What Is an Information Memorandum and How Do You Write One?

An information memorandum (IM) is the primary sales document in a UK business sale process. It tells the story of your business to prospective buyers. Who you are, what you do, how you make money, and why someone should want to own you. Without a well-constructed IM, serious buyers cannot progress, and most will not bother trying. Getting it right is not a formality; it is often the difference between a competitive process and a quiet one.

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What is an information memorandum in a UK business sale?

The IM. Sometimes called a Confidential Information Memorandum (CIM) is a structured document, typically 30 to 60 pages, prepared during the early stages of a business sale. It is sent to prospective buyers who have signed a non-disclosure agreement (NDA) and expressed genuine interest.

Think of it as the business case for buying your company. It is not a legal document. The Sale and Purchase Agreement (SPA) handles that. But it is the foundation on which a buyer forms their initial view of value and strategic fit. A well-written IM generates serious interest and credible offers. A poorly constructed one raises doubts before a buyer has even spoken to you.

The IM is typically marked "Private and Confidential" and circulated on a controlled basis. It should never be sent without a signed NDA in place.

What does an information memorandum contain?

A good IM follows a logical structure that takes a buyer from overview to conviction. The sections below are standard in UK mid-market deals.

SectionPurpose
Executive SummaryTwo to three pages. Captures the investment thesis. What the business is, its size, sector, and why it is being sold. Often the only section a buyer reads first.
Business OverviewHistory, ownership structure, legal entity (Companies House details), locations, and how the business operates day to day.
Products and ServicesWhat you sell, to whom, at what margins, and what differentiates your offer from competitors.
Market PositionYour sector, competitive landscape, customer concentration, and where you sit in the market.
Management TeamBiographies of key personnel. Buyers are buying people as much as profit. This section matters enormously.
Financial PerformanceThree to five years of historical financials, adjusted EBITDA, key metrics, working capital profile, and capex requirements.
Growth OpportunitiesCredible, evidenced routes to growth. New markets, contracts in pipeline, capacity headroom, geographic expansion.
Deal RationaleWhy now, what structure is preferred, and any conditions relevant to the seller (e.g. Management retention, site continuity).

The financial section deserves particular attention. Buyers will scrutinise adjusted EBITDA closely. Normalisations. Removing one-off costs, owner salary adjustments, related-party charges. Should be clearly explained and defensible. Unexplained adjustments invite scepticism.

Who writes the information memorandum?

In most UK mid-market transactions, the IM is written by the corporate finance adviser leading the sale process. This is one of the core services they provide and a significant part of what their fee covers. They will interview you at length, review your management accounts, and draft the document over several weeks.

Your role as the owner is to review, correct, and add texture. Particularly around the business story, competitive positioning, and growth narrative. No adviser knows your business as well as you do. The best IMs combine an adviser's structure and objectivity with the owner's genuine understanding of the market.

Occasionally, particularly in smaller transactions, an owner may draft the IM themselves, with an adviser reviewing and tightening it. This is workable but carries risk: owners often struggle to write objectively about their own business, tend to either undersell or oversell, and may omit information that buyers expect to see as standard.

If you are preparing for sale without an adviser, at minimum have someone independent. An accountant or experienced non-executive. Review the document before it goes out.

What makes a good IM. And what makes a weak one?

This is where deals are won and lost before a single meeting takes place.

A strong IM:

  1. Opens with a compelling, honest executive summary that lands the key investment points immediately
  2. Presents financials clearly, with adjustments explained line by line
  3. Tells a coherent growth story backed by evidence. Not aspiration
  4. Addresses customer concentration, key-person risk, and other sensitivities head-on rather than hoping buyers won't notice
  5. Presents the management team as capable of running the business post-sale
  6. Uses plain language. Buyers read dozens of these documents; jargon and padding slow them down
  7. Is professionally presented but not over-designed. Substance over aesthetics

A weak IM:

  • Leads with lengthy company history before making any investment case
  • Contains financial data that does not reconcile with the statutory accounts filed at Companies House
  • Glosses over obvious risks (a single customer representing 40% of revenue, for example) buyers will find them in due diligence and wonder what else you have hidden
  • Overstates the growth opportunity with no supporting evidence
  • Has a management section that makes the business sound entirely dependent on the owner. A significant red flag for most buyers
  • Contains factual errors, inconsistent figures, or basic formatting issues that suggest a lack of care

The credibility you establish through a well-written IM carries forward into the entire process. Buyers who trust the document are buyers who engage properly.

What are buyers actually looking for when they read it?

A buyer reading your IM is trying to answer five questions as quickly as possible:

  1. Does this business fit our strategy or investment criteria? Trade buyers are looking for strategic fit. Financial buyers (private equity, family offices) are looking for EBITDA scale, margin profile, and growth potential. If the IM does not make the fit obvious, they move on.

  2. Is the EBITDA real and repeatable? Adjusted EBITDA is the primary valuation metric in most UK SME and mid-market deals. Buyers want to see normalised earnings that are credible, consistent over multiple years, and not dependent on one contract or one person.

  3. What are the risks. And are they manageable? Customer concentration, supplier dependency, regulatory exposure, lease obligations, key-person risk. Buyers expect some of these; they just want to understand them.

  4. Is the management team capable? Particularly relevant where the owner is planning a full exit. Can this business continue to perform without you in it?

  5. Is there a genuine growth story? Not projections that bear no relation to history, but credible, grounded reasons to believe the business can be larger in three years than it is today.

EBITDA multiples in UK mid-market deals vary meaningfully by sector. As a rough guide for owner-managed businesses as of 2025–2026:

SectorTypical EBITDA Multiple Range
Manufacturing4x – 7x
Logistics and distribution4x – 6x
Construction and civil engineering3x – 6x
Healthcare services6x – 10x
Pharmaceutical services6x – 9x
Professional services (SME)4x – 7x
Recruitment4x – 6x
Food production4x – 7x
Business services / FM5x – 8x

These are indicative ranges. Quality of earnings, recurring revenue, management depth, and competitive dynamics all move the dial significantly within any given range.

Where does the IM fit in the broader sale process?

The IM sits in the early-to-mid stage of a structured sale process. A typical UK mid-market transaction runs as follows:

  1. Preparation phase (2–4 months) financial clean-up, valuation work, identifying the right adviser
  2. IM drafting (4–8 weeks) adviser interviews owner, reviews financials, prepares document
  3. Teaser and NDA stage. A one-page anonymous summary (the "teaser") goes to a longlist of buyers; those who respond sign an NDA and receive the IM
  4. Indicative offers. Buyers submit non-binding indicative offers based on the IM, typically within 3–4 weeks of receipt
  5. Management presentations. Shortlisted buyers meet the team; the IM supports but does not replace these conversations
  6. Final offers and Heads of Terms (HoTs). Preferred buyer submits binding offer; HoTs are agreed
  7. Due diligence and SPA (3–5 months) buyer verifies everything in the IM; legal documentation follows
  8. Completion

The whole process from IM to completion typically runs 9–15 months for a UK mid-market deal. The IM is not the end of anything. It is the start of serious engagement.

FAQ

How long should an information memorandum be? Most IMs for UK owner-managed businesses run between 30 and 60 pages. Shorter than 25 pages often feels thin and unconvincing. Longer than 70 pages and buyers stop reading properly. Aim for substance over length.

Is an IM the same as a business plan? No. A business plan is written for internal use or for lenders. An IM is written specifically for prospective acquirers as part of a sale process. The audience, purpose, and structure are different.

Do I have to disclose everything in the IM? The IM should be accurate and not misleading. Misrepresentation can create legal liability under the SPA. However, it is not a due diligence data room. Commercially sensitive specifics (customer names, pricing, contracts) are often held back until a preferred buyer is under exclusivity.

What happens if a buyer asks something the IM does not cover? That is normal. Buyers submit questions after reading the IM, which the adviser handles through a Q&A process. A well-written IM reduces the volume of basic questions and focuses buyer queries on genuinely substantive points.

Can I send the IM without using an adviser? Technically yes, but it carries meaningful risk. A poorly constructed IM can undervalue your business, expose sensitive information unnecessarily, or attract the wrong buyers. For most transactions above £2.5m in value, the cost of a good corporate finance adviser is recovered many times over in deal terms.

How confidential is the IM in practice? NDAs are standard but imperfect. The IM should be written on the assumption that it could, in the worst case, be seen by a competitor. That does not mean withholding important information. It means being thoughtful about the level of operational detail included before exclusivity.

This article contains general information only and does not constitute financial or tax advice. Every business sale is different. Speak to a qualified UK tax adviser about your specific situation before making any decisions.

Find out what your business is worth

Before your IM can make a compelling case to buyers, you need a clear view of your own valuation. Use the free valuation calculator at Succession Group to get an indicative sense of where your business sits. Based on your sector, EBITDA, and growth profile. It takes under five minutes and gives you a grounded starting point before any formal process begins.