What is an Investment Teaser?
An Investment Teaser is a one- or two-page professional document that is used to introduce an acquisitionMergers Acquisitions M&A ProcessThis guide takes you through all the steps in the M&A process. Learn how mergers and acquisitions and deals are completed. In this guide, we”ll outline the acquisition process from start to finish, the various types of acquirers (strategic vs. financial buys), the importance of synergies, and transaction costsor investment opportunity to strategic or financial buyers. The teaser is a most important document in a transaction process as it is the first document that prospective buyers look at before proceeding with a deal. Teasers are typically prepared “blind” (i.e., on a no-name basis) to maintain the confidentiality of the potential target investment.
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The document is often prepared by the investment bankJobsBrowse job descriptions: requirements and skills for job postings in investment banking, equity research, treasury, FP&A, corporate finance, accounting and other areas of finance. These job descriptions have been compiled by taking the most common lists of skills, requirement, education, experience and other that is representing the company. It is a marketing document, whose primary purpose is to entice potential buyers to come to the deal-making table.
Qualities of an Effective Investment Teaser
Although there is no maximum page limit when preparing an Investment Teaser, the teaser should probably not exceed three pages in length. Otherwise, potential buyers may feel overwhelmed by the amount of information to process and lose interest.It is crucial to only include key information and to keep the content concise.The Investment Teaser should include relevant graphics to give potential buyers better insight into the products and/or services provided by the company.The name of the company should not be disclosed in the document.A well-written investment highlights section, company overview section, company products/services section, and financials section are crucial to building a successful Investment Teaser.
Contents of an Effective Investment Teaser
An effective Investment Teaser typically includes the following:
Company Overview: An investment teaser usually includes a brief description of the geographical regions and the competitive landscape the company operates in. A company description should also be provided to give potential buyers a better understanding of the company. It is critical that the company information is not directly copied from the company’s website, since doing so may enable potential buyers to identify the company when it wishes its identity kept confidential.Customers Overview: If possible, major customer names should be included to build credibility for the company.
Deal Information: Details on the type of transaction should be indicated (strategic partnership, full sale, partial sale, buyout, etc.) in the investment teaser.Product and/or Sales Mix: A list of the main products/services offered and the revenue generated from each one.
For example, let’s assume that Company AppCentral, the largest creating company in the USA, is looking to form a strategic partnership in China. AppCentral tasks CFI to lead the deal and prepare an Investment Teaser for potential buyers in China. An example Investment Teaser can be prepared as follows:
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The Next Steps
An Investment Teaser is sent to potential buyers such as strategic investors (those who operate in the same industry) and financial investors (Private Equity firms). The objective of a Teaser is to attract interest and potentially execute a deal with the seller.
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If potential buyers are interested in the business, a Non-Disclosure Agreement (NDA)Non Disclosure Agreement (NDA)A Non Disclosure Agreement (NDA) is a document that is exchanged between a prospective buyer and a seller in the initial stages of an M&A transaction. with the company is signed to create a confidential relationship between the parties and protect confidential information or trade secrets. Upon signing the NDA, the company’s identity will be disclosed and more information will be provided in a Confidential Information Memorandum (CIM)CIM – Confidential Information MemorandumAConfidential Information Memorandum(CIM) is a document used in M&A to convey important information in a sale process. Guide, examples, and template.
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