From afar, investment banks’ mergers and acquisitions (M&A) divisions seem to be highly appealing to job-seeking graduates. At the graduate level, M&A is also one of the most challenging areas to enter into.
Let us know about Mergers and Acquisitions Career Path!
What are Mergers and Acquisitions?
Mergers and acquisitions professionals collect information about growth, rivals, and market share opportunities in order to analyse business prospects. They also examine the company’s fundamentals and financial statements, as well as build a mosaic to aid upper-level executives in making business decisions.
Why do companies engage in Mergers and Acquisitions?
Some reasons for which companies need M&A and hence, professionals for carrying out the same are –
- An acquiring business may be able to raise sales by gaining access to new markets, hiring an innovative product development team, or expanding its regional scope by acquiring a target company. Cross-selling opportunities will arise as a result of diversified product and service lines. Companies may also want to obtain patented technologies or a superior R&D department from another business.
- Companies should be viewed as cash flow sources that senior management should handle proactively to minimise cash flow volatility. A decrease in volatility is interpreted by the market as a reduction in investment-capital risk, and it is rewarded accordingly. Combining two or more companies and, as a result, their cash flow sources, can reduce the portfolio company’s overall risk.
- Larger businesses are often priced at higher multiples than smaller businesses. Larger businesses are generally thought to be less risky due to their greater wealth and access to capital.
Required Qualifications
A bachelor’s degree in accounting, economics, finance, or mathematics is required for entry-level M&A analysts. Additionally, they must have previous investment banking experience. MBAs are common among M&A professionals, particularly at higher levels. Any of the employees hold law degrees.
Advanced degrees may not be needed, but some colleges and schools offer postgraduate and executive education programmes in mergers and acquisitions, the latter of which is aimed at senior executives.
Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA) certifications will open a few doors. The Financial Industry Regulatory Authority administers a mandatory licencing test in the United States (FINRA). The licences must be kept up to date and renewed on a regular basis.
Key Skills
Analytical abilities, problem-solving abilities, global market experience, business understanding and business sense, and sound judgement are all important skills. The willingness to work with others and in high-stress situations, decision-making ability, and experience of the acquisition process, electronic stock trading, and marketing prediction software systems add lustre to a candidate’s profile.
Career Options
Some of the career options you can explore after gaining sufficient knowledge about the subject are –
Mergers and Acquisition Analyst – The groundwork in the mergers and acquisitions process is done by mergers and acquisitions analysts. They primarily assist organisations with due diligence, market analysis, and peer group research. An analyst is expected to work long hours on the project and provide a report detailing the results.
Merger and Acquisition Associate – The Merger and Acquisition Associate supervises the junior analyst’s job and assists him with different documents such as ppts and excel spreadsheets during the due diligence process. In terms of day-to-day operations and the status of the contract, he reports to the VP.
Vice President – The Vice President is in charge of them as well as a department, and is in charge of ensuring that the merger goes as smoothly as possible. On a regular basis, he reports directly to the firm’s partner / CEO on the success of the team members and the status of the contract.
Consultant – Mergers and acquisitions is not a position that can be filled solely by bankers. Consulting companies of all sizes have dedicated M&A teams who aim to get a slice of the action by consulting their clients on a variety of merger-related strategic issues. In reality, these consulting firms play a critical role in the post-merger world, which is particularly vulnerable to teething problems or cultural clashes.
Average Salary
Bulge bracket bank M&A analysts typically start with a fixed portion of USD 85,000 to USD 100,000. The variable component is only tangentially linked to analyst results, and it typically accounts for 50 percent to 100 percent of the base component. This is focused on the overall performance of the team rather than the individual analyst’s performance.
The fixed component at the associate level is normally USD 150,000 to USD 200,000, with the variable component ranging from 50% to 150 percent of foundation. In terms of the performance-linked component, this is where you start to see more variation.
If you reach the level of vice president or associate director, the salary range can be very broad. You are partly responsible for origination activities at this stage, and your revenue generating capacity accounts for a larger portion of your total compensation.
Market Demand
Certified Merger and Acquisition Analyst might find employment in various companies like KPMG, E&Y, Tata Capital, Ikya Human Capital Solutions, PwC. By far the worst hours of any banking role are in M&A. Expect to spend 75 to 80 hours a week at your desk. There’s also the chance of extra work being assigned over the weekend. When you reach the associate rank, things start to get a lot easier. Associates are typically recruited right out of business school and do not have to go through the same trials and tribulations as analysts. The hours are still bad, but they aren’t nearly as bad as the analysts.
Resources for Mergers and Acquisitions
You must first establish a stable foundation before you can become an expert in those fields. And you’ll need to have the right applied skills before you can move on to the practical teaching. You may use the following tools to get a complete understanding of the domain:
- Firstly, Online Tutorials for Mergers and Acquisitions
- Also, Certification Courses from verified sources such as Vskills, Coursera, Udemy and so on.
- In addition, Online communities
- Moreover, Blogs and study material from experts in this field and many more.
Here are some examples of how you can improve your abilities:
- Freelancing
- Internships
- Apprenticeship programs
The above steps will help you to get this domain started. It’s a long way to go, however. You can take an advanced course to reach a new level of skills.
Some resources offered by Vskills
Vskills offer Merger and Acquisition Analyst Certification for all those interested in working in this field. This certification course covers the following topics –
- Introduction to M & A
- Seller’s perspective
- Buyer’s perspective
- Corporate Restructuring
- Management Process
- Legal Regulations
- Cross Border mergers and acquisition
- Corporate demerger and reverse merger
- Due diligence
- Pricing and Valuation
- Funding Mergers and Takeovers
- Negotiation and Bidding
- Post Merger Integration
- Post Acquisition Review
- Post closing issue
Vskills also offers free practice tests and online tutorials to supplement the learning process. You can check them by clicking on the following links –
Discover the career opportunities and other prospects of career in Mergers and Acquisitions. Hurry up and start preparing now with Vskills.in!
