Zoom on the Teaser in the M&A Process

In a sell-side M&A process, what is commonly referred to as a "teaser" is a document consisting of a few slides aimed at introducing a company to potential acquirers. It plays a crucial role as it piques the interest of potential buyers and initiates the valuation process for the sale of a company or asset. The purpose of this document is to create a strong first impression without disclosing too much sensitive information right from the start.

Role of the Teaser

The teaser acts as a captivating introduction to attract the attention of potential investors. Its primary goal is to generate enough enthusiasm to encourage these interested parties to learn more about the introduced company.

It serves as an initial filter for potential acquirers, allowing the sell-side team to select serious and qualified candidates.

The quality of the teaser can significantly influence the success of the sales process, as it constitutes the first formal interaction between the seller and potential buyers. Well-crafted writing and an elegant presentation can make a difference by sparking initial interest and positioning the company for sale favorably in the market.

Beyond its role as a simple presentation, the teaser serves as the gateway to a more in-depth process of due diligence, valuation, and final offer. It has a strong impact on the willingness of potential acquirers to sign the NDA and commit to an in-depth acquisition process.

Place of the Teaser in the Sell-Side Process

Once the pitch is made, and the selling team selected by the seller begins the search for potential acquirers. When the list of potential acquirers has been validated by the seller, the teaser is sent to the M&A executives of the selected companies.

The sending of the teaser occurs at the very beginning of the sell-side process, before sending the Non-Disclosure Agreement (NDA). Its purpose is to entice potential acquirers to sign the NDA to then receive the Information Memorandum (IM) and move on to the more in-depth due diligence phase.

Content of a Teaser

In general, a well-designed teaser includes several essential components:

• Introduction : The document typically begins with a brief presentation of the company for sale, including its industry, size, location, and other general data.

• Strengths : The teaser highlights key investment factors, such as the company's strengths, competitive advantages, market positioning, and potential growth opportunities. It aims to demonstrate why this acquisition might be attractive to an investor.

• Summary financial data: Although not detailing all financial figures, the teaser provides an overview of the company's financial performance. This could include indicators such as revenue, gross margin, EBITDA, or annual average growth.

• Transaction structure and reasons : It may also contain information about the possible structure of the transaction, whether it is a total sale of the company, asset sale, or minority stake. The intended reason for the sale can also be presented so that potential acquirers understand the seller's ambitions.

Length of a Teaser

An effective teaser should be concise, impactful, and informative without revealing confidential information. On average, a teaser consists of 1 to 5 slides. It is, once again, a document meant to pique the curiosity of potential acquirers without revealing the identity of the company. This information will only be disclosed once the NDA is signed.

n conclusion, the teaser is a key moment in the sell-side M&A process. Its ability to captivate, generate interest without revealing sensitive data, and initiate a confidential dialogue with potential acquirers makes it a crucial element for transaction success. A good teaser must strike the perfect balance between information and confidentiality.