Getting a look at a CIM under the radar
Say I heard a small to midsize ($500m revenue) company has recently launched a PE sale process. And we would like to see that CIM because the info would be useful to our portco's in the space (would help us with TAM estimates, competitive strategy etc.).
However, we wouldn't be allowed into the process the normal way. We're not a logical buyer and some of our portco's are uncomfortably close to the company that's selling.
If I were to get my hands on that CIM, what are the channels for doing that? We don't know which IB is running it. First thought I guess is figure out which IBs might be advising likely buyers, and call a friend there. Just wondering if I'm missing something obvious because this feels like a rookie question, and yet it hasn't come up for me till well into my career.
Thanks!
Or call a friend that got a cip. If it’s MM it’s probably a broad auction. Another way is to ask bankers if they’ve heard of it and they’ll give you process info
Not a comment meant to disparage you as I understand you're following your incentives here, but from the IB's perspective or objective perspective, doesn't this feel unethical? I'm obviously a beginner in IB but would be curious about WSO's thoughts on these kind of dealings.
Presumably they should not see the CIM without signing an NDA and if they do that'd be illegal? If this happens all the time that's one thing too idrk so am curious how people perceive this low level corporate espionage-like activity.
Could be unethical, depending on the circumstances. But more just trying to learn the mechanics of where the info tends to flow. I could just as easily be on the sell side, asking the forum this question for the purpose of protecting my confidential info.
Separately, it's unfortunate how often ethical concerns prevent someone from doing XYZ when the person had no unethical plan. In this case, if the seller could scan our brains and learn what we wanted to use the information for, they'd actually be glad to share it with us and make a fee for it. But since they can't scan our brains, they have to assume the worst intentions and the opportunity is lost for a mutually beneficial exchange.
In any event I think it would be helpful for several WSO readers if those who are familiar with this situation would shed some light.
Why not ask the sellside bankers to do some work for you on the space. Just a strategic overview / the information you would want from the CIM anyway. They’re going to lift material from that CIM and others, albeit changed just enough to not be liable lol
Yeah this is pretty unethical... does it happen with these small companies? Yes, sure, usually by companies getting involved in a process they're not truly interested in. If you can pass muster that you'd be interested they may send it, but this guy is clearly only in it for the non-public info. It's one thing to hear street gossip "oh company XYZ is running a process, heard they are looking for $X valuation" and entirely another to be after the CIM for detailed metrics.
Your IB friend is not going to send you a CIM, he can and will lose his job for that.
If you have friends at similar funds who may be logical buyers, perhaps they would print it out for you. But this is technically not allowed and I wouldn't push too hard here, IMO you are crossing an ethical line
I didn't ask if it was ethical. I asked only what I asked. I would actually discourage anyone from going to WSO for moral advice.
Not unethical to ask the bankers for a CIM without intention on bidding to get "learnings" on an industry. That said if there's competitive dynamics with a portco the bankers need to use discretion on whether to let you into the process or not. This is pretty standard in the industry and why sellers are often hesitant to broaden processes.
Also not illegal to receive a CIM without signing an NDA. It would be a breach of the NDA by whoever sent it to you, but that would be a civil matter against that party, not breaking any laws.
Yep agree with this (from a RE seat). Collecting books for the info is pretty common. Most NDAs have language that the info is only to be used for the transaction
Probably not through the banks, they have much more to lose by sharing a CIM with someone not in the process. Definitely not the sell-side bank - likeliest would be a bank given the book as part of buyside.financing.
Reach out to your friends at funds that were likely to have been contacted. They will be more receptive to sending you the CIM (or, more likely, print it out and give it to you given NDAs).
500MM revenue is considered small-medium now??????
Fuck me….
I honestly have no idea. Don't trust my labels.
You need a very good friend (probably costing you a diner and a good bottle of wine) working on that deal / industry team at said bank and you’ll want a paper copy… without the former you’re never going to get what you are after. Good luck
The only way you get that CIM is by having very close contact with the sell-side advisor or other interested PE(s). If someone called me asking for a CIM, I'd tell them no way in hell am I sharing the CIM with them unless they want in on the process.
I'd share the sources/materials we used when developing the CIM but no way am I sending the actual CIM.
You need to be close enough friends with someone that they are willing to violate an NDA for you...
This
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