What is a Public Information Book (PIB)?
A Public Information Book (PIB) is a document that compiles available public information on a specific company. Generally, it contains information from the company’s latest annual report, equity research reports, industry information, news articles, and recent quarterly earnings webcasts or conference calls. A PIB is very helpful when performing due diligence on a company, which in turn is indispensable for Business Valuation. It is a powerful resource that will usually be the starting point and provide important supporting documentation for your analysis of a company. PIBs are usually prepared by analysts in investment banking in preparation for a deal/transaction or for a pitchbook.
What’s Included in a PIB?
The following items are usually included in a PIB:
- News releases (last 6-12 months)
- SEC filings – such as 10Q, 10K, ownership changes, key events (last 3-5 years)
- Equity research reports – industry, comps, own bank’s previous research
- Corporate/ Investor presentations
- Credit ratings – 2 to 3 rating agency reports
- Conference call transcripts
Where to Find the Information for a PIB
Usually, having access to databases such as Bloomberg, Capital IQ, and Hoovers is a great advantage when preparing the PIB. These are expensive services, but most banks, credit agencies, and buy-side institutions have access to at least one, if not all, of these systems. In addition to these paid resources, there is a lot of free information online that can be accessed through the following websites:
- EDGAR, SEDAR, and UK Companies House – Access Filings and Financial Statements
- Company’s Website Investor Relations Section – You may find
- Earnings conference calls
- Press Releases
- Shareholder Letters
- Proxy Reports
- Sustainability Reports
- Google Finance, Yahoo Finance, Stock Exchange websites:
- Historical Stock Prices
- News Articles
Public Information Book and DCF Business Valuation
Investments Bankers tend to put Public Information Books together for business valuation; they generally have their Junior Analysts doing most of the data collection grunt work. The PIB is a key component of “Step 1: Information Gathering” of the Four-Step Approach to DCF Business Valuation. It is the summary of all the relevant public information that one should be aware of when valuing a business. The Public Information Book is a valuable resource to understand how the company generates value, how it is managed, and the industry landscape that it is operating in.
The information in the PIB can be used for the next step of DCF analysis, Comparable Company Analysis, and for creating a pitchbook.
This step can be broken down into:
- Thorough assessment and critique of a company’s stated strategy
- An assessment of the management team and its ability to deliver using its stated strategy
- Detailed and quantified assessment of the company’s competitive advantages and disadvantages
- Robust review of the company’s financial statements
- Assessment of industry dynamics
- General economic and demographic trends
Check out the CFI Resources below to keep on learning! If you want to learn how to build models for business valuation, CFI has a Business Valuation Modeling Course, which is part of the FMVA™ Certification program!