How to Get Hired in the Business Mergers And Acquisitions Industry
The mergers and acquisitions industry is an interesting one to be in. You get to see formerly separate businesses coming together into one entity. You get to witness a company that started from scratch grow into a multi-niche brand. Most of all, you can help guide the top-level management team of businesses in acquiring smaller companies that could grow their portfolio.
M&A analysts are indispensable in this industry. These experts are responsible for identifying and evaluating companies that their clients might be interested in. M&A analysts are also tasked with advising top-level managers about a deal, whether it is worth the investment, or if it does not offer good value. They also assist companies in “spinning off” or selling a portion of their business that it’s no longer interested in operating.
In other words, these experts are important in making sure that business mergers and acquisitions provide a win-win arrangement for the involved parties. If this is an experience you’d want for yourself, you might enjoy a career as an M&A analyst.
To qualify as an M&A analyst, you must have at least a finance-related degree. Acceptable degrees are in the fields of accounting, economics, and mathematics. In addition to these degrees, you need to have built a knowledge of or have gained experience in investment banking.
These will give you the skills and expertise that will help you understand the rigors of mergers and acquisitions. These degrees will train you in reading financial statements, a skill that’s critical to analyzing a company’s value and potential for acquisition.
You can choose to pursue graduate studies in accountancy, management, and law is not always required. However, you’ll need to pass the Financial Industry Regulatory Authority’s mandatory exam, after which the FINRA will issue you a license as a mergers and acquisition analyst.
What You Should Expect in the Mergers and Acquisitions Industry
As an M&A analyst, you’ll be in charge of determining whether a potential merger between two companies can provide value for the shareholders of either party. This means checking out if the merger can result in a more robust business once the deal is concluded.
As mentioned earlier, M&A analysts spend most of their time looking at the target company’s financial statements. One of these statements is the income statement. M&A analysts pore through the target business’ income statement to gauge its profitability immediately before the merger and identify the recurring expenses that the purchasing company’s cash flow will have to shoulder after the deal.
You’ll also have to look at the target’s balance sheet and look at its assets and liabilities. The balance sheet conveys various information regarding the company’s financial health.
For instance, the balance sheet will help you calculate its debt-to-equity ratio. This ratio is used by financial institutions to gauge the business’ eligibility for loans. Assuming a high debt-to-equity ratio through the merger might put the purchasing company’s eligibility in peril. It’s your job as an M&A analyst to look for that information and advise your client accordingly.
Must-Have Habits as an M&A Analyst
An M&A analyst is an ever-evolving role. Financial landscapes could change at any moment. Thus, one of the most important habits of an effective M&A analyst is to keep oneself updated on news in the financial industry. It’s also a good exercise to practice forming your own opinions on the news while reading because this sharpens your analytical and memory recall skills.
A good M&A analyst also knows how to network with other experts in their niche. You should make a point to meet other people, whether they are businessmen, M&A analysts, lawyers, accountants, or bankers, among others. Having a solid network helps you spot opportunities for employment as well as gain referrals.
Enthusiasm for the job, of course, is a requisite. You certainly are passionate about finance and corporate mergers as an M&A analyst. However, if you’re not showing it through your actions, your clients will actually think you lack the energy for the job. Discussing mergers may be a serious topic, but it doesn’t hurt to inject some energy into your presentation to your clients.
The life of an M&A analyst focuses on the world of corporate finance. It requires a thorough knowledge of financial statements, investments, and the fundamentals of financing. It’s a very challenging yet also very fulfilling role, as an M&A analyst bears witness to a very important milestone in any business’ history.