Pitchbook and CIM writing solutions in preparation for mergers, acquisitions and capital formation projects across the middle-market.
We Create Pitchbooks & Offering Materials
A large amount of both treasure and time is spent by companies on marketing programs and marketing collateral to promote the business. Similarly issuers and sellers spend a great deal looking to draft an appropriate pitchbook for their stock offering or private business sale. Quality investment collateral can mean the difference between success and failure regardless of whether or not you are running a private placement or a outright business sale. Skimping on the essential elements of an extensive pitchbook or Confidential Information Memorandum (CIM) for your intended offering can be a bit short sighted.
As a company seller or issuer, a CIM/pitchbook or “book” includes all the essential and extensive elements of a business offering, including information on historical financial, marketing and operational performance, expected metrics on future prospects and information on personnel and other important qualitative measurements. Often private businesses are approached by an unsolicited offering from a single potential buyer. In this case, buyer and seller will typically sign an NDA. If the business does not yet have the “for sale” sign out, it is unlikely the selling firm will have the appropriate CIM or pitchbook in place. We often suggest a more broad-based marketing of the offering, rather than going with the first unsolicited bid, but that is a discussion for another time.
Even if the company is approached by a single buyer, it is important to put the company in the best possible light when entertaining such a potential suitor. The book will provide all the necessary elements a buyer would want to see when looking to make a strategic investment in the company. Typical books include the following:
- Executive Summary — A general executive summary includes a brief, but helpful overview of the business, its performance and its potential as a good investment.
- Company History — A complete historical outline of the business, including its founding, general operations and on-going prospects will be included in the company history section.
- Manufacturing Process and/or Sales Capabilities —Most firm's maintain a core competency that may set them apart from regional or national competitors. The capabilities section may outline some of the company's most unique and proprietary internal skills.
- Management Team and Org Chart—The deck will include biographical information on management as well as a typical organization chart of the company.
- Growth Prospects—Does the company have large potential contracts on the horizon? Has the company grown rapidly on a historical basis? Does it expect to maintain this growth into the future?
- Industry & Competitive Landscape—The overall health and growth prospects of the industry in question will be included in the relevant marketing materials. Is the industry growing or shrinking? What are the market's expectations over the short and long term? This section often requires a great deal of industry knowledge and Investment Banking Analyst research.
- Company Assets & IP—Many firms own significant assets, including intellectual property. In the company assets section, the company assets are not only listed, but often the qualitative value of such assets is discussed.
- Historical Financials—Most pitchbooks include financials for up to five years or more. Also included will be expected financial projections along with corresponding assumptions for growth going forward.
Why You Need Professional Offering Documents
Not every CIM is created equally. Each will be custom-tailored to match both the offering (e.g. sell-side M&A vs. capital raise) and the underlying business. A properly drafted pitchbook will streamline the deal process and timing as it helps to fast track questions that lead to a Letter of Intent. In addition, if written extensively, a pitchbook can assist in fast tracking certain due diligence items by preemptively answering detailed underlying questions about the business before they arise. Most important is the streamlining of dealing with multiple buyers and investors. An appropriate pitchbook saves the time of multiple phone calls answering many of the same questions from ten or more different parties.
Additionally, many uninterested buyers may pass after simply reading the pitchdeck without the need for a long, time-consuming conference call to discuss the opportunity, saving everyone valuable time. Furthermore, conference calls with interested buyers who may have already reviewed the pitchbook in detail means the conversation is likely more meaningful, covering quality topics in more detail. Not only does the pitchbook set the tone for future conversations, it is a method of putting the company’s best foot forward when headed toward a potential transaction.
Even if your firm is not currently actively selling securities, preemptively drafting a pitchbook or CIM has several benefits. First, the exercise of assembling the materials incident to a pitchbook can be helpful to current owners and managers at visualizing the company in the eyes of potential buyers. It may also create a scenario that allows management to see the business more holistically, helping to solve inefficiencies and improve the overall business. Said differently, perhaps the pitchbook uncovers problems like customer concentration, inefficient processes or holes in the management team—all items that should be amended before heading to market. A quality pitchbook can also be a great tool in seeking debt financing from traditional banks. Finally, drafting an initial pitchbook years before your intended transaction will save your company time to market when it does come time to eventually sell as much of the material is likely still relevant and may simply require a simple update at the time of a transaction.