During my analyst years, I recall working on quite a few pitches which were a 1 in a 1,000 chance at best. In fact, worked a few holidays on this crap. I've read plenty of similar stories on WSO as well.
Those deals never went anywhere...not even close. Which got me to thinking.....has anyone ever worked on a deal that seemed to have a 1 in a 1,000 chance when pitching it and the deal actually happened? If so, please share your story. Would love to know if these Hail Mary style pitches EVER actually work.
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I'm not talking about pitching a lot and then landing a few deals. I'm talking about pitches like acreage in Kazakhstan to a small cap company that has only ever operated in Pennsylvannia. I've worked on deals at that level of intelligence and know that others have too. Anyone seen this actually work?
Ah understood. Not sure if I had to work on things that just don’t make sense. Not sure why your leadership would do then if they don’t make any sense. If it really is a 0.1% chance than eventually I would think it would work. The challenge may be whether it really is a 0.1% or if it is actually a 0.00000001% chance. Idk. Good luck again
If the probability of the mandate being won is 0.1%, then the probability of winning AT LEAST ONE mandate is = 1 - ( 1 - 0.001)^1000 = 0.6323 = 63.23%
Sorry, the statistics were just bugging me lmao. Also, I was not the one that threw MS at you.
All good thanks. Numbers seem good to me
I think you need to broaden your definition of making a pitch "work." You might (or might not) be surprised at how often a bank/banker that consistently brings even halfway decent ideas to a client gets hired by that client on something completely different, that neither the banker nor the management team ever thought of before. I know it's happened to me. Obviously you don't want to pitch outright stupid ideas, but even little acq. targets that the client wouldn't use a banker for, interesting but "out-there" / flyer ideas that wouldn't wreck the acquiror if they didn't work out, and similar 1/1000 things keep you in the flow with the client, and getting a constantly refreshed understanding of their strategic priorities.
Yea I’m with you. This seems like good stuff. Thanks for posting :)
Yeah, our MD used the 1/1000 ideas to just get his face in front of the management team and build the relationship, but still curious if these deals ever work. Also, like you note, it's a double edged sword. You get to spend time with management but you also brought a really dumb idea to them. Which hurts or helps more? Also, I don't disagree that a flow of small or kind of interesting ideas is always good - no disagreement there but I'm talking about really dumb borderline whacky ideas.
This might be uncalled for: I just got in a verbal commitment with a very close friend's family business, to help them with their distressed company. I will be responsible for writing the CIM, building DCF and LBO (full-blown, illustrative is probably not enough) models, going through the appropriate comps with my friend and his father (founder and current CEO of the company), and drafting a management presentation after everything else is done. Right now they are approaching a wealthy individual buyer. If needed, I will also build an M&A model for them, suppose a potential buyer is willing to provide financials.
How do I find time? Well my current coverage group's MD is a very chill guy. I average 50-60 hours a week (with below street pay, that's a big downside). Weekend work I'd say ~50% of time. I haven't closed a single M&A deal yet because my group mainly focuses on equity raising, while I do have good modeling skills and I have read a lot of books and articles on M&A.
Granted, I won't be guiding my friend through a whole M&A process, but they hired a lawyer for that. My work is largely pro-bono. Maybe I will get a couple thousand bucks and that's it. Worst case is 50 Big Macs. Yes this shit is real...we are not crazy and I'm not fat.
I like this experience and I decided to do it for them, Their situation is beyond distressed, and for some reason I cannot speak about, their controlling shareholder won't allow them to go through a bankruptcy process. The biggest shareholder (a big local company in a small town, I guess you can call this kind of company a bully) is so absurd that they don't allow factory workshops to produce, solely because the current Chairman wants my friend's family to know (verbatim) "who's the fucking boss".
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Does my company know about this: no. I have brought this up with my MD. The TEV currently stands at 200-250mn, which is not very lucrative from my MD's viewpoint, so he didn't want to take it. I'm working under the radar.
Will I write this experience on my resume: hell yeah.
Will it be helpful in future interviews: I sincerely hope so.
Will it be a meaningful thing, like in my life: hell yeah.
Cool. Good luck with all that
Thanks.
Is your work "largely pro-bono" or did you sign a contract... I get what you're trying to do and it's great to hustle but if you're still employed with your existing bank, as a registered broker nonetheless, this just sounds like a huge potential liability for you.
Hi, edited. It's a mutual agreement, no serious contract. I understand what you are saying here and I totally agree. When they sign anything, my name won't appear on it. I will travel and meet people with them if needed, suppose I have time.
Want to put Direct Lending (& Lev Fin) experience on your resume and do some projects for me instead? synthesizing / spreading the data (that you And I can discuss / analyze). Seems like you have the skill set? Probably won't even take you THAT long (vs a CIM/LP). After that If you want more, I'll feed you all the projects to add job skills to resume that you desire.
Hi, that sounds very interesting. My group doesn't do any LevFin work so it would be a great experience for me.
Is that proposal a long-term one, or a short-term one? I currently don't have the time to commit to another side project anymore. If it's LT, I'll PM you. If it's ST, I won't be of much help.
You should ask the bankers that pitched Cabot and Cimarex on merging. Bet the analyst and associate thought that pitch was the biggest waste of time ever, ended up somehow getting a huge deal done.
Hi, I know nothing about that deal. Sounds interesting though. Will look into it. Thanks.
Will check that one out. Thanks!
To those of you who aren’t familiar with it, it was just kind of a head scratcher when it was announced. The trend in upstream oil and gas has been single basin consolidation with companies moving away from being diversified across basins (this applies to the smaller guys, obviously Exxon isn’t selling off all their global operations to focus on one basin). Tends to be more synergies between two companies that operate in the same basin. But Cabot operates in Appalachia, and Cimarex is in the Permian and SCOOP/STACK (Oklahoma). So it didn’t make a whole lot of sense because the only real synergies are just shutting down an office and only having one HQ building, but beyond that their operations didn’t overlap at all - they’re on opposite sides of the country. Cabot produces all gas, Cimarex is oil-focused. Both companies traded down at announcement because it just wasn’t the deal investors expect to see right now, it’s kind of the exact opposite. So with that in mind, that’s why being the analyst pitching Cabot to merge with Cimarex (because Cimarex was already running a process - somehow decided to choose Cabot over other bidders) probably felt like the dumbest work of all time. They definitely didn’t expect Cabot to bite but they did, then actually ended up being the winner.
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