What’s a Confidential Information Memorandum (CIM) in M&A?

A confidential information memorandum (CIM) is a document that markets your company to the most engaged and qualified buyers. Much like the luxury property market, the biggest and best acquisition opportunities have seldom been open to the general public. Instead, you’d circulate details to the right people, inviting only the most committed to the negotiating table. 

For years, brokers have used CIMs to advertise high-value companies for sale to small groups of buyers. Today, with platforms like Acquire.com, you can advertise your business to thousands of qualified buyers through one free account, regardless of the size of your company. CIMs and similar documents are, therefore, increasingly common in all but the smallest deals.

Below are the most important facts you need to remember when drafting a CIM and how we can help you draft one quickly and easily if you sell your SaaS on Acquire.com.

What Is a CIM?

CIMs are documents that you, a broker, or another intermediary creates to help sell your business. They are summaries of your operations that include your company:

  • Structure
  • History
  • Finances
  • Growth potential
  • Desired steps for courting buyers

A CIM gives potential buyers a first impression of your business so they can decide whether or not to pursue your company quickly. These documents also help buyers better understand how much you believe your business is worth.

How Are CIMs Used?

As the name implies, you’d normally distribute a CIM confidentially to a select group of buyers. Usually, a broker or other M&A intermediary creates a CIM based on the information you give them. Then they circulate a list of key data points from the CIM to potential buyers (often called the executive summary). From the initial group of interested buyers, the seller and brokerage create a vetted list that can access the full CIM and may eventually bid for the business.

How Do You Structure a CIM?

CIMs include just about everything to do with your business and should give any potential buyer a clear understanding of what you’re selling. Usually, they are divided into these categories: 

  1. Executive Summary – at-a-glance information to entice buyers to read further. It will usually cover the most relevant points from the greater CIM
  2. Business History – the highlights from your business’s past like acquisitions, renovations, marketing, and major pivots
  3. Investment Considerations – a review of your company’s competitive landscape, operations, business lines, products, and strategies, and how these elements could help the business grow further
  4. Financial Review – a detailed overview of your finances (short of a full financial audit). It might include a profit and loss (P&L) statement but at a minimum:
    1. Major cash flows
    2. Liabilities
    3. Assets
    4. Revenue
  5. Management – an overview of key employees that will be part of the transaction
  6. Process Considerations – how you wish to be solicited for a sale. This can include preferred deal terms and periods where you’ll take offers.

Example of a CIM

As all CIMs are confidential, few examples exist without extensive redactions. However, Wallstreetprep.com shares a CIM for a casino chain called American Casino and Entertainment Properties LLC (ACEP) drafted in February of 2007 by New York investment bank, Bear Stearns. 

You can see the full version here. I discuss the highlights below and explain how each section would correspond with the CIMs we create for SaaS businesses on Acquire.com. Each section header corresponds to a section of this CIM.

While this section isn’t included in this sample CIM, at Acquire.com we usually place a legal disclaimer at the beginning of the document. CIMs are not meant to be legally binding and often make subjective claims about the state of the business and future growth options. You don’t want a buyer to argue for revoking the sale because of the CIM.

As sales are sensitive, we also specify here that readers may only contact the founder about details regarding the CIM.

Executive Summary

In this executive summary, American Casino lists its three major properties (two in Las Vegas and one in Laughlin, Nevada). For each location, ACEP includes:

  • Recent renovations
  • Square footage
  • Revenue
  • Types of gaming machines in each casino

The executive summary also outlines the finances of each location and the percentage of revenue obtained from slots, rooms, food, retail, beverages, and more.

ACEP’s summary notes lower revenue levels the year before drafting the CIM (2006) due to construction projects at different casinos. This may give some insight into why they were selling – perhaps these updates impacted revenue more than expected.

Lessons for SaaS

If you were to create a CIM for selling an online business, your executive summary would also list your revenue-earning properties (say you sell a subscription software and an agency-style service) and give a brief overview of each.

At Acquire.com we usually use the overview section to describe any major peaks and valleys in performance and significant changes in the business and what caused them.

Investment Considerations

The CIM explains the value and market position of each location it owns. This section details the state of the overall casino market in Nevada and in each ACEP casino location.

For each casino location, Bear and Stearns also list ACEP’s:

  • Current growth rate
  • New renovations and how they will impact future growth
  • Total dollars invested
  • Competitive landscape

The section ends with a list of senior management, their tenure, and blurbs explaining how their combined experience (apparently over 100 years between them all) has helped the business.

Lessons for SaaS

For this section on Acquire.com, our brokers like to list things like:

  • Potential new products customers would be willing to buy.
  • Changes that would allow the business to handle ten times more customers.
  • Types of buyers ideal for growing the business.
  • How to best spend investment funds.

Business History and Description

According to the document, ACEP has three sub-holding companies and two of these have about three to four LLCs beneath them. There are no further details regarding each company’s role in the conglomerate.

After the business structure, the business history section describes (for each casino):

  • How much it initially cost to open.
  • When it was acquired by ACEP.
  • The dollar amount ACEP invested.
  • Description of its revenue generators (slot floors, restaurants, lounges, and so on).
  • Investment opportunities for each location.
  • The current business and marketing strategy for each location (target demographics, promotion tactics, communications channels, and more).
  • The current competitive landscape (in this case, other casinos near each casino).

It’s worth noting that in places where data is similar between casinos, this CIM more or less repeats itself word-for-word in each section.

Lessons for SaaS

Most startups and other tech businesses lack the operating history to justify a dedicated history section. Often, a brief overview of company history in the executive summary suffices for CIMs made on Acquire.com.

We usually use this section to focus on exactly who a SaaS business’s customers are, covering things like:

  • What customers care about.
  • How many customers you’ve recently lost.
  • Geographic area customers live in.
  • How the business encourages repeat purchases.
  • Average amount paid by customers.

As marketing makes up a huge portion of SaaS operations, we also create a separate section detailing your business’s marketing channels. This includes answers to questions like:

  • How is most new business generated?
  • Which channels are primarily used? (Social media, email, direct calls, and so on)
  • Do you use salespeople/sales reps?
  • What marketing have you tried that didn’t work?

Financial Review Management

The financial review section begins by repeating the financials highlighted in the executive summary verbatim. After this, it moves to an in-depth consolidated balance sheet showing the total liabilities for each member casino over the past four years.

This is followed by:

  • A four-year income statement breaking down ACES’ EBITDA.
  • A four-year consolidated statement for cash flows including:
    • Cash flows from operating activities (normal cash from the casino).
    • Cash flows from investing activities.
    • Cash flows from financing activities (business loans, debt, and so on).
Lessons for SaaS

When we create CIMs for SaaS businesses, we usually include a detailed profit and loss statement (P&L) from the past three years of operation. We then add a cumulative profit and loss statement across all years your business operated.


This section details each member of senior management (CEO, CFO, and GMs for each location) with information like:

  • When they joined.
  • Previous employment.
  • Any other organizations they are involved in.
  • University(ies) they graduated from and their highest degree obtained along with any other certifications or distinctions.
Lessons for SaaS

When we create CIMs at Acquire.com, we create a general overview of the company’s internal structure without naming names. This includes things like:

  • Number of employees (W-2s and contractors).
  • List of key employee positions along with salaries.
  • Whether or not these employees will remain with the company.
  • Employee autonomy (can they operate without the CEO?).
  • Employee benefits.
  • Recruitment process.

Process Considerations

ACEP indicates the deals they’re interested in pursuing. They even indicate an exact time and date for when they may receive an indication of interest (IOI) (they specify no later than 5:00 pm EST on Friday, March 2, 2007).

After receiving IOIs, Bear Stearns says they will notify a limited number of parties (“Invited Parties”) that they can continue to work towards a deal. Invited Parties have the opportunity to conduct additional due diligence, including:

  • Access to certain members of the ACES management team.
  • Access to a data room containing business and legal information.

The CIM finally signs off with a disclaimer that projections for investment may not turn out exactly as hoped and then leave the contact information for Bear Stearns.

Lessons for SaaS

We keep this section very simple, asking you to tell us:

  • The type of acquisition you want (100 percent or less).
  • Desired deal structure.
  • Assets included in the sale (usually things like codebase, IP, and web domain)
  • How you plan to transition to new management
  • Whether or not you would comply with a non-competition clause.

Who Sends a CIM?

Traditionally, seller intermediaries like brokers and investment banks draft CIMs after discussing them with a business’s leadership team. On Acquire.com, we’ll make a CIM for you when you sell your SaaS business (making at least $1 million in revenue) through our Managed By Acquire service and send it on to our buyer network.

Who Receives a CIM?

There are traditionally two steps when receiving a CIM:

  1. A group of buyers the brokerage selects receives only the executive summary section of the CIM with the business name redacted. If a prospective buyer is interested after reviewing the teaser, they’ll sign a non-disclosure (NDA) or a confidentiality agreement before viewing the rest.
  2. Buyers who sign an NDA gain full access to the CIM including the company’s name and operational and financial information.

How CIMs Work on Managed By Acquire

If you run a SaaS business making over $1 million in revenue, our Managed By Acquire service helps you court prime buyers from around the world. As part of that process, we create a quick and effective CIM for your business. It’s a simple process where:

  • We ask you to give us specific information about your business.
  • You send us everything you believe is relevant to your business (no need for an official document or proper grammar).
  • We put everything you’ve sent us into an effective CIM.
  • We’ll store it in a folder with your financials, operational information, and more, and then send it to potential buyers.

Once we start soliciting buyers for your business, we expect your deal to close in weeks, not months. All it costs is five percent of the sale – up to 80 percent less than most M&A banks and brokerages – payable only when (and if) you close.

Ready to get your SaaS business acquired? Sign up for a seller account and start soliciting buyers in hours.

Are CIMs Ever Used in Small Sales?

Official CIMs are rarely used in small sales. However, most for-sale listings on platforms like Acquire.com require a description very similar to an executive summary in a CIM before listing. You’ll likely need to cover all of the basic tenants of a CIM like:

  • Financials
  • Company structure
  • Future plans and investment concerns

How Long Does It Take to Write a CIM?

Traditionally, CIMs are lengthy documents anywhere from 50 to 150 pages long, and written by M&A intermediaries like investment banks, entrepreneurs, corporate finance firms, and business brokers. An official CIM can take anywhere from a few days to a few weeks depending on how much information is in there. But that’s changing today.

When you create a CIM for a SaaS sold through our Managed By Acquire service, we create this document for you in a matter of days.

Are There CIMs on Acquire.com?

Yes, if you sell a SaaS business with at least $1 million in revenue, you can use our Managed by Acquire service to solicit high-value buyers and we will help you construct a CIM.

If you sell your business through our marketplace, you don’t always need a CIM. However, you will need to provide much of the information frequently provided in a CIM’s executive summary – a sort of “micro-CIM” used to entice buyers.

Who Writes a CIM?

CIMs are usually created by M&A intermediaries like banks and brokers but they can be created by anyone. Usually, they’re created by an entity connected with many buyers. These entities should know exactly what to write to entice these buyers to buy.

Do You Need a CIM to Sell a Business?

Most businesses aren’t sold with a CIM. That said, many buyers will ask for many of the details included in a CIM’s executive summary before agreeing to buy a business. You may find yourself creating an informal CIM of sorts in most online sales. You’ll likely provide all of the information compiled in a CIM during due diligence too.

The content on this site is not intended to provide legal, financial or M&A advice. It is for information purposes only, and any links provided are for your convenience. Please seek the services of an M&A professional before any M&A transaction. It is not Acquire’s intention to solicit or interfere with any established relationship you may have with any M&A professional.

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