Pitch book

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A pitch book is a marketing presentation (information layout) used by investment

banks around the world. It consists of a careful arrangement and analysis of the
investment considerations of a potential or current client, and/or a reference for
comparison for an employee in an investment or commercial bank. Its purpose is to
secure a deal for the investment bank with the potential client.

When an investment bank seeks new business, the starting point is the initial pitch
or sales introduction. Investment banking traditionally adopts a highly formalised
approach to making sales and will follow a tailored and highly effective sales
strategy. If the bank is planning to be a participant and managing member of a
share offering then it will make making agreeing to firm commitment underwriting,
if the investment bank is planning to act as a lesser participant, involving less
commitment, then it is agreeing to either a best efforts underwriting or "standby"
commitment.

Full-service investment banking conglomerates (a.k.a. "Bulge Bracket" banks), will

compete to win the business of an established client as either the lead or co-
manager of a syndicate. If a firm is less established, the firm, and not the
investment bank, will make the pitch to secure the relationship. The founders and
management of the business can do this through marketing a business plan or
structured private placement. (See Regulation D) of the United States Securities Act
of 1933

The pitch book is indigenous to the investment bank marketing itself to its clients. It
represents valuable and detailed marketing material and provides the bank with a
chance to show and prove why that investment bank should be considered amongst
the wide variety of financing and other sources of capital and considerations in the
financial marketplace (and a pitch book will typically go beyond simple comparisons
of debt and equity costs and structures).

The pitch book is not to be confused with a public information book ("PIB"), which is
an internal resource for the investment bankers to glean transactional and historic
information of the intended industry a particular target firm may be in or may be
heading towards. The PIB is an easy to access research source, which is usually
maintained in the library of an investment bank.
The pitch book may employ a SWOT analysis (Strengths, Weaknesses,
Opportunities, and Threats). "Comps", or Comparable Company Analysis may also
be presented. In a comp, an investment bank will present industry specific details,
trends, macro- and microeconomic and company specific analysis, which will not
only support the investment bank's vision but also support reasoning for a particular
future valuation discussion for the potential client.

There are many contributors to an investment bank's pitch book. It starts with the
analyst to the associate to the vice-president and senior vice-president (relationship
managers) to the lead of the team, the managing director. As an example, a table of
contents or outline will open the pitch book for discussion. Name, title, and
department present a management description of the deal team and other
contributors within the firms internal wealth of resources. An "overview", "financing
requirements (such as satisfying capital expenditures "CAPEX" and capital
budgeting)", and finally as mentioned a description of the company's universe, the
"comparable company analysis" are all essential elements to an investment banking
pitch book.

References[edit]

Downes, John & Goodman, Jordan Elliot; Barron's Financial Guides, 1995

Further reading[edit]

Monkey Business: Swinging Through the Wall Street Jungle (ISBN 0-446-67695-0)

[hide] v t e

Corporate finance and investment banking

Capital structure

Convertible debt Exchangeable debt Mezzanine debt Pari passu Preferred equity
Second lien debt Senior debt Senior secured debt Shareholder loan Stock
Subordinated debt Warrant

Wall Street Sign NYC.jpg

Transactions

(terms/conditions)

Equity offerings

At-the-market offering Book building Bookrunner Corporate spin-off Equity carve-out

Follow-on offering Greenshoe Reverse Initial public offering Private placement Public
offering Rights issue Seasoned equity offering Secondary market offering
Underwriting
Mergers and

acquisitions

Buy side Control premium Demerger Divestment Drag-along right Management due
diligence Managerial entrenchment Minority discount Pitch book Pre-emption right
Proxy fight Post-merger integration Sell side Shareholder rights plan Special
situation Squeeze out Staggered board of directors Stock swap Super-majority
amendment Tag-along right Takeover Reverse Tender offer

Leverage

Debt restructuring Debtor-in-possession financing Financial sponsor Leveraged

buyout Leveraged recapitalization High-yield debt Private equity Project finance

Valuation

Accretion/dilution analysis Adjusted present value Associate company Business

valuation Conglomerate discount Cost of capital Weighted average Discounted cash
flow Economic Value Added Enterprise value Fairness opinion Financial modeling
Free cash flow Free cash flow to equity Market value added Minority interest
ModiglianiMiller theorem Net present value Pure play Real options Residual income
Stock valuation Sum-of-the-parts analysis Tax shield Terminal value Valuation using
multiples

List-Class article List of investment banks List-Class article Outline of finance

Categories: Banking termsAdvertising terminologyPublishingTypes of marketing

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