investment banking flips.?
How does an investment banker make an organization/company merge with another or say buy out another?. How do they get involved? Im on a road to business and i been self studying mostly and this part is where it gets confusing for me. I know they work with a bunch of clientele ranging from a single handed client to a large corporation. Issuing certain services to them, mostly pertaining to bonds and stocks. Confuses me when i hear how investment bankers make the merges or buyouts take place. Is that where the big dogs come in or do regular analysts do this as well. Thanks for the knowledge
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Answer by Hugo's Roomy
The part of an investment bank that handles mergers and acquisitions is the corporate finance group. This part of an investment bank is also the side that structures IPOs, follow-on offerings and other securities issues.
The M&A process can work in many different ways. An investment bank could pitch the idea of buying or selling a particular company to the company or a company could approach an investment bank to assist them with buying or selling a company.
Once a bank is engaged to work on a transaction, it will then advise a company either on the purchase of another company or the sale of the company itself. The bank will then put together an offering memorandum, or analyze the offering memorandum of a potential acquisition. It will assist with the due diligence process between buyer and seller and run a controlled process in which negotiations may take place between multiple buyers and sellers. It all depends on the particular situation.
You can think of M&A with an investment bank as being very similar to hiring a real estate agent to buy or sell a house. It's very similar — just a lot more involved and complicated.
Here's some more info on what an investment bank does:
http://www.financeocean.org/finance_articles/article/6-investment-banks-just-what-are-they
Hope this helps.
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Save Darfur protest at Franklin Templeton Investments
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