Anyone here who has or is, I just have a few quick questions about the m&a process. Specifically how deals are originated, and work is won. Shoot me an email at khosanman (at) hotmail.com Or get back on here
a) idea for a pitch comes into MD’s brain b) MD calls around and gets a meeting with a company c) analyst makes pitch book and financial model d) MD or VP pitches to company in face to face meeting e) some work is won, deals go live ___________ disclaimer: i don’t work in m&a / / / just some sunday thoughts
But im wondering… Will a VP lets say have a good relationship with Company A. Then think, hmm maybe they shoud target some such and stuch downstream companies, or such and such similar companies to gain marketshare and take advantage of synergies. And then just put together a potential list of targets and go approach company A wiht targets and ideas??
philip.platt Wrote: ------------------------------------------------------- > a) idea for a pitch comes into MD’s brain > > b) MD calls around and gets a meeting with a > company > > c) analyst makes pitch book and financial model > Analyst spends a few hundred hours making a pitch book and financial model with irrelevant projections and half truths and whole lies about the company in-play > d) MD or VP pitches to company in face to face > meeting > MD looks like a despearte panhandler trying to wrestle a few pennies from a soup kitchen owner while the guys on the other side of the table lazily paw the MD around like a blazé kitten. > e) some work is won, deals go live > > Monkeys suffer, MD’s laugh. > ___________ > > > disclaimer: i don’t work in m&a / / / just some > sunday thoughts Read ‘Monkey Business’
Monkey Business is a great read, definitely read that if you want to get a flavor for M&A.
I have read Monkey Business. It is good for a satirical view, but other books such as Big Deal by Wasserstein would be better if you want real background, real companies, and an inside perspective to deals that have gone through.
All I really want to know about is how IBDs source business and potential targets for clients. As I have a potential business idea for that.
A lot of people have ideas (and good ones at that). If you don’t have the experience, pedigree, and key IB relationships, it is going to be hard for you to push this idea to the CEO/CFO of a company.
Regardless of that, Id still like some more info if anyone has info on how this process can work. Will an MD say, ok BHP has a lot of cash lets present ideas of companies they can buy that are similar to take advantages or synergies. Or lets present them ideas of companys they can buy that turn the iron into steel (down stream). etcetc. Or will someone like BHP go to IBD and say, ok we want to but such and such type companies that do such and such. Or also do companies say Ok we want to sell this part of our business. FInd companies who may want to buy us and go sell us. All of the above occur or am I way off?
not to sound too harsh, but for someone who isn’t in investment banking to think they can provide these guys who work 100s of hours on something they didn’t do or unaware of is quite optimistic. if you dare, give us a glimpse of your idea. I’m pretty sure ppl on this board who work in ibanking will tell you why the idea is really brilliant or dumb and you can reassess from that point on.
In this case I back up Phil.P on Wasserstien’s book, ‘Big Deals’ Wasserstien is the Wilt Chamberlain of deal making.
Basically, I am wondering here… Do m&a advisors often just say to company A, ok look at company B, they look good for you, do you want to make an offer for them? And if so, how do they find these targets like company B? Basically what I would like to know I guess is how do advisors research and identify targets which meet acquisition criteria?
They do the same things that companies do and screen for potential M&A targets or asset acquisitions. Unless the company sucks or has no in house business development/M&A/corp planning group, the investment bank will almost never come up with some magical idea that will be a complete surprise to the company. The IB will either be marketing a company that has retained their services while looking at strategic alternatives, or they will be pitching as many ideas as they can hoping that they can show some of their capabilities to prospective clients.
Most large companies have on their radar several companies - target or acquirors. A companies strategic direction is not a big secret to those connected to the industry. In more niche areas, such as emerging markets where information does not flow as freely or cutting edge technology, PE groups, IBs, consultants etc provide some input. This is usually solicited. The whole game revolves around relationships and reputation etc.
Thanks for the responses. Basically what I am interested to know is if BBs, MMs, smaller m&a advisory and corp development teams, may be interested in a product i could produce for them. Basically in my current job I have developed the skills to seek out companies that will fit specific profiles of functions, risks and assets as requested. So what I am wondering is if this could be applied to such firms. That is for them to say, ok we have a maker of some sort of drink. They dont bottle it, but are interested in doing this themselves, through acquiring a company that does such. Ok so I could search for companies that fit a specific profile and provide info on these companies to the firms etc. Do you think this is something they would be willing to maybe pay for. Or is it something they already do inhouse themselves, or just plain wouldnt be interested in?
No one knows an industry better than the companies that are in that industry. Companies looking for strategic opportunities typically know exactly who the players are before they start the M&A process, so I think it would be difficult for you to add much value. My firm adds value through our database of PE firms…we rarely know of a strategic buyer/seller that our client is not aware of.
Im thinking it could be useful in the MM market. Where firms don’t know about smaller ones, particularly in neighbouring countries and dont have corp dev teams. But yeah, I think I may have ot shelve this idea and stick to finding a new day job!
My friends in M&A use Thomson, CapitalIQ and other such tools to basically do exactly what your saying. The most basic and simple task an analyst is assigned to is building comp tables and verifying with information from those data mininig services.
Dont they only provide info for public comps? unsure Basically what this would be is, put together a profile. Download off database all companies that match. Go through each one individually, websites etc. Select ones that fit. Then give a dossier on each company. But I guess you are saying this is what the analysts already do
nequity Wrote: ------------------------------------------------------- > But I guess you are saying this is what the > analysts already do Yes.