What is an Information Memorandum, and why do I need one?An IM is a document provided by a company to prospective investors after the investors have reviewed a brief Investment Summary, or “teaser”, and signed a Confidentiality Agreement.
Some business owners and financial advisors look at an IM as a marketing document which provides a selective overview of the attractive features of a company. For the Hungarian market a memorandum is recommended.
In general, an IM allows the owners of a company to present a comprehensive, accurate, and attractive picture of a company.
An IM also helps to ensure that all investors receive the same information. This is particularly crucial when a seller is running a competitive process. The more information that finds its way into the IM, the less need there is for investors to pose written questions, saving time for both buyer and seller.
From an investor’s point of view, a good IM demonstrates the professionalism and motivation to sell of the sellers, as well as the quality of the management—all important factors when deciding whether to invest in, or buy, a company.
Katalin Ballun is the Information Memorandum specialist for Hungary. If you have questions about IM feel free to inform. Learn more about M&A advisor Katalin Ballun.