Confidential Information Memorandum (CIM)
A detailed document providing comprehensive information about a business for sale to potential buyers.
Full Definition
A Confidential Information Memorandum (CIM), also known as an Information Memorandum (IM) or Sales Memorandum, is a comprehensive document prepared by the seller or their advisers to market a business for sale.
Contents typically include:
- Executive summary and investment highlights
- Business overview and history
- Products/services description
- Market analysis and competitive position
- Operational overview
- Financial information and projections
- Management team profiles
- Growth opportunities
- Transaction structure and process
Purpose of the CIM:
- Provide sufficient information for buyers to assess interest
- Generate competitive tension among bidders
- Set expectations about the business and transaction
- Reduce repetitive information requests
- Professional presentation of the opportunity
Best practices:
- Only provided after NDA is signed
- Balanced presentation (not just marketing)
- Financial data reconciled to audited accounts
- Clear disclaimers about forward-looking statements
- Regular updates if information becomes stale
A well-prepared CIM is essential for running an effective sale process and achieving best value.
Related Terms
Teaser
A brief anonymous document providing high-level information about a business for sale to generate buyer interest.
Non-Disclosure Agreement (NDA)
A legal contract protecting confidential information shared during M&A negotiations and due diligence.
Data Room
A secure repository where confidential documents are stored and shared with potential buyers during due diligence.
Due Diligence
The comprehensive investigation and analysis of a target business before completing an acquisition.