Deal Structuring
After matching a financial or strategic buyer’s mandate with a target, landing the M&A engagement and building & executing on a buyer list, it is up to the investment banker to work with the buyer and seller to structure a
Buyer List Methodology
In order to build a buyer list, the investment banker uses a database service such as Mergr.com to pull a list of likely strategic and financial buyers along with contact information in order to run the M&A process and build
Confidential Information Memorandum (CIM)
After creating the teaser, the investment banker goes into greater detail in a marketing document called a CIM. This document is distributed to buyers after the teaser and is for the serious buyers to do an in depth analysis of
Building the Teaser
After finding adjusted EBITDA and determining valuation, the investment banker can build the marketing material for the target company which includes a teaser and a CIM. The teaser is a summary of the client’s key selling points. The teaser can
Finding Adjusted EBITDA
After receiving the financials for the target, the investment banker must calculate adjusted EBITDA. EBITDA and Total Owners Benefits (TOB) are proxies for cash flow but not true cash flow of the business as there will be CAPEX and working
M&A Fee Methodology
It is important for the investment banker to have a strong understanding of fees so that the In the lower middle market to middle market, fees usually are the following: 6% for <$5M TEV 5% for $5M-$7M TEV 4% for $7M - $10M TEV 3%
Mandate/Target Matching
After determining one’s coverage and then initiating coverage in the form of index-building, it is important for the investment banker to then begin matching investment mandate’s of strategic and financial buyers to targets within the investment banker’s coverage. The Mandate/Target
Building the Pitchbook
As mentioned earlier, the pitchbook is an origination document meant to win sell side business for the investment bank. There are two main types of pitchbooks that are created. Introduction & Market Overviews– Introducing the investment bank and giving market updates to
M&A Origination Methodology
M&A origination requires coverage, relationship-building & pitching. You first need to establish your coverage of a given industry and sub-sector to develop your awareness and expertise. From there, you need to go about building relationships with both strategic and financial
Rolodex Building for Investment Bankers
As an investment banker it is important to establish relationships with the strategics in your coverage group as well as relationships with targets and their potential buyers. After building the index containing relevant strategics, one should go to RocketReach.co and