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What is a CIM?

A Confidential Information Memorandum (CIM) is the cornerstone document of any sell-side M&A process. It is a 40-60 page document that presents a company to potential acquirers in the most compelling, data-driven way possible. The CIM serves a dual purpose: it is both a sales document (designed to maximize buyer interest and support a premium valuation) and an information document (providing enough detail for buyers to form a preliminary view and submit an informed indication of interest). Every M&A process run by every investment bank in the world produces a CIM. The format is remarkably standardized across firms: executive summary, company overview, industry overview, growth opportunities, customers and sales, operations, and financial overview. This standardization exists because buyers (both strategic acquirers and private equity firms) expect a specific structure and can quickly identify missing or inadequate sections. The CIM is distributed only after a potential buyer signs a Non-Disclosure Agreement (NDA). Before the NDA, buyers see only the anonymous teaser. The transition from teaser to CIM is a critical moment — it is when the buyer learns the identity of the company and receives detailed financial and operational information for the first time.

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Why It Matters

  • Sets the valuation narrative: The CIM is where the seller’s story is told. Investment highlights, growth opportunities, and financial presentation all work together to justify a premium valuation
  • Drives buyer engagement: A well-written CIM generates excitement and competitive tension among buyers. A poorly written one kills deals before they start
  • Reduces diligence friction: A comprehensive CIM answers common questions upfront, making the diligence process smoother and faster
  • Legal significance: CIM representations can have legal implications. Information presented must be accurate and defensible
Who produces CIMs:
  • Investment banking analysts and associates do the drafting
  • VPs and MDs review for narrative quality and strategic positioning
  • The client (seller) reviews for factual accuracy
  • Legal counsel reviews disclaimers and any regulatory disclosures

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Key Concepts

TermDefinition
Investment HighlightsThe 5-7 most compelling reasons to acquire this company — the “elevator pitch” for the deal
EBITDAEarnings Before Interest, Taxes, Depreciation, and Amortization — the standard profitability metric in M&A
Adjusted EBITDAEBITDA with pro forma adjustments for non-recurring items, owner compensation, and other normalizations
Pro Forma AdjustmentsNormalizations to financial statements that show what the business “really” earns on a recurring basis
TAM/SAM/SOMTotal/Serviceable/Obtainable market sizes that demonstrate the company’s growth runway
Customer ConcentrationWhat percentage of revenue comes from the top customers — high concentration is a risk buyers scrutinize
NDANon-Disclosure Agreement that buyers must sign before receiving the CIM
Quality of Earnings (QoE)Independent accountant’s report validating adjusted EBITDA — often produced alongside the CIM

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Worked Example: CIM for a Specialty Chemical Company

To illustrate how a CIM comes together, walk through an example for “Project Atlas” — a specialty chemical manufacturer with 85Mrevenueand85M revenue and 18M EBITDA being sold by a private equity sponsor.

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Executive Summary (Pages 1-3)

PROJECT ATLAS -- CONFIDENTIAL INFORMATION MEMORANDUM

COMPANY OVERVIEW
Atlas Specialty Chemicals ("Atlas" or the "Company") is a leading
manufacturer of specialty coating formulations for the aerospace and
defense industries, headquartered in Houston, Texas. Founded in 1997,
the Company has grown from a single-product line into a diversified
platform serving Tier 1 aerospace OEMs and MRO facilities globally.

INVESTMENT HIGHLIGHTS

1. MARKET LEADERSHIP IN AEROSPACE COATINGS
   - #2 market position in military aircraft coatings (18% share)
   - #3 in commercial aerospace MRO coatings (12% share)
   - Only 3 qualified suppliers for F-35 program coatings
   - 15-year average customer relationship tenure

2. HIGHLY RECURRING, SPECIFICATION-DRIVEN REVENUE
   - 72% of revenue from qualified/specified products
   - Specification approval process takes 18-24 months
   - Customer switching costs are extremely high (requalification
     testing alone costs $500K-$2M per product line)
   - 97% gross customer retention rate (FY2021-FY2024)

3. STRONG AND EXPANDING MARGINS
   - Adjusted EBITDA margin expanded from 17.2% to 21.2% over
     3 years (FY2022-FY2024)
   - Margin expansion driven by: pricing power (+300bps),
     manufacturing efficiency (+100bps), mix shift to higher-
     margin specialty products (+200bps), partially offset by
     raw material inflation (-200bps)

4. ROBUST ORGANIC GROWTH WITH MULTIPLE LEVERS
   - Revenue CAGR of 12.4% (FY2022-FY2024)
   - Growth drivers: commercial aerospace recovery, F-35
     production ramp, new product launches (3 in 2024),
     international expansion (EMEA facility opened Q3 2024)

5. FAVORABLE INDUSTRY DYNAMICS
   - Global aerospace coatings market: $3.2B, growing 6% annually
   - Military spending increasing globally (+5% CAGR)
   - Commercial fleet expansion driving MRO demand
   - Regulatory tightening favoring established players with
     compliance infrastructure

6. PROVEN, EXPERIENCED MANAGEMENT TEAM
   - CEO with 22 years in specialty chemicals (12 at Atlas)
   - COO promoted from within, oversaw 40% capacity expansion
   - CFO recruited from Sherwin-Williams in 2022
   - Management team willing to roll equity (up to 25%)

FINANCIAL SUMMARY
| Metric              | FY2022 | FY2023 | FY2024 | FY2025E |
|---------------------|--------|--------|--------|---------|
| Revenue ($M)        | 67.2   | 76.8   | 85.0   | 94.5    |
| Revenue Growth      | 8.5%   | 14.3%  | 10.7%  | 11.2%   |
| Gross Profit ($M)   | 30.9   | 36.9   | 42.5   | 48.4    |
| Gross Margin        | 46.0%  | 48.1%  | 50.0%  | 51.2%   |
| Adj. EBITDA ($M)    | 11.6   | 14.8   | 18.0   | 21.4    |
| Adj. EBITDA Margin  | 17.2%  | 19.3%  | 21.2%  | 22.6%   |
| Capex ($M)          | 3.2    | 4.5    | 5.8    | 4.0     |
| Free Cash Flow ($M) | 6.8    | 8.5    | 10.2   | 15.0    |
| Employees           | 285    | 310    | 345    | 370     |

TRANSACTION OVERVIEW
The Company's majority shareholder, Apex Capital Partners, is
exploring strategic alternatives for its investment in Atlas.
Interested parties are invited to submit non-binding indications
of interest. Process timeline: IOIs due [Date], management
meetings [Date range], final bids [Date].

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EBITDA Bridge and Adjustments (Key Financial Detail)

The EBITDA bridge is one of the most scrutinized sections: 
ADJUSTED EBITDA RECONCILIATION -- FY2024

Reported Net Income                              $8.2M
  Add: Interest expense                          $3.5M
  Add: Income taxes                              $2.8M
  Add: Depreciation & amortization               $2.2M
Reported EBITDA                                 $16.7M

Pro Forma Adjustments:
  Owner salary normalization (1)                 +$0.4M
  Non-recurring legal settlement (2)             +$0.3M
  One-time facility move costs (3)               +$0.2M
  Non-recurring consulting fees (4)              +$0.1M
  EMEA facility start-up costs (5)               +$0.3M
Total Adjustments                                +$1.3M

Adjusted EBITDA                                 $18.0M
Adjusted EBITDA Margin                           21.2%

Notes:
(1) Owner compensation of $850K reduced to market rate of $450K.
    Based on Robert Half 2024 Salary Guide for comparable role.
(2) Settlement of customer dispute ($300K). No ongoing litigation.
(3) Houston facility relocation completed Q1 2024. Non-recurring.
(4) Transaction-related advisory fees. Non-recurring.
(5) EMEA facility opened Q3 2024. Start-up costs of $300K
    expected to normalize by Q2 2025. Recurring run-rate
    operating costs are $800K/year, already reflected in base.

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Customer Analysis (Critical Section)

CUSTOMER OVERVIEW

                    FY2022  FY2023  FY2024  Trend
Total Customers       142     158     175    +11% CAGR
  Aerospace OEMs       28      32      35
  MRO Facilities       65      72      82
  Defense Primes        18      20      22
  Industrial/Other     31      34      36

TOP CUSTOMER CONCENTRATION
| Customer      | FY2024 Rev | % of Total | Tenure | Trend |
|---------------|-----------|------------|--------|-------|
| Customer A    | $12.8M    | 15.1%      | 18 yrs | Stable|
| Customer B    | $8.5M     | 10.0%      | 14 yrs | Growing|
| Customer C    | $6.4M     | 7.5%       | 11 yrs | Growing|
| Customer D    | $5.1M     | 6.0%       | 9 yrs  | Stable|
| Customer E    | $4.3M     | 5.0%       | 7 yrs  | Growing|
| Top 5 Total   | $37.1M    | 43.6%      |        |       |
| Top 10 Total  | $52.3M    | 61.5%      |        |       |
| Remaining 165 | $32.7M    | 38.5%      |        |       |

CUSTOMER RETENTION METRICS
| Metric                    | FY2022 | FY2023 | FY2024 |
|---------------------------|--------|--------|--------|
| Gross Retention Rate      | 96%    | 97%    | 97%    |
| Net Revenue Retention     | 108%   | 112%   | 111%   |
| New Customer Wins         | 18     | 22     | 25     |
| Customer Losses           | 6      | 5      | 5      |

IMPORTANT: Customer names anonymized per NDA requirements.
Full customer list available in the data room post-LOI.

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Full Skill Workflow (From SKILL.md)

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Phase 1: Gather Source Materials

Collect all available inputs before drafting:
SourceWhat to ExtractPriority
Management presentationsBusiness narrative, investment highlightsCritical
Historical financials (3-5 years)Revenue, EBITDA, margins, growthCritical
Budget/forecastForward projectionsCritical
Quality of Earnings reportAdjusted EBITDA, add-backsCritical
Company websiteProducts, services, messagingImportant
Customer dataConcentration, retention, tenureImportant
Org chartKey personnel, reporting structureImportant
Prior board decksStrategic initiatives, KPIsHelpful
Marketing materialsValue proposition languageHelpful
Industry reportsMarket size, growth, trendsHelpful

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Phase 2: Structure the CIM

Follow the standard table of contents that every buyer expects: I. Executive Summary (2-3 pages)
  • Company overview — what they do, why they win
  • Investment highlights (5-7 key selling points)
  • Financial summary table (revenue, EBITDA, growth, margins)
  • Transaction overview (what is being sold, indicative timeline)
II. Company Overview (3-5 pages)
  • History and founding story
  • Mission and value proposition
  • Products and services description (with revenue contribution)
  • Business model and revenue streams
  • Key differentiators and competitive advantages
III. Industry Overview (3-5 pages)
  • Market size and growth dynamics (TAM/SAM/SOM with sources)
  • Key industry trends and tailwinds
  • Competitive landscape
  • Regulatory environment
  • Barriers to entry
IV. Growth Opportunities (2-3 pages)
  • Organic growth levers (new products, markets, pricing)
  • M&A / add-on opportunities
  • Operational improvements
  • Technology investments
  • White space analysis
V. Customers & Sales (3-5 pages)
  • Customer overview (number, segments, geography)
  • Top customer analysis (anonymized if pre-LOI)
  • Customer concentration and retention metrics
  • Sales process and go-to-market strategy
  • Pipeline and backlog
VI. Operations (2-3 pages)
  • Organizational structure
  • Key personnel
  • Facilities and geographic footprint
  • Technology and systems
  • Supply chain / vendor relationships
VII. Financial Overview (5-8 pages)
  • Historical income statement (3-5 years)
  • Revenue analysis by segment, geography, customer type
  • EBITDA bridge and margin analysis
  • Balance sheet overview
  • Cash flow summary
  • Capital expenditure history
  • Working capital analysis
  • Management forecast / budget (if included)
VIII. Appendix
  • Detailed financial statements
  • Customer list (anonymized)
  • Product catalog
  • Management bios

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Phase 3: Draft with Guidelines

Tone: Professional, factual, compelling but not hyperbolic Narrative principles:
  • Tell a story — why this business is attractive, defensible, and positioned for growth
  • Lead with strengths but acknowledge material issues (buyers find them in diligence anyway)
  • Support every claim with data: “Revenue grew at a 15% CAGR from 2021-2024” not “strong growth”
  • Use charts and graphs for financial trends, market size, and competitive positioning
  • Length: 40-60 pages — enough to inform first-round bids, not so long buyers will not read it
Financial normalization rules:
  • Pro forma adjustments must be clearly labeled and explained
  • Each add-back must be documented with the dollar amount, the rationale, and whether it is truly non-recurring
  • Do not add back items that recur every year (e.g., “restructuring” charges that happen annually are not one-time)
  • The EBITDA bridge is the most scrutinized page — it must be bulletproof

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Phase 4: Review and Deliver

Deliverables:
  • Word document (.docx) with professional formatting
  • Separate Excel appendix with detailed financials
  • Embedded charts and exhibits throughout
  • Confidentiality disclaimer page

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Common Mistakes (and How to Avoid Them)

What goes wrong: The CIM shows adjusted EBITDA of 18M,but18M, but 3M of the 5Minadjustmentsarequestionable:"normalized"marketingspend(theyspendthiseveryyear),"excess"ownercompensation(thenumberisreasonableforaCEO),and"one−time"consultingfeesthatappeareveryyear.Asophisticatedbuyerwillstripouttheaggressiveadd−backsandarriveat5M in adjustments are questionable: "normalized" marketing spend (they spend this every year), "excess" owner compensation (the number is reasonable for a CEO), and "one-time" consulting fees that appear every year. A sophisticated buyer will strip out the aggressive add-backs and arrive at 15M EBITDA — then value the company at that lower number.How to avoid it: Apply a “would a third-party auditor agree?” test to every add-back. The Quality of Earnings report should validate each adjustment. If an item recurs every year, it is not one-time. If owner compensation is within market range, do not normalize it further. Under-promising and over-delivering on EBITDA is far better than the reverse.
What goes wrong: The top customer represents 35% of revenue. The CIM buries this in a footnote. During diligence, buyers discover the concentration and either walk away or significantly discount their bid. The seller is surprised by the negative reaction.How to avoid it: Address concentration head-on. Present the data transparently (top 5, top 10 customer mix), then explain the mitigating factors: long customer tenure, contractual relationships, specification lock-in, and diversification trend (showing concentration decreasing over time). Hiding the data does not make the risk disappear.
What goes wrong: The management forecast shows 25% revenue growth and 500bps of margin expansion in the projection year after 5 years of 8% growth and flat margins. Buyers immediately discount the forecast as unrealistic. The credibility of the entire CIM suffers.How to avoid it: Projections must be grounded in specific, identifiable drivers: “New product X launching in Q2 (5Mcontribution),""EMEAfacilityatfullcapacityadds5M contribution)," "EMEA facility at full capacity adds 8M,” “Price increase of 4% across all product lines.” If historical growth was 8%, a 25% projection requires compelling evidence. Most banks present a “Management Case” alongside a “Base Case” with conservative haircuts.
What goes wrong: The industry overview is 2 pages of generalities copied from an industry report: “The specialty chemicals market is large and growing.” It does not explain how industry dynamics specifically benefit the company being sold.How to avoid it: Every industry insight should tie back to the company. “The global aerospace coatings market is growing at 6% annually, driven by commercial fleet expansion. Atlas is positioned to outgrow the market because its qualification on 3 next-generation platforms provides a built-in growth tailwind.” Tailor the industry analysis to the seller’s specific competitive position.
What goes wrong: Market size claims, growth rates, and competitive positioning statements have no sources. A buyer cannot verify the claims, which reduces trust in the entire document.How to avoid it: Cite every external data point: “Global aerospace coatings market: $3.2B (MarketsandMarkets, 2024).” For company-specific claims, reference specific financial statements or internal data: “Revenue by geography per FY2024 audited financial statements.”
What goes wrong: The seller expects 12x EBITDA ($216M enterprise value), but the CIM presents the company as a mature, slow-growth industrial business. Nothing in the document justifies a premium multiple. Buyers submit IOIs at 8-9x.How to avoid it: The CIM’s narrative must build the case for the valuation the seller expects. If you want 12x, the CIM must demonstrate: premium growth (above market), recurring/sticky revenue, strong competitive position, multiple growth levers, and margin expansion opportunity. The investment highlights should directly address the factors that drive premium multiples.
What goes wrong: The executive summary says FY2024 revenue was 85M.Thefinancialoverviewsectionshows85M. The financial overview section shows 84.5M. The appendix shows $85.2M. Three different numbers destroy credibility.How to avoid it: Designate a single source of truth for all financial data (typically the audited financial statements or QoE report). Cross-check every number that appears in multiple sections. This should be the final quality check before distribution.
What goes wrong: The CIM is sent to buyers before the seller (client) reviews it. The client discovers factual errors about their business, or objects to how certain information is presented. The bank must issue corrections, which looks unprofessional and can damage the process.How to avoid it: The client must review and approve every CIM before distribution. They know their business better than you do. Build in 5-7 business days for client review and revisions. Common client feedback: correcting product descriptions, updating customer data, adjusting emphasis on certain growth opportunities.
What goes wrong: The CIM is distributed without a confidentiality disclaimer. A buyer shares it with a competitor. The seller has no legal recourse because the document itself did not contain confidentiality restrictions.How to avoid it: Every CIM must open with a confidentiality disclaimer page. This page, typically drafted or reviewed by legal counsel, states: the document is confidential, distribution is prohibited, the information is provided for evaluation purposes only, and no representations or warranties are made regarding accuracy. This page should be the very first page of the document.
What goes wrong: A 25-page CIM leaves buyers with too many unanswered questions and signals that the bank did not do thorough work. A 100-page CIM overwhelms buyers and signals that the bank cannot distinguish between important and unimportant information.How to avoid it: Target 40-60 pages. This is enough to tell the full story and provide sufficient financial detail for first-round bids, but not so much that buyers stop reading. If you have additional detail (100+ pages of financial data), put it in the data room, not the CIM.

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Daily Workflow Scenarios

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Scenario 1: Building a CIM from Scratch (3-4 Week Timeline)

Week 1: Data Gathering and Outline
  • Day 1-2: Kickoff meeting with client. Gather all source materials. Review financials.
  • Day 3-4: Draft the CIM outline. Map available data to each section. Identify gaps.
  • Day 5: Present outline to the deal team (VP/MD). Get alignment on narrative angle and investment highlights.
Week 2: First Draft
  • Day 1-2: Write Executive Summary and Investment Highlights (the most important section).
  • Day 3: Write Company Overview and Industry Overview.
  • Day 4: Write Growth Opportunities and Customers & Sales.
  • Day 5: Write Operations and Financial Overview.
Week 3: Internal Review and Charts
  • Day 1-2: Deal team review. VP/MD provide comments on narrative, emphasis, and tone.
  • Day 3-4: Revise based on comments. Create all charts and exhibits.
  • Day 5: Second review. Finalize draft for client review.
Week 4: Client Review and Distribution
  • Day 1-3: Client reviews. Expect 1-2 rounds of comments.
  • Day 4: Legal review of disclaimer.
  • Day 5: Finalize, print, and prepare for distribution.

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Scenario 2: Updating an Existing CIM with New Financials

Context: The CIM was drafted using FY2023 data. FY2024 financials are now available and need to be incorporated. Timeline: 1 week
  1. Day 1: Get updated financials from the client. Compare FY2024 actuals to prior projections.
  2. Day 2: Update all financial tables and charts throughout the CIM.
  3. Day 3: Revise the narrative to reflect FY2024 performance. Update investment highlights if financials support stronger (or weaker) claims.
  4. Day 4: Internal review.
  5. Day 5: Client review and finalization.

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Scenario 3: Producing a CIM for a Smaller Deal ($10-25M Revenue)

Context: Smaller companies have less data, simpler business models, and fewer growth levers. The CIM should be shorter (25-35 pages) but equally professional. Adjustments from standard CIM:
  • Executive Summary: 1-2 pages (shorter financial summary)
  • Company Overview: 2-3 pages (simpler business model)
  • Industry Overview: 2 pages (less detailed market sizing)
  • Financial Overview: 3-4 pages (fewer years of history, simpler segments)
  • Total: 25-35 pages

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Scenario 4: CIM for a Technology/SaaS Company

Context: SaaS companies require different financial metrics and a different narrative emphasis. Key differences from industrial CIM:
  • Revenue metrics: ARR, MRR, net revenue retention, customer count instead of revenue/EBITDA
  • Profitability: Rule of 40 (growth + margin), unit economics (CAC, LTV, payback period)
  • Customer section: Cohort analysis, churn rates, expansion revenue
  • Financial section: Billings, RPO, deferred revenue in addition to GAAP revenue
  • Growth levers: Product expansion (cross-sell), enterprise upmarket motion, international expansion

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Practice Exercise

Exercise: Draft a CIM Executive Summary You are an investment banking analyst at a middle-market firm. Your client is a healthcare staffing company with the following characteristics:
MetricFY2022FY2023FY2024
Revenue$42M$55M$68M
Gross Margin32%34%36%
Adj. EBITDA$4.2M$6.6M$9.5M
Adj. EBITDA Margin10.0%12.0%14.0%
Clients (Hospitals)456278
Healthcare Workers1,2001,8002,500
Avg Client Tenure4.2 yrs4.5 yrs4.8 yrs
Net Revenue Retention115%118%120%
Task 1: Write 5-7 investment highlights for this company. Each should be a specific, data-supported selling point. Task 2: Create the EBITDA bridge showing adjustments from reported to adjusted EBITDA. Assume: owner salary normalization (200K),one−timelegalfees(200K), one-time legal fees (150K), and new office build-out ($100K). Task 3: Write a 2-paragraph company overview that tells a compelling story. Task 4: Identify 3 potential growth opportunities and quantify each (e.g., “Geographic expansion into Southeast US represents $X addressable opportunity”). Task 5: What is the weakest part of this company’s story? How would you address it in the CIM without hiding it?

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How to Add to Your Local Context

# Install the plugin
claude plugin install investment-banking@financial-services-plugins
Customizing for your firm’s CIM template: If your firm has a specific CIM template (cover page design, disclaimer language, formatting standards), edit the skill file: 
open ~/.claude/skills/investment-banking/cim-builder.md
Add your firm’s specific requirements: cover page layout with firm branding, confidentiality disclaimer text, standard font and color scheme, and section ordering preferences. Connecting to data sources: 
{
  "mcpServers": {
    "client-data": {
      "command": "file-server-mcp",
      "args": ["--root", "/path/to/deal-materials"]
    }
  }
}

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Best Practices

  • Lead with strengths, but do not hide material issues: Buyers will find problems in diligence. Surprises kill deals and destroy credibility
  • Investment highlights should address three things: Growth potential, margin profile, and defensibility. Every buyer cares about these
  • Support every claim with data: “Revenue grew at a 15% CAGR from 2021-2024” is credible. “Strong growth” is not
  • Financial normalization must be transparent: Pro forma adjustments should be clearly labeled and explained. Aggressive or unexplained add-backs will be challenged
  • The CIM sets valuation expectations: Make sure the narrative supports the asking price. If you claim the company is worth 12x EBITDA, the CIM needs to justify that premium
  • Get management to review for accuracy: The client knows their business better than you. Factual errors undermine the entire document
  • Work with legal on disclaimers: The confidentiality notice and any regulatory disclosures must be reviewed by counsel

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Dependencies

Required:
  • DOCX skill for document creation
  • Source materials from the client (financials, presentations, org chart)
Optional:
  • XLSX skill for financial appendix
  • Chart generation tools for embedded exhibits
  • Quality of Earnings report for EBITDA validation