As more companies begin to consolidate or grow globally through mergers and acquisitions, the demand for M&A bankers is rapidly increasing. A career in mergers and acquisitions demands long hours in high-stress environments and requires highly skilled individuals to execute deals. Therefore, mergers and acquisitions are one of the most challenging areas to break into at the entry-level. If you are considering entry into the M&A arena, here are some things you should consider to start a career in mergers and acquisitions successfully.
Is Mergers and Acquisitions the right career for you?
Is it worth starting a career in mergers and acquisitions? You bet it is. Despite the long workweeks and high-stress environments, the challenging work you do is sure to keep you stimulated. Working closely with shareholders and directors of clients, you will be continuously learning and developing as a professional. Particularly, the most rewarding part of the role is the tangible outcomes of a completed transaction. A bonus is a geographic mobility, as skills are easily transferable, and most banks have a global presence.
A good mergers and acquisitions career path places you at the nexus of finance and strategy. Working as a mergers and acquisitions analyst is a fast-paced experience. It is an intellectually rewarding role that will place you at the forefront of the business world. Furthermore, working in a demanding role will build your resilience and make you a master of multitasking.
The downside of working in mergers and acquisitions is the tight deadlines that result in long hours and stress. Juggling between long work weeks and managing your personal life can be difficult. You can expect that after hours of researching and assembling financial information, there may be disappointment. Often a merger and acquisition deal may fail due to inadequate due diligence or poor strategy. However, you must be able to persevere and maintain focus on long-term goals.
What do financial institutions look for?
Individuals interested in getting into the field will need to have a Bachelor’s degree in accounting, economics, or finance. Financial institutions will receive hundreds of applications from fresh graduates applying for a mergers and acquisitions position. Most other applicants will boast similarly impressive CV’s, so your academic transcript will matter. Although not required, many M&A professionals hold advanced degrees, such as MBA’s.
In addition, strong proficiency in mathematics, communication, strategy, negotiation, and an eager aptitude for spreadsheets is expected. Numerical skills are fundamental as majority of an analyst’s time will be spent producing complex financial models. Although strong capabilities on the quantitative aspects of tasks are imperative, the ability to be creative and identify critical issues in deals is valuable.
Networks and Internships:
To start a career in mergers and acquisitions, having a solid academic record is essential, but ensuring you have strong networking skills and experience will heavily assist you. Speaking to your friends, family, university alumni, and professors can connect you with industry professionals working in your ideal role. Essentially, this could lead to an internship in an M&A consultancy. Moreover, internship experience will improve your job opportunities and help you gain invaluable experience in the field.
Stay up-to-date with market trends:
Financial institutions will often look for applicants that have knowledgeable and critical opinions on current market trends. Prepare for your career now by reading online resources and subscribing to email lists of financial corporations to gain insight into market trends.
The key skills necessary to start a career in mergers and acquisitions include analytical skills, critical thinking, sound judgement, and global market and business knowledge. Therefore, considering the long hours, it is expected that M&A analysts are autonomous and maintain accuracy under pressure. Strong negotiation skills are also imperative to avoid deal termination and influence the process to move forward. Executing deals is all about teamwork. You should have the ability to interact with colleagues in different departments and clients across the globe.
What does a career path in Mergers and Acquisitions look like?
There is a relatively straight career path up the ladder in mergers and acquisitions. You will start at the analyst level, then associate positions before moving up into manager and director positions. At the junior level, you will be focused on researching and financial modelling to prepare for pitches. Conversely, the more senior you become, the more you will deal with clients personally.
From day one, you can expect to be involved in:
- Industry research: Examining industry prospects based on competitors, market share and growth.
- Deal filtering: This involves researching companies that are feasible for potential acquisition based on defined criteria directed by senior executives. Additionally, valuing a company based on their financial statements and benchmarking them using several different valuation techniques.
- Liaising: Working with the other company’s advisory team and lawyers to structure deals.
- Due diligence: As instructed by the target company’s management, this will involve examining detailed financial results and conducting operational and legal assessments that could potentially affect the value of the acquisition.
- Deal Structuring: At this stage, you will prepare deal proposals and need to successfully execute negotiation points, secure finance for deals, and assign ownership of contingent liabilities.
- Post-merger integration: Executing an integration plan approved by senior executives.
Undoubtedly, mergers and acquisitions is an intense field that is relatively difficult to enter. With some perseverance, and eagerness to learn, starting a career in Mergers and Acquisitions can be possible.
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