Confidential Information Memorandum (CIM) Example in M&A

Project_Voltaic_CIM_Tie-Out.xlsx

C155fx=SUM(C150:C154)

	B	C
149	SELLER ANCHOR TO IOI BRIDGE
150	Seller-basis EV anchor	4,819¹
151	Less: transaction costs, severance, VPPA gains and interest income (EBITDA quality)	(172)
152	Less: power cost not recovered	(157)
153	Less: contracted-term discount	(233)
154	Less: development exposure	(36)
155	IOI midpoint before rounding	4,221²

119.2x the seller's $224.0M adjusted EBITDA, plus $508M spent on buildings under way. The 19.2x is the six campus appraisals' multiple and values the operating buildings only
2Rounded to $25M, Compound's indication is $4,225M, about $0.6B below what the CIM implies

CIM Tie-OutBuyer Adj EBITDAMgmt QuestionsWorkings

Ask: “Tie out the CIM against the data room, rebuild adjusted EBITDA as a buyer and price the IOI.” The bridge from the value the CIM implies to Compound's bid, US$ millions, from a real Compound run, unedited. Each line is one of the four CIM claims the room contradicts. Ironvale is a fictional company from PE Bench's open data room.

You are the associate on the buy side. The banker, Kingsmill & Co., has sent the CIM for Project Voltaic: the sale of 100% of Ironvale Digital Infrastructure, a US data center developer and operator with 220 MW of commissioned capacity in six markets. The CIM shows $412.0M of FY25 revenue and $224.0M of adjusted EBITDA. The process letter of June 12, 2026 asks for a single enterprise value by July 23.

Before anyone prices the deal, your job is to test the CIM against everything else in the data room: the audited accounts, the executed leases, the power data and the construction budgets. This page takes that check one step at a time, each step run in Compound. The answer at the end: four of the CIM’s claims do not survive the room, and Compound indicates $4,225M, about $0.6B below what the CIM’s own numbers imply.

A confidential information memorandum (CIM) is the sell-side banker’s book on a company for sale, sent to buyers under an NDA after the teaser. The investment teaser is the anonymous one or two pages that come first. An offering memorandum (OM) is the same document under another name, common in larger processes and in real estate, where the broker’s OM carries a rent roll and a T12 (see the rent roll and real estate pro forma examples). A CIM nearly always holds an executive summary, investment highlights, operations, customers, market, management, historical financials with adjusted EBITDA, projections and an appendix.

Ironvale Digital Infrastructure and Project Voltaic are fictional: the company and its data room are the open data room of PE Bench, published under CC-BY-4.0. Everything Compound produced on this page is real: the workbook, tear sheet, IOI letter and slide come from one Compound run on that room, quoted unedited apart from excerpts.

CIM tear sheet: what the book says, on one page

The first step boils the CIM down to one page a partner can read in five minutes, every figure cited to its page.

Prompt“Read the CIM for [company] and write a one-page tear sheet: business, key financials, price guidance and process timetable. Cite every figure to its document and page.”

Project_Voltaic_Tear_Sheet.docx

Project Voltaic: buy-side tear sheet

Business. Founded in 2014 and headquartered in Dallas, TX, Ironvale develops, owns and operates hyperscale and enterprise colocation data centers in six US markets (Northern Virginia, Dallas, Phoenix, Atlanta, Columbus, Reno). It has 220 MW of commissioned critical IT capacity across 11 buildings, 96 MW under construction and a ~400 MW land bank. Three hyperscale anchors provide 56% of ABR and 140 enterprise customers the rest; the company has 385 employees. Halcyon and the other equityholders are selling 100% of the equity through Kingsmill & Co.

FY25 total revenue: $412.0M Audited FS FY25 (2.03) p4
FY25 NOI: $246.6M Audited FS FY25 (2.03) p4
FY25 adjusted EBITDA, seller: $224.0M CIM (11.02) p3
Annualized base rent: $305.0M CIM (11.02) p5
Occupancy at 31-Mar-26: 91.9% CIM (11.02) p6
Capacity in flight, budget / spent: $988M / $508M CIM (11.02) p18
Net debt and debt-like, bank / seller / buy-side: $1,485M / $1,506.9M / $1,584.0M CIM (11.02) p32; Sell-side QoE (11.04) p16; deal team

The business section and key figures from Compound's tear sheet, unedited apart from the excerpt. Net debt is shown on the CIM's bank basis, the seller's QoE basis and the buyer's view. The buyer's EBITDA comes later on this page.

Read as written, the CIM sells a long-dated, triple-net platform that funds its own growth. It claims a 6.9-year weighted average lease term (WALT), power passed through to tenants at cost and no new equity needed to finish the buildings under way.

Takeaway: so far the tear sheet tells the seller’s story, and the next step tests it against the room.

How to tie out a CIM against the data room

The second step sets each claim in the CIM against the document in the room that can prove or disprove it.

Prompt“Tie out the CIM for [company] against the rest of the data room. For each material claim, give the CIM page and figure, the figure in the room with its document and page, the difference, and what it is worth to the price.”

Compound’s CIM Tie-Out tab tests 24 claims. Revenue, NOI and occupancy tie to the audited accounts and the rent roll. These are the four contradicted claims that move the bid most.

Project_Voltaic_CIM_Tie-Out.xlsx

G13fx=Workings!C28

	D	E	F	G	H	I	M
6	CIM claim	CIM page	CIM figure	Room figure	Unit	Difference	EV at stake ($M)
9	Adjusted EBITDA of $224.0M presented as NOI less G&A	p29	224.0	212.8¹	$M	(11.2)	105
12	Wholesale leases triple-net in substance; metered power passed through at cost ($84.2M FY25)	p23	84.2	92.4²	$M	8.2	157
13	Portfolio WALT of 6.9 years, ABR-weighted at 31-Mar-26	p3, p5, p24	6.9	4.0³	years	(2.9)	233
20	No new equity required to complete capacity in flight	p18	0.0	365.0⁴	$M	365.0	365

1NOI less G&A is $212.8M. The $11.2M gap is other income the CIM table leaves out. Compound removes the $5.4M of VPPA gains and interest on cash, worth $105M at 19.2x, and keeps $5.8M of recurring fees
2Interval data put FY25 utility cost at $92.4M against $84.2M billed to tenants. About $8.2M a year is absorbed by the company and missing from EBITDA
3The executed hyperscale leases expire 2028 to 2032. The rent roll shows 2034 to 2037, and no amendment in the room explains the change
4$480M of spend remains on the buildings under way against $115M of undrawn construction facilities

CIM Tie-OutBuyer Adj EBITDAMgmt QuestionsWorkings

Four of the 24 rows in Compound's CIM Tie-Out tab, unedited apart from the excerpt. EV at stake is at the 19.2x reference multiple, the six campus appraisals over FY25 EBITDA before other income, which values the operating buildings only. The funding gap is an equity need, not a deduction from value.

The lease term is the finding a reader of the CIM alone could never make. The rent roll and the lease abstracts agree with the CIM. Only the executed leases, in a separate folder, show the hyperscale tenants’ terms ending four to seven years earlier. On those dates, hyperscale WALT is 4.6 years, not 9.7, and 31.8 MW carrying about $44M of rent rolls by FY28.

Takeaway: the room contradicts the CIM on earnings, power, lease term and funding, and in the bid they take about $597M off the value the CIM implies.

Adjusted EBITDA: $224.0M in the CIM, $206.9M for a buyer

The third step rebuilds the seller’s adjusted EBITDA one add-back at a time and sets out what a buyer would pay for.

Prompt“Bridge [company]'s reported FY25 EBITDA to the seller's adjusted EBITDA, one adjustment per row with its source. Add a buyer column with what we accept and why, and show the difference.”

Project_Voltaic_CIM_Tie-Out.xlsx

D19fx=SUM(D16:D18)

	B	C	D	E
6	Item	Seller FY25	Buyer FY25	Buyer view
10	Reported EBITDA ($M)	219.1	219.1
11	(+) Transaction & process costs	4.8	1.9¹	Reduce
12	(+) Storm repair, June 2025 hail event (DFW I)	1.1	1.1	Accept
13	(+) Severance, two commercial roles	0.6	0.0²	Reject
14	(-) Insurance recoveries received (DFW I storm)	(1.0)	(1.0)	Accept, query
15	(-) One-time property tax refund (PHX I appeal)	(0.6)	(0.6)	Accept
16	Adjusted EBITDA, seller definition ($M)	224.0	220.5
17	(-) VPPA settlements and interest income (embedded in seller figure)	0.0	(5.4)³	Cut
18	(-) Power cost not recovered from tenants	0.0	(8.2)⁴	Reduce (new)
19	Buyer adjusted EBITDA ($M)	224.0	206.9⁵
20	Difference, buyer vs seller		(17.1)

1Only the November and December spend follows the Board's 19-Nov-25 authorization of a sale review. The $2.88M of pre-sale readiness spent from May to September is cut
2Rejected: the two commercial roles are being rehired, so the saving does not recur
3$2.20M of VPPA settlements and $3.24M of interest on cash, which goes in a cash-free deal. The $5.76M of development and management fees stays in
4Power cost not recovered from tenants, from the interval data
5Buyer adjusted EBITDA, the base Compound capitalizes

CIM Tie-OutBuyer Adj EBITDAMgmt QuestionsWorkings

Compound's Buyer Adj EBITDA tab, US$ millions, unedited apart from the excerpt. The seller column is the sell-side QoE bridge.

Compound accepts the storm repair and tax refund items, with a query on the insurance recovery. From the CIM’s $224.0M it deducts $2.9M of pre-sale readiness costs spent before the Board authorized a sale, the $0.6M severance add-back, because the roles are being rehired, and $5.4M of VPPA gains and interest on cash, which leaves $215.1M. It then deducts the $8.2M of power cost the tenants do not pay, which gives $206.9M. The $5.8M of development and management fees stays in, because it recurs every year. The adjusted EBITDA page goes through each kind of add-back, and the financial due diligence example carries the full buy-side work.

Takeaway: a buyer’s adjusted EBITDA is $206.9M, $17.1M below the CIM’s $224.0M.

Management questions, ranked by the value at stake

The fourth step turns each contradiction into a question for management and the first document request that would settle it.

Prompt“Write the management questions for [company] from the tie-out. Give each the CIM claim it tests, the value at stake and the first data request, and sort by priority.”

Project_Voltaic_CIM_Tie-Out.xlsx

F7fx=-Workings!C153

	B	C	D	F
6	#	Topic	Question	Value at stake ($M)
7	1	Contracted term	The executed wholesale leases expire 2028 to 2032 (Exhibit A), but the rent roll and lease abstracts show current terms to 2034 to 2037. Which signed amendments or phase supplements extended each phase, and when?	233
8	2	Power pass-through	Interval data estimate FY25 utility cost at $92.4M against $84.2M billed to tenants, yet the P&L shows power cost equal to reimbursements. Where is the $8.2M booked, and how much is house load, vacancy or the 1.35 PUE cap?	157
9	3	EBITDA quality	Adjusted EBITDA includes $11.2M of other income per the management accounts ($11.1M in the audited statements). We keep the $5.8M of development and management fees as recurring; which contracts support them, and why are $5.4M of VPPA gains and interest income in adjusted EBITDA when the CIM bridge omits the line?	105
10	4	Development funding	Remaining spend on PHX II and ATL II is $480M against $115M of undrawn construction facilities. How is the gap funded before closing, and does any of it fall to the buyer?	365

CIM Tie-OutBuyer Adj EBITDAMgmt QuestionsWorkings

The first four of 12 questions in Compound's Mgmt Questions tab, unedited apart from the excerpt. Value at stake is enterprise value at the 19.2x reference multiple, except question 4, which is an equity need.

Each question names the document that would answer it. The first asks for every executed amendment and phase supplement for the 12 hyperscale leases, reconciled to the rent roll. If those amendments exist, the lease-term discount goes away.

Takeaway: the four questions that move the bid go to management first, and the lease amendments alone are worth $233M.

The IOI: $4,225M, with no banker guidance to bid against

The last step prices the bid and writes the letter and the committee slide from the same workbook.

Prompt“Value [company] on our adjusted EBITDA and the evidence in the data room, propose a single IOI value with the assumptions it rests on, write the IOI letter and a one-page IC slide.”

The process letter gives no price or multiple guidance. It asks for a single cash-free, debt-free value and says any range will be read at its low end. So Compound set the bid against what the room implies. The six campus appraisals imply 19.2x FY25 EBITDA before other income, a multiple that values the operating buildings only, with no platform premium and no development pipeline. On the seller’s $224.0M plus the $508M already spent on buildings under way, it gives about $4.82B. Compound applies 17.7x to 18.5x to the buyer’s $206.9M, a discount for the shorter lease term, adds the buildings under way at cost and deducts the PHX II cost overrun and the unbudgeted $18M DFW chiller. That gives a range of $4,144M to $4,299M. The size of that discount, 0.75x to 1.5x, is Compound’s own judgment, set as an input in the Workings tab.

Project_Voltaic_IOI_Letter.docx

1. Headline value

We indicate an enterprise value of $4,225 million for 100% of the equity interests of the Company. This is a single value, as the process letter requests. It equals 18.9x the FY25 adjusted EBITDA of $224.0 million presented in the CIM, 20.4x our diligence view of FY25 adjusted EBITDA of $206.9 million and 19.4x our view of LTM March 2026 adjusted EBITDA of $217.9 million.

2. Basis of valuation and key assumptions

Earnings base. FY25 adjusted EBITDA of $206.9 million. From the CIM’s $224.0 million we deduct $2.9 million of pre-sale readiness costs incurred before the Board’s November 2025 authorization, the $0.6 million severance add-back (the roles are being rehired) and $5.4 million of VPPA settlement gains and interest income, which leaves $215.1 million; we then deduct $8.2 million of power cost that interval data show is not recovered from tenants. Development and management fees of $5.8 million stay in, as they recur every year.

Reference multiple. The six operating-campus appraisals total $4,095 million as is at March 31, 2026, or 19.2x FY25 EBITDA before other income of $212.8 million (audited NOI less G&A). That multiple values the operating buildings only, with no platform premium and no development pipeline. We apply 17.7x to 18.5x because the executed hyperscale leases in the clean room expire between 2028 and 2032, which puts contracted portfolio WALT at about 4.0 years rather than 6.9 years. With capacity in flight added (next point), the enterprise value range is $4.14 billion to $4.30 billion.

Capacity in flight. PHX II and ATL II are valued at cost spent to March 31, 2026 of $508 million, less $17.6 million to restore PHX II contingency and cover the unaccrued HVAC claim, and less the $18 million DFW I-A chiller replacement that the long-range plan does not fund.

Upside to our value. Executed amendments supporting the rent-roll lease terms would add up to about $233 million, and documented power cost recovery up to about $157 million.

3. Net working capital and debt-like items

We put net debt and debt-like items at $1,584.0 million, against $1,506.9 million in the QoE at December 31, 2025. On these figures our indication implies an equity value of about $2,641 million before the working capital true-up.

Sections 1 to 3 of Compound's IOI letter, unedited apart from the excerpt. The letter leaves placeholders for the purchaser's name, funds and advisers.

Compound put the whole review on one slide for the investment committee.

Compound's one-page Project Voltaic IC slide headlined 'Indicate $4,225M, about $0.6B below what the CIM implies'. On the left, four CIM claims the room contradicts, each with its EV effect at 19.2x: adjusted EBITDA includes non-operating income ($172M), power is not fully passed through ($157M), contracted term is about 4 years, not 6.9 ($233M), and capacity in flight is neither funded nor on budget ($36M). Below them, two smaller contradictions and the figures that tie. On the right, seller adjusted EBITDA of 224.0 bridged to buy-side adjusted EBITDA of 206.9 through pre-sale readiness costs, the severance add-back, VPPA gains and interest income, and unrecovered power. Three boxes compare no price guidance, a seller-implied $4.82B and the $4,225M indication, and a list shows what would move the number up. A footer labels Ironvale a fictional company from PE Bench and notes net debt and debt-like items of $1,584.0M. — The IC slide from the same run, unedited. Its four EV effects, $597M together, take the $4.82B the CIM implies down to the bid before rounding. The staple financing’s $1,344M term loan, sized at 6.0x the seller’s EBITDA, is the other anchor in the room.

The letter’s assumptions list is what makes a bid this far under the seller’s numbers defensible. Each assumption names a document, so the second round becomes a discussion of those documents. The slide follows the shape of the investment memo example, and the returns case waits for the data room and the LBO model. If Kingsmill invites you to Phase II, the financial due diligence example picks up from there.

Takeaway: with no guidance to anchor on, the bid is $4,225M, about $0.6B below the CIM’s implied value, and every deduction starts from a document in the room.

One-page IC slide (PowerPoint)Compound’s IC slide for Project Voltaic: the four contradicted claims, seller to buyer EBITDA and the bid against what the CIM implies.Download · Free, no form IOI letter (Word)Compound’s two-page indication of interest, with the valuation basis, assumptions, financing and Phase II diligence stated, and placeholders for the purchaser’s details.Download · Free, no form

FAQ

How is a CIM different from a pitch book or a management presentation?

An investment banking pitch book is what a bank shows a company to win the sell-side mandate: credentials, a view on value, the buyer list. The CIM comes after the bank is hired and is written to sell the company to buyers. The management presentation comes later, in the second round, and its updated numbers should be tied out against the CIM.

What should a buyer check first in a CIM?

The adjusted EBITDA bridge, against the audited accounts and the quality of earnings report, because the price is built on it. Then any claim the rest of the data room can test directly: contract terms against the executed contracts, cost pass-throughs against the bills, and funding claims against the facility agreements. In this example the lease term, which the CIM, rent roll and abstracts all agreed on, was wrong against the signed leases.

What does a real estate offering memorandum contain?

A broker’s OM for a property has the rent roll, the trailing twelve months of operating statements (T12), in-place and pro forma NOI, the cap rate at the asking price, abstracts of the larger leases, and market comps. The buyer ties the rent roll to the leases and rebuilds NOI from the T12, as in the rent roll and real estate pro forma examples.

How is a private placement memorandum different from a CIM?

A private placement memorandum (PPM) offers securities, such as a fund’s interests or an issuer’s shares or notes, and carries the legal disclosure and risk factors of a securities offering. A CIM sells a company. It is a marketing document shared under an NDA, and it usually says the seller and the banker make no representation as to its accuracy, so a buyer can rely only on what the purchase agreement warrants. Reviewing a fund’s PPM is part of fund due diligence.

Can Compound read a CIM downloaded from a VDR?

Yes. Compound reads PDFs, including the charts and tables in them, along with Word, Excel and PowerPoint files from a data room. Every figure it reports is cited to the document and page it came from, so a reviewer can check it. Whether a particular VDR allows the download depends on the banker’s settings.

Should the IOI come in below the banker's guidance or what the CIM implies?

Only when you can give the reason in a sentence the banker can repeat to the seller. Here the process letter gave no guidance, so the comparison is the roughly $4.82B the CIM’s own numbers imply. The reason here is the appraisals’ own multiple, less a discount for the shorter signed lease term, applied to EBITDA without VPPA gains, interest income or the pre-sale add-backs, and net of the power cost tenants do not pay. The recurring development and management fees stay in. A number tied to documents in the seller’s own room gets you to the second round with the argument already framed.

What is in a CIM?

A CIM nearly always holds an executive summary, investment highlights, operations, customers, market, management, historical financials with adjusted EBITDA, projections and an appendix. The Project Voltaic CIM also claims a 6.9-year weighted average lease term, power passed through to tenants at cost and no new equity needed to finish the buildings under way, and each of those claims can be tested against the data room.

What is the difference between a teaser and a CIM?

The investment teaser is the anonymous one or two pages that come first. A buyer who signs the NDA then receives the CIM, the sell-side banker’s full book on the company, with its historical financials, adjusted EBITDA and projections.

CIM example: four claims the data room contradicts, and a $4,225M bid

CIM tear sheet: what the book says, on one page

Project Voltaic: buy-side tear sheet

How to tie out a CIM against the data room

Adjusted EBITDA: $224.0M in the CIM, $206.9M for a buyer

Management questions, ranked by the value at stake

The IOI: $4,225M, with no banker guidance to bid against

1. Headline value

2. Basis of valuation and key assumptions

3. Net working capital and debt-like items

FAQ

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