Sell-side M&A vs. Buy-side M&A

Will you M&A bankers out there shed some light on the differences? Some pros and cons will do. Please focus on the experience of an incoming analyst. Of course, specific details are greatly appreciated. Thanks all.

Work in buy side advisory vs. sell side investment banking?

Experiences for bankers on the buy side and on the sell side can be quite different. For clarity, a buy side bank represents the buyer in a given transaction and a sell side banking team represents the company that is selling itself or a given asset.

Generally speaking, buy side processes involve more modeling and more technical analysis focused on structure and determining the price of an asset purchase. A sell side process involves working with a company's management team to put together promotional materials, handle the bidding process, and handle items such as the virtual dataroom.

Ricqles:
Sellside gives you all the fundamentals wrt process. Buyside gives you the modeling/valuation skills you can discuss in interviews (especially sponsor buyside, but that's rare). If you get to work on 1-2 sellsides and 1-2 buyside towards middle of your first year, you should be pretty set for interviews.

While the common consensus says that buy side processes are more educational and beneficial to analysts, user @ex-banker", a retired investment banker, shared a different opinion:

ex-banker - Retired Investment Banker:
As an analyst, you learn more and get a better experience on a typical sell-side. It's a longer process and you do a lot more work. You also get much more exposure to your client (often spending significant time at your client's site especially at the beginning of a deal). Though once you've done a few sell-sides, they can get boring as the processes are usually the same.

The other advantage of sell-side is that they have a much higher chance of closing (1 seller, many buyers). While that's not going to affect your bonus as an analyst, it's nice to work on deals that close (helps with exit opportunities too). It's not to say you can't learn a lot on buy-side too as you'll do valuation and modeling and help with due diligence but a lot of buy-side is just acting as a conduit of information between your client and the sell-side advisor.

Both sell-side and buy-side M&A require a lot of tedious administrative work (setting up conference calls, meetings) from the analyst but sell-side has a higher ratio of real work.

You can read more about this topic on a seperate thread on Wall Street Oasis.

Preparing for Investment Banking Interviews?

The WSO investment banking interview course is designed by countless professionals with real world experience, tailored to people aspiring to break into the industry. This guide will help you learn how to answer these questions and many, many more.

Investment Banking Interview Course Here

Region

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (11)

Dec 6, 2007 - 10:54pm

when you charge your fee based on a % of the transaction, sellside is advantageous because you are able to boost your fee by negotiating the highest bid. buyside you are engaged to help negotiate the lowest price, which results in a lower fee.

sellside you will have to write a memo on the company used to give to potential buyers. buyside will not require this.

i have found that companies are typically more willing to speak to someone who is representing a buyer than someone representing a seller.

Best Response
Dec 7, 2007 - 11:08am

as an analyst, you learn more and get a better experience on a typical sell-side. it's a longer process and you do a lot more work. you also get much more exposure to your client (often spending significant time at your client's site especially at the beginning of a deal). though once you've done a few sell-sides, they can get boring as the processes are usually the same. the other advantage of sell-side is that they have a much higher chance of closing (1 seller, many buyers). while that's not going to affect your bonus as an analyst, it's nice to work on deals that close (helps with exit opportunities too). it's not to say you can't learn a lot on buy-side too as you'll do valuation and modeling and help with due diligence. but a lot of buy-side is just acting as a conduit of information between your client and the sell-side advisor. both sell-side and buy-side M&A require a lot of tedious administrative work (setting up conference calls, meetings) from the analyst but sell-side has a higher ratio of real work.

Author of www.IBankingFAQ.com
  • 2
Dec 7, 2007 - 3:23pm

I've heard the opposite. Though it's obviously true that a sell-side assignment is more likely to close, I've heard you learn a lot more from a buy side assignments -- its where you learn the most about modeling/due diligence which is key for exit opps.

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Jun 1, 2011 - 4:02am

sellside gives you all the fundamentals wrt process

buyside gives you the modeling/valuation skills you can discuss in interviews (especially sponsor buyside, but that's rare)

if you get to work on 1-2 sellsides and 1-2 buyside towards middle of your first year, you should be pretty set for interviews.

  • 1
  • Intern in IB - Cov
Jun 28, 2021 - 12:06pm

Eos eius sit qui et rerum odit et. Quo dolores sint dicta aut voluptatibus quo ut. Eligendi assumenda ut et quas amet.

Occaecati ut ratione quo possimus reprehenderit libero nisi. Qui consequatur ab consequatur et vel. Tempora est laborum qui odio cum ullam. Veritatis quis amet pariatur ut ut temporibus suscipit officia.

Et neque ut quo quia eveniet. Minus non ea sed omnis distinctio animi nulla. Minus quia officiis atque et at et. Et molestiae qui minima dignissimos voluptatem voluptas.

Start Discussion

Total Avg Compensation

November 2021 Investment Banking

  • Director/MD (10) $853
  • Vice President (40) $360
  • Associates (234) $234
  • 2nd Year Analyst (144) $156
  • 3rd+ Year Analyst (34) $154
  • Intern/Summer Associate (107) $146
  • 1st Year Analyst (513) $136
  • Intern/Summer Analyst (393) $83