Information memorandum: what to include to sell for a better price

When an owner decides to sell their company, the first serious document that reaches a potential buyer is not the contract or the binding offer: it is the information memorandum. Known as the IM or, in full, the Confidential Information Memorandum (CIM), it is the dossier that presents the company in a structured and persuasive way, and it largely determines whether the interested party carries on or walks away from the process.

In a country where the family firm is the backbone of the productive fabric — family businesses account for around 89% of Spanish companies and generate roughly 57% of private sector GDP and close to 67% of private employment (Instituto de la Empresa Familiar, the Spanish family business institute, 2025) — most sales of industrial SMEs are faced only once in the owner's lifetime. A well-built information memorandum is the difference between selling well and selling at any price.

What an information memorandum is and what it is for

The information memorandum is a confidential, exhaustive document that describes the company being put up for sale: its business model, its competitive position, its finances and its growth potential. It has two purposes. First, to convey trust and rigour: a professional buyer — an industrial competitor, a private equity fund or an international group — also judges the seller by the quality of the information they hand over. Second, to maximise the perceived valuation, presenting the strengths of the business without exaggerating or hiding the risks.

It helps to place it within the sale process. The M&A adviser normally prepares a teaser first: a short, anonymous document of one or two pages that raises interest without revealing the identity of the company. Only when the interested party signs a non-disclosure agreement (NDA) do they receive the full information memorandum. From there, buyers who remain interested submit non-binding indicative offers and, finally, enter the due diligence phase.

The information memorandum is therefore the centrepiece of the marketing phase: it is the buyer's first detailed contact with the company and the anchor on which the whole negotiation is built. What it states sets expectations; what it omits or overstates will resurface — always — in due diligence. It should be read as a sales document and, at the same time, as a verifiable commitment.

Market context matters too. The Spanish transactional market sustains a significant volume of M&A deals every year, according to the periodic reports of specialist providers such as TTR Data. For an industrial SME, that means there are active buyers — trade and financial alike — but also that a professional buyer compares opportunities and quickly discards those that do not convey rigour. A weak information memorandum does not only lower the price: it can keep the company off the radar of the best buyers.

If you want to understand the full path from the initial decision to closing, we recommend our guide on how to sell a company in Spain, where we place the information memorandum within all the phases of the process.

What is the difference between the information memorandum and the teaser?

The teaser is a short, anonymous document of one or two pages that the M&A adviser prepares first to raise interest among possible buyers without revealing the identity of the company. The information memorandum, by contrast, is the full confidential dossier that the buyer receives only after signing a non-disclosure agreement (NDA), and on the basis of which they will submit non-binding indicative offers. In short: the teaser opens the door, the information memorandum is what convinces.

What an information memorandum must include

There is no single format, but a solid information memorandum for an industrial SME usually runs to between 30 and 60 pages and covers, as a minimum, the following sections.

1. Executive summary

This is the section people read most and, paradoxically, the one that gets the least care. In two or three pages it has to sum up the opportunity: what the company does, what makes it attractive, its key figures and why it is being sold. Many buyers decide whether to go deeper on the strength of this part alone, so it deserves particular attention.

2. Company description and history

Track record, relevant milestones, corporate structure, locations and how the business has evolved. This is where the narrative is built: how a company reached the position it holds and what sets it apart from its competitors.

3. Products, services and business model

Catalogue of products or services, value proposition, margins by line, production capacity and, above all, how the business generates revenue. A buyer needs to understand how recurring that revenue is, how dependent the company is on customers or suppliers and how scalable the model is.

4. Market and competitive position

Size and trends of the sector, main competitors and market share. The point is not to copy a generic sector report, but to explain where the company fits and what defensible advantages it holds (technology, brand, long-term contracts, barriers to entry).

5. Customers and suppliers

Customer portfolio (with the degree of concentration), current contracts and relationships with strategic suppliers. Customer concentration is one of the factors that penalises a valuation most: if a single customer accounts for 40% of turnover, the buyer sees a high risk.

6. Team and organisation

Organisation chart, management team and dependence on the founder. A company that keeps running without the owner at the helm is worth more than one whose critical knowledge sits with a single person.

7. Financial information

The core of the memorandum. Accounts for the last three to five financial years, EBITDA and its normalisation (adjusting non-recurring expenses or the owner's personal items), how debt has evolved, working capital and, where appropriate, a business plan with reasonable, justified projections. The golden rule: every figure has to stand up in the due diligence that follows.

8. Growth opportunities

Perhaps the most strategic section. This is where you set out the potential the buyer could develop: new markets, digitalisation, synergies, spare capacity or product lines left unexploited. It is what turns a transaction about price into one about value.

9. Deal considerations

The type of transaction envisaged (full or partial sale, asset deal or share deal), the reason for selling and the process planned. It is also worth setting out the structure here, because it carries significant tax consequences that are best planned from the outset.

Normalised EBITDA: the figure that gets negotiated most

Of all the figures in the information memorandum, normalised EBITDA receives the most attention, because it is usually the basis on which the valuation multiple is applied. Normalising EBITDA means adjusting the accounting result to reflect the real profit-generating capacity of the business, stripping out items a new owner would not carry or that are not recurring.

The most common adjustments in a family SME include owner remuneration above market rates, personal expenses charged to the company, related-party transactions on non-market terms, extraordinary non-recurring costs (a one-off dispute, a restructuring) or unusual income that will not be repeated. Every adjustment has to be documented and justified, because the buyer will review them one by one in due diligence and will knock off the price anything that cannot be evidenced.

A credible, well-supported normalised EBITDA reinforces the valuation; an inflated or unsupported one destroys it. The difference between the two can amount to a very significant share of the final price, especially where high multiples apply. To understand how EBITDA translates into a specific price and which valuation methods buyers use, it is worth reading how much my company is worth and the valuation methods.

How is the confidentiality of the information memorandum protected?

Selling a company means balancing two objectives in tension: giving enough information to generate competitive offers and, at the same time, protecting sensitive data that must not reach competitors. The information memorandum is the tool that holds that balance together.

That is why it is always delivered under an NDA and, in many processes, in stages: the most sensitive information (the customer portfolio with names, specific contracts, trade secrets) is held back for advanced phases, when the buyer's interest is already serious. Good practice is to work with a virtual data room where documentation is released in tiers as the deal progresses.

This careful handling of information is not an administrative detail: an early leak about the sale can unsettle customers, suppliers and employees, and weaken the business just when you want to show it at its best. The information memorandum therefore has to be designed with an eye on what is disclosed, to whom and when.

The information memorandum and tax: plan before you start

An information memorandum is not only financial marketing; it is also the prelude to a transaction with a heavy tax impact. The legal form of the deal determines how the seller is taxed, so it is best settled before going to market.

In Spain, corporate restructurings may qualify for the special tax neutrality regime (régimen especial de neutralidad fiscal) set out in Chapter VII of Title VII of Ley 27/2014, the Impuesto sobre Sociedades (Spanish corporate income tax) act, which governs mergers, spin-offs, contributions of assets and share exchanges. Under certain conditions, this regime allows tax on the capital gain to be deferred where the transaction responds to valid economic reasons and not to a purely tax-driven purpose.

We will not go into the technical detail here, because every case calls for individual analysis, but the message is clear: the tax structure of the sale has to be designed before the memorandum is prepared, not afterwards. If you want to go deeper into how tax affects a sale and the role of holding structures, we cover it in our guide to tax in a company sale and holding structures.

Common mistakes that cut the price

Across many sale processes, certain failings in the memorandum come up again and again and end up costing the seller money:

• Unjustified optimism in the projections. An unrealistic business plan breeds distrust and falls apart in due diligence, damaging the credibility of the whole process.
• Hiding known problems. Disputes, tax contingencies or critical dependencies surface in the end. It is better to present them with a mitigation plan than to let the buyer discover them.
• EBITDA that is not normalised or is poorly documented. If the adjustments are not justified, the buyer will discount them in their own favour.
• Disorganised financial information. A lack of rigour suggests poor management and opens the door to renegotiating the price downwards.
• A generic memorandum. Reusing templates without adapting them to the reality of the company signals indifference and weakens your negotiating position.

The link between the information memorandum and due diligence is direct: the more solid and verifiable the information presented, the less room the buyer has to adjust the price once they start reviewing the documentation. That is why we recommend preparing both phases in a coordinated way; we explain it in detail in our article on what due diligence is and how to prepare for it.

When should the information memorandum be prepared, and by whom?

A common question among owners is when to start preparing the information memorandum. The answer is: before going to market and with enough time in hand. Building a solid memorandum — gathering and ordering the documentation, normalising the finances, writing the narrative and designing the structure of the deal — usually takes several weeks. Doing it in a rush, once a buyer is already knocking at the door, puts the seller in a weak position.

As for who draws it up, the owner is best advised to prepare it alongside an M&A adviser. The owner brings deep knowledge of the business; the adviser brings judgement on what to highlight, how to present the figures and what the different buyer profiles expect. That combination is what produces a balanced document: convincing for the market and, at the same time, defensible in due diligence.

It is also worth keeping the memorandum up to date throughout the process. If the sale runs on for several months, the figures and the position of the company change, and handing over out-of-date information costs credibility. A good adviser reviews and refreshes the document as the deal progresses.

How to prepare an information memorandum that sells

Beyond the content, three principles set a good information memorandum apart:

1. Strategic honesty. Show the strengths clearly, but also acknowledge the risks and pair them with a plan. A professional buyer values transparency and penalises surprises.
2. Verifiable data. Every figure has to be provable with documents. Information that does not stand up turns against the seller.
3. Focus on the right buyer. Approaching an industrial competitor is not the same as approaching a financial fund. The story the memorandum tells — especially the synergies and growth opportunities — has to be tuned to the profile of the target buyer.

Preparing an information memorandum of the right standard takes experience, judgement and knowledge of the sector. It is not a document the owner should improvise alone: it calls for normalising the finances, building the right narrative and anticipating the questions the buyer will ask.

At Tecnocim Innova we support industrial SMEs through the whole process, from the initial valuation to closing. If you are considering selling your company and you want the information memorandum to reflect its true value, take a look at our information memorandum preparation service within our M&A and business transfers area. A well-prepared dossier does not just make the process easier: it protects your position and maximises the final price.