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There is a Part-time contract opportunity available for experienced Web-Engineers (Tech Lead level) (100% remote). Project Client is a Japanese Tech firm.
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It’s a operational model instead of DCF model. You don’t need banking experience, but you should be strong in excel and atleast understand financial statements / EBITDA. At a high level, it usually ends up being a 15 or so tab model broken up by functional area (finance, hr, sales, legal, operations, etc.), with headcount and non-headcount costs. Depending if it’s looking at synergy or carve-out costs, you look at incremental costs by functional area. You generally do both one-time costs and re-occurring costs. You then lastly make some assumptions on how long each will take to achieve.
Any advice on good literature to learn more about the process?
It ends up being fairly bespoke, but the above should explain it high level. Sometimes you need to spend a lot of time making the cost baseline make sense and is properly mapped (e.g. one company may put salesforce in IT, but another company may put it in sales). Also mapping headcount costs also usually takes a while.
EY, at Deloitte working capital stuff would be a FDD and done by Deloitte advisory not consulting . Also day 1-100 would be the phase after an ODD (e.g. implementation planning) and not within M&A strategy.
My resume is baller, but I’m burnt out and ready to quit. I’m manager now. You learn corporate level strategy, understand every functional area of business, learn industries, and talk to senior leaders or PE people
CDD are market sizing and growth, growth drivers, competitive landscape, customer assessments, and validating company growth targets (you don’t always do all of these). It usually involves 50+ interviews, ability to quickly synthesis, and create a convincing story (similar to a normal strategy project). A lot less excel than an ODD, but market sizing model can sometimes get complex.
I am aiming for corporate strategy & development roles, M&A roles, and PE-backed portco roles. I don’t know if I can get a direct PE role, but maybe in a LMM, my lack of DCF experience may be a showstopper. May also look into value creation (ops) teams instead of deals teams at larger PE.
Try to do some CDDs too
Sometimes you might deep dive into one area (e.g. customers) and be going in stores to interview people, create and release a survey, etc.
I’ve done about 12
Definitely not DCF, merger models nor LBOs. Probably just some simple financial 'models' to show day 1 to 100 readiness and what a company would need to do operationally (whether it's a working capital issue, working on transaction support agreements) and the like
At least, that is what I presume.
D1 did you enjoy those projects? I heard they are high burn but what do u feel u gain from that exp? I would be coming from an SC perspective
Would you be able to describe the CDD work we do by any chance
Sorry last question : what exit opps are u looking at D1 as an M? Corp strat dev/PE ?
Thanks a bunch D1!
Great explanations here, D1
D1: where are you based? I do mostly pre-deal work and always looking for experienced M’s (SM here)
OP: D1’s descriptions spot on. I encourage you to reach out to some M’s and SM’s in our pre-deal space to get more info. Am one of them and happy to help. Am NYC-based
Agree with D1. Whether it’s synergy assessment or stand alone cost, the model is always broken down by function and head count vs non headcount. I would add that the census is source of headcount costs and the TB is the source of non headcount costs. The model really isn’t that hard after you’ve done a few but assessing the reasonableness of a proposed end state cost structure is where a lot Of time is spent after senior associate