The confidential information memorandum is the document a buyer reads before they meet you. It is written by your adviser, it is released under a non disclosure agreement, and it does the work of thirty conversations. It also sets every expectation that diligence will later test.
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What is a CIM in business, and what goes in it
What the business does and for whom, its history, the market and where it sits in it, the customers and their concentration, the people and who does what, the financial record with adjustments explained, and a view of why the business will keep earning. Twenty five to fifty pages is common. Longer is rarely better.
The adjustments are the risk
The adjusted earnings figure in the memorandum is the number every offer is built on, and it is the number diligence attacks. Every add back needs a document behind it before the memorandum goes out. An adjustment that cannot be evidenced does not just get removed; it makes the buyer check everything else twice.
What sellers most often get wrong
Presenting a forecast as though it were a record. Omitting a known problem that diligence will certainly find. Writing about the market rather than about the business. And describing the owner's role vaguely to hide how central it is, which never survives a management meeting and costs trust exactly when it is most expensive.
Questions people ask about cim M&A
Who writes the CIM?
Your adviser, from information you supply, with you reviewing it. If you are selling without an adviser, a shorter information document written by you does the same job.
When is it released?
After a buyer signs a non disclosure agreement, and often after some evidence of funds. It should not go to anyone who has done neither.
Should it include a price?
Usually not. Naming a price caps the outcome; letting buyers bid is the point of running a process.
What is a confidential information memorandum?
The document a buyer reads before they meet you. Your adviser writes it from information you supply, it is released only under a non disclosure agreement, and it sets every expectation that diligence will later test.
Is there a CIM example I can work from?
Not a specimen document, and a generic one would mislead, because the memorandum's whole value is that the adjusted earnings figure in it is evidenced for your business. What transfers is the structure set out above, and the discipline that every add back has a document behind it before the memorandum goes out.