For my sophomore summer, I interned at a boutique PE, and as I prepare for IBD SA interviews, I need concise answers for my experience. So let's say the question is,
"Tell me more about XXX target company's deal." And I've done industry research, read CIM, and built pre-lbo model (just calculating purchase price, but nothing from building cap structure.)
How can I talk about it in 2~4 sentences?
Here is my strategy so far:
1. perks of this company (high recurring revenue, dominant market presence, decent operating margin at 20~25%)
2. Industry overview (stagnant/growing industry)
3. challenges (no comps/precedent transactions available, no room for organic growth, etc.)
4. What I've done (did industry research, wrote ppt for the investors)
What do you guys think? Can I make it even shorter? Any suggestions?
Your strategy sounds good to me. I'd try and boil it down to a few things:
1.) What your role was in working on the transaction. So, if you built some basic analysis, explain what it was and what it told you about the company (i.e. I did a segment analysis and discovered that x% of gross margin was derived from segment X.) If you did a presentation for the partners, explain what the purpose of it was and briefly what you learned about the company.
2.) Give your rationale for why the company was a good investment. What it's strengths were and what it's weaknesses were. If it had strong margins, explain why. Are these margins strong vs. the rest of the industry? Is there something driving this? Etc. Just showing that you understand how to talk through a business model and understand its strengths and weaknesses is helpful.
3.) You might even want to explain why the company would or would not be a good sell-side M&A candidate. Did your analysis show that this could be a good candidate for a broad auction?
You want to be fairly brief, but being able to talk through this sort of thing can help you stand out in an interview and makes you look conscientious.
Exactly why I'm asking this question. Thanks for your help. I have revised my strategy a little bit and here is what it's now like: Q: Tell me about this XXX deal you worked on A: Yea, This company does "Wash dishes" and I did "industry research, ppt, what I found??, etc." This company was interesting because "most revenue came from service business; good operating margin at 20~25%", and the challenges were "capped industry; low organic growth at 3~5%" but overall we thought it could be a good candidate because of "historically steady cash flow, very low capex."
Any feedback?
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