M&A IB 1hr case study: How do I prep?

I have a case study assessment day on Wednesday for a bank's mid-market M&A Industrials team. They've told me the structure will be the following:

  • Intro to the Case Study: c.10 mins
  • Preparation Time: c.1 hour
  • Presentation and Discussion of Results: c.1.5 hours

This will be my first role in M&A, even though I have worked on transactional work in debt advisory for the past few years. I'm competent in the theory of why firms would merge/acquire another entity (both trade and private equity buyers), but I'm unsure what I would be expected to prepare in an hour. I would appreciate any help you can give me.

More Detail:

Below is what I believe should be included in my quantitative analysis for the presentation. The following is the framework I plan for (A) Trade Buyer and (B) Private Equity:

A) Trade Buyer (M&A):

  1. Make simple assumptions about combined sales growth, OpEx savings, D&A, WC_inv (DSO, DPO, DIO) and CapEx. Apply information (hopefully provided) on market attractiveness (market size, growth, Porters' 5 forces), company attractiveness (profitability, growth rate, assets [IP, tech, other assets], differentiator from other targets), and potential synergies (sales growth and cost savings).
  2. Proforma sales to FCF with supporting schedules for WC_Inv and CapeX
  3. Use LTM or 20XXE/20XXA * multiplier (hopefully given) to find the EV of the target. Implementing premiums for trade.
  4. Proforma financial structure discussing how purchase can be structured TLA/TLB, unitranche, subord debt considering separate RCF WC/ ABL financing to support some industrials' long WC cycles/ high CapEx. Include credit metrics to assess the affordability of the debt structure.
  5. Basic scenario analysis to see how premium, pre-tax synergies, and stock consideration impact breakeven and accretion/dilution for EPS. Will use this analysis to determine whether to buy or not, considering the opportunity costs of this vs. other opportunities on EPS.

B) Private Equity (LBO):

  1. Same as Trade Buyer, except synergies could be with other portfolio companies
  2. Same as Trade Buyer
  3. Same as Trade Buyer (except lower premium for PE) and consider exit multiple
  4. Similar to Trade Buyer, except higher leverage to consider Levered IRR and Cash-on-Cash multiples
  5. Basic scenario analysis to see how leverage (TLA and TLB), entry and exit multiples impact levered IRR and Cash-on-cash multiples. Compare this with investment funds' internal requirements.

If I have time, I will attempt scenario analysis for all rev, cost, and asset assumptions; however, I doubt I would have the time.

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