What's this sort of transaction called in banking?
This might be a stupid question, but consider the following scenario:
My bank is working on behalf of commercial bank A who is interested in investing in industry A. We do the due diligence and compile a list of companies in industry A, and serve as a mediary for the transaction to occur. Correct me if I'm wrong, but this is buy-side for commercial bank A, right? What is it for the investment bank? What exactly are we doing here?
... sounds to me like you ARE the investment bank.
What's the problem?
You're working on a buy-side deal for a buy-side client... You're developing the contact/prospect target list. It's technically buy-side "advisory". Has an engagement letter been signed?
Yes the letter has been signed, we're working on behalf of the commercial bank, as our client. And yeah we're coming up with a list of places to target. I was confused because I thought it was only considered by side work if we're the ones investing in the company? So this is just called buy side advisory?
bump?
buy-side advisory isn't the same as buy-side firm.
Well shit that doesn't look fun. Is it odd that we're approaching banks to find a target company for our client? They don't want to acquire a bank obviously, but we're approaching banks that have clients in that industry to see if any of their over-leveraged clients are seeking an equity investment of up to X million. Is that normal?
Not understanding your question. Your previous posts imply that the commercial bank IS your client... are you saying now that you have a firm as a client and are going through other banks to find targets?
EDIT: Reread your question more carefully, my bad. Yes, it's normal. A commercial bank is still a buy-side firm, just like a PE shop. You're the investment bank, the intermediary. You link up buyers (commercial bank) and sellers (other firms, or in your case, from what I'm able to understand, other commercial/merchant banks who have holdings?) to get a deal done. Nothing exciting to see, move right along.
The commercial bank is our client who is looking for targets in a certain industry. We're contacting investment banks who have clients in that industry to see if they are representing any companies in that industry who are looking to raise equity
Bump. still confused about this project, and no one in my office seems to care to explain it to me.
Ok so you're probably dishing out some form of sourcing fee to the IBs who can send some sell-side deals your way while you guys take on the primary diligence? When you say "investing" I'm assuming it is majority ownership in some form of cash/stock deal? An equity raise implies selling shares through retail/institutional, so no majority holders/acquisition. If this is all correct, not sure on the exact name for this other than a sourced buy side deal..
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