TECH M&A Canacord Flashcards
(24 cards)
Why canacord and this role?
What really draws me to Canaccord Genuity is that has great global reach and reputation as a full-service bank and when youre with a highly regarded firm in you know you’re going to be working with really talented people, being lead by great leaders and having access to best in class resources training, which for someone in the more developmental phase of their career is very important.
I also like that it has a more boutique feel where you have more close-knit collaborative deal teams and more exposure to senior leaders and clients which is great for learning and forming stronger relationships.
Then lastly I would say I like the mid-market focus, as for an analyst it offers early responsibility, hands-on exposure to all aspects of deal-making and more closer client interaction, which is again ideal for learning quickly and career development.
Why investment banking?
I’m drawn to investment banking because it offers a dynamic and intellectually stimulating environment where I can make a direct impact on companies and
markets.
The fast-paced nature of the work, combined with the opportunity to solve complex problems and work on high-stakes, transformative deals, excites me. I am obviously young and want to do as much learning in as short a time as possible and investment banking is the best place to do that.
I think that when and if to transact is one of the biggest decisions that companies make and I find the motivations behind these decisions to be inherently
interesting.
I have had a taste of what the work will be like this year working on the deal for NMS and getting exposure to the high-impact, fast-paced nature of dealmaking, sparking a genuine passion to pursue my next role in this dynamic field
What interests you about tech M&A
Tech M&A excites me because it’s a sector where change happens at an incredible pace, with companies constantly evolving through innovation, acquisitions, and disruptive technologies. I’m particularly drawn to how M&A in tech isn’t just about financials—it’s about strategic transformation, whether it’s helping a company expand into new verticals, accelerate product development, or gain a competitive edge through tech integration. The chance to work on deals that shape the future of industries like AI, cybersecurity, or SaaS offers a unique opportunity to be part of something that’s not only financially significant but has a lasting impact on the way we live and work.
Describe the sale of BlakYaks
Company: Blakyaks, a UK-based AI-powered tech firm specializing in cloud solutions, data infrastructure, and AI-driven technology.
Transaction Type: Sale to Proact, a leading European IT services company.
Buyer: Proact, a global provider of cloud services, data management, and IT infrastructure solutions, which sought to enhance its capabilities in the AI and cloud technology space.
Canaccord Genuity’s Role: Exclusive financial advisor to Blakyaks, helping the company navigate the sale process and secure the deal with Proact, which aligned well with Blakyaks’ cloud-based services and AI expertise.
Sector: Cloud computing, data infrastructure, AI solutions, and IT services.
Describe the Aquis Exchange PLC deal
How does Aquis complement SIX?
What is an LBO and how you increase the returns on a model?
LBO Model involves using debt to acquire a company, with the company’s future cash flows used to repay the debt. The goal is to realize a higher exit price and gain significant returns on the small equity portion invested.
What makes a good LBO target?
Important valuation considerations in Tech M&A (rev growth and scalability, customer acquisition and retention, landscape and strategic positioning, customer and revenue concentration, technology viabilty and IP).
Describe the 3 common valuation methods and their pros and cons?
Trading Multiples (Comparable Companies Analysis):
What it is: Valuation based on market multiples of similar publicly traded companies (e.g., EV/EBITDA, P/E).
Pros: Quick, market-based, and easy to apply.
Cons: May be influenced by market distortions, lacks company-specific insights.
Transaction Multiples (Precedent Transaction Analysis):
What it is: Valuation based on multiples from past M&A transactions of similar companies.
Pros: Reflects actual deal prices and strategic premiums.
Cons: Limited by historical data, may not reflect current market conditions.
Discounted Cash Flow (DCF):
What it is: Values a company based on its projected future cash flows, discounted to the present using a required rate of return.
Pros: Focuses on intrinsic value and long-term cash generation.
Cons: Sensitive to assumptions about future performance and difficult to estimate accurately.
Key Differences:
Trading and transaction multiples are market-based and easier to apply but don’t capture long-term potential.
DCF provides a deeper, intrinsic valuation but requires accurate future forecasts and is sensitive to assumptions.
What are the types of moats in tech?
In business, a “moat” refers to a company’s sustainable competitive advantage — something that protects it from competitors and helps maintain market share and profitability over time. The term was popularized by Warren Buffett.
When should each be used?
Trading Multiples: Best for a quick, market-based valuation of a company or for companies with public peers in similar industries.
Transaction Multiples: Ideal when assessing the value of a company in the context of potential M&A transactions, especially if there are premium considerations or synergies., as trading multiples do not reflect these
DCF: Most useful for understanding the intrinsic value of a company based on its own future potential, especially for companies with stable cash flows or long-term growth projections.
What is the rule of 40?
Less than 40, either growing to slowly or losing to much money (not profitable).
How would you value a company that is not profitable?
For a tech company that’s not yet profitable, the Discounted Cash Flow (DCF) method might still be used, but more attention would be given to future growth projections. A common approach would be to forecast revenue growth and the eventual path to profitability, especially if the company operates in high-growth sectors (like SaaS). Multiples-based valuation (e.g., EV/Revenue) is often used for early-stage companies, since earnings may not be meaningful yet. In this case, I would focus on Revenue multiples, ARR (Annual Recurring Revenue), customer growth, and retention metrics to derive a valuation.
Key financial metrics in tech companies
Explain the key steps in a sale process?
Compare a trade buyer vs a financial buyer?
Trade buyer vs financial buyer: Trade buyer usually looks to acquire and realise/extract synergies as a buyer and thus often will pay a higher price.
They also have the operational expertise to run the company and realise the synergies.
Financial buyers (usually PE firms) look to buy and financiallyengineer to the target and exit for a higher price, usually having a short investment horizon than the trade buyer.
Usual synergies and disynergies ion tech M&A
Major tech deal you have been following
Microsoft Acquires Activision Blizzard – $68.7 Billion
Microsoft completed its acquisition of gaming giant Activision Blizzard, securing major franchises like Call of Duty and World of Warcraft. This move significantly bolsters Microsoft’s position in the gaming industry, enhancing its Xbox Game Pass offerings and intensifying competition with Sony and Nintendo
Deal in 2025 you have been following?
Preqin acquisition by blackrock
Questions for them
What are some challenges about this sector and spot in the market (mid-market)?
What are some deals you have worked on and what was interesting about them?
Whats the differences between doing work for financial sponsors versus traditional clients or the business operators?
How would you benchmark a cloud software company against comps?
I’d select comparables based on similar business model (SaaS vs license), growth rate, size, margin profile, and customer base. Key multiples include EV/Revenue, EV/Gross Profit, and EV/EBITDA if profitable. I’d also review metrics like net revenue retention, LTV:CAC, and ARR growth to refine the comp set.
How do stock-based comp and capex affect valuation in tech deals?
Tech companies often have high stock-based compensation (SBC), which inflates EBITDA but dilutes shareholders. Analysts usually adjust EBITDA and free cash flow to exclude SBC. Tech firms often have low capex, but high R&D spend that is expensed — important for assessing real investment levels.
Difference between licence and SaaS model?
