First Step to Final Offer 12/3/24

Author

Brooks Gammill
December 04, 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

Class of 2027 Opportunities

  • Deutsche Bank Internship Program - Investment Bank: Origination and Advisory Capital Markets - New York 2026 Link

  • Deutsche Bank Internship Program - Investment Bank: Origination and Advisory - New York 2026 Link

  • Deutsche Bank Internship Program - Investment Bank: Origination and Advisory - San Francisco 2026 Link

  • Perella Weinberg Partners 2026 Investment Banking Summer Analyst: Houston Energy Link

  • Perella Weinberg Partners 2026 Advisory Summer Analyst (US) Link

  • Stout 2026 Investment Banking Summer Analyst (Chicago) Link

  • Deloitte Deloitte Corporate Finance - Investment Banking 2026 Summer Analyst Link

  • Ardea Partners 2026 Investment Banking Summer Analyst Program Link

  • JPMorgan Chase & Co. 2025 Advancing Hispanics & Latinos Fellowship Program - Corporate Analyst Development Program Track Link

  • JPMorgan Chase & Co. 2025 Advancing Black Pathways Fellowship Program - Corporate Analyst Development Program Track Link

  • Audax Group Summer Analyst, Private Debt Origination (2025) Link

  • Union Square Advisors Investment Banking 2026 Summer Analyst Link

  • Houlihan Lokey SA 2026 Investment Banking Analyst (Multiple Roles) Link

  • Rothschild & Co US 2026 Global Advisory Summer Analyst Link

  • GTCR 2026 Private Equity Summer Analyst Link

  • Houlihan Lokey Women in Financial and Valuation Advisory 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

Class of 2026 Opportunities

  • Deloitte Deloitte Corporate Finance - Investment Banking 2025 Summer Analyst Link

  • Lazard 2025 Financial Advisory Summer Analyst Program - New York Capital Solutions & Financial Sponsors Link 

  • BDO Capital Advisors Advisory Intern, BDO Capital Advisors - Fall 2024 (Richmond) Link 

  • Scotiabank 2025 Investment Banking Summer Analyst Link

  • Lazard, Inc. 2025 Summer Analyst - San Francisco Healthcare Link 

TECHNICAL QUESTION OF THE WEEK:

What do you do after summing the PV of Terminal Value and the PV of Free Cash Flows?

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MARKET NEWS

Wells Fargo Set to Have Asset Cap Removed in 2025 Following Regulatory Upgrades

Wells Fargo is nearing the removal of its $1.95 trillion asset cap, imposed by the Federal Reserve in 2018 due to governance and risk management issues stemming from a fake accounts scandal. The bank has submitted a third-party review of its risk and control improvements to the Fed, aiming to lift the cap as early as the first half of 2025. However, recent regulatory challenges, including an enforcement action by the Office of the Comptroller of the Currency (OCC) for inadequate anti-money laundering measures, may delay this timeline. Senator Elizabeth Warren has urged the Fed to maintain the asset cap until Wells Fargo demonstrates effective management of associated risks.

Source: Reuters

Citigroup Names BlackRock's Kate Moore as New Wealth Management CIO

Citigroup has appointed Kate Moore as the new Chief Investment Officer (CIO) for its wealth division, effective February 2025. Moore joins from BlackRock, where she was a portfolio manager and head of thematic strategy for the allocation business. Her previous roles include chief investment strategist at JPMorgan Chase's private bank and positions at Merrill Lynch and Morgan Stanley. She will succeed Steven Wieting, who has been serving as interim CIO following David Bailin's resignation last year.

Source: Reuters

M&A DEAL OVERVIEW

BlackRock to Acquire Private Credit Manager HPS in $12 Billion Deal

BlackRock, the world's largest asset manager overseeing more than $10 trillion, has reached a tentative agreement to acquire HPS Investment Partners, a private credit firm managing approximately $117 billion in assets. The deal, valued at nearly $12 billion, represents a significant premium over HPS's post-IPO valuation of $10 billion. The final terms are expected to be announced soon after the U.S. Thanksgiving holiday. This acquisition aligns with BlackRock's strategy to expand its portfolio in alternative assets, including private equity and infrastructure. Earlier in 2024, BlackRock agreed to purchase UK-based data firm Preqin for $3.32 billion and received approval for a $12.5 billion deal with Global Infrastructure Partners.

Source: Reuters

ADDITIONAL RESOURCES

LAST WEEK TECHNICAL QUESTION OF THE WEEK ANSWER:

Correct Answer: A, Public Comps because you don't want to reflect the control premium in the Precedent Transactions — If you use the Multiples Method to calculate Terminal Value, do you use the multiples from the Public Comps or Precedent Transactions?

Explanation: When calculating Terminal Value using the Multiples Method, you use the multiples from Public Comps rather than Precedent Transactions because Public Comps reflect the valuation of companies on a standalone basis, without including a control premium. Precedent Transactions inherently include such premiums due to the strategic value buyers often pay to acquire control of a company, which would artificially inflate the valuation if applied to a business on an ongoing, standalone basis in a DCF analysis. Public Comps, therefore, provide a more accurate and consistent basis for projecting a company’s future exit value.