Short CIMs

January 07, 2025

by a searcher from Harvard University - Harvard Business School in Washington, DC, USA

Hi, I have a question on how to approach the more concise CIMs.

Sometimes I get really good, well laid-out CIMs that have a good amount of information to evaluate. Other times, I get some financials and a tax return.

My question is, for the CIMs that are mostly financials - if I'm still interested in the business after reviewing them - is it appropriate to send a (or many) laundry list(s) of questions that would then add up to what a complete CIM would be, pre-LoI; or do you just let that CIM go and move on?

For clarification, I'm not asking if I can ask them for detailed client lists, what systems they use etc. pre-LoI, but rather things like how many employees they have, percentage split of products/services, how they get new business etc. --- Things that I have seen/received in CIMs without having to ask and that I would need to make an informed LoI decision.

Thanks!

Reply by a searcher
in Chicago, IL, USA

Personally, I find an underwhelming CIM as a sign of a lack of preparedness to sell. That can work in your favor as you may uncover hidden potential, but most likely it will drive you crazy if you move into due diligence.

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I am not a searcher myself but a lender and have some experience working with our clients on this topic. Typically speaking, even if you get a detailed CIM, there are always going to be questions the come up. Usually you will need to put those questions together and send them to the broker or get on a call with the broker and seller and ask those questions. I would not advise anyone to move forward on any deal unless they get solid answers out of the broker and/or seller to address their concerns.

The issue that may come up is timing on those questions. Some brokers and even sellers do not always want to answer every question up front before they know there is an IOI, LOI, etc. in place that they would consider moving forward with. The reason I hear for this is that the brokers can get over-inundated with questions from buyers that might not be real or that might have offers no where near what the seller would entertain. So you are going to have to find out how much information the broker and seller are willing to give you on the front end and you may have to wait to get some of the more detailed questions answered in due diligence on some opportunities.

Maybe some brokers on here can give their opinion, but this is at least what I hear and have seen with my clients. Good luck.

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