Information Memorandum: The Central Document in a Sale

The information memorandum is the central sale document. It presents the company comprehensively and serves interested buyers as the basis for their first valuation. In the German-speaking world it is also called an Exposé or Verkaufsprospekt.

The memorandum is not distributed openly. Interested parties receive it only after an anonymous teaser and after signing a confidentiality agreement. Only then is the name of the company disclosed.

What is an information memorandum?

An information memorandum is a confidential document, usually several dozen pages long, in which the seller or his advisor describes the company for prospective buyers: business model, market, figures, organisation and planned sale process. It follows the anonymous teaser and the confidentiality agreement (NDA) in the process and forms the basis for indicative offers. It answers the questions a buyer asks before a serious offer: what the company does, in which market, with which figures and what outlook.

A weak memorandum costs offers and reduces competition in the process. The document is embedded in the process described by Selling a company.

Structure and content

In practice an information memorandum often covers several dozen pages. The structure usually follows a proven pattern:

• Executive summary: the condensed core message, often the most-read chapter.
• Company and business model: history, structure, value creation, products and services.
• Market and competition: market environment, position, customers and competitors.
• Finances: historical figures, current situation and a plan with comprehensible assumptions.
• Employees and organisation: management structure and key people.
• Transaction structure: object of sale, planned process, framework conditions.

Balance is decisive. The memorandum should convince without embellishing. Buyers later check every statement in the due diligence. Overly optimistic presentations stand out there and damage trust.

Every statement needs evidence in the data room

A simple rule spares trouble later: what is in the memorandum should be verifiable in the data room. The following overview shows which statements typically need which evidence.

Statement in the memorandum	Evidence in the data room
Revenue and earnings of recent years	Annual accounts, management accounts
Adjusted earnings figures	Reconciliation with explanation of each adjustment
Customer structure, dependencies	Anonymised revenue list by customer, material contracts
Market position	Named external source, reference date
Employees and key people	Organisation chart, contracts of the management level
Planning	Assumptions listed individually, comparison of plan and actual for previous years

Also set a reference date for all figures and use terms consistently. If you speak of “adjusted earnings” in the introduction, the definition must be readable. What turns your figures into a robust price expectation is described by the company valuation; a first orientation is given by the company value calculator.

Legal framework: protection of secrets and accuracy

Two legal points belong in the planning from the start. This is a classification, not legal advice.

Protection of secrets. Under § 2 Nr. 1 of the Geschäftsgeheimnisgesetz, information is a protected trade secret only if it is not generally known, has economic value and its lawful holder protects it through secrecy measures that are appropriate in the circumstances. For a memorandum this means in practice: confidentiality agreement before release, a manageable recipient list, numbered copies and documented dispatch. The IHK Regensburg cites as typical measures, among others, confidentiality agreements with business partners, access restrictions and the classification of information by sensitivity.

Accuracy. The commencement of contract negotiations alone establishes, under § 311 Abs. 2 BGB in conjunction with § 241 Abs. 2 BGB, an obligation with duties of consideration. And under § 444 BGB a seller cannot rely on an agreed exclusion of liability to the extent that he fraudulently concealed a defect. Both argue for asserting nothing in the memorandum that you cannot evidence, and for naming known weaknesses objectively instead of leaving them out. A liability notice in the memorandum (“information without guarantee”) does not replace this care. How warranties in the purchase agreement later interact with the content of the memorandum is something you clarify with your lawyer.

Distinction: teaser, information memorandum, factbook

The three documents differ in depth of detail and timing.

Feature	Teaser	Information memorandum	Factbook
Purpose	arouse interest	inform comprehensively	evidence data
Level of detail	brief, one to two pages	comprehensive, many pages	deep operating metrics
Anonymity	anonymised	name disclosed	name disclosed
Timing	before NDA	after NDA	in or before the due diligence
Character	qualitative, promotional	qualitative and quantitative	quantitative, data-driven

The teaser is sent to a wider circle and does not name the company. The memorandum follows after the confidentiality agreement. The factbook later supplies hard operating metrics as a data-driven supplement. How these documents fit into the overall process is shown by the process of a company sale.

The role of discretion and the NDA

A sales process is delicate. If it becomes known early, it unsettles employees, customers and suppliers. That is why discretion comes first.

The anonymous teaser protects identity in the first approach. Only after signing a confidentiality agreement (NDA) does an interested party receive the memorandum with the name and the details. This keeps control over sensitive information with the seller. A structured preparation also supports the company valuation, because robust figures safeguard negotiating room.

Does it always have to be a detailed memorandum?

No, the scope should fit the size of the business. For a small business with few employees, a leaner version of a few pages is often enough. The order of magnitude of the market is shown by a KfW survey: the previous owners surveyed in the Succession Monitor Mittelstand 2025 cite a targeted sale price of on average around EUR 499,000, the median is EUR 375,000. At such magnitudes, the effort of a 40-page presentation is not always in proportion to the benefit, while a cleanly structured short profile with evidenced figures suffices. For the first anonymous approach, the business exchange nexxt-change is also suitable: you can list there anonymously, and use is free of charge according to IHK Nord Westfalen.

An example for illustration (constructed, without real figures): a craft business is sold to a successor from the region. Instead of a long memorandum, a document is produced with business model, customer structure, three annual accounts, employee overview and a clear statement on what depends on the owner after the sale. The buyer can follow the figures in the data room, and the conversations begin on a common basis.

How many businesses will be up for handover in future has been estimated by IfM Bonn: 186,000 companies in the years 2026 to 2030, on average around 37,200 per year. Buyers therefore see many offers; a clear, evidenced presentation makes it easier for them to place yours. For the regional picture of succession in Germany see Business succession in Germany.

Information memorandum, teaser, NDA: the documents of a sales process are listed with short definitions in the M&A glossary.

Frequently asked questions

What is the difference between a teaser and an information memorandum?

The teaser is a short, anonymised summary meant to arouse interest. The information memorandum is the detailed sale document with name and details. It is released only after signing a confidentiality agreement.

How long is an information memorandum?

There is no fixed length. In practice it often covers several dozen pages. What matters is not the length, but that all essential questions of a buyer are answered clearly and verifiably. For small businesses a shorter version often suffices.

When does an interested party receive the memorandum?

After two steps: first the anonymous teaser, then the confidentiality agreement. Only after that is the memorandum handed over with the name of the company.

What is the factbook for in addition to the memorandum?

The memorandum tells the qualitative story. The factbook supplies the hard operating metrics as a data-driven supplement. It is used later, usually in or before the due diligence.

Who prepares the information memorandum?

As a rule the M&A advisor together with the entrepreneur. The entrepreneur supplies knowledge and figures; the advisor structures, classifies and drafts. The aim is a correct, convincing and review-proof presentation.

Is the seller liable for statements in the memorandum?

That depends on the individual case and the later purchase agreement. By law, an obligation with duties of consideration already arises with the negotiations (§ 311 Abs. 2, § 241 Abs. 2 BGB), and fraudulently concealed defects cannot be waived by exclusions of liability (§ 444 BGB). Evidence every statement, therefore, and have the document legally reviewed.

Sources, retrieved on 29.09.2026: § 2 GeschGehG, § 311 BGB, § 444 BGB (lxgesetze.de); IHK Regensburg, Der Schutz von Geschäftsgeheimnissen (ihk.de/regensburg); KfW Research, Nachfolge-Monitoring Mittelstand 2025 (kfw.de, Fokus Volkswirtschaft Nr. 526, 9 January 2026); IfM Bonn, Unternehmensnachfolgen in Deutschland 2026 bis 2030 (ifm-bonn.org, November 2025); IHK Nord Westfalen on nexxt-change (ihk.de/nordwestfalen). Classification, not legal advice.