Prospectus.com is a world class leader in writing and drafting information memorandum documents, also known as a Confidential Information Memorandum or “CIM”.
An information memorandum is a document used to raise capital, either debt or equity. Worldwide usage of the term for a ‘book’ to raise funds varies from country to country, and often many companies based in Asia refer to the memorandum employed in raising money as an “information memorandum”. They are often used by mergers and acquisition firms or broker dealers or other advisory bodies.
Similar to other memoranda used to sell securities – such as a prospectus or offering memorandum – the IM, as it is often referred to, is a critical document utilized in the presentation to raise capital. The IM will detail key insights and benefits of the investment and allow perspective purchasers both to make an educated decision regarding infusing their own capital, and to actually invest immediately by subscribing to the securities.
Valuation of the Business
One of the most important reasons for creating the IM document is for the company to showcase its valuation to perspective purchasers. Often, however, the information memorandum omits any pricing of the company or its core businesses. This is done so that the selling company has an advantage by not giving away its bottom line pricing which would in turn most likely receive lower priced offers on purchase. The IM will provide sufficient data for any organisation seeking to acquire or purchase the company or securities to undertake its own valuation. Once the prospective buyers have done their valuation they will return to the seller with an offering price.
The Prospectus.com team can assist with the development of the IM and company valuation and bring in extra value by protecting our clients from low offers.
Attributes of the Information Memorandum (IM)
The following details should be included in the information memorandum:
- Thorough description of the business, its products and services;
- Summary of the sale and structure of the offering;
- Description of the market opportunities, and industry trends;
- Competitive analysis, barriers to entry for new competition;
- Risk Factors;
- Financial projections, historical performance, future projections;
- Management team, skills, and future personal needs;
- Growth opportunities and scalability;
- Future products and services.
An information memorandum is often viewed as a marketing memorandum or document. While this is not entirely the correct term, the IM in fact is the best marketing document a company can possess if they are seeking a sale of any kind. Since the IM provides the necessary attributes of the company, it is therefore the most powerful tool a company can utilize during the selling process.
Our team at Prospectus.com develops the memorandum in tandem with our client’s staff, ensuring that compelling information is included to attract buyers. Highlighting the performance, products and service offerings of the company is a key component of the information memorandum and instrumental in selling one’s company or securities.
- Prospectus Writing
- IPO Stock Exchange Listing
- Bond Offerings
- Feasibility Study
- Hedge Funds and Mutual Funds
- Offering Memorandum
- Private Placement Memorandum
- Offering Circular
- Explanatory Memorandum
- Information Memorandum
- Fund Setup Formation
- Securities Identifiers
- Registration and Filing
- Legal Work
- Escrow Services
- Business Plans