A Business Information Memorandum, or IM, is a confidential sale document that gives qualified buyers a structured overview of a company before full due diligence. It should explain what the business does, how it makes money, its financial performance, customers, management, operations, market position, growth opportunities, reason for sale and proposed transaction. The best IMs are detailed enough to support an informed buying decision without becoming overly promotional or disclosing unnecessary sensitive information too early.
| IM section | What it should cover | Why buyers care |
|---|---|---|
| Executive summary | Concise overview of the opportunity | Helps buyers judge immediate relevance |
| Business and revenue model | What the company does and how it makes money | Explains the commercial model |
| Financial performance | Revenue, profit, EBITDA and recent trends | Supports initial valuation analysis |
| Customers and market | Customer profile, concentration and positioning | Helps assess revenue quality and risk |
| Management and employees | Team structure and owner involvement | Shows how transferable the business is |
| Operations and assets | Locations, systems, technology and key assets | Explains how the business delivers |
| Growth opportunities | Evidence-based routes to future growth | Helps buyers assess upside |
| Sale rationale and transaction | Reason for sale and high-level deal structure | Clarifies seller motivation and next steps |
A Business Information Memorandum, usually shortened to IM, is one of the most important documents a seller prepares during a business sale.
It gives qualified buyers enough information to understand the company, assess whether it fits their acquisition criteria and decide whether to progress towards a meeting or offer.
A good IM should make the business attractive without becoming promotional at the expense of accuracy.
It should explain what the company does, how it makes money, its financial performance, customers, employees, operations, market position and growth opportunities. It should also give buyers enough context to understand important risks.
However, an IM should not contain every piece of confidential information a buyer may eventually request.
Customer names, individual employee data, detailed contracts, sensitive pricing and other commercially valuable information can usually be reserved for later stages of the sale once the buyer has been properly qualified.
Read our page on how to sell a business safely for a more in depth guide.
A Business Information Memorandum is a confidential sale document prepared for prospective buyers that provides a structured overview of the company being offered for sale.
It is sometimes called a:
Terminology varies between advisers and transaction sizes, but the underlying purpose is broadly the same: to help a serious prospective buyer understand the opportunity before committing substantial time and resources to due diligence.
ICAEW's commercial due diligence guidance describes teasers and confidential information memoranda as examples of the higher-level information buyers may receive during the earlier stages of an acquisition process, before deeper management access and detailed investigation.
A strong business Information Memorandum will normally cover:
|
IM section |
What to include |
Why buyers care |
|
Executive summary |
Concise overview of the opportunity |
Helps the buyer determine immediate relevance |
|
Business overview |
History, activities and structure |
Explains what is actually being acquired |
|
Products and services |
Revenue-generating activities |
Shows how the business makes money |
|
Market and customers |
Customer profile, sectors and concentration |
Helps assess revenue quality and risk |
|
Financial performance |
Revenue, profit, EBITDA and trends |
Supports initial valuation analysis |
|
Management and employees |
Team structure and owner involvement |
Shows whether the company can operate after sale |
|
Operations |
Locations, systems, assets and processes |
Helps buyers understand delivery capability |
|
Competitive position |
Differentiators and market position |
Explains why customers choose the company |
|
Growth opportunities |
Evidence-based opportunities |
Helps buyers assess future potential |
|
Reason for sale |
Clear seller rationale |
Removes uncertainty about seller motivation |
|
Transaction overview |
High-level sale structure and process |
Helps the buyer understand next steps |
The IM is a detailed summary, not the complete evidential record of the business.
Supporting documentation generally follows later through the data room and due diligence process.
These three parts of a sale process perform different jobs.
|
Document or stage |
Purpose |
Typical level of detail |
Typical recipient |
|
Teaser |
Generate initial interest |
High-level and usually anonymous |
Prospective buyers |
|
Information Memorandum |
Allow serious buyers to evaluate the opportunity |
Detailed but controlled |
Qualified buyers under NDA |
|
Data room |
Allow evidence-based due diligence |
Extensive underlying documentation |
Advanced buyer and advisers |
A teaser might tell a buyer:
Established B2B services company in the South East generating approximately £4 million revenue with recurring customer relationships and an experienced management team.
The IM would explain:
The data room might then contain:
The distinction matters because sellers should not release due-diligence-level information simply because a buyer has expressed initial interest.
An IM is normally sent after the buyer has passed an initial qualification stage and signed an appropriate non-disclosure agreement.
A practical sequence may be:
This is not a legal requirement or rigid transaction sequence, but it creates a sensible relationship between buyer commitment and information access.
ICAEW's guidance distinguishes early high-level material such as a CIM from more extensive due diligence involving detailed supporting financial information and management access.
Usually, yes.
A good Information Memorandum may contain commercially sensitive information about:
An NDA can establish how that information may be used and who may receive it.
It may also regulate:
However, an NDA is not a substitute for buyer qualification.
A buyer signing an NDA does not prove that they have sufficient funds or a genuine acquisition rationale.
For a broader seller-risk framework, read Selling a Business Safely.
Do not use the IM as the first response to every enquiry.
Before releasing it, you should normally understand at least:
The IM contains enough information to be commercially valuable. Treat access to it as part of the buyer qualification process rather than an automatic download.
The executive summary should allow a buyer to understand the opportunity in a few minutes.
It should normally cover:
Business: Established UK-based technical services company serving commercial and industrial customers.
Scale: Approximately £6 million annual revenue with consistent profitability.
Customers: Diversified B2B customer base with a significant level of repeat business.
Operations: Experienced management and operational team with limited day-to-day reliance on the shareholder.
Opportunity: Scope to expand geographically and increase penetration across existing customer sectors.
Reason for sale: Majority shareholder seeking retirement following an agreed transition period.
That tells the buyer enough to understand the proposition without trying to sell the entire company in one paragraph.
Give the buyer enough background to understand how the business reached its current position.
Include:
Avoid a long corporate chronology unless it helps explain the company today.
For example, the fact that the founder opened the first office 30 years ago may be useful.
A detailed list of every office move probably is not.
Explain whether the business consists of:
Buyers need to understand what they are actually being invited to acquire.
Where the structure is complicated, use a simple organisation chart.
Public Companies House information can later be used by buyers to check registered company details, accounts, officers and filing information, so the IM should be consistent with the company's public record.
Do not assume buyers understand your sector as well as you do.
Explain:
|
Revenue stream |
FY2026 revenue |
% of total |
Revenue characteristic |
|
Managed services |
£2,400,000 |
48% |
Recurring contracts |
|
Project work |
£1,500,000 |
30% |
Repeat and new projects |
|
Maintenance |
£750,000 |
15% |
Recurring / repeat |
|
Equipment sales |
£350,000 |
7% |
Transactional |
|
Total |
£5,000,000 |
100% |
This gives the buyer more insight than saying:
The company has several diversified revenue streams.
Use charts and tables where they make the commercial model easier to understand.
Financial information is one of the most important parts of the IM.
Buyers will usually want an initial view of:
|
£000s |
FY2023 |
FY2024 |
FY2025 |
FY2026 |
|
Revenue |
3,800 |
4,150 |
4,550 |
5,000 |
|
Gross profit |
1,520 |
1,702 |
1,911 |
2,150 |
|
Gross margin |
40.0% |
41.0% |
42.0% |
43.0% |
|
Reported EBITDA |
470 |
515 |
590 |
680 |
|
Adjusted EBITDA |
500 |
545 |
630 |
710 |
This is an illustrative example only.
The figures included in a real IM should reconcile with underlying financial records.
ICAEW describes financial due diligence as helping sellers, buyers and finance providers understand the financial performance of a business. That means headline numbers in the IM should be capable of surviving later scrutiny.
Do not simply provide numbers.
Explain:
For example:
Revenue grew by 12% in FY2026, primarily due to a full-year contribution from three framework agreements won during the previous financial year. Gross margin also improved as a higher proportion of revenue came from managed services.
That is more useful than allowing the buyer to guess why the numbers changed.
If you present adjusted EBITDA, show buyers how you reached it.
Possible adjustments may include:
You should also allow for replacement costs where necessary.
|
Adjustment |
Amount |
|
Reported EBITDA |
£620,000 |
|
Add back one-off litigation expense |
£35,000 |
|
Add back personal owner expense |
£15,000 |
|
Deduct additional replacement MD cost |
(£40,000) |
|
Adjusted EBITDA |
£630,000 |
Avoid presenting aggressive adjustments merely to increase the valuation.
If a cost happens every year, buyers are unlikely to regard it as exceptional simply because it is described that way in the IM.
A buyer does not need to agree with every interpretation in the IM.
They should, however, be able to understand where the figures came from.
Before publication, ask:
The IM is often the first detailed financial story the buyer sees. Inconsistencies discovered later can damage confidence beyond the specific figure involved.
ICAEW characterises due diligence as part of informed investment and divestment decision-making, with financial due diligence examining underlying financial performance and commercial due diligence examining areas such as markets, customers, business plans and projections.
That is why an IM should not be treated like an advertising brochure.
A buyer may later test statements about:
The safest approach is to make important claims specific enough to be useful and evidence-based enough to survive diligence.
Customer information is important because buyers want to understand the durability and concentration of revenue.
Your IM may show:
|
Customer group |
% of annual revenue |
|
Largest customer |
9% |
|
Top 5 customers |
31% |
|
Top 10 customers |
47% |
|
Remaining customers |
53% |
This tells the buyer something meaningful without identifying customers by name.
Often, no.
Named customer information can be particularly sensitive where the potential buyer is a competitor.
Instead, you can use descriptions such as:
Customer names can be disclosed later where necessary and appropriate.
A buyer will want to understand whether revenue is:
Include details such as:
Do not describe revenue as "recurring" simply because the same customer has bought from you several times.
Explain what actually causes the customer to return.
Buyers also need to understand the other side of the commercial model.
Include:
You may initially anonymise suppliers where the commercial terms are sensitive.
Highlight genuine risks.
For example:
Approximately 35% of raw-material expenditure is sourced from one specialist manufacturer. The relationship has operated for nine years, with alternative suppliers identified but not currently used.
That is much more credible than:
The company has no significant supplier risks.
A buyer needs to understand who operates the company after the shareholder leaves.
Include a concise profile of:
For each, consider:
Avoid publishing unnecessary personal information.
An organisation chart is often more useful than several pages of biographies.
If the seller still:
say so.
Then explain the proposed transition.
For example:
The shareholder currently remains involved in strategic customer relationships and financial oversight but does not manage day-to-day operations. A six-month transition is anticipated following completion.
This gives buyers something realistic to evaluate.
You do not need to provide every employee's personal details in the IM.
An initial workforce summary may include:
|
Function |
Employees |
|
Management |
4 |
|
Sales and marketing |
7 |
|
Operations |
22 |
|
Finance and administration |
5 |
|
Technical |
8 |
|
Total |
46 |
Individual names, salaries, home addresses and employment contracts are generally more appropriate for controlled due diligence where required.
Employee considerations also depend on the transaction structure. UK government guidance confirms that employees may have protections where a business changes ownership, including under TUPE in applicable business transfers.
Buyers should understand how the company actually functions.
Cover:
If property is important, explain:
If machinery or equipment is material, provide a high-level summary.
Detailed asset registers can follow during due diligence.
Relevant intellectual property may include:
Explain:
Do not include sensitive technical documentation, source code or trade-secret detail in the IM.
The purpose is to tell the buyer what exists and why it matters, not to give them unrestricted access to it.
A strong IM helps the buyer understand the environment in which the business operates.
Cover:
Commercial due diligence commonly tests a business's market, competitive position and assumptions supporting its business plan, so broad claims about the market should have a reasonable basis.
Avoid unverifiable statements such as:
unless you can substantiate them.
Possible differentiators could include:
Specific evidence is more persuasive than generic adjectives.
Growth opportunities matter because buyers are purchasing future potential as well as historic earnings.
Possible opportunities include:
Suppose the company has never sold internationally.
It may be reasonable to say:
There is an opportunity to explore selected European markets where several existing UK customers already operate.
It would be much less defensible to say:
European expansion will generate £2 million additional revenue within two years.
unless there is strong evidence supporting that forecast.
Buyers generally recognise that growth opportunities carry execution risk.
The IM should demonstrate opportunity without implying that every possible improvement has already been earned by the seller.
A buyer may create additional value through:
Those may justify a stronger offer from a particular buyer, but they are not the same as growth already embedded in the company.
The most persuasive growth section separates:
That makes the commercial story easier to trust.
Buyers will ask why the owner is selling.
Common reasons include:
British Business Bank guidance specifically notes that prospective buyers will want to understand the seller's reason for selling.
Keep the explanation straightforward.
For example:
The shareholder has owned the business for 24 years and is seeking retirement. They are willing to provide a structured handover to support continuity.
Avoid vague language if the real reason is likely to emerge later.
If the company is experiencing financial difficulty, disclose the position appropriately rather than presenting the sale as purely retirement-led.
Buyers should understand at a high level what is being offered.
The IM might state:
Do not attempt to write the legal deal in the IM.
Detailed matters such as:
belong later in the process.
A well-run IM can explain what happens next.
For example:
This can help create momentum and prevent buyers from assuming there is no structured timetable.
An IM should be detailed, but not unrestricted.
Information often better reserved for later includes:
Especially where recipients could be competitors.
Summarise key characteristics initially.
Use aggregated workforce data before controlled diligence.
Commercially valuable supplier terms may need restricted disclosure.
These should never be included in a marketing document.
Describe the asset rather than giving away the underlying IP.
Data-protection obligations continue to apply during acquisitions.
Material issues may need to be disclosed, but legal advice should guide how privileged or sensitive documentation is handled.
Detailed returns and correspondence generally belong in the data room.
Financial statements may be relevant; operational account access is not.
Do not include claims simply because they make the business sound stronger.
The ICO specifically states that mergers and acquisitions may involve data sharing and that organisations should consider what data is being transferred, the purpose for which it was originally obtained, the lawful basis for sharing and the need to document the process.
For IM preparation, this supports a practical principle:
use aggregated commercial information where that is enough to answer the buyer's question.
For example, instead of listing every employee with name, salary and date of birth, the IM may initially show:
Detailed employee information can then be handled through an appropriate due-diligence process where necessary.
Yes, where they are sufficiently important to the buyer's understanding of the company.
The IM does not need to become a catalogue of every minor problem.
But presenting an obviously incomplete picture can backfire.
Examples of significant matters may include:
Explain the issue accurately and, where appropriate, the mitigation.
For example:
The largest customer represented 27% of FY2026 revenue. The relationship has existed for 11 years and currently operates under a three-year framework agreement expiring in September 2028.
That allows the buyer to make an informed assessment.
There is no mandatory length.
For a typical SME, an IM may reasonably run to around 20–50 pages, depending on:
A small owner-managed business may need much less.
A diversified mid-market company may need considerably more.
Length should follow information requirements, not a predetermined page count.
A 70-page IM filled with generic market commentary is not automatically stronger than a concise 30-page document that answers the questions buyers actually have.
Presentation matters because buyers may review several opportunities simultaneously.
Use:
Avoid:
A modern IM should feel credible and easy to navigate rather than like a glossy sales brochure.
A strong Information Memorandum helps qualified buyers understand your business while allowing you to retain control over the most sensitive information until later.
Valius brings UK business sellers, buyers and advisers together through one modern platform built to make business acquisitions simpler, more transparent and less fragmented.
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You can, particularly where:
However, an adviser may be useful where:
Potential contributors include:
The final document should still have one consistent voice.
At minimum, the people responsible for important sections should verify them.
That may include:
Confirm the overall business description and strategic statements.
Review:
Review material legal statements and potentially sensitive disclosures.
Review transaction or tax statements where included.
Confirm operational facts, where their involvement is appropriate and the sale is known to them.
Do not assume that because a broker or adviser drafted the IM, the seller has no responsibility for checking the information.
Update it when material information changes.
Possible triggers include:
If the process runs for several months, buyers should not continue receiving outdated financial information simply because it appeared in the original IM.
Use a clear version number and publication date.
For example:
Information Memorandum – Version 2.1 – August 2026
This makes it easier to control which document buyers have received.
A serious buyer may then:
This is still not full due diligence.
The purpose of the IM is to move the buyer from:
"This might be interesting."
to:
"I understand this opportunity well enough to decide whether I want to pursue it seriously."
Detailed verification comes later.
An Information Memorandum and vendor due diligence are different.
The IM is a seller-prepared overview of the opportunity.
Vendor due diligence is a more detailed independent investigation commissioned by the seller in anticipation of buyer diligence.
ICAEW notes that sell-side financial due diligence can involve full access to detailed supporting financial information and regular engagement with management.
Vendor due diligence may be considered for larger or more complex processes where several buyers need confidence in the same detailed financial information.
It is not necessary for every SME sale.
Buyers expect strengths to be highlighted, but excessive sales language damages credibility.
Material risks are likely to emerge during due diligence.
An IM should not contain every confidential customer, pricing or employee detail.
A buyer needs enough information to assess earnings quality and potential value.
Financial tables should reconcile throughout the document.
Unsupported add-backs are likely to be challenged.
Explain the actual commercial arrangement.
Show what assumptions support growth.
If the owner is operationally essential, explain the position and transition.
Keep recent trading current during the sale process.
The IM should answer the questions a credible acquirer will naturally ask.
A useful test for every section is:
What decision does this information help the buyer make?
Revenue history helps the buyer assess scale and trajectory.
Customer concentration helps them assess risk.
Management information helps them understand transferability.
Growth opportunities help them assess upside.
If a section does not improve the buyer's understanding of value, risk or strategic fit, consider whether it belongs in the document.
Before releasing your IM, confirm it includes:
Also confirm that:
A finished document could follow this sequence:
The order can change depending on the company.
For a software company, technology and recurring revenue may move much earlier.
For a manufacturer, operations, facilities and machinery may deserve greater prominence.
The structure should reflect what creates value in the particular business.
The best Information Memorandum is not the one that makes the company appear flawless.
It is the one that helps a serious buyer understand why the business is valuable while remaining consistent with what they will discover later.
A strong IM should:
Think of it as the bridge between an initial business-for-sale listing and full due diligence.
For the wider process, read Selling a Business Safely.
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