Information memorandum

The information memorandum (IM), or mémorandum d’information in French, is the detailed presentation of an asset for sale. It is sent to a prospective buyer once a non-disclosure agreement has been signed, and follows the teaser, which remains anonymous. It is neither an offer to sell nor a contractual commitment: the information comes from the vendor, has not been audited, and the buyer checks it during due diligence.

In the hotel sector

A hotel IM usually covers:

• location, the local market and competing properties
• the building, rooms, facilities, technical condition and planned works
• trading over several financial years: occupancy, average daily rate, RevPAR, revenue, staff costs, reported EBITDA and then adjusted EBITDA, each adjustment backed by a document
• the legal framework: ownership structure, title deeds, commercial lease, franchise or management agreements, permits, fire-safety classification (ERP)
• the transaction perimeter, its tax principles, the price and terms
• the process timetable and what the letter of intent should contain

In a transaction

Each copy is named, numbered and watermarked with the recipient’s name. Where staff must not find out, disclosure can be staged: an anonymised memorandum first, then the hotel’s name, address and photographs at the site visit or letter-of-intent stage, in a separate document.

An issue known to the vendor but left out of the memorandum almost always surfaces during the audits. It then weighs more heavily in the negotiation than if it had been disclosed.

Not to be confused with

• The teaser, two pages long and written so that the hotel cannot be identified.
• The data room, which holds the supporting documents the memorandum refers to.

How these documents are prepared is set out in our sale process.