Tests Boutique M&A

French35's picture
Rank: Orangutan | banana points 282

Hi everyone,

I am going to have a test new week for an internship in a boutique M&A based in Europe. I will have to process an article about a company and prepare a one-pager for a senior banker based on the information you managed to extract from the article. The boutique is specialized in TMT.

How should I structure my page?

thank you.

Comments (10)

Aug 16, 2017


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Aug 16, 2017

Company Overview
1. talk about the company and their history
2. talk about their products, what drives revenue (key drivers)
Investment Highlights
3. why is this a good opportunity
4. is it quickly growing? good CF? what positions it for growth?
5. talk about their customer base and what makes them attractive/blue chip? fast growing?
Financial Highlights
6. talk about revenue and EBITDA mostly (avoid FCF as you can make mistakes in calcs.)
7. talk about margins, are they scalable?
8. if their public, I'd put MD&A guidance and forecast 1 or two years but avoid assumptions (or you can put
"X" as a place holder, they won't penalize you for this).

You need to sell your ability to write not your DCF capabilities. Identify what makes this a good company and why someone would want it. DO NOT PUT A PURCHASE PRICE.

If you want to get creative, look up company docs and try and mimic their format and colours, so it will show you've done your homework and know how to adapt.

    • 1
Aug 16, 2017

Thanks @tiptop101

Aug 16, 2017

Can't find it. Do you have a link? I'm not too worried about the lbo model. Just wanted to see if anyone has done something like this. I'm woundering how to navigate the stock/debt/cash mix in the merger model since it will most likely be for a private co. Would this most likely be give. With no EPS, what you other items be to look for when evaluating the potential merger.

Aug 16, 2017


Aug 16, 2017

Download the CapIQ DCF model. Stick with bottom-up beta, and calculate working capital cash flow via the working capital schedule (assuming same cash conversion cycle on working capital).

Understand it to the point that you can built it from scratch if you want to.

The reason I say to use this model is that (i) if you set it up properly it will be fairly accurate (ii) it has the standard setup they'll want to see and (iii) it's something you can build in an hour.

Regarding assumptions, do things which are reasonable. (E.g. check to make sure the terminal value multiple is in the normal trading range.)

Practice building it out a few times. One you have the core framework down pat, start adding bells and whistles to make it look sexy such that yours stands out.

Aug 16, 2017

I can't find the CapIQ DCF model on google, any chance you can send it by PM or other ways?
What do u mean by bottom up beta?
For WC, you mean that I have to forecast the ending balance of AR AP an Inv each year (with the day in inventory, days receivable etc) and then calculate the delta every year?