Skills needed for updating CIM’s?
Hi Everyone,
I have a final interview for a spring analyst position at a sell side M&A firm in a few days. The position is described as being involved with updating CIM’s, and was told that during my interview I would be given a form of writing test in relation to writing and updating CIM’s. Given this information, I wanted to ask if there were any specific skills you would recommend I focus on honing prior to interviewing, with that description given.
Thank you!
Focus on honing financial analysis skills, attention to detail, and clarity in communication. Familiarize yourself with recent M&A deals, industry trends, and valuation methods. Practice concise and impactful writing to effectively convey complex information in CIMs. Good luck!
Is this for the boutique in LA?
Have you ever had to re-word wikipedia or another written source to make it seem like its your own words? Writing a CIM is kinda like that
I imagine they have alot of sellside processes that were put on hold during this weird market. They will kick these off again someday hopefully soon. But their books are all stale now.
That means every single chart and table you can imagine will need to be rolled forward to the latest available data.
Includes:
All financial statements / data
All verbal statements about the financial statements (commentary)
All industry charts and tables
Every word in the book that is related to said data
Practice your:
ATTENTION TO DETAIL first and foremost
Ability to carefully read and understand existing numbers and statements about those numbers
Ability to take data (financial statements) and add in another column(s) in consistent formatting to show the latest year / quarter / ltm period and do the relevant calculations accurately and quickly
Proofreading - ability to spot things that are outdated / no longer relevant / stale (eg “latest precedent transaction was x which was y months ago”)
Updating comps and flowing that through models and test of book (valuations - public comps, transaction comps, dcf valuation / “football field chart” and new QoE / ebitda bridges / waterfalls)
Ability to find and incorporate data where the last analyst quit and did not write the source on the page
Basically, your boss should be able to throw a whole CIM at you and say “just roll everything forward please” and you can do it. If you have any questions on what all is in a CIM I am sure someone here can post one.
frgna
Ps nice username and thanks for reminding me that the Roman Empire was a thing
Your best friends:
Copy and paste format (ctrl+c, alt e, s, t, enter)
Copy and paste formula (ctrl+c, alt e, s, f, enter)
Search for the words “year ended” and “LTM period”
Etc
Lol thanks ab the username. On a real level, thank you so much for such an insightful response. this will be really useful to me in just knowing what to focus in on and know in and out / re study prior to the interview. Thanks!
The thing about CIMs, and the most important thing about CIMs, is contrary to conventional thinking, they are not actually supposed to tell you what the company does. They are there to excite, enchant, and yes, even titillate the reader. This requires a special blend of buzzwords, misdirection, and a certain razzle dazzle to get there.
Here are some tips for how you can go above and beyond in your update pass through to get it there (and WOW your assessors):
Good luck and don't forget you're selling the sizzle not the steak - so as long as it looks good and sounds good, you're doing your job just great.
Thank you!
Idk man. This is right on- but I can just imagine a newly hired analyst taking this advice and making an ass out of himself. I’d be pissed if an inexperienced analyst took a written CIM interview and put some “razzle dazzle” and misdirection. Big time. I would look for the basics, factual, flows appropriatey (ie start at earlier period Year end and then comment on LTM/YTD) and has the basics of decent financial analysis as well hits on the business model/revenue model. Decent concise business writing and proper grammar/ect.
kind of figured this. wasn’t sure if it was a joke at first
This is a dumb take. From a PE perspective, we will always find out what the company actually does once we get to a management presentation and see the facility / ask probing questions, so, if there is too much razzle dazzle / misleading points in the CIM, it will just result in overinflated IOI bids. Once we figure out that the company is nothing special, our valuation will drop significantly or we will drop out of the process, often resulting in a busted process. If you actually want to close a deal, make it clear to the buyers what the Company actually does up front so that everyone is aligned on value throughout the process and no one’s time is wasted.
No, that would make too much sense. We must try to convince you that our Wuhan China based glove manufacturer is the next apple or else we spontaneously combust.
Top tier sarcasm. Though I have seen a fair share of CIMs where I have no idea what the company does 15 pages in.
CIM: Positioning looks fantastic. Unit economics well above peers. Durable revenue model. Sustainable high growth with tepid increase in overhang. Myriad of tuck-ins, bolt-ons, etc. all available for a 2-3x multiple. Founder owned business.
CIM Backup / VDR post-NDA: Obvious middle-man in a crowded space dominated by established incumbents. Adjustments to unit economics laughable. Tissue paper revenue concentrated to one customer. Most costs capitalized and amortized over a 100 year period with accounting conventions that would make Enron blush. None of the targets are available, are littered with liabilities, well overpriced, or got eaten by Blackstone (largely due to their 2023 Holiday video no doubt). Founder owns 5% (last deal was an LBO 10yrs ago where the sponsor wants out but no one is willing to hold the bag).
1 finger and 2 brain cells
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