Acquisition case interview?

I'm currently working on a acquisition case study sent to me by a company that I'm interviewing for. Is it unusual to recommend not to undertake the development/acquisition? I have reasons to back up why, I am just wondering if I'm over thinking.

 

No idea the nature/character of the shop you are interviewing with, but generally modeling cases are given that are 'positive' in view. I mean, unless your a quarterback, why pay someone to pass? (old joke).

But in these 'COVID' days, maybe someone would give one that should recommended against. Still, I'd look over carefully be deciding that is the way to go.

 

At the end of the day, the options here are either you messed up the calcs, or that they want you to clearly articulate why it doesn’t work.

I would recommend (as others have) that you review your model, but the most important thing is to be extremely thorough in your response. I would clearly communicate the strengths and weakness of the deal, what would have to change to make it worth it (moving cap, decreasing interest rate, etc.), etc.

if you handled me a model that was wrong, but was formatted right, and had drawn the correct conclusions based on your results, I won’t automatically throw you out (unless you mistake(s) was(we’re) very basic and made me question if you either didn’t put effort in or just don’t have the baseline knowledge). you won’t get a leg up on the kid who did everything right (numbers, formatting, write-up), but if I had you a kid and an okay model (right numbers, average formatting, average write-up), I would still give you a look to think if you were a better cultural fit and I could just train you better.

 

My first approach PRIOR to recommending that they pass on the deal would be recommending mitigating strategies that make the deal doable. Sometimes there are deal breakers you can't fix, but if it's a risk with the deal, find a mitigating tactic. If it's a return, recommend pricing be adjusted by X to meet X.XX% IRR. Then if those can't be acheived, then pass. Shows more thought than just "Pass for these x reasons"

Don't @ me
 
Most Helpful

Debitis nisi nostrum assumenda perspiciatis sapiente ducimus. Quia dolores et tempora nostrum a ut. Impedit autem itaque culpa non architecto. Qui ullam aperiam excepturi architecto aut non.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”