Hello,
I will be doing an M&A case in the near future. In terms of M&A/PE strategy I would say that I have sufficient knowledge regarding frameworks (industry, target, risks etc). I also feel comfortable regarding the technical aspects (DCF valuations and so on).
When I try to apply this on real CIMs however, I always fail to apply this in practice. It is easy to evaluate financial risks from the financial review. But when I start readin the qualitative part of the CIM, it does not leave much room for applying the frameworks since it is pretty much a sales document and not very objective for analysis. Since the CIM is the only input I will receive during an hour case, how can I "dissect" through this?
1
With a CIM, most people will go straight to the financial section and glance over historical performance.
You can't fluff actual performance. Always a great place to start.
Exactly,
But lets say that I am asked to do a commercial due diligence as well during the case interview where a "fluffed" CIM is the only thing at hand. How should define commercial risks in the CIM when the CIM basically say that this company is gods gift to the world.
I had this kind of case previously and I failed to determine risks from the commercial parts in a good way.
The list above is just a sample of things you might be able to find in a CIM, which could help you identify what needs to be diligenced.
Thanks a bunch!
123
Sticky customer base I guess
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