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O P I N I O N
The seller series, part 3
A confidential information memorandum, also referred to as the “deal book,” is a document drafted by an M&A advisory firm and used in a sell-side engagement to market a firm to prospective buyers. The confidential information memorandum will save you a lot of hassles when and if you want to sell your firm, so have one crafted.
The CIM is one of the most important documents prepared in the sales process, because it explains the intricacies of the firm being sold and provides a prospective buyer with the necessary information to generate an initial offer. This is different from a “teaser” because it contains detailed confidential information. Most design professionals understand the importance of investing in high-quality marketing material to sell their services, but many fail to appreciate the importance of possessing and maintaining professionally prepared materials within their own company. This investment is instrumental when it comes time to explore an M&A transaction. Having a well-crafted CIM will have a substantial impact on the success of the M&A process in three areas: speed, efficiency, and
buyer perception. It’s also important for the CIM to clearly articulate all of the firm’s attributes in order to fetch a premium valuation. WHY DO YOU NEED A CIM? After a prospective buyer has been identified and an NDA has been executed, what do you do next? This is where a CIM comes into play. Its purpose is to help other firms un- derstand your company and the unique strategic investment opportunity it presents. The typical components of a CIM within the AEC industry include: ❚ ❚ Executive summary ❚ ❚ Company history
Noah Hunt
See NOAH HUNT, page 10
THE ZWEIG LETTER January 1, 2018, ISSUE 1229
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