Documents in the M&A Process
What documents will you receive during the purchase process? How to properly read and evaluate the teaser, confidentiality agreement, and company profile. Includes checklists for each document.
1 The Teaser
The teaser is an anonymized brief profile of a company that is for sale. It gives you an initial overview—without revealing the company's name or exact location.
A professional teaser is usually only created when an M&A advisor is involved in the sale process. For small companies (under 2 million EUR) that are listed directly by the seller, there is often no separate teaser—in these cases, the listing on DUB itself serves as the primary source of information. The following points apply primarily to advisor-supported sales processes.
What does the teaser say?
Industry and Business Model – What does the company do? In which market is it active?
Key figures – Approximate revenue, number of employees, region
Reason for Sale – Why is the company being sold? (e.g., succession, retirement)
Transaction structure – What type of deal is planned? (Share deal, asset deal)
Asking price – Often specified as a range
On DUB, you'll find both agent-assisted listings (with professional teasers) and direct listings from sellers. For direct listings, the listing itself contains the key details—review it with the same care as you would a traditional teaser.
What should you look for?
Is the industry a good fit? – Compare it to your buyer profile
Is the scale right? – Are revenue and purchase price within your budget?
Is the reason for the sale plausible? – Succession is common and positive; “strategic realignment” can mean many things
Is the information complete? – Missing financial data in the teaser is a red flag
Don't let a flashy teaser blind you. Some companies are professionally "glossed over." Focus on hard facts (revenue, profit, number of employees) rather than marketing jargon.
- Are the industry and business model clearly described?
- Are revenue and/or earnings (EBIT/EBITDA) specified?
- Number of employees and region specified?
- Is the reason for the sale plausible and understandable?
- Is the asking price within your budget?
- Does the company match your buyer profile?
2 The Non-Disclosure Agreement (NDA)
Before you receive detailed information about a company, you must sign a non-disclosure agreement (NDA). This is standard practice and protects both parties.
Why is the NDA necessary?
Protection for the seller – Confidential company information (customers, revenue, contracts) should not be disclosed to third parties
Protection for you – Your interest in the purchase also remains confidential
Building trust – The NDA signals that both parties are serious about the transaction
On DUB, the NDA is completed digitally when you express interest in a listing. You don't have to draft it yourself—but you should still read and understand it.
The 7 Most Important Points of an NDA
Subject Matter – What exactly is “confidential”? (All information about the target company)
Term – How long does the confidentiality agreement remain in effect? (Typically: 2–3 years)
Permitted Disclosure – Are you allowed to involve advisors (attorney, tax advisor)? (Should be permitted)
Non-Solicitation Clause – You may not solicit employees of the company
Obligation to Return Documents – What happens to the documents if the deal falls through?
Contractual Penalty – Is there a penalty for breach? (Not always, but possible)
No Obligation to Purchase – The NDA does not obligate you to make a purchase
Be cautious of NDAs that include blanket contractual penalties or the right to seek injunctions against you as the buyer. Such clauses are disproportionate—please ask the seller or their advisor to remove these provisions.
Be pragmatic when negotiating the NDA: Focus on real deal-breakers, such as blanket contractual penalties or unusually long terms. Negotiating over minor details signals inexperience and can cause sellers or advisors to lose interest in you. The NDA is a standard document—treat it as such.
- Is the scope of confidentiality clearly defined?
- Is the term appropriate (max. 2–3 years)?
- Is the involvement of consultants permitted?
- No excessive contractual penalties?
- Are there no provisions for a lump-sum contractual penalty or a preliminary injunction?
- Is the obligation to return or delete documents specified?
3 Detailed Company Information: IM vs. Annual Financial Statements
After signing the NDA , you will receive detailed information about the company. The documents you receive will depend on whether an M&A advisor is involved or whether the seller is handling the process on their own.
With a sales consultant: You’ll receive a professionally prepared information memorandum (IM)—a comprehensive overview of the business.
Direct sale (common for small deals): After signing an NDA and having a personal meeting, the seller provides annual financial statements and business performance analyses. There is generally no formal IM.
Option 1: The Information Memorandum (IM)
An IM is typically prepared by the seller’s M&A advisor—especially for targets with a purchase price of approximately 5 million EUR or more. It is a comprehensive document that professionally presents the company.
What’s in the IM?
Company profile —history, legal form, location, ownership structure
Business model – products/services, value chain, unique selling propositions
Market and Competition – Market Size, Growth Trends, Competitive Position
Customers and Sales – Customer structure, top customers, sales channels, dependencies
Employees and Organization – Organizational Chart, Key Personnel, Turnover
Finances – Income Statements for Recent Years, Balance Sheet, Cash Flow, Adjustments
Future Outlook – Planning, Investment Needs, Opportunities, and Risks
By its very nature, the IM presents the company in a positive light. Read it critically and verify the information later during the due diligence process. The financial figures, in particular, deserve close scrutiny.
Option 2: Financial Statements & Business Analysis (typical for small deals)
For small companies with less than 2 million EUR in revenue, the seller often handles the process themselves—without an M&A advisor. The business model is usually easy to understand. Instead of a formal term sheet, after signing an NDA and having an in-person introductory meeting, you’ll receive:
Annual financial statements —balance sheets and income statements for recent years, prepared by the tax advisor
BWA (Business Analysis) – Monthly or quarterly analysis of current business figures
Additional documents —lease agreements, customer lists, employee overview, etc.—are generally provided only as part of the due diligence process, near the time an indicative offer is submitted or an LOI is signed
In direct sales, a face-to-face conversation with the seller is often the most important source of information. This is where you’ll learn details about the business model, customers, employees, and the reason for the sale—information you won’t find in any document. Prepare by coming up with specific questions.
Finances – What to Look Out for in Both Cases
Revenue Trends – Is the company growing, stagnating, or shrinking?
EBITDA / EBIT – The key metric for valuation. Is it adjusted? For which items?
Owner Dependency – How high is the owner’s salary? What personal expenses are run through the company?
Customer Concentration – Do a few customers account for the majority of revenue?
Investment backlog – Has there been sufficient investment in recent years?
Seller Hesitates to Disclose Financial Data
Adjusted figures without a clear explanation
No information on key personnel or employees
Unrealistic growth forecasts without a basis
Missing or incomplete balance sheet
Create your own summary of the documents you’ve received, including the key metrics and any questions you still have. This list will serve as the basis for your next conversation with the seller or advisor—and later for the due diligence process.
- Is the business model clear and easy to understand (based on the IM or a conversation)?
- Are financial data available for several years (annual financial statements or business plan)?
- Are the EBITDA/EBIT adjustments explained plausibly?
- Is the customer structure disclosed (no extreme concentration)?
- Have key personnel and succession planning been addressed?
- Are investment needs and backlog presented transparently?
- Have you prepared your own list of questions for the next meeting?
4 All Documents at a Glance
During the sales process , you’ll receive the documents in a logical order. The exact sequence depends on whether an M&A advisor is overseeing the sale or the seller is managing the process on their own.
With an M&A advisor (typically for transactions starting at approximately 5 million EUR)
1. Teaser 2. NDA 3. IM, LOI / DD
Direct sale without an advisor (often under 2 million EUR)
1. Listing 2. NDA + Meeting 3. Acceptance / Business Plan / LOI / DD
Here’s how to organize the documents
Teaser / Ad – Your initial assessment: Is the company a good fit in principle? Decide here whether you want to proceed.
NDA – The key to the details. Required in both cases.
Business Plan or Financial Statements/Business Analysis – Your main source of information. This is where you decide whether to draft an offer (LOI).
Take enough time to review the documents—whether they’re interim reports or annual financial statements. Take notes and write down your questions. This will help you as you move forward and show the seller that you’re serious.
- Teaser & IM: These are generally only used in consultant-supported sales processes
- Direct Sales: After signing an NDA and having a personal conversation, you’ll receive annual financial statements and a business analysis
- NDA: Standard in both cases—read it carefully, paying attention to the term and contractual penalties
- Warning Sign: Always treat missing or incomplete information as a red flag
- Checklists: Use them for every new company you evaluate
Answer 7 questions about the documents used in the M&A process. All answers must be correct to complete the module.
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