Those working in M&A are the deal researchers, negotiators and specialist advisors, with M&A bankers being the deal-makers, overseeing the execution of a transaction.
M&A projects generally fall into two stages. M&A analysts carry out financial analysis of the company or the sector it operates in. They will review how a company subject to takeover or sale has been performing and will carry out a thorough competitor analysis.
They may write and deliver presentations and speak with clients, but under the supervision of senior M&A bankers. M&A analysts often have particular sectors of industry that they focus on (such as media, technology, leisure etc). Once the research and ‘pitch books’ are complete the deal is passed onto senior M&A bankers to take forward. A large part of the ‘pitch book’ process, which can take months to prepare and which the client is not obligated to take up, is to present a deal so tempting that it makes complete commercial sense to pursue it.
At the next phase – execution – more senior bankers work alongside clients to negotiate, structure and complete the deal. Acting on the client’s behalf, you would be working closely with lawyers and accountants in order to negotiate the finer details, which include financing, managing or defending mergers, acquisitions or reconstructions. The financial aspects cross over into corporate finance, which involves arranging bonds or loans or the issue of shares. Deals themselves could be worth huge sums of money and financial backing for a deal could be obtained through numerous sources. With the senior banker responsible for developing new clients, bringing financial backers to the table and securing deals, you’ll need to know your stuff. This role is usually one that experienced analysts progress into. Commercial awareness, intelligence and ambition, combined with excellent social and networking skills are all the desirable qualities that M&A employers seek.
- Researching market conditions and developments
- Devising M&A strategies, identifying sectors and groupings of companies that might be viable business targets for clients
- Conducting investigations into the financial and commercial state of companies subject to a particular transaction
- Carrying out financial modelling, then developing and presenting appropriate financial solutions to clients
- Constructing business ‘pitch book’ cases and presenting these to clients
- Managing the implementation of a M&A proposition
- Working with corporate finance colleagues to provide advice on capital structure
- Project managing transactions, overseeing the negotiation of terms and developing proposals to raise funds
- Constructing new issue and takeover timetables
- Providing instructions to other colleagues and professionals, such as lawyers
- Ensuring all the regulatory aspects of a transaction have been considered
- Outstanding relationship management skills
- Strong analytical skills
- Strong numerical skills
- Well-rounded commercial and economic awareness and understanding of the financial markets
- Strong sense of integrity and business ethics
- Business communication and interpersonal skills
- Confident negotiator
- Energy and commitment
- Motivated, creative and decisive in approach to problem solving
- Excellent project management skills
- Flexibility, as significant extended hours may be required during specific negotiations and deals, including weekends and long weekdays
- Ability to work within a regulated environment and comply with set policies and procedures
This is a graduate level position and employers will usually expect candidates to quickly acquire knowledge in the following areas, through training and relevant professional qualifications:
- Formulating business strategies
- Sector specific experience on a global scale, and specific demands for commodities
- M&A tactics and mechanisms, including how business finance and deals are structured
- Sound knowledge of risk analysis and due diligence techniques
- Understanding of corporate finance and how all the investment roles link together
The opportunities to enter mergers and acquisitions are aimed at people with a degree. Employers will require entrants to be numerate, but will accept graduates from any subject discipline who have typically achieved a 2:1 degree. Employers will specify their own exact academic requirement and subject. People will usually join firms as analysts, progressing to M&A associates. Some switch from corporate finance. Eventually, when highly experienced in researching M&A opportunities, you may move into M&A transactional negotiations and project managing deals. Having an additional language may be an advantage.
Qualifications most relevant to M&A include:
- Chartered Institute for Securities & Investment (CISI) Level 3 Certificate in Corporate Finance or Level 3 Certificate in Investments
- ICAEW (The Institute of Chartered Accountants in England and Wales) Corporate Finance Qualification
- CFA Society of the UK Investment Management Certificate (IMC)
With several years’ experience, M&A analysts may progress towards more advanced professional qualifications, such as:
- The CFA Institute’s Chartered Financial Analyst (CFA) qualification
- Certified International Investment Analyst (CIIA) from the Association of Certified International Investment Analysts (ACIIA)
- A relevant Masters degree or Masters in Business Administration (MBA)
Most M&A professionals will strive to achieve Chartership or Fellowship from the appropriate professional body.
Graduate entry level positions start at approximately £25,000 per annum. With the right experience, qualifications and skills you could progress to management roles and earn in excess of £150,000 per annum. This does not include potential bonuses and additional benefits. Salaries will vary considerably based on location and employer.
Apart from the large investment banks, other employers include M&A boutiques or the M&A divisions of large accountancy firms. The boutique firms tend to specialise in fewer product or industry specific work areas. UK-based positions are almost exclusively in London, although some firms have regional offices in large financial city centres like Leeds and Edinburgh. Globally, the main investment centres are New York and London, followed by major European cities such as Frankfurt and Paris. Many investment banks have global offices and offer trainees the chance to work overseas within the first two years. Once experienced, you might spend significant time working overseas with international clients.