How to read a CIM: what to review before making an offer
The CIM (Confidential Information Memorandum) is the document the seller delivers to qualified buyers after the NDA: it summarizes the business, normalized EBITDA, the investment thesis, and risks. As a buyer, your offer (IOI or LOI) is based on what the CIM shows and what you reconstruct; reading it well avoids offering on wrong assumptions or discovering gaps late. This guide explains what to review first in the CIM, what to do when something is missing or unclear, and how to connect it to your offer.
What to review first in the CIM?
Prioritize four areas: the EBITDA bridge, concentration and dependence, disclosed risks, and the proposed transaction structure. The table summarizes what to verify in each and what signals reduce credibility.
| Area | What to verify | Red flag |
|---|---|---|
| Normalized EBITDA bridge | Reconciliation from reported to normalized with amount, justification, and reference to support for each adjustment. | Adjustments without documentation or explanation; EBITDA that cannot be traced to financial statements. |
| Concentration and dependence | Customer concentration, owner dependence, key contracts and term. | Concentration not quantified; no mention of transition plan or mitigation. |
| Risks and contingencies | Litigation, tax issues, fiscal vs financial accounting differences disclosed proactively. | Generic risks with no quantification; what you discover in due diligence should already be mentioned in the CIM. |
| Transaction structure | Cash at closing, seller note, contingent: how the seller proposes to split value. | Unclear structure or one that does not square with the indicated enterprise value. |
Every number you use in your offer must be traceable to the CIM or the statements that back it. If the CIM does not include a documented bridge, request one in writing or reconstruct EBITDA yourself from the information available; do not anchor your offer on an EBITDA the seller has not justified. The guide on normalized EBITDA adjustments in Mexico describes the most common ones and how to document them.
What to do when something is missing or unclear?
Do not base your offer on unwritten assumptions. If the EBITDA bridge is incomplete or an adjustment has no support, ask the seller's advisor for the detail in writing or the data room reference (if you already have access). If something material — working capital, debt, contingency — is not in the CIM, include it in the assumptions of your IOI or LOI so it is clear you considered it and that your value depends on it being confirmed. If the seller does not respond or complete, that is information: a process where the CIM is half-done often brings more surprises in due diligence. The guide on IOI in Mexico details what to include in the indication of interest and how to prepare as a buyer.
How does the CIM connect to your offer?
The CIM is the base on which you build your value and consideration structure. Your IOI or LOI must be consistent with what the CIM presents: if your normalized EBITDA differs from the seller's, explain why (adjustments you exclude, assumptions you change). If the CIM does not clarify working capital or debt, state in your assumptions how you are treating it. A vague or contradictory offer weakens your position in the next round. When you advance to the LOI, the terms you negotiate — price, seller note, contingent — are anchored in what the CIM and due diligence confirm. The guide on how to structure a purchase offer in Mexico covers price, consideration structure, and conditions.
In this guide:
CIM (Confidential Information Memorandum) — what it is, what it contains, and how it is used in the transaction.
How to buy a company in Mexico — full process for buyers.
IOI in Mexico — what to include and how to prepare before sending the indication of interest.
How to structure a purchase offer in Mexico — price and consideration structure.
Due diligence in Mexico — what the buyer reviews after the LOI.
Normalized EBITDA — valuation base and what to document.
Sources
What to review after this guide?
The guide on IOI in Mexico details what to include in the indication of interest and how to prepare as a buyer before drafting it. For the full buy-side process — from sourcing through closing — the guide on how to buy a company in Mexico describes the steps and what to review at each stage.