M&A consulting case interview: social media acquisition (w/ Bain and Kearney consultants)

🎥 Here's a consulting case interview featuring a Bain Consultant & Keraney Consultant focusing on a mergers & acquisitions (M&A) case that centers on the possibility of acquiring a social media platform for $3B by a manufacturing CEO. The case delves into the strategic fit, financial viability, and operational aspects of the potential acquisition.
Watch Eishan Dhandhania (Bain Consultant, London Business School MBA) run Vigram Mohan (Kearney Consultant, ex-Accenture) through this M&A consulting case interview.
🎬 Video Sections:
00:00 About the case
00:57 Introductions
01:32 Case question
03:43 Structure
07:12 Charts & data
13:21 Brainstorm
17:48 Key risks
21:10 Synthesis
23:20 Conclusion
🚀 Prepping for case interviews? RocketBlocks has the best concepts, drills, and coaching to get you more consulting offers: www.rocketblocks.me/consultin...
📝 Try this case on your own and read through sample answers with the full PDF: www.rocketblocks.me/pdfs/Buyi...
➡️ Book a 1-on-1 coaching session with Eishan here: www.rocketblocks.me/contribut...
#consultinginterviews #Bain #mergersandacquisitions #consulting

[@assassinator006]

Doubts -
1. Why haven't we delved into the revenue projections for Bs? To bake into the multiple valuation? Isn't that pretty standard.
2. Wouldn't we need to know more about John's existing media company, before presenting ideas?

[@vipuljha97]

Thank you so much for doing this interesting M&A case! Just wanted to understand how did Vigram arrive at the revenue multiple for Birdshot? It does make sense to compare it with Company B, considering the kinda comparable user-base, but why 4X?

[@ThePiston199]

Would've loved to extract more about what John thinks by asking a lot more questions. It was mostly a pessimistic view from the candidate before in-depth evaluation.

[@jimmykhawand1315]

I don't understand why he estimated a valuation/user based on Company B. Isn't he supposed to then divide his total estimated valuation ($3.6B) by the number of users Birdshot has (150M)? This would then give $24/user , which is actually attractive?

[@TripKs777]

The purpose of using a various valuation methods was to get a different angle view. He would not have achieved this if he continued using the $3.6B number onto the valuation/user based method

[@cjack_25]

Incorrect. The valuation/user is a derived calculation that takes the provided valuation and divides it by the current user base. This normalizes per-user value across the comp set and is NOT a separate valuation methodology. Thus, the correct use of Valuation / User would be to take the 3.6B valuation using the revenue multiple and divide it by the user base for Birdshot, giving $24/user which offers a strong case that users on Birdshot monetize particularly well and drive significant value relative to the market. Not sure why the interviewer didn't interject on that point.

[@TripKs777]

⁠@@cjack_25The interviewer’s intent was to CROSSCHECK if Birdshot’s valuation of $3.6B is reasonable. So using competitor’s valuation/user ratio, he calculated backwards by applying it to Birdshot’s number of users thereby attaining a ‘new’ valuation number from a different angle.
This is a common cross checking methodology that consultants use.

[@vitakalma1830]

If the valuation is 3,6 billion and the asking price is 3,0 billion, why is it not an interesting target? It seems to me the company is undervalued and therefore should be considered further