BIWS 400 Questions each with correct answers

What do bankers do? ... What is the IPO process? First, meet with client to gather basic information such as their financials, industry overview and who their customers are Next, meet with other bankers and legal team to draft the s-1 registration statement (describes the business and markets it to investors). You will receive comments from the SEC and revise as necessary. Road show process to institutional investors 00:02 01:11 Can you tell me about different product groups and industry groups at our bank? Typical product groups include M&A, LevFin and RX. ECM/DCM could be considered product groups. Industry groups can be found on website some banks do not have product groups and instead do everything in industry groups What is in a pitch book? 1. Bank "credentials" (similar deals they've done to "prove" their expertise). 2. Summary of a company's options ("strategic alternatives" in banker-speak). 3. Valuation and appropriate financial models (for example, if you're pitching for an IPO you might show where the IPO proceeds would go). 4. Potential acquisition targets (buy-side M&A deal) or potential buyers (sell-side M&A deal). This is not applicable for equity/debt deals. 5. Summary and key recommendations. How do companies select the bankers they work with? Usually based on relationships Walk through the process of a typical sell-side M&A deal 1. Meet with the company, create initial marketing materials like the Executive Summary and Offering Memorandum (OM), and decide on potential buyers 2. Send out materials to potential buyers to gauge interest 3. Send NDAs to interest buyers along with more detailed information like offering memorandum 4. Set a "bid deadline" and solicit written indications of interest (IOIs) 5. Select buyers to advance to the next stage of process 6. Continue responding to information requests and setting up due diligence meetings between the company and potential buyers 7. Set another bid deadline and pick the "winner" 8. 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 1. Spend a lot of time doing research on many potential targets and go through multiple cycles of selection and filtering 2. Narrow down the list based on their feedback and decide which ones to approach 3. Conduct meetings and gauge the receptivity of each potential seller 4. As discussions with the most likely seller become more serious, conduct more in-depth due diligence and figure out your offer price 5. Negotiate the price and key terms of the purchase agreement and then announce the transaction Walk me through a debt issuance deals 1. Meet with the client and gather basic information 2. Work closely with the DCM / LevFin group to develop a debt financing or LBO model for the company and figure out what kind of leverage, coverage ratios and covenants might be appropriate 3. Create an investor memorandum describing all of this 4. Go out to potential debt investors and win commitments from them to finance the deal Diff from an IPO in that there are fewer banks involved and you don't work with the SEC