Working on Wall Street - Corporate M&A

Jul 01, 2010

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This post is part of the Wall Street - Where to start your Corporate Finance Career series contributed by Neil Venters of mergersandacquisitionsjobs.com

A corporate job?
An often overlooked avenue is corporate M&A. Many acquisitive corporations have an M&A or Corporate Development department whose sole mission is to evaluate and acquire smaller businesses. Technology, beverage, manufacturing, and virtually any industry have companies who are looking to grow via acquisition.

Why is this a good idea again?
The person who sees the glass half-empty will tell you that corporate jobs do not pay as much. That’s true, but also consider the following:

• You will not work as hard. While you will eat an occasional dinner at your desk working till midnight on an impending deal, it will be an exception rather than a rule at most companies.

• You will learn all finance and valuation skills without doing the monkey work – i.e. redoing the same pitch book 47 times just because your MD cannot decide which font he should use for the exhibit on page 187 of the presentation.

• You will meet and work with a lot of investment bankers.  That way you will be able to safely evaluate which bank is the right fit for you.  Also, getting a job at an investment bank is a natural next step – after the bankers worked with you on deals, and they feel like you are a good fit, they will let you know that you should join them.

• It is a good background for the private equity career in case you want to try it in the future. You will likely meet people in private equity firms because they are often the sellers. In addition, you will not only learn finance skills but will be exposed to operational issues as well.

• That’s where the jobs are. Many cash-rich Corporations are expected to take advantage of the relatively low valuations now hence they are expanding their M&A teams.

In Summary…
Similar to the boutique banks, Corporate M&A teams are too small to have a solid corporate finance training program. Before approaching them you should make sure you have a very solid set of technical and modeling skills, and be sure to advertise this fact quickly. It also helps to demonstrate some interest and knowledge of the industry and a grasp of corporate strategy.

In-house M&A is an underestimated avenue that will equip you with very solid experience and valuable contacts for your future investment banking career.