Careers in Finance 27/04: Big 4 M&A
What is M&A?
M&A stands for ‘mergers and acquisitions’. It refers to the process of combining two or more companies through a variety of financial transactions, such as purchasing a controlling stake in another company, merging two companies to form a new entity or acquiring another company outright.
How do Big 4 M&A services work?
The Big 4 professional service firms refer to the four largest accounting and consulting firms in the world which are Deloitte, PwC, EY and KPMG. These firms offer a range of professional services including M&A.
All the Big 4 firms typically offer a range of services that cover the entire M&A lifecycle, from initial strategy development to post-merger integration. The key M&A services offered by the Big 4 firms include M&A strategy and advisory, transactions services, valuation services and integration services.
M&A strategy and advisory involves providing strategic advice to clients on M&A opportunities, including identifying potential targets and assessing the potential benefits and risks of a particular deal. Transaction services involve providing due diligence services, including financial and tax due diligence to help clients identify and manage risks associated with a potential M&A transaction. Valuation services assist clients in determining the fair market value of a target company or a client’s own company. Integration services help clients integrate newly acquired businesses into their existing operations.
The different services offered by the Big 4 firms may be relevant at different stages of the M&A lifecycle. For example, M&A strategy and advisory services may be relevant during the early stages of an M&A deal when a client is considering potential acquisition targets. While transaction services and valuation services may be more relevant during the due diligence phase of a deal. Integration services may be most relevant after a deal has been completed, when a client is seeking to integrate a newly acquired business into their existing operations.
How is Big 4 M&A different from Investment Banking M&A?
Both Big 4 M&A and Investment Banking (IB) M&A involve advising clients on mergers and acquisitions. IB, however, tends to focus on larger transactions, working with clients to identify target acquisitions or acquirers, negotiate deal terms, and arrange financing. While the Big 4 also offer these, they often focus more on support services, such as financial and tax due diligence, valuations, and post-merger integration. The Big 4 also tend to have smaller dedicated M&A teams, who as a result work across a wide range of deals from varying industries. Compared to investment banks who have larger teams often each specialising in deals for a particular industry such as healthcare or energy. Thus, while both Big 4 and IB M&A engage in similar fundamental work, the size and scope with which they do this varies.
What does a role in Big 4 M&A entail and what are recruiters looking for?
At the more junior graduate or analyst level of Big 4 M&A, work often involves preparing presentations for client pitches. Alongside undertaking more background work in preparing due diligence or valuations reports for more senior firm leaders to review. This work shifts, however, at the partner or director level, having a greater emphasis on hitting revenue targets and attracting new clients to the firm. Big 4 work thus progresses with seniority to increasingly emphasise interacting with and pitching to prospective clients. As opposed to the more junior levels that focus on executing services for existing clients.
Regardless of seniority, however, adaptability is a key skill valued by recruiters, due to the sheer variety of clients the Big 4 cater to and breadth of services they offer them. Analysts particularly can often be working on multiple deals at once in completely different industries, making the ability to adapt to new challenges highly advantageous.
Further to adaptability, some other soft skills highly valued by recruiters include:
What entry level opportunities are there in Big 4 M&A?
Big 4 M&A Is thus a great career pathway for those looking at a career in deals and can also serve as a great steppingstone to eventually move into IB. Graduate and internship opportunities are available each year at the Big 4. While mid-tier firms such as Grant Thornton and BDO also offer similar corporate finance entry level opportunities that can work as eventual pathways into the Big 4.
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