Glossary
Information memorandum
The document prepared by the seller and its advisors that presents the business to prospective buyers: what it does, why it wins, its people, clients, financial performance and prospects.
In plain English
An information memorandum, often shortened to IM, is shared with interested buyers after they sign a confidentiality agreement. It is usually preceded by a short anonymised teaser used to gauge interest without revealing the identity of the business.
A good IM is honest and well-evidenced. It presents the business at its best without overstating, because everything in it will be tested in due diligence.
Why it matters
The IM sets buyers' expectations and frames the valuation conversation. Preparing it forces the business to articulate its own story, which is useful whether or not a sale follows.
What to watch for
- Reconcile every number in the IM to the management accounts.
- Be clear about the specialism and the evidence for it.
- Confidentiality agreements should be in place before the IM is shared.
Transaction language and legal treatment depend on the agreement and the jurisdiction. Written by Motion Advisory Partners as general guidance, not legal advice.