Information memorandum
An information memorandum (also known as an info memo or IM) is an important document in company takeovers and mergers (M&A). It is used to provide potential buyers with key information about the company being sold in a summarised form.
After signing the non-disclosure agreement (NDA), the information memorandum is sent to the potential buyer. It is a detailed document (usually between 50 and 80 pages) that describes the company in its entirety. It is considered a marketing document and should therefore emphasise the strengths and advantages of the company in a positive way.
The information memorandum usually contains the following information:
- Highlights of the company (e.g. market leader, niche provider, high margins, strong business model, etc.)
- Description of the market (characteristics, size, growth, market drivers and trends, competitive environment, etc.)
- Description of the company (history, products and services, customer classes, organisational and employee overview, management team, etc.)
- Financial figures: Actual figures and target figures.
Although the information memorandum is primarily a marketing document, the information it contains, and in particular the figures, should be able to be confirmed in the subsequent due diligence.