Confidential Information Memorandum

The Confidential Information Memorandum (CIM), also called a Pitch Book, is a document that details the opportunity being presented to buyers. The goal is to provide buyers with all the information they need to decide whether or not to submit a letter of intent and/or meet with your client and carry out a site visit. The Confidential Information Memorandum is an important tool for creating a positive perception of your client’s company, so it is worth using an advisor who spends time and money to do an excellent job.

The Confidential Information Memorandum is sent out to potential buyers who respond to a blind teaser and sign a non-disclosure agreement. It should be very informative, including meaningful information that is not common knowledge, and create desire in buyers. Right away, it sets the tone for how much value buyers place on the business—if it’s nicely designed, properly organized, and well written, buyers will immediately see more value. It’s important that there is full disclosure to ensure buyers don’t uncover any surprises during the due diligence process.

The Confidential Information Memorandum includes a description of the sale process, including how it will work and when specific actions, such as submitting a letter of intent, should be taken. This puts the seller in control of the process.

The CIM also outlines the deal structure: the type of sale (assets or shares), payment of purchase price, and the terms of your client’s management contract with the buyer.


Although the CIM contains a great deal of information about your client’s business, care should be taken to avoid disclosing highly sensitive information until the number of buyers has been reduced to those who are very interested. This is done to guard against, and minimize the potential damages of, a breach of confidentiality. Highly sensitive information will be made available to buyers in a secure data room set up by the M&A advisor. 

Preparing The Confidential Information Memorandum

Providing information for the CIM will account for much of the time your client is required to spend on the sale of the business. Your client will need to provide all information requested by the M&A advisor and have periodic face-to-face or phone meetings for progress updates. The advisor needs to understand all aspects of the client’s business in order to prepare a pitch book that will capture buyer interest and create desire to move forward.

The time your client spends providing information can be reduced if there is a comprehensive business plan the M&A advisor can draw on. Information can be provided in written form as well. You may be able to help your client gather information to reduce the workload.

Information Required

The Confidential Information Memorandum should include the following:

1 Business Overview

  • History and description
  • Corporate structure
  • Industry and community involvement
  • Strengths and weaknesses
  • Opportunities for growth, threats faced
  • Sale considerations (deal structure)

2 Financial, Legal, and Information Systems

  • Financial analyses
  • Legal issues and contracts
  • Facilities and fixed assets
  • Information system descriptions and capabilities

3 Organization and Human Resources

  • Organizational structure
  • Owners and managers: bios, roles, duties, compensation
  • Employee statistics: pay rates, turnover, etc.
  • Consultants and independent contractors
  • Details of family members involved in business
  • Safety, benefits, training

4 Industries and Markets

  • Industries and markets served
  • Current market conditions, trends, and outlook
  • Threats and challenges
  • Potential new industries and markets

5 Competition

  • Description of major competitors
  • Strength and weaknesses
  • Competitive advantages
  • Barriers to entry of new competitors

6 Customers

  • Characteristics and demographics
  • Description of major customers
  • Significant contracts
  • Attrition rate and potential new customers

7 Products and Services

  • Descriptions
  • Intellectual property
  • Obsolescence and new products/services
  • Suppliers and contractors
  • Production, fulfillment, and distribution
  • Capacity

8 Marketing and Sales

  • Marketing strategy, plan, and programs
  • Sales, distribution, and pricing strategies
  • Sales systems and techniques
  • Selling process
  • Detailed sales analysis by industry, market, products, customers