✔ For deal leads who are responsible for getting approval for M&A deals
Or…
✔ For corporate leaders who are on the investment committee, and responsible for approving M&A or investment deals
Once substantially all of the diligence and valuation work is done on a new investment, the deal goes before the investment committee for approval.
This could happen either before a non-binding offer (LOI) or a binding offer.
❓ What are the main pieces of information to include in a memo to the committee?
❓ Or conversely, what information should the executive committee be looking for before approving a deal?
❓ And why is crafting this memo carefully so crucial?
Here’s why:
𝗚𝗲𝘁𝘁𝗶𝗻𝗴 𝘁𝗵𝗶𝘀 𝗿𝗶𝗴𝗵𝘁 𝘄𝗶𝗹𝗹 𝗽𝗿𝗲-𝗲𝗺𝗽𝘁 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗵𝗲𝗹𝗽 𝗰𝗿𝗲𝗮𝘁𝗲 𝗰𝗼𝗻𝘀𝗲𝗻𝘀𝘂𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗱𝗲𝗮𝗹.
❌ Missing important information could waste time simply sharing facts.
❌And conversely, including too much information could take the group down rabbit holes and derail the conversation.
Here is a common outline I’ve used often to frame the discussion.
This should be adapted based on investment-specific considerations and the level of knowledge that the audience has about the deal.
The suggested outline below typically runs 12-15 pages.
Be sure to send this at least 24 hours (ideally 48 hours) before the actual meeting to give the group time to absorb the information.
The actual meeting should be reserved for constructive discussion, not repeating factual information.
► Company overview / highlights [2-3] pages, can be largely taken from the Target’s pitch materials
► Strategic Rationale – 1 page
► Key Diligence Findings – 2-3 pages. Only include the key findings by functional area. Move all details to the appendix.
► Past and projected financials – standalone – 1 page
► Revenue Synergies, Cost Synergies, Integration Costs and Transaction Costs Assumed – 1 page
► Valuation “football field” (a simple illustration that shows the valuation under the Target management case, Acquiror case, downside case, transaction comparables, and trading comparables) – 1 page
► Deal Risks and Mitigation Plan – 1 page
► Key LOI or binding agreement terms – 1-2 pages (keep this commercial, avoid legalese)
► Post-close operating model (and high-level Integration Plan, if ready to present) – 1 page
► Timeline and Next Steps – 1 page