How to research deals?

So when applying to the bank, the why firm question is always quite tricky to be specific in cover letters and interviews. I've heard a few people being asked "tell me about a recent deal we worked on", what are the logistics when preparing for this type of interview question?

So how does one go about finding a recent deal on websites like the Financial Times.

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I don't have access to FT but have access to CapIQ through my school, so I've been going to the "Screening" tool and then filtering out for M&A (or you could look at IPO too, etc)/whatever transaction type you'd like, and then filter for your bank as the financial advisor, and then perhaps put a date range.. That helped me find some cool deals to talk about when I recruited. I also heard that it's best to talk about a deal from a different group than the one your interviewer is in bc sometimes they can grill you for no reason. Hope that's helpful!

 
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You’re not meant to be an expert or try to be one - we all assume all you have at your discretion is YouTube, the news, 8Ks if it is a public co., and WSJ/similar publications. Here’s a summary of what’s generally disseminated and how to stitch it together:

1) Find a deal announced within the last year in the relevant industry (most shops don’t require it to be a firm specific deal, but have one of those as a backup tbh).

  • Know the Buyer/Seller and advisories on both side. If the buyer is another company, it is a “strategic deal”, if it is a private equity firm, it is a “financial sponsor” deal. This will be relevant when understanding deal rationale later.
  • Know the sticker price paid in $ and the consideration (all-cash, all stock etc)
  • Have a ONE LINER on the “why”. Did the buyer acquire this business to gain access to new markets? Did they buy them to complete an end-to-end process from product development to customer distribution? Is the sponsor in the midst of a roll-up strategy to 5x their investment in the next 3 years achieved by cost synergies? Why did this company make this acquisition now? Oh their stock price is overvalued 35%? That’s why they paid all stock… Etc.
  • Bonus (necessary for EBs): Put on your consulting hat and explain how this impacts the wider industry. Does this combo achieve majority market share now? Does this transaction put new pressure on competitors? Have an opinion on what this means for the future of that industry. This is where YouTube is your friend.

Order to speak on it in an interview:

Deal Background (players, price, consideration) — > Deal Rationale (Strategy, and the “why” this is ultimately a good investment) —> Industry Impact (Comparing the multiples of this deal to industry averages and use your consulting-esque soft market knowledge to contextualize how the playing field changes)

Don’t go into a bunch of hardo merger math or try to opine on the specific synergies that will be achieved or whatever, the point is to test if you “get it”. You should be able to talk conversationally about it as if you were talking about it’s merits over coffee with your friends. One of my super day interviews with a MD I literally just talked about a deal and the industry outlook for the entire 20 minutes - was great to pick his brain. Hope this helps and happy to answer follow up questions.

 

Hey, thanks so much but wow this is very very comprehensive, just curious why it's necessary for EBs. A lot of M&A reports I've read followed your structure exactly tbh. 

Btw, I'm a penultimate applying for summers and you clearly seem like you've prepared during your recruiting very well. If you don't mind, could you dm to run through some things quickly? 

 

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