Hi guys,

During an AC, when you have to understand if you were or no to invest in the company, what things do people generally analyze?
I would tend to do:
1. SWOT, in order to understand if the target is well positioned
2. Key investment highlights considering market trends
3. Financials
4. Valuations

what would you guys say?
Cheers

Reply 4987

fabulanoctis

Original post by gsbs2

Hr straight forward. Grad or SA?

SA. You didn't receive any technicals / M&A questions? Just competency? Thanks so much! (and good luck for your AC haha)

Reply 4988

olly_price

2

Original post by pipp10

Hi guys,

During an AC, when you have to understand if you were or no to invest in the company, what things do people generally analyze?
I would tend to do:
1. SWOT, in order to understand if the target is well positioned
2. Key investment highlights considering market trends
3. Financials
4. Valuations

what would you guys say?
Cheers

I would start by assessing the overall market for the industry. If it is an attractive market, I would go on to look into the economic situation of the country - depending on the type of investment being made, the impact of economic downfall could be different (for example, investing in stock could be risky if there are economic risks, however investing in a private company may be less so).

Once these two have been cleared up, I would look into the market share of the company and I would assess the likelihood of any potential takeovers of mergers, and assess the main competitors as well.

Then I would look into the financials: revenue, EBITDA, P/E ratios, debt-to-equity (very important - look at the oil industry now), PEG etc. etc. I would make sure that I am comparing these to key competitors and industry averages as well.

Finally, I would look into management. Are the management trustworthy? Do they have an ambitious but not delusional outlook for growth? Are the accounts all completely up to scratch?

That would be my process.

Reply 4989

StevenGRogers

JPM AM SA test invite

Posted from TSR Mobile

Reply 4990

PrinceOfTeddies

Anyone done any tests/interviews with JP Morgan?

What is the JPM Online test about?

Reply 4991

Amelia_123

4

Anyone had a BAML IBD AC?

Reply 4992

PrinceOfTeddies

Original post by StevenGRogers

JPM AM SA test invite

Posted from TSR Mobile

does everyone get this? and what are the tests about.. is it just numerical?

Reply 4993

jchap9776

7

got greenhill f2f with freshminds, emailed MS markets and they're getting back to some
people this week

Reply 4994

alfy10

Original post by Amelia_123

Anyone had a BAML IBD AC?

Had informal chat 3 weeks ago - nothing since. What about you?

Reply 4995

pipp10

1

Original post by gsbs2

What are the main drivers for the acquirer. Is it looking for synergies? Market share? Takeover of a main / potential competitor? Strategic acquisition / portfolio?

Type of acquirer, is it a strategic investor or a financial sponsor? Obvs they will have very different reasons to invest and most likely they will be willing to pay different prices. A strategic investor will pay a higher premium and won't need as much of a low valuation as a PE fund.

In my opinion the acquirer's drivers and the type of investor are even more important than any of the ones you mentioned above.

Thanks for this.

I forgot to mention that I know who is the acquirer (I was speaking for PE AC), but I totally agree with your view.

Bearing this in min, would you assess something in particular, for instance the Management and the market trend?

cheers

Reply 4996

pipp10

1

Original post by olly_price

I would start by assessing the overall market for the industry. If it is an attractive market, I would go on to look into the economic situation of the country - depending on the type of investment being made, the impact of economic downfall could be different (for example, investing in stock could be risky if there are economic risks, however investing in a private company may be less so).

Once these two have been cleared up, I would look into the market share of the company and I would assess the likelihood of any potential takeovers of mergers, and assess the main competitors as well.

Then I would look into the financials: revenue, EBITDA, P/E ratios, debt-to-equity (very important - look at the oil industry now), PEG etc. etc. I would make sure that I am comparing these to key competitors and industry averages as well.

Finally, I would look into management. Are the management trustworthy? Do they have an ambitious but not delusional outlook for growth? Are the accounts all completely up to scratch?

That would be my process.

Many thanks for this - I totally agree with the process though I would still do a SWOT initially.

For what concerns the investment itself, would you ultimately analyze NPV, Payback period and IRR of undertaking the investment or this is something not required during AC? (Specifically PE AC).

Thanks

Reply 4997

olly_price

2

Original post by pipp10

Many thanks for this - I totally agree with the process though I would still do a SWOT initially.

For what concerns the investment itself, would you ultimately analyze NPV, Payback period and IRR of undertaking the investment or this is something not required during AC? (Specifically PE AC).

Thanks

I don't actually know what any of those things are haha. I'm a physics student so my knowledge on those kinds of things only goes so far and the ACs generally take that into account

Reply 4998

olly_price

2

Original post by pipp10

Many thanks for this - I totally agree with the process though I would still do a SWOT initially.

For what concerns the investment itself, would you ultimately analyze NPV, Payback period and IRR of undertaking the investment or this is something not required during AC? (Specifically PE AC).

Thanks

There's a pretty high chance you won't be asked about an investment anyway... I just had an assessment centre and no one asked me about it