What is A Pitch Book?

A pitch book is a document used by investment banks to pitch potential companies to firms. The book contains the main attributes of the firm as well as potential returns and attempts to show how the bank making the pitch is the best bank for the job. The purpose of the pitch book is twofold:

• Convince the potential buyer that the companies on offer are good value
• Convince the potential buyer that the bank making the pitch is the best possible bank for the deal

Typically a pitch book is divided up into 5 sections depending on whether it is to the company or to investors:

• Market Update - Some comments and charts showing the current state of the financial markets, sector and peers. Will usually find a way to say that now is the best possible time to do the deal

• Credentials - Various league tables and biographies explaining why the current bank and team is the best for the job. Can usually be ignored

• Deal Outline - Provides the rationale behind doing the deal, what it would involve, what options there are to consider

• Considerations - Contains some basic charts and tables showing effects on EPS (or other relevant metric) as well as any potential problems. The important thing here is to read the footnotes as potential problems are usually just referred to as "execution" or "management"

• Appendix - Despite being placed at the end of the book, this is probably the most important section. It contains the model being used as well as whatever assumptions have gone into calculating the future effects