BANK DEAL
Let's say I'm working on an IPO for a client. Can you describe briefly what I would
do? - ANSFirst, you meet with the client and gather basic information - such as their
financial details, an industry overview, and who their customers are.
Next, you meet with other bankers and the lawyers to draft the S-1 registration
statement - which describes the company's business and markets it to investors. You
receive some comments from the SEC and keep revising the document until it's
acceptable.
Then, you spend a few weeks going on a "road show" where you present the
company to institutional investors and convince them to invest. Afterwards, the
company begins trading on an exchange once you've raised the capital from
investors.
How much do you know about the lifestyle in this industry? Do you know how many
hours you're going to work each week? - ANSSay that you've done your homework
and you understand it's going to be an 80-100 hour per week job. It helps if you can
reference specific times when you worked that much and how you dealt with it,
whether it was in a summer internship or a previous job you've held.
Can you talk about a time when you had to work long hours and make sacrifices? -
ANSThis is similar to many of the other questions we've been over - once again,
emphasize that you not only worked long hours, but also did it over several weeks or
several months.
One point that makes this question different: because of the way it was framed, you
probably want to discuss something outside extracurricular activities.
Can you tell me about the different product and industry groups at our bank? -
ANSThis one is bank-dependent and will differ for boutiques, middle-market firms
and bulge brackets - so you need to research it before your interview. Typical
product groups include Mergers & Acquisitions (M&A), Leveraged Finance (LevFin)
and Restructuring; you could also consider Equity Capital Markets and Debt Capital
Markets "product groups" but that one is debatable.
Common industry groups include Healthcare, Retail, Industrials, Energy, Natural
Resources, Financial Institutions, Gaming, Real Estate and Technology, Media &
Telecom (TMT). Not all banks are structured this way - Goldman Sachs, for example,
does not have product groups and instead handles all types of deals in its industry
groups.
Meanwhile, most bulge bracket banks do not have Restructuring groups at all - that
is something that only middle-market and boutique firms do.
, Finally, a lot of boutiques focus only on M&A and/or Restructuring and ones that are
small enough are not even split into industry groups.
a pitch book? - ANSIt depends on the type of deal the bank is pitching for, but the
most common structure is:
Bank "credentials" (similar deals they've done to "prove" their expertise).
Summary of a company's options ("strategic alternatives" in banker-speak).
Valuation and appropriate financial models (for example, if you're pitching for
an IPO you might show where the IPO proceeds would go).
Potential acquisition targets (buy-side M&A deal) or potential buyers (sell-side
M&A deal). This is not applicable for equity/debt deals.
Summary and key recommendations.
How do companies select the bankers they work with? - ANSThis is usually based
on relationships - banks develop relationships with companies over the years before
they need anything, and then when it comes time to do a deal, the company calls
different banks it has spoken with and asks them to "pitch" for the business. This is
called a "bake-off" and the company selects the "winner" afterward.
Walk me through the process of a typical sell-side M&A deal. - ANSMeet with
company, create initial marketing materials like the Executive Summary and Offering
Memorandum (OM), and decide on potential buyers.
Send out Executive Summary to potential buyers to gauge interest.
Send NDAs (Non-Disclosure Agreements) to interested buyers along with more
detailed information like the Offering Memorandum, and respond to any follow-
up due diligence requests from the buyers.
Set a "bid deadline" and solicit written Indications of Interest (IOIs) from buyers.
Select which buyers advance to the next round.
Continue responding to information requests and setting up due diligence
meetings between the company and potential buyers.
Set another bid deadline and pick the "winner."
Negotiate terms of the Purchase Agreement with the winner and announce the
deal.
Walk me through the process of a typical buy-side M&A deal. - ANSSpend a lot of
time upfront doing research on dozens or hundreds of potential acquisition targets,
and go through multiple cycles of selection and filtering with the company you're
representing.
Narrow down the list based on their feedback and decide which ones to approach.
Conduct meetings and gauge the receptivity of each potential seller.
As discussions with the most likely seller become more serious, conduct more in-
depth due diligence and figure out your offer price.
Negotiate the price and key terms of the Purchase Agreement and then announce
the transaction.
Let's say I'm working on an IPO for a client. Can you describe briefly what I would
do? - ANSFirst, you meet with the client and gather basic information - such as their
financial details, an industry overview, and who their customers are.
Next, you meet with other bankers and the lawyers to draft the S-1 registration
statement - which describes the company's business and markets it to investors. You
receive some comments from the SEC and keep revising the document until it's
acceptable.
Then, you spend a few weeks going on a "road show" where you present the
company to institutional investors and convince them to invest. Afterwards, the
company begins trading on an exchange once you've raised the capital from
investors.
How much do you know about the lifestyle in this industry? Do you know how many
hours you're going to work each week? - ANSSay that you've done your homework
and you understand it's going to be an 80-100 hour per week job. It helps if you can
reference specific times when you worked that much and how you dealt with it,
whether it was in a summer internship or a previous job you've held.
Can you talk about a time when you had to work long hours and make sacrifices? -
ANSThis is similar to many of the other questions we've been over - once again,
emphasize that you not only worked long hours, but also did it over several weeks or
several months.
One point that makes this question different: because of the way it was framed, you
probably want to discuss something outside extracurricular activities.
Can you tell me about the different product and industry groups at our bank? -
ANSThis one is bank-dependent and will differ for boutiques, middle-market firms
and bulge brackets - so you need to research it before your interview. Typical
product groups include Mergers & Acquisitions (M&A), Leveraged Finance (LevFin)
and Restructuring; you could also consider Equity Capital Markets and Debt Capital
Markets "product groups" but that one is debatable.
Common industry groups include Healthcare, Retail, Industrials, Energy, Natural
Resources, Financial Institutions, Gaming, Real Estate and Technology, Media &
Telecom (TMT). Not all banks are structured this way - Goldman Sachs, for example,
does not have product groups and instead handles all types of deals in its industry
groups.
Meanwhile, most bulge bracket banks do not have Restructuring groups at all - that
is something that only middle-market and boutique firms do.
, Finally, a lot of boutiques focus only on M&A and/or Restructuring and ones that are
small enough are not even split into industry groups.
a pitch book? - ANSIt depends on the type of deal the bank is pitching for, but the
most common structure is:
Bank "credentials" (similar deals they've done to "prove" their expertise).
Summary of a company's options ("strategic alternatives" in banker-speak).
Valuation and appropriate financial models (for example, if you're pitching for
an IPO you might show where the IPO proceeds would go).
Potential acquisition targets (buy-side M&A deal) or potential buyers (sell-side
M&A deal). This is not applicable for equity/debt deals.
Summary and key recommendations.
How do companies select the bankers they work with? - ANSThis is usually based
on relationships - banks develop relationships with companies over the years before
they need anything, and then when it comes time to do a deal, the company calls
different banks it has spoken with and asks them to "pitch" for the business. This is
called a "bake-off" and the company selects the "winner" afterward.
Walk me through the process of a typical sell-side M&A deal. - ANSMeet with
company, create initial marketing materials like the Executive Summary and Offering
Memorandum (OM), and decide on potential buyers.
Send out Executive Summary to potential buyers to gauge interest.
Send NDAs (Non-Disclosure Agreements) to interested buyers along with more
detailed information like the Offering Memorandum, and respond to any follow-
up due diligence requests from the buyers.
Set a "bid deadline" and solicit written Indications of Interest (IOIs) from buyers.
Select which buyers advance to the next round.
Continue responding to information requests and setting up due diligence
meetings between the company and potential buyers.
Set another bid deadline and pick the "winner."
Negotiate terms of the Purchase Agreement with the winner and announce the
deal.
Walk me through the process of a typical buy-side M&A deal. - ANSSpend a lot of
time upfront doing research on dozens or hundreds of potential acquisition targets,
and go through multiple cycles of selection and filtering with the company you're
representing.
Narrow down the list based on their feedback and decide which ones to approach.
Conduct meetings and gauge the receptivity of each potential seller.
As discussions with the most likely seller become more serious, conduct more in-
depth due diligence and figure out your offer price.
Negotiate the price and key terms of the Purchase Agreement and then announce
the transaction.
