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- First Step to Final Offer 11/12/24
First Step to Final Offer 11/12/24
Brooks Gammill
November 12, 2024
Your weekly round-up of an M&A deal walkthrough, insightful market news summaries, technical quiz questions, and various internships, events, and diversity programs. A key resource to best prepare yourself for finance recruiting. If someone sent you the newsletter subscribe below!
CAREER OPPORTUNITIES
RecruitU Partners Upcoming Event List
Guggenheim (Early Insight Program):
Wednesday, November 13 @ 5:30pm–7:30pm EST, Guggenheim Securities Investment Banking Diversity & Inclusion Panel
Application Deadline: Closed
Evercore:
Friday, November 15 @ 1:00–2:00pm EST, Evercore Restructuring Virtual Sophomore Open House Link
RecruitU Investment Banking Prep Series Overview
Every Monday and Wednesday, RecruitU Mentors from Evercore, Morgan Stanley, Guggenheim, and JPM will be presenting on their experiences in banking and answering questions. Please RSVP below:
November 13th @ 7pm EST, Lesson 10: DCF Link
November 18th @ 7pm EST, Lesson 11: DCF Link
November 20th @ 7pm EST, Lesson 12: M&A Link
November 25th @ 7pm EST, Lesson 13: M&A Link
November 27th @ 7pm EST, Lesson 14: LBO Link
December 2nd @ 7pm EST, Lesson 15: LBO Link
December 4th @ 7pm EST, Lesson 16: LBO Link
December 9th @ 7pm EST, Lesson 17: Market Awareness Link
Class of 2027 Opportunities
Houlihan Lokey Women in Financial and Valuation Advisory Insight Day Link
Houlihan Lokey 2025 Women in Financial Restructuring Insight Day Link
Perella Weinberg Partners 2025 U.S. Perella Weinberg Advisory Prep Program Link
RBC Capital Markets 2026 Capital Markets, Global Investment Banking Summer Analyst Link
The Raine Group LLC 2025 Growing Diverse Leaders Program Link
Lincoln International 2026 Summer Analyst Intern (M&A) Link
Lincoln International 2026 Summer Analyst Intern (CAG) Link
Lincoln International 2025 Sophomore Job Shadow Program Link
Lincoln International 2026 Summer Analyst Intern (PFA) Link
The Raine Group LLC 2026 Summer Analyst (New York) Link
William Blair Investment Banking Summer Analyst, Private Capital Advisory, Summer 2026 Program Link
William Blair Investment Banking Summer Analyst, Financial Sponsors Group, Summer 2026 Link
William Blair Investment Banking Summer Analyst, Leveraged Finance, Summer 2026 Program Link
William Blair Investment Banking Summer Analyst, Equity Capital Markets, Summer 2026 Program Link
William Blair Investment Banking Summer Analyst, Life Sciences, Summer 2026 Program Link
Point 72 2025 Summer Internship - Private Investments Link
RBC Capital Markets 2026 Capital Markets, Global Markets Sales & Trading Summer Analyst Link
RBC Capital Markets 2026 Capital Markets, Global Investment Banking Summer Analyst Link
Insight Partners 2026 Summer Investment Analyst Overview Link
Class of 2026 Opportunities
D.A. Davidson Companies Investment Banking Summer Analyst, Technology Group - Summer, 2025 Link
D.A. Davidson Companies Investment Banking Summer Analyst, Financial Sponsors Group - Summer, 2025 Link
D.A. Davidson Companies Investment Banking Summer Analyst, Financial Institutions Group - Summer, 2025 Link
TECHNICAL QUESTION OF THE WEEK:
If a company previously used 20% Debt and 80% Equity, but it just paid off all its Debt, how does that affect its WACC? |
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MARKET NEWS
BlackRock Targets Expansion in Money Market Funds with New ETF Strategy
BlackRock is pushing to transform its money market fund offerings into exchange-traded fund (ETF) share classes, seeking approval from the U.S. Securities and Exchange Commission (SEC). This move is part of BlackRock's strategy to tap into the growing demand for ETFs by combining the flexibility and tax advantages of ETFs with its existing mutual fund strategies. If approved, it could set a significant precedent for the broader asset management industry.
Source: Bloomberg
Deutsche Bank Cuts 100+ Senior Roles as Part of Cost-Cutting Strategy
Deutsche Bank has laid off more than 100 senior bankers in its retail and private wealth division as part of an ongoing effort to reduce costs and achieve its 2025 financial goals. The bank is aiming to lower its cost-to-income ratio from 77% to between 60-65% by next year. This restructuring is a response to the division's underperformance, which has contributed to a smaller share of the bank’s profits despite generating a significant portion of its revenue. To streamline operations, Deutsche Bank has already closed hundreds of branches in Germany, merged management levels, and reduced front-office staff by 6.5%. These moves reflect a broader focus on cutting high-paying senior roles while investing in relationship managers to strengthen the wealth management division moving forward.
Source: Finance Yahoo
Hedge Funds Lose Over $5 Billion Shorting Tesla Amid Stock Surge
Hedge funds that bet against Tesla by holding short positions have collectively lost more than $5 billion following a significant rally in the company’s stock price. This sharp increase in Tesla’s value comes amid growing investor confidence in the electric vehicle giant’s future potential, bolstered by strong quarterly earnings and optimism surrounding its technology advancements. The losses underscore the volatility and risks involved in short selling, especially when market conditions turn in favor of the companies being bet against. Tesla’s stock has been a battleground for short-sellers and bullish investors alike, with this latest surge adding to the pressure faced by hedge funds that had hoped for a decline. The substantial losses also reflect broader trends in market sentiment, where rapid shifts in investor perception can have a significant financial impact.
Source: Bloomberg
Goldman Sachs Elevates Record Number of Partners Since 2010
Goldman Sachs has promoted 95 individuals to partner status, marking the largest cohort since 2010. This group includes 26 women, the highest number ever, and reflects the firm's ongoing commitment to diversity. The promotions span various regions, with 21 in Europe, Middle East, and Africa (EMEA), underscoring the firm's global expansion. CEO David Solomon highlighted that these individuals have significantly contributed to the firm's success and culture.
Source: Bloomberg
M&A DEAL OVERVIEW
Blackstone Close to Acquiring Minority Stake in American Industrial Partners
Blackstone is nearing a deal to acquire a minority interest in American Industrial Partners (AIP), a private equity firm focused on industrial investments. AIP, which manages around $16 billion in assets, specializes in transforming industrial companies across various sectors. This move reflects Blackstone's ongoing strategy to strengthen its presence in the industrial space, utilizing AIP's expertise and investment portfolio.
Source: Bloomberg
Morgan Stanley Sells HVAC Firm Sila to Goldman Sachs Alternatives
Morgan Stanley has reached an agreement to sell its HVAC business, Sila Services, to Goldman Sachs Alternatives in a deal valued at around $1.5 billion, including debt. The transaction, which includes Sila’s operations in plumbing, HVAC, and electrical services across the U.S. Northeast, Midwest, and Mid-Atlantic regions, marks a significant move for both firms. While the exact financial details were not disclosed, Sila's management team will retain a minority stake and continue running the business post-sale.
Source: Reuters
ADDITIONAL RESOURCES
LAST WEEK TECHNICAL QUESTION OF THE WEEK ANSWER:
Correct Answer: D, If the conversion price of the bonds exceeds the current share price, you count the bonds as Equity. If the bonds are not currently convertible, you count them as debt — How do convertible bonds factor into the WACC calculation?
Explanation: Convertible bonds are hybrid securities that can be converted into equity under certain conditions. If the conversion price of the bonds exceeds the current share price, it indicates that the bonds are unlikely to be converted into equity, so they are counted as debt in the WACC calculation. Conversely, if the bonds are not currently convertible (i.e., they cannot be converted into equity at the moment), they are also treated as debt for the WACC calculation. However, when the bonds are convertible and the conversion price is favorable (lower than the share price), they are treated as equity because bondholders are more likely to convert them, thus impacting the equity portion of WACC.