Question regarding to buy-side process - Thank you!
Hi! I am a current college student who is interested in investment banking. I have tried to do my own research on this for 3 hours and can not find any answers online, so I was wondering if someone with experience can answer this question. Thank you for your time!
The Question:
In a buy-side process, investment bank (assume already have a buy-side mandate and exclusivity) will contact sellers for the buyer. During this contacting process, do bankers make pitch decks to sellers and explain why they should sell?
Sorry if the question looks stupid, but I am very interested to learn about this. Thank you again for your time!
Not a silly question, the industry is super opaque.
A "buyside process" typically refers to a situation where there is an active sellside process being managed by another bank, and so there's an identified target and seller. These sellside processes are quite structured, and involve bidding phases. The buyside bank will advise the buyer / client throughout this, providing insight on market intelligence, valuation, due diligence, etc.
To touch on an aspect of your question, the formal "bid letters" which sellers expect to see to decide who to sell to usually require a section on, basically, "Why me?", which often disusses aspects of the buyer's experience with similar assets, strategic plans for the target, confidence around ability to close the deal, etc.
There are some buyside processes where there is not a formal sellside process, and these usually involve proactively reaching out to a potential seller with a "Letter of Intent", setting out valuation, "Why me?" type discourse, etc. This is quite a bit less common in my experience, and I've never seen a pitch deck as part of this. Usually it's the case that the buyer / client has identified a specific asset - I at least have never worked on a situation where a buyer will actually engage a bank before a specific asset is identified.
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