What "industry knowledge" should I know when applying to an M&A firm? Currently in the last stage of PWP and it says on their email that industry knowledge will be tested on the email....
| +405 | Evercore Intern Seizure | 62 | 6h |
| +113 | UBS IB Americas has failed, now behind Santander and Stiffel | 31 | 44m |
| +79 | JPM M&A is Gone??? Purely Coverage Banking??? | 44 | 2m |
| +60 | How do I understand vs. just memorizing? | 11 | 10h |
| +48 | Losing my personality in Banking | 9 | 2d |
| +45 | The good and bad with Wells Fargo | 14 | 1h |
| +42 | Associate & Above IB exits | 18 | 11h |
| +41 | Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday. | 23 | 1h |
| +33 | Incoming IB Analyst: Best Ways to Prepare? | 13 | 8h |
| +33 | Some banks are overrated as fuck | 10 | 5h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Be able to talk about a couple recent M&A deals: rationale, financials, etc.
What do you mean rationale? Do i need to know what is an LBO etc?
Just touch on 2 key areas: 1. Type of Consideration: Stock Deal, Cash Deal, Combination * Also touch on Control Premium Paid (~15-30% usually) 2. Type of Acquirer: * Strategic (Usually either a competitor or a company within its supply chain) -Talk about the possible synergies(Revenue and Cost Synergies) * Financial (ie Financial Sponsors) -Usually doesn't allow for much synergies but may be possible if the financial sponsor acquires and merges the company with another company in its portfolio. 3. Just a rough view of which direction you feel the broader industry is headed
I think if you touch on that, which shouldn't take too much time at all, you should be good to go.
Stock sales vs. asset purchases-know the difference in accounting for these in terms of asset write ups to FMV, deferred taxes, NOLs, why a company may prefer asset purchases (can choose assets and exclude liabilities like pensions/lawsuits and amortization of goodwill and the accompanying tax benefit where as in a stock purchase agreement you step in the targets shoes). Know the differences and how they affect the balance sheet. Asset purchases allow for sales of specific business units such as an oilfield for example, but can be entire companies.
Financing- a) assumption vs refinancing of debt (paying down target debt vs taking on additional debt load). B) consideration-issuing equity, especially if considered over valued, can keep the leverage ratios smaller, but can be dilutive. Cash payment is the least dilutive. Borrowing is tricky because it raises leverage ratios, making further borrowing more costly, but can amplify returns but losses as well. It would depend on finding the right mix to keep the newco's capital structure optimal.
3) deal motivation- synergies should mainly be cost related due to economies of scale and minimizing redundancies, much easier to realize and more likely than revenue synergies. The run rate is important in the accretion dilution model because of the run rate is low early on, it may take longer for the deal to become accretive. If target p/e > acquirer p/e, deal is generally dilutive and vice versa. Inverse for eps. Strategies have a higher control premium in most cases than financial buyers. Financial buyers are more focused on hitting an IRR and that's why an LBO can be a floor valuation.
If you can get all that done and know basics like sources and uses you should be fine. Wouldn't expect any detailed LBO questions, but in those cases cf available for debt service is more important and likewise focuses on being able to maintain covenants. A recap in an LBO is essentially leveraging up the company and paying yourself a large dividend to improve IRR.
perfect thanks!! I'll learn it
Reprehenderit sunt et velit vitae ipsa. Vel a mollitia esse suscipit sed inventore labore. Adipisci velit sed id vel asperiores nobis. Eveniet tempora aut incidunt pariatur. Blanditiis provident voluptates quod nulla illo. Voluptas assumenda sunt aut et.
Harum est veniam molestiae numquam enim quaerat vel. Quia impedit veniam sed nihil quia voluptas. Non id repellat vel fugit excepturi velit distinctio. Aut consequatur voluptate veniam non optio debitis consequatur.
Occaecati aliquid inventore sint omnis. Voluptas quia qui molestias dolorem eius id. Incidunt nulla cupiditate et ut dignissimos. Laborum dolores totam exercitationem qui.
Ipsum quae et enim accusantium ut delectus. Reiciendis sit molestiae illo. Facilis non expedita id et impedit labore non quis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...