Investment Banking Teaser Overview
The teaser is a document sent out to potential investors in an opportunity. Teasers are used in many sorts of marketing roles, but most prominently in investment banking and commercial real estate. Investment banks will mail out teasers to parties they feel would be interested in a transaction.
An effective teaser piques interest and outlines a timeline for any proposed transaction. Serious bidders will write to confirm their interest and will be selectively mailed confidential information memorandums (CIMs) subject to signing a non-disclosure agreement (NDA). CIMs are far more comprehensive than the teaser. Teasers are appropriately named – they offer a vague overview and are thin on numbers required to make a real investment decision.
In this post, we walk through what to expect in a cookie cutter teaser, which is usually in Word form (sometimes in PowerPoint depending on aesthetics). Usually, the teaser will condense everything below in a few pages (2-3 standard letter pages on Microsoft Word) – so this illustration is much more comprehensive than what you would see in the average teaser.
- Teaser Title Page
- Deal Team Slide (may also be at the end)
- Investment Opportunity Overview
- Business Overview
- Proposed Transaction
- Investment Highlights and Rationale
- Overview of Assets
- Transaction Timeline
Investment Banking Teaser Walkthrough
For our illustrative teaser, a food conglomerate, Yummy Food, is looking to sell its bakery chain subsidiary, Fluffy Cake Shoppe, to rationalize its portfolio and reduce its physical footprint. It has hired Sell Side Hand Bank to market its bakery chain.
Teaser Title Page
The teaser title page will have some photo representing the company and a project name to keep it confidential. Usually the project name will invoke some sort of image relating to the potential transaction.
Project Patisserie Teaser – December 2018
Transaction Deal Team
The next page has an organizational chart highlighting the extensive capital markets platform of Sell Side Handbank. Product groups displayed will be the ones relevant to the transaction. If the proposal may come with packaged acquisition financing (a buyer will have pre-approved loans and capital markets takeout from Sell Side Hand Bank, making the process much faster than if they were to have to approach their corporate bank), DCM, industry coverage, leveraged finance, and corporate banking would be logical groups.
An example deal team silo would be:
For more information please contact:
Debt Capital Markets
Investment Banking – Consumer & Retail
Managing Director & Group Head – Retail
Managing Director – Restaurants
These people can be contacted via email or phone number.
Investment Opportunity Overview
This outlines what Fluffy Cake Shoppe offers to a potential private equity investor.
Fluffy Cake Shoppe has 125 locations across various high-income locations such as Vancouver, Fremont, Markham, Arcadia, Flushing, Rochester, Houston, Seattle, and Nassau County. Fluffy Cake Shoppe has 30 planned new stores with annual revenues of $1 billion.
An overview of the business with any relevant industry metrics.
Fluffy Cake Shoppe sells bakery items such as chocolate mousse, mango mousse, strawberry mousse and offers in-house dining for high tea and lunch focused on affluent millennial consumers. Fluffy Cake Shoppe has average ticket of $25 with sales per square foot of $x and same store sales growth of x%. 2017 foot traffic was x,xxx,xxx. Each restaurant has chic interior design by Alexander Wang x Perkins + Will.
The cakes are really good, you should eat them.
Fluffy Cake Shoppe is available for sale. Buy it!
Investment Highlights and Rationale
Some data points which would be compelling to a financial buyer. These may range from possible to wildly unrealistic – a good private equity firm will be able to discern fairly quickly. Each marketing point will come with some supporting data or nicely curated photos.
- Industry leading same store sales growth of x
- Top quartile restaurant for average ticket
- Top quartile restaurant for sales per square foot
- Strong revenues of x with high operating margins
- Owns substantial Real Estate where sale-leaseback opportunity exists
The teaser tends not to be too granular in detail. High level information such as production volumes or revenues may be given, but thorough financials are reserved for buyers with genuine interest and the due diligence process. In lieu of comprehensive financials, banks will jam in a lot of flattering photos.
Overview of Assets
A brief segmentation of assets with relevant data
30 stores in the San Gabriel Valley in California
- High Household Income
- Demographics Favor Fluffy Cake Shoppe
20 stores in Greater Vancouver Area
- Stores are Anchor Tenants in Class AA Malls
- Located in High Density, Affluent Postal Codes
Usually a vague expected “Bids expected by Mid-October”. At the most specific level, a colored in schedule with bid dates for each step of a potential sale process and an expected close – very unlikely for a teaser.