Dear all,
I have done several M&A cases recently and I am a little confused about which part I should focus on.
In some case, the main focus is about the synergy and in some other case is to understand the marketplace/product of the target company. There are also cases focusing on the fit between the two companies.
Is there any best way to figure out by asking limited questions to figure out which part the case foucs on?
Thank you very much!
(editiert)
Hi,
In consulting interviews you may have two types of due diligence cases:
There are two ways to identify the exact type of a case:
1. For commercial DD you can use the following structure:
Market
Competition
Company
Feasibility of exit:
2. For Synergies Calculation you can use the following structure:
Good luck!
Hi Peter,
I agree with Vlad, the way to clarify where to focus would either receive the information directly from the interviewer, or simply ask at the beginning why the client wants to buy this company.
In general, in an M&A case you should cover the following points:
With this structure you could cover both the potential goals you mentioned. With the first (synergy focus) you would concentrate more on Area 2, with the second (marketplace/product) more on Area 1. You should still present all the areas when presenting the structure though (mentioning your priorities), unless the interviewer explicitly said that, say, we are not interested in the price. After that, the interviewer will likely ask you to concentrate in one area (or you could take initiative to prioritize the one fitting more the goal).
There is a very important thing to remember in order to optimize your communication with this framework: you should always refer to the goal when explaining why you want to cover an area. Eg., if you goal is synergies, don’t say “I want to look and size, growth and barriers to entry to understand if the market is attractive”. Rather “I want to look and size and growth to understand how sustainable may be potential synergies in this market in the future, and barriers to entry to assess whether we could enter at all in this market to benefit from these synergies”. In this way it would not sound you have memorized a structure, rather that you are personalizing your approach towards the client’s goal.
Best,
Francesco
