Mergers and Acquisitions
Participating in and leading the execution of various types of transactions, including mergers, acquisitions and divestitures.
Level 1 Demonstrates introductory understanding, directing people to the appropriate source for further information.
BEHAVIORS
- Describes the fundamental characteristics of basic corporate transactions, such as mergers, acquisitions and divestitures.
- Identifies the basic process involved in evaluating and executing a corporate transaction.
- Describes basic due diligence procedures and the basic rationale for these procedures.
- Describes basic valuation terms such as Earnings per Share, Enterprise Value and Share Value.
QUESTIONS
- Describe a time you participated in the evaluation of a business transaction.
Probing Questions
* What was the transaction?
* What was your role?
* Why methodologies were used?
* What was the outcome?
- Can you tell me about a time when you assisted in carrying out due diligence?
Probing Questions
* What was the situation?
* Why was due diligence necessary?
* What information did you collect?
* What was the result?
Level 2 Applies the competency in common situations that present limited difficulties, working with a moderate level of guidance.
BEHAVIORS
- Participates in creating models and ratios to evaluate the corporate transaction.
- Identifies and utilizes resources as needed, such as primary databases and industry research for transactions.
- Describes basic financial statements and tax implications as they relate to transactions.
- Knows and clearly describes the various steps involved in the transaction process.
- Participates in due diligence activities.
- Describes the strategic rationale and financial implications of various transaction types and structures.
- Describes the variables involved in calculating valuations and where those variables are applicable.
QUESTIONS
- Can you describe a time you were involved in a corporate transaction?
Probing Questions
* What was the circumstance?
* What was your role?
* What other roles did you observe during the process?
* How do you think your involvement added value to the process?
- Tell me about a time you were involved in a valuation exercise.
Probing Questions
* What was the circumstance?
* What was your involvement?
* What information was used to support the valuation?
* What was the result?
Level 3 Applies the competency in the full range of typical situations, requiring guidance in only the most complex or new situations.
BEHAVIORS
- Describes the organization’s strategies and organization across business units and corporate functions as it relates to transactions.
- Describes the sensitivities and trade-offs of various transaction metrics.
- Synthesizes key information from deal memorandums and creates basic business plans.
- Defines and coordinates due to diligence activities.
- Describes tax and accounting as it relates to transactions.
- Engages directly with outside advisers and potential targets or buyers without supervision.
- Researches and calculates valuation for target organization and own organization and describes that valuation process to management.
QUESTIONS
- Can you describe a time when you were involved in a corporate transaction?
Probing Questions
* What was the transaction?
* What was your role?
* What resources did you use in your role?
* Do you think you were able to add value to the transaction process? Why or why not?
- Can you describe a time you related valuation, either in a target organization or your own organization, to overall business goals?
Probing Questions
* What was the circumstance?
* How did you determine what factors to consider?
* Who did you communicate this information to?
* What was the result?
Level 4 Applies the competency in new or complex situations and advises others.
BEHAVIORS
- Analyzes various transactions or structuring alternatives based on experience and insights to inform decisions.
- Leads transactions in an organized manner; ensuring participants clearly understand, accept and succeed in their roles.
- Makes transaction decisions based on due diligence findings across various areas of concern.
- Describes market dynamics and norms for transactions (valuation, key legal terms) and adapts approach for the particular circumstance.
- Makes decisions regarding deal structures based on business objectives, financial statements and tax implications.
QUESTIONS
- Can you tell me about a corporate transaction that you were responsible for?
Probing Questions
* What was the transaction?
* What was your role?
* How did you approach the task?
* Who else was involved in the transaction and how did you interact?
* What was the result?
- Tell me about a novel part of a transaction that you developed.
Probing Questions
* What was the circumstance?
* What about it was a novel?
* How did you arrive at the novel terms?
* What information did you consider?
* What was the result?
Level 5 Develops new approaches and methods in the area. Is recognized as an expert within the organization.
BEHAVIORS
- Optimizes the use of financial and human capital (both internal and external) in executing transactions.
- Articulates the strategic and financial benefits of transactions.
- Factors the impact of transactions on the organization and the strategic mission when analyzing the merits of various alternatives.
- Negotiates all transaction types and sizes while seeking guidance and support from the leadership team and key functional experts.
QUESTIONS
- Tell me about a time you led negotiations in a corporate transaction.
Probing Questions
* What was the transaction?
* Can you tell me about the team and their roles?
* What were the major challenges?
* How did you overcome the challenges?
* What was the result?
- Can you tell me about a time you determined a proposed corporate transaction was not in accordance with the organization’s strategy?
Probing Questions
* What were the circumstances?
* How did you determine that the strategic fit was not appropriate?
* What did you do?
* What were the results?