$50M Services firm currently having an IB take us to market.
Early CIM drafts have been 50-65+ page decks, and compared to the last 2 decks I saw from my colleagues selling their $250M-$750M firms, theirs have been 15-20pages.
Is this a red flag? Our bankers have said its so that they can give a great supportive picture of the business, but if I was to be on the buy-side is that going to bore/disengage a prospect?
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I typically see 40-70. BUT, there’s truly no difference to value between 20 and 70.
Worked at a LMM firm (€10m - €150m EV) before. Our CIM‘s were always painfully long, 70-100 pages each. If you look at GS/EVR decks online, they are way shorter and far less „fancy“. Think smaller firms have to compensate/justify their fees that way…
It should be focused on quality and objective of content vs length. With that said sometimes other objectives, and at times process dynamics at play (ie is there already a buyer at a compelling value who has front loaded work and no need to broadly disseminate information or a bunch of buyers and trying to winnow field or will it be a very broad process and buyer discovery engagement needed). With that said they will vary a lot by group, firm, nature of business etc. I have seen amazing shorter and longer CIMs with great, and relevant, detail that help to advance internal work for buyers so 2nd / later rounds aren’t a nose dive. I have also seen short and long CIMs that are worth less and rougher then toilet paper and clear that another buyer better positioned, or the bankers / company couldn’t articulate what they try were selling / own in 10 or 100 pages. Sellers reps do get bad raps and calls of subpar process or information which may seem like nothing until you are on an environment like the one we have had the last few years and a committee is asking what happened with a process or value that was supposed to be achieved. Not at all suggesting a CIM makes or breaks this but is part of a broader process and that feedback sometimes gets delivered (typically by other banks or potential buyers who dropped early citing some issue with info as an excuse).
You should press as to objective and focus of content and why vs page length and things should fall nicely from there ideally.
Work at a BB. Id say it really depends, but the ones Ive worked on have been 100-150 pages
That’s insane, what kind of businesses need that lol
Oil and gas CIMs get pretty big and are hard to slim down.
P&U decks can be long - different power types, different regions and power hubs / markets, operating and development assets, platform, operations and asset management - can be a lot to cover for a decently sized portfolio.
Unless it’s a truly complex business I’m not reading shit after the exec sum (which itself should not be more than like 10 slides). ChatGPT enterprise is summarizing those 100 page monstrosities for me.
There was an insanely large sellside/merger divestiture we looked at years ago, had to be broken into two 150+ page each PDFs because it was so large. Never seen anything like it since.
It depends. What kind of process are you running? Narrow, strategic-focused? 20 pages is plenty.
Broad or PE-focused? 40-50 feels about right. Anything over that means you are not effective at communicating the business model and/or differentiation.
40-60 is sweet spot for a business that requires real explanations, e.g. multiple distinct products / service lines or tons of case studies etc. Anything longer is mind-numbing, anything shorter probably does not contain enough information and will need to be supplemented. I typically see longer due to 1) nature of senior guys asking for more and more, and 2) we tend to have pretty comprehensive financial sections vs. having a full datapack to share immediately alongside the CIM.
I wouldn't say it's a red flag but it's a colossal waste of time. I used to work at a shop that did 50+ page CIMs and now work at one that does 20-25 pages which is really all you need. The goal is to maximize value for the client and get them to market quickly. I don't think waiting an extra week while the team formats the appendices is worthwhile. Some of this is industry dependent though.
Most of the CIMs I’ve done have been 50-60 pages (BB). They felt a little long, but 20 seems short to hit on all the topics we typically covered (exec sum, company overview, product overview, industry, growth strategy, financials). 30-40 range seems ideal
How many pages in the appendix vs the body?
A large number of appendix pages can be useful for laying out data points or other support behind assumptions that will drive the model work and narrative in a certain direction.
15-20 pages sounds insanely light
In my experience, CIM length was proportional to the complexity of the business. An easy to understand machine shop will have a 30 page CIM, while a complex SaaS business with multiple platforms and streams of revenue will need more pages to explain. Buyer calls would often reveal if we missed something in the CIM. If everyone asked about a certain geographical expansion or product line that wasn’t elaborated in the CIM, it was too short. If everyone asked for info that was in the CIM but buried on page 77 in 8pt font, it was too long.
$50 M valuation or Ebitda?
If the former 60 pages is too long by definition because your entire fee could go to kinkos
Value - trust me I’m watching their invoices closely for this reason
I was joking but something tells me the data quality might not be there to justify 60 clean pages. I'm picturing confusing quick book outputs from someone's laptop and scanned paper receipts with coffee stains
Let’s see. Middle Market bank. Think of Baird, Blair, HL. Broad processes where every PE and their mothers are called:1 page at a glance, 8-12 pages exec.sum.,~15 investment highlights, 20-25 company overview, 10-12 Industry pages ripped from mkt study, and 5~10 on financials (some are very standard and others require some sort of data analyses and writeups). So total: ~60-75. Narrow processes / inbound already biz: cut industry and financials (buyers are going to see the model, data cubes, and mkt study anyways) and less investment highlights / positioning. Do about ~35-40 pages. Now extremely narrow business: No cip maybe a 10 page fireside. straight to data room opening and diligence.
20-25 pages on company overview is not an overview but a fucking novel.
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