Confidential Information Memorandum (CIM)
A detailed document prepared by sellers or brokers providing comprehensive information about a business for sale, including financials, operations, and growth opportunities.
A Confidential Information Memorandum (CIM) is a comprehensive document prepared for potential buyers that provides detailed information about a business for sale.
CIM Contents
Executive Summary
- Investment highlights
- Business overview
- Asking price and terms
Business Description
- History and background
- Products/services
- Competitive advantages
- Customer overview
Financial Information
- 3-5 years of historical financials
- Adjusted EBITDA/SDE calculations
- Revenue breakdown
- Expense analysis
Operations
- Facilities and equipment
- Employees and organization
- Key processes and systems
- Supplier relationships
Growth Opportunities
- Expansion possibilities
- Untapped markets
- Operational improvements
Who Prepares CIMs
- Business brokers: For most small business sales
- Investment banks: For larger transactions ($10M+)
- Sellers directly: Less common, usually lower quality
CIM Red Flags
- Missing or incomplete financial data
- Vague customer descriptions
- Unrealistic growth projections
- Heavy reliance on add-backs
- No clear reason for sale
Related Terms
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