When selling a business, the Teaser and Info Memo are essential presentation documents. The Teaser is a concise document that gives potential buyers the opportunity to quickly assess their interest and sign a confidentiality agreement (NDA). This then enables them to receive the Info Memo, a detailed presentation file on which they can base their offer.
AKCEAN writes these documents in a factual manner, highlighting the company’s strengths and potential. The Teaser and Info Memo are drafted from the company’s documentation to describe and justify its activities, organization, positioning, financial performance and outlook, thus meeting the information needs of buyers.
The Teaser: a concise document to arouse interest
The Teaser, a single-page document, anonymously presents the company’s main activities and financial information, as well as the proposed transaction. This document is the first to be shared with a potential buyer after initial contact.
This document may include the following information about the company:
- Geographical area
- Years in business
- Description of activities and business model
- Number of employees
- Company strengths and outlook
- Key performance indicators: number of customers/products or services, sales, EBITDA
- Transaction scope and reasons for disposal.
The aim of the Teaser is to arouse the interest of the potential buyer, prompting him to ask for more information. If interest is confirmed, the buyer signs a confidentiality agreement (NDA), undertaking to keep the data shared confidential and to use it solely for the purposes of the planned transaction.
To preserve confidentiality, the company is given a code name in the Teaser, ensuring its anonymity until the NDA is signed.
Once the NDA has been signed, the prospective buyer receives the Info Memo, a presentation offering a more exhaustive description of the company and the transaction.
The Info Memo: a detailed, factual presentation of the company
The Info Memo is a detailed presentation of the company and the proposed transaction. It is generally consulted by the prospective buyer before opening discussions with the seller.
The information included in the Info Memo, discussed during meetings between the seller and the buyer, must be sufficiently detailed to enable the latter toobjectively analyze the company, make the acquisition decision and draft a letter of intent.
The drafting of the Info Memo is of particular importance, and requires a faithful and objective presentation of the company. For this reason, it is usually prepared by the seller’s M&A advisor. The accuracy and completeness of the information provided are decisive in establishing the mutual trust between buyer and seller that is essential to the success of any transaction.
That said, the need for transparency does not limit the document’s ability to highlight the company’s assets and potential. The Info Memo plays a key role not only in providing information, but also in highlighting the elements that make the company attractive.
Subsequently, the buyer will verify the information presented in the Info Memo. A factual document, backed up by the company’s documentation, will facilitate the due diligence process. The buyer can also forward the Info Memo to his or her bank, to facilitate the process of obtaining financing.
What should the Info Memo contain?
The purpose of the Info Memo is to provide a comprehensive presentation of a company’s operations and performance to a potential buyer. The number of pages in the document may vary according to the size of the company and the information to be detailed.
It is essential that the Info Memo adopts a coherent structure, highlighting the company’s major assets, such as its know-how, its team, its capacity to innovate, its market share, and other distinctive elements.
Here’s an example of an effective Info Memo structure:
- Key messages
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- Description of the company and the transaction
- Financial data: sales, EBITDA, cash flow
- Company strengths
- Company
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- History & development
- Business model
- Shareholders and legal structure
- Recent events and strategy
- Products & Services
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- List of products and services
- Positioning
- Key data: contribution to sales and profitability of each product or service line
- Resources
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- Employee organization chart
- Complete profile of key employees
- Locations and offices
- Production tools
- Operations
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- Procurement / Suppliers
- Production
- Distribution
- Research & Development (R&D)
- Internal processes
- Marketing & Sales Organization
- Customers
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- Customer typology & geography
- Customer concentration
- Order types
- Customer loyalty
- Market
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- Market characteristics and size
- Market growth
- Direct players and competitors
- Positioning
- Market share
- Financial data over the last three years
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- Sales (volume and price effects)
- Profitability by product or service and type of customer
- Income statement analysis (fixed and variable costs)
- EBITDA normalizations
- Balance sheet analysis (inventories, fixed assets, receivables, off-balance sheet items)
- Net debt & adjustments
- Working capital requirement (WCR) / Seasonality
- Capital expenditure (Capex)
- History and projections (income statement, balance sheet, cash flow)
- Latest available figures and current year budget
- Development plan
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- Strategic analysis (strengths, weaknesses, opportunities, threats)
- Current objectives
- Strategic plan & Outlook
If the acquirer wishes to establish a price and defend it, it may be wise to include valuation elements such as recent transactions, sector multiples and a financial model.
Finally, it is essential to include an analysis of growth prospects and possible areas for improvement. This approach enables the buyer to better project the company’s potential.
Last update: February 2024
