core problem/challenge/need facing your customers

·      How your company uniquely and powerfully addresses the core problem/challenge/need

·      Product or service description

·      Your business model

·      Market overview

·      Overview of your people and organizational structure

·      Financial overview (i.e., summary historical (three years) and projected (three years) income statements and summary current balance sheet)

·      Contact information

A writer of a very long letter many years ago, and it’s not Mark Twain, despite the stubborn belief of many, said, “I’m sorry this letter is so long, but I didn’t have the time to make it shorter.” This is so true with sell-side CIMs. You want it to be brief. And you want it to be good, which usually means focused, conclusive, accurate, and engendering of greed or fear. In other words, you want it to be a powerful sales pitch.

Each page should make no more than a point or two or three and have a lot of blank space. A lot of meandering text does not make a potential buyer want your business more. In fact, it serves as a deterrent.

So, how do you prepare this CIM (and the Teaser, discussed in a coming post)? If you are marketing-oriented and a good writer and presenter, you may be able to do this yourself. If you are not, and many are not, look for someone in your company who is good at this, with whom you can work closely to prepare the materials. If the talent is not available in your company, how about using your ad agency or social media marketing firm to assist you? Finally, there are many online resources that can assist. For instance, do a search in Upwork (www.upwork.com) and you’ll likely find excellent, and affordable, writing and presentation talent. Or try some AI tools!  We have not yet found one that captures your story as well as a human M&A professional that knows precisely what will attract interest in your company, but we keep trying!

GROW and SELL Advisors, wholly-owned by Traversi & Co., LLC, is a premier sell-side M&A advisory firm – a boutique investment bank – serving the lower middle market.  Visit us here.

For a short video clip on this topic, click here.