I'm curious how many of you (if any) have been asked in depth questions or questions in general about merger models, how to walk through them, etc when interviewing for SA positions. I'd expect this more from places like Greenhill, Evercore, PWP that are very M&A focused but don't even know what sort of expectations they have. Thanks for your help (I'm also asking this for a relevant reason beyond just being curious).
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how to calculate beta in a merger context --- how to use DCF vs NPV in a merger to calculate target co's value...
I have a feeling that's why they specifically asked that lol...
So what was the correct answer for the DCF vs NPV question?
I'd like to know the answers on these questions as well. Any help would be more than welcome
FYI I was asked that during an interview with one of the elite boutiques..
I think it would probably be rare to get these sort of questions unless you were at a place which is extremely M&A heavy and you had a finance background and maybe you said something about it. That said, never hurts to know it and stand out. The modeling classes WSO offers will probably help you learn that stuff.
I've been asked about Acc/Dil model, but it was high level. Some unsolicited advice: understand how an operating model works [3 Financial Statements], once you're familiar with it LBOs, Acc/Dil or DCF will come intuitively, they're all pretty much the same thing just w/ different schedules / manipulations based on the analysis.
Had to consolidate balance sheets using the 3 methods. Then do an LBO on paper.
SA interview for a pretty good boutique.
Taking a wild guess DCF - value of combined firmed (w/ synergies, etc.) - standalone value of DCF NPV - future CF of target + synergies - initial investment Beta - figure out the new operating stats (in terms of sales, etc.) and find a comp set and unlever/relever?
Would like to know answers to these as well
SA 2018 - Merger Model? (Originally Posted: 10/15/2017)
Hey guys,
Just wondering if anyone has actually been asked to walk through a merger model for a summer analyst interview (for IBD)?
My consensus was that its mainly DCF, public comps, precedent transactions that they would ask about in terms of valuation, accounting, and then of course some behaviourals as well.
Was definitely going to go over a merger model, but was wondering how deep I should dive into the whole model
For all the EB (spare Moelis/Greenhill) the hard merger stuff I got asked was stuff like
Company A buys company B for 40% debt 60% stock company A has xyz company B has xyz. Is it Accretive/dilutive how much and what %?
Surprisingly I got asked these questions in their 1st round but not superdays
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