Are corp development interview more fit related, or are they technical? How would I figure out which aspect to prepare more for? And if fit related, what are some good questions?
Background - MBA with strategy consulting background, looking to break into a cop dev of business unit in a large F500 company. Interviewers are ex-consultants.
Your interview may involve some valuation questions, but it will most likely focus almost entirely on your background and work experience. You should be able to walk the interviewers through your experience and projects that you worked on in great detail. I would also spend some time educating yourself on the industry that the F500 company is in (unless, of course, you covered that industry in your consulting stint).
Greater emphasis on industry knowledge with less emphasis on financial modeling. Have to understand valuation techniques.
Industry and company-specific knowledge are both important, but I would not de-emphasize modeling aspect. In every corp dev interview I've had or given, once I've gotten past the initial screening rounds, I've been given a case study where I had to create a financial model and formal presentation/write-up.
Thank you people, much appreciated.
Is there a framework on how you would approach an M&A case question, if that ever came up?
What do you mean by “case question”? Walking through how a strategic might go through its process from identifying targets to closing transactions?
Yes, exactly. One of the questions I'm expecting is "how would you think about us buying X company". So I would talk about hard valuation techniques, synergies (market share + talent + cost reduction), integration issues with culture, etc. Just wanted to see if there was a framework out there that laid it out comprehensively.
While your answer is technically correct, I think you are missing the opportunity to demonstrate the research you have done into this industry and company. I would start off by giving a high level overview of the industry and company and why M&A is a strategy they are pursuing. Then, walk through how this company in question fits this mold. Then proceed with the rest of your response.
Since you're coming from a consulting background, I'd make you do a modeling test. I honestly don't care how long it takes you, but you need to be able to do it. A simple linking of the income statement, balance sheet and statement of cash flows with a separate depreciation schedule that flows through to a DCF. I assume you haven't done a lot of M&A modeling, which is why I would ask the question.
If you're given a case study, I think the temptation is to jump into the problem too quickly. For any strategic investor (as opposed to a fund, for instance), there is always a build vs. buy decision. As in, "Should we acquire this company or build something like it internally?" Companies like Amazon tend to favor building it themselves if possible. And the natural question when buying something is if it represents a better use of capital than reinvesting in your existing business lines. If your core business is low growth, low profitability and you're about to get disrupted by a smaller competitor, buying them might make sense.
To be honest, a lot of corporate M&A is destructive to shareholder value. There are a lot of other reasons you might buy a company besides financial, but if the numbers don't make sense, there really has to be a compelling reason to do so.
I suppose I would at least take a moment at the beginning of the case study to ask if they would like you to consider whether it makes sense to pursue M&A at all before diving into the particular case they present you. There are absolutely times in any corporate development team where inorganic growth is simply off the table, so if they've made some meaningful acquisitions recently, and are still focused on integrating them, they might not be looking to buy something for a year or more. Looking at their recent acquisition history as well as the recently announced deals by major competitors would give you a good indication on whether they're going to be active in the next few months. It would also give you some context for why they might be looking to expand operations in a specific geography or sub-sector of their business (maybe it's wide open, maybe one of their competitors just made an acquisition there, maybe the tax regime is exceedingly favorable, maybe the firm needs a new regional hub, etc).
In most instances, you can make the case either way (to buy, or not to buy, that is). That's why M&A flows from corporate strategy, not the other way around. As such, you need to start with an excellent understanding of the firm and how they're positioned against their competitors before attempting to answer the question, "Should we buy this?"
For a corp dev interview process I went through in January, I had to complete a modeling test. I was also coming from consulting but covered a similar sector as the corp dev job was in. The modeling test was pretty easy, it more tested my industry knowledge. We sat in a room together and a current analyst described a company to me while I built its income statement, then did a dcf. Answering questions the whole time was the tougher part... all industry specific though.
Corp Dev interviews are difficult to fit into a nice box (e.g. consulting or banking interviews where you get a boilerplate of questions).
I wouldn't be surprised if you did 5 interviews and got 5 different interview formats.
My general super high-level rule of thumb is to look at the interviewer's background, are they ex-consultants or ex-bankers? If they are ex-consultants, probably a more case study focused interview process - if they are ex-bankers than maybe more like your traditional banking interview.
brotherbear My first corp dev interview was similar to what he outlined. I had a decent technical background so it was very case study focused. They wanted to understand how I viewed at particular investments and build an investment thesis around it (didn't involve modeling). If I remember correctly, they gave me an overview of the three business units and asked me what type of investments I would make in each and then my thoughts on the market size/potential for a particular product.
Manager Needing Help w/ Junior Corp Dev Interview Questions (Originally Posted: 02/05/2014)
As a new(ish) manager for my corporate development team, I'm starting the process of building my squad of minions (aka analysts). I've interviewed many individuals for hires at the same level as me, but I've never been in the position where I'm hiring people to work directly for me. As such, most of those interviews were more along the lines of finding a drinking buddy as opposed to a competent hire. I'd love to get the community's thoughts on some high-quality, separate the men/women from boys/girls (do you see what middle management has done to me?) interview questions to help find my perfect minion army. Please let me know of some of the most insightful and telling questions you've used to get results.
Some thoughts/requirements:
Thanks in advance.
"If you were sitting on this side of the table interviewing me what would be the most important thing you'd want to know about me?"
Interesting. Can you give an example of a strong response you received from this question and how it informed you as a manager? Perhaps a weak one as well, if you've experienced one.
Thanks!
I hate asking (and being asked) questions like aforementioned suggestion (sorry..). Personally, I like digging in and asking questions about the type of work they've done in the past -- e.g. walk me through how you did XX, why did you think about XX this way, how much autonomy did you have in XX, I don't understand XX -- even if you do -- can you explain it to me at a basic level, etc.. I want to make sure that they're not fabricating anything on their resume, they have the ability to think on their own, and I want to know that they have the ability to speak thoughtfully about the work that they produce (means they can do well in presentations, etc.).
While I don't have a good question to ask, it's important to try and determine if you think the person is going to make a lot of mistakes. Having analysts on your team that you don't trust b/c they make a lot of mistakes is very frustrating.
Seems like you've been burned before with a bad hire. How did you handle that after the fact?
Give me a rundown of your background Then ask details about things you want to know more about Why are you looking to leave (if employed) What can you tell me about yourself thats not on your resume
FYI, you can still find a drinking buddy that is your minion.
"FYI, you can still find a drinking buddy that is your minion."
I think you have to be careful with this one. I've seen good and bad instances of this, and I think the situation is determined a lot by the analyst. If the analyst is really smart, respectful, wants to always make a good impression, and is motivated to do well/move up, it might be okay. But, I've also seen instances where the analyst starts to get too "friendly" in the workplace and will make disrespectful comments and start pushing back on work b/c he starts to think of his boss as more of an equal.
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