Mergers and acquisitions analyst

Mergers and acquisitions analysts oversee the execution of transactions for the purchase, sale, merger or takeover of companies. They negotiate and complete the deal on the client’s behalf by working closely with lawyers and accountants. Mergers and acquisitions analysts conduct operational and legal risk assessments of a company, assess comparable companies in the market, and help with the post-merger integration.

Mergers and acquisitions analysts typically do the following duties:

• Conduct comprehensive financial analyses to assess target companies’ financial health and valuation.
• Perform due diligence investigations, including reviewing financial statements, contracts, and operational data.
• Analyze industry trends, competitive landscapes, and market conditions to evaluate the strategic fit of potential targets.
• Assist in structuring M&A transactions, considering tax implications, financing options, and legal requirements.
• Develop and maintain financial models to project future performance and assess potential synergies.
• Utilize various valuation methods, such as discounted cash flow (DCF) and comparable company analysis (CCA), to determine the fair value of companies.
• Prepare presentation materials, reports, and documentation for internal and external stakeholders.
• Collaborate with cross-functional teams to facilitate the execution of M&A transactions.
• Provide financial analysis and insights to support negotiation strategies during deal discussions.
• Ensure compliance with legal and regulatory requirements throughout the M&A process.

The following job titles also refer to mergers and acquisitions analyst:

M&A professional
M&A specialist
mergers and acquisitions banker
M&A banker
mergers and acquisitions professional
acquisitions analyst
M&A analyst
acquisition manager
mergers and acquisitions associate
mergers analyst

Mergers and Acquisitions Analysts typically work in investment banks, private equity firms, or corporate development departments of large corporations. The role involves a combination of office work, collaboration with various teams, and adherence to tight deadlines, especially during deal execution.

A bachelor’s degree in finance, business, or a related field is commonly required for Mergers and Acquisitions Analyst positions. Many analysts also hold advanced degrees, such as a Master’s in Business Administration (MBA) or relevant certifications. Strong analytical and quantitative skills are essential, and proficiency in financial modeling is crucial. Practical experience gained through internships or entry-level positions in investment banking or financial advisory roles contributes to the development of M&A Analysts. Continuous learning, staying updated on industry trends, and obtaining relevant certifications contribute to the ongoing success of professionals in this dynamic and competitive field.

ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:

• the nature of the work performed in an occupation in relation to the characteristic tasks and duties
• the level of formal education required for competent performance of the tasks and duties involved and
• the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.

Mergers and acquisitions analyst is a Skill level 4 occupation.

These occupations, although different, require a lot of knowledge and skills similar to mergers and acquisitions analyst.

corporate investment banker
dividend analyst
venture capitalist
investment analyst
investment adviser

This knowledge should be acquired through learning to fulfill the role of mergers and acquisitions analyst.

• Mergers and acquisitions: The process of joining together separate companies and relatively equal in size, and the purchase of a smaller company by a bigger one. The financial deals, the legal implications, and the financial records and statements consolidated at the end of the fiscal year.
• Modern portfolio theory: The theory of finance that attempts to either maximise the profit of an investment equivalent to the risk taken or to reduce the risk for the expected profit of an investment by judiciously choosing the right combination of financial products.
• Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.

These skills are necessary for the role of mergers and acquisitions analyst.

• Analyse market financial trends: Monitor and forecast the tendencies of a financial market to move in a particular direction over time.
• Develop investment portfolio: Create an investment portfolio for a customer that includes an insurance policy or multiple policies to cover specific risks, such as financial risks, assistance, reinsurance, industrial risks or natural and technical disasters.
• Review investment portfolios: Meet with clients to review or update an investment portfolio and provide financial advice on investments.
• Analyse business plans: Analyse the formal statements from businesses that outline their business goals and the strategies they set in place to meet them, in order to assess the feasibility of the plan and verify the business’ ability to meet external requirements such as the repayment of a loan or return of investments.
• Provide support in financial calculation: Provide colleagues, clients or other parties with financial support for complex files or calculations.
• Analyse financial performance of a company: Based on accounts, records, financial statements and external information of the market, analyse the performance of the company in financial matters in order to identify improvement actions that could increase profit.
• Manage contracts: Negotiate the terms, conditions, costs and other specifications of a contract while making sure they comply with legal requirements and are legally enforceable. Oversee the execution of the contract, agree on and document any changes.
• Apply technical communication skills: Explain technical details to non-technical customers, stakeholders, or any other interested parties in a clear and concise manner.
• Budget for financial needs: Observe the status and availability of funds for the smooth running of projects or operations in order to foresee and estimate the quantity of future financial resources.
• Assess financial viability: Revise and analyse financial information and requirements of projects, such as their budget appraisal, expected turnover, and risk assessment, for determining the benefits and costs of the project. Assess if the agreement or project will redeem its investment, and whether the potential profit is worth the financial risk.
• Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover those risks.
• Make strategic business decisions: Analyse business information and consult directors for decision-making purposes in a varied array of aspects affecting the prospect, productivity and sustainable operation of a company. Consider the options and alternatives to a challenge and make sound rational decisions based on analysis and experience.

This knowledge is sometimes, but not always, required for the role of mergers and acquisitions analyst. However, mastering this knowledge allows you to have more opportunities for career development.

• Financial statements: The set of financial records disclosing a company’s financial position at the end of a set period or of the accounting year. The financial statements consist of five parts: the statement of financial position, the statement of comprehensive income, the statement of changes in equity (SOCE), and the statement of cash flows and notes.
• Business valuation techniques: The processes to valuate the worth of the assets of the company and the value of the business following techniques such as asset-based approach, business comparison, and past earnings.
• Securities: The financial instruments traded in financial markets representing both the right of property over the owner and at the same time, the obligation of payment over the issuer. The aim of securities which is raising capital and hedging risk in financial markets.
• Business loans: Loans that are intended for business purposes and which can either be secured or unsecured depending on whether collateral is involved. The different types of business loans such as bank loans, mezzanine finance, asset-based finance, and invoice finance.
• Holding company activities: The principles, legal actions and strategies of a holding company such as influencing the management of a firm through the acquirement of outstanding stock and other means, more specifically by influencing or electing the board of directors of a company.
• Accounting: The documentation and processing of data regarding financial activities.

These skills and competences are sometimes, but not always, required for the role of mergers and acquisitions analyst. However, mastering these skills and competences allows you to have more opportunities for career development.

• Apply credit risk policy: Implement company policies and procedures in the credit risk management process. Permanently keep the company’s credit risk manageable and take measures to avoid credit failure.
• Provide legal advice on investments: Study corporate investments and their legal repercussions in order to advise organisations on the legal procedures, the drafting of the contracts, and tax efficiency operations.
• Control financial resources: Monitor and control budgets and financial resources, providing capable stewardship in company management.
• Assess risks of clients’ assets: Identify, evaluate and determine the actual and potential risks of your clients’ assets, considering confidentiality standards.
• Create a financial plan: Develop a financial plan according to financial and client regulations, including an investor profile, financial advice, and negotiation and transaction plans.
• Interpret financial statements: Read, understand, and interpret the key lines and indicators in financial statements. Extract the most important information from financial statements depending on the needs and integrate this information in developing the department’s plans.
• Analyse economic trends: Analyse developments in national or international trade, business relations, banking, and developments in public finance and how these factors interact with one another in a given economic context.
• Examine credit ratings: Investigate and look for information on the creditworthiness of companies and corporations provided by credit rating agencies in order to determine the likelihood of default by the debtor.
• Handle mergers and acquisitions: Handle the negotiation of financial deals and the legal implications involved in the purchase of a company by another or in the merging to separate companies.
• Manage financial risk: Predict and manage financial risks, and identify procedures to avoid or minimise their impact.
• Conduct financial audits: Evaluate and monitor the financial health, operations and financial movements expressed in the company’s financial statements. Revise the financial records to ensure stewardship and governability.
• Handle financial disputes: Handle disputes between individuals or organisations, either public or corporate, which deal with financial matters, accounts, and taxation.
• Maintain financial records: Keep track of and finalise all formal documents representing the financial transactions of a business or project.

2413 – Financial analysts

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References

1. Mergers and acquisitions analyst – ESCO
2. Mergers and Acquisitions Analysts – Career Profile – Investopedia
3. How to Become a Mergers and Acquisitions Analyst | Salary.com
4. Featured image: By Ken Rutkowski – https://www.flickr.com/photos/kenradio/1301156470/, CC0