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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 buyers to get an idea of the buy-side. This includes obtaining investment mandates which will either be formally listed or informally given from corporate M&A departments for strategics. From there you are going to need

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 and find the email addresses for each of the CEOs, CFOs, and/or corporate M&A department head for the potential acquirer. An example of a vertical specific rolodex would be the following:

When maintaining coverage of an industry or sector, one prepares a newsletter to be send to prospective sell side clients in the industry or sector. Investment bankers use the index information to create this newsletter. The newsletter is about 2 to 6 pages. For example, our AltQuest software industry coverage has produced the following newsletter which is sent to potential targets:   Industry or Sector Newsletter       Industry or Sector Report   When maintaining coverage of an industry or sector, one prepares

If you are at a larger investment bank, you will have various paid data sources at your disposal. These include: Bloomberg CapitalIQ FactSet Mergr For those that are not at a larger bank, one can use the free sources of financial data including: Yahoo Finance Google Finance Yahoo Finance and Google Finance get their EBITDA numbers from CapitalIQ and their analyst EPS consensus estimates from there as well. Investment banks typically do not want you to use the

Regarding the vertical index and sub-vertical index, the investment banker ultimately tracks trends in: Growth rates Margins Multiples The investment banker takes the index and establishes tiers which turn into peer groups. This is why we pull comps, to build an index and benchmark against the comps. The indexing and benchmarking that is done for a target company is going to serve as the basis for advising on strategic alternatives. One should build indexes at the vertical level, then sub-vertical level

First, the investment banker is going to choose what size of companies he/she is going to cover (ex. public co's, middle market, lower middle market). From there, the investment banker chooses an initial vertical and sub-verticals to cover. With AltQuest Group, our initial coverage groups were the following:   Manufacturing Software Business Services Healthcare   After choosing your coverage, the investment banker is then to build an index for each of the verticals and sub-verticals made up with

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