1. Information Memorandum (IM) or Offering Memorandum (OM):
- Purpose: This document provides detailed information about the company being sold. It includes an overview of the business, financial performance, market position, and growth potential.
- Content: The IM/OM generally includes the company’s history, operations, financial statements, business model, industry analysis, and future projections.
2. Confidentiality Agreement:
- Purpose: Before detailed information is shared, potential buyers often need to sign a confidentiality agreement (also known as a non-disclosure agreement or NDA).
- Content: This agreement ensures that sensitive information about the company remains confidential and is only used for evaluating the potential acquisition.
3. Data Room:
- Purpose: A secure online repository where buyers can access detailed documents related to the company.
- Content: Includes financial statements, legal documents, contracts, employee information, and other relevant data.
4. Teaser:
- Purpose: A brief, high-level summary of the business that is sent to prospective buyers to gauge their interest.
- Content: Provides a snapshot of the company’s key selling points and high-level financials without disclosing too much detail.
5. Due Diligence Package:
- Purpose: This is the comprehensive set of documents that potential buyers will review in detail before finalizing their offer.
- Content: Includes detailed financial records, legal documents, and other relevant data needed for a thorough evaluation.
6. Valuation Reports:
- Purpose: These reports help in determining the fair market value of the business.
- Content: Includes methods such as discounted cash flow (DCF), comparable company analysis, and precedent transactions.