A teaser and a confidential information memorandum can describe the same company with different revenue or earnings figures. That does not tell a buyer which number to use. The figures may cover different periods, parts of the business, or definitions of earnings. One may also include adjustments or projections that the other leaves out.
The first job is to understand the difference well enough to make a sound first-screen decision. Compare the period, scope, and basis behind each figure, then ask the intermediary for a focused explanation. Do not quietly choose the more attractive number or turn an open question into a full diligence request.
Check that both documents describe the same period and business
Start with the label beside each number. Is it the last full fiscal year, the last twelve months, a year-to-date period, a budget, or a forecast? A figure for a full year should not be compared with a partial year or a projection as though both were actual results. Ask which months are included and whether the period ends on the same date.
Then check the company scope. One document may describe a parent and its subsidiaries while another focuses on the operating company for sale. A division, location, product line, or acquired business may appear in one figure and not the other. The deal can also include several entities or assets, so a headline figure needs to be tied to what is actually being offered.
Write down what you know and what remains open. If the period or scope is different, the apparent mismatch may not be an error at all. It may simply be an apples-to-oranges comparison that needs a short bridge before the team decides whether the company fits.
Separate reported earnings from adjusted or projected earnings
Revenue is only part of the screen. EBITDA may be described as reported, adjusted, pro forma, or projected. Those labels can point to different calculations. A seller-adjusted figure may remove certain costs or include changes that have not yet appeared in reported results. A pro forma number may include the effect of an acquisition or another change in the business.
Ask what adjustments are included, which period they apply to, and whether the same definition is used in both materials. Do not treat an adjustment as supported just because it appears in the CIM, and do not assume that two figures with the same label were calculated on the same basis. A forecast can inform the buyer’s view of what might happen; it should stay separate from historical results.
CFA Institute notes that private companies vary widely in financial disclosure quality and that earnings adjustments are used to address inconsistencies before building a forecast. Its overview of private company valuation is a useful reminder that the starting figures need a clear basis before they can support a buyer’s view.
Put the difference into a short reconciliation
A simple comparison keeps the conversation concrete. For each figure that matters to the screen, record:
- The metric, such as revenue or EBITDA
- The amount shown in each document
- The period covered and the period-end date
- The business or entities included
- Whether the figure is reported, adjusted, pro forma, or projected
- The source page or schedule and the explanation still needed
The goal is not to rebuild the company’s financials from the first two documents. It is to see whether the discrepancy changes the buyer’s first view. If the teaser reports a prior-year figure and the CIM presents a more recent period, note the two periods and ask what explains the movement. If only EBITDA differs, focus on the earnings definition and adjustments before debating a valuation range.
Ask one question that can resolve the gap
A focused question is easier for an intermediary to answer than a general request to explain all of the financials. For example: “The teaser and CIM show different EBITDA figures. Could you confirm the period and scope behind each number and share the bridge or note that explains the difference?” If the discrepancy concerns revenue or a particular division, name that item instead.
Ask through the broker or banker managing the process and follow the stated confidentiality steps. Keep the request tied to the screen. A full data-room list, a request for every ledger, or an early quality-of-earnings exercise may be premature when one clarification would settle whether the opportunity merits another step.
Decide whether the answer could change the buy-box screen
A mismatch matters when it could change a decision the firm needs to make now. If the clarified revenue or EBITDA falls outside the firm’s range, the buyer may have a clear answer. If the difference affects whether the company fits a target sector, geography, or platform plan, hold that point open until it is explained. Do not label the company a fit by using the more favorable figure.
If the difference does not affect the current screen, record it and move to the next decision in the process. It still needs to be resolved before the relevant underwriting or valuation depends on it. The screen should stay proportional to the stage: ask for enough evidence to decide whether to continue, then reserve deeper work for later.
Make the next step clear
Close the review with a short note: which documents were compared, what basis differs, who is clarifying it, and what answer would change the buyer’s view. Mark the opportunity as pass, hold for clarification, or advance to the next step. That gives another member of the deal team a clear record without turning an unresolved number into a fact.
A difference between a teaser and CIM is a reason to compare the basis behind the figures. Once the buyer knows the period, scope, and earnings definition, the team can judge the deal against its actual criteria and ask only for the evidence that matters to the next decision.