BEST PRACTICES FOR ACQUISITION STAGE INVESTMENT MEMO?
We are looking at standardizing our searcher's acquisition stage investment memos, and wanted to get some of ideas from the community for best practices. In the Nordics, investment memos (or CIMs if you will) are treated more as marketing than legal documentation. The legal fine print will be in a separate term sheet or investor agreement.
At the moment, the draft outline has:
1. Executive Summary: What are the key reasons why we are acquiring?
2. Transaction: Expected returns, form of investment, sources and uses of capital, cap table post-acquisition
3. Industry: Industry assessment, key competitors
4. Company: Overview of the company, history, current owner, business model, financial performance
5. Management: New management team, board of directors
6. Value creation: Financial projections, growth opportunities, operating improvements, exit scenarios
7. Key risks: Risk, probability, severity, mitigation
8. Appendix: Audited financial statements, five year financial forecasts, SHA/IM term sheet, Searcher CV
Any suggestions on the outline, or more generally on what to include and what not on an investment memo?
(edit: fixed the broken layout)