Information Memorandum Example: What Each Section Should Contain

The confidentiality notice appears on the first or second page of the IM. A strong confidentiality notice includes an explicit restriction on distribution ("This document is provided solely for the use of the intended recipient"), a statement that the document may not be reproduced or disclosed, a disclaimer of warranty ("The information has been compiled from sources believed to be reliable but is provided without representation or warranty"), and a direction to return or destroy the document if the recipient elects not to proceed.

Example language: "This Confidential Information Memorandum has been prepared by [Broker Name] on behalf of the Vendor. It is strictly confidential and intended solely for the use of qualified prospective purchasers who have executed a Non-Disclosure Agreement. Recipients may not copy, reproduce, or distribute this document or its contents. The information contained herein has been obtained from sources believed to be reliable; however, no representation or warranty, express or implied, is made as to its accuracy or completeness. Recipients should conduct their own independent due diligence. This document does not constitute an offer or solicitation to purchase."

The Executive Summary is the most-read section of the IM and is typically written last. A strong Executive Summary gives a qualified buyer everything they need to decide whether to read further.

Example content for a cafe business: "Acme Café presents a compelling acquisition opportunity in Melbourne's competitive inner-north hospitality market. Established in 2017, the business has grown consistently to generate $1.4M in annual revenue and $280K in EBITDA (FY2024). The business trades six days per week from a 120-seat venue on a 5+5 year lease with four years remaining on the initial term. Revenue is diversified across dine-in (68%), takeaway (21%), and regular corporate catering contracts (11%). The business operates with a stable management team of eight and requires minimal owner involvement in day-to-day operations. The vendor is selling for lifestyle reasons and is willing to provide a three-month transition period. The asking price of $1.2M reflects a 4.3× EBITDA multiple, in line with comparable Melbourne hospitality transactions."

Notice what the Executive Summary does not do: it does not use superlatives ("best café in Melbourne"), it does not make claims it can't substantiate, and it does not withhold the asking price or financial performance. A strong IM is direct and confident.

The Business Overview covers the history and structure of the business. It should tell the story of how the business was built without overselling. Example content: "Acme Café was established in March 2017 by Jane and Michael Smith, who identified an opportunity in the inner-north Melbourne precinct for a quality-focused all-day dining venue. The business operates as Acme Café Pty Ltd (ACN: XXX XXX XXX) and trades under a single ABN. Jane and Michael own equal shares in the company. The sale includes the business as a going concern — all plant, equipment, fixtures, fittings, goodwill, and intellectual property including the Acme Café brand and social media accounts. The commercial lease, fit-out, and supplier relationships are also included. Stock at settlement will be purchased at cost in addition to the sale price."

The Financial Overview is the most scrutinised section of any IM. It must be accurate, clearly presented, and include a proper explanation of normalised earnings.

Example structure: Present a 3-year income statement summary (FY2022, FY2023, FY2024) showing Revenue, Cost of Goods Sold, Gross Profit, Gross Margin %, Operating Expenses, EBITDA, and EBITDA margin. Then present a normalised EBITDA bridge showing adjustments: add back owner salary above market rate, add back one-off legal costs, add back personal vehicle, arriving at Normalised EBITDA.

What separates a professional IM from a weak one is the add-back explanation. Each adjustment must be individually described and justified. "Add back — Owner salary adjustment: The vendor draws $180K per annum. A replacement manager would cost approximately $90K in this market. The add-back of $90K represents the difference between the owner's remuneration and a market-rate equivalent." Unexplained add-backs undermine buyer trust.

The Growth Opportunities section presents specific, actionable upside scenarios — not vague aspirations. Each opportunity should describe what it is, why it hasn't been pursued by the current owner, what investment is required, and what the estimated revenue or EBITDA impact would be.

Example opportunity: "Extended Trading Hours — The venue currently trades Tuesday to Sunday, closing Monday. The immediate neighbouring hospitality businesses trade seven days per week. Trading Monday would require hiring one additional full-time staff member (estimated annual cost: $65K) and is expected to generate approximately $150K in additional annual revenue based on comparable daily takings. The current owner has not extended trading due to personal preference. A new owner with an additional staff member could implement this change within 30 days of settlement."

This is specific, credible, and easy for a buyer to evaluate. It tells them what it will cost and what they can expect in return.

The Risk Factors section demonstrates professional honesty and builds buyer trust. Attempting to omit risks backfires — buyers will identify them in due diligence anyway, and an IM that doesn't acknowledge obvious risks signals that the broker or vendor is not to be trusted.

Example risk factor: "Key Person Risk — The vendor, Jane Smith, is the primary customer-facing identity of Acme Café and is known personally to many regular customers. There is a risk that a portion of customers may not continue to patronise the venue following a change of ownership. This risk is partially mitigated by: (1) the strength of the brand and the Google review profile (4.8 stars, 620 reviews), which demonstrates that the venue's reputation extends beyond a single individual; (2) the stability of the kitchen team, with the Head Chef and Sous Chef both having been employed for 3+ years; and (3) the vendor's commitment to a 3-month transition period during which she will introduce the new owner to key regular customers and corporate accounts."