Technical Round

Why M&A?

For me, M&A sits at the intersection of strategy, finance, and execution—all areas I’ve actively
explored through hands-on internships and competitive case challenges. What draws me to M&A is
the ability to create tangible value—not just analyse it. Unlike audit or compliance, which often look
backward, M&A is forward-looking: you’re shaping how businesses evolve, enter new markets, or
unlock synergies that fundamentally transform their trajectory. It’s intellectually demanding and
fast-paced, and every deal is different—which means constant learning. Whether it's running a
valuation model, structuring a carve-out, or managing Day 1 readiness, M&A lets you work at the
core of business transformation—and that’s exactly where I want to be.

What happens in M&A?

In M&A or Deal Advisory, the work revolves around helping clients navigate the deal lifecycle—
whether they’re acquiring, merging, or divesting. It goes beyond just valuation or due diligence; it’s
about making sure the deal actually delivers value. That means supporting operational carve-outs,
structuring integration plans, identifying synergies, assessing Day 1 readiness, and aligning the
organization for post-deal execution. You work closely with clients on both the strategic and
execution side

 Deal Lifecycle
The end-to-end process of a transaction—starting from target identification, due
diligence, valuation, negotiation, deal signing/closing, and post-merger integration.

 Valuation
Estimating the economic worth of a company using methods like DCF, comparable, or
precedent transactions.

 Due Diligence
A deep-dive investigation into a target company’s financials, operations, legal, tax, etc., to
assess risks and validate assumptions before a deal.

 Operational Carve-Out
When a business unit is separated from a parent company—requiring independent systems,
teams, and financials.
Example: In 2019, Nestlé decided to carve out and sell its Skin Health division (which
included brands like Cetaphil and Proactiv) to a consortium led by EQT Partners and Abu
Dhabi Investment Authority (ADIA).

 Integration Planning
Strategizing how two companies will merge people, systems, operations, and
culture post-deal.

 Synergies
The added value from a deal—can be cost synergies (shared back office,
supply chain) or revenue synergies (cross-selling, new markets).

 Day 1 Readiness
Ensuring that on the first day post-deal close, the combined business can run
without disruption—HR, IT, legal, vendors all need to function smoothly.

 Post-Merger Execution / Integration (PMI)

The actual rollout of integration plans post-closing—aligning org structures,
processes, systems, and culture.
Delivering Deal Value
DDV = post-deal strategy + execution
It’s a part of PwC’s Deals practice that helps companies realize the value they expected from a deal
— whether it's a merger, acquisition, divestiture, or carve-out.

DDV ensures that the value promised in the boardroom actually gets delivered on the ground after
the deal closes.

Goodwill = The extra price paid over the fair value of net assets during an acquisition.
Goodwill arises ONLY in an acquisition — when a company buys another company and pays more
than the net value of its assets.

This usually happens because the seller has intangible value not captured in the balance sheet, like:

 Brand name

 Customer loyalty

 Strong management

 Proprietary tech

 Synergies the acquirer expects

Due Diligence
Due diligence is a 360° review of a target company — covering financials, operations, legal, tax, and
commercial health. It helps validate valuation, identify risks, and plan value realization post-deal —
which is exactly what PwC's DDV team focuses on.

Synergies
Synergies refer to the added value created when two companies merge or acquire — the combined
entity is worth more than the individual parts. They’re a key driver in M&A and are often used to
justify a higher purchase price.

Types of Synergies:

 Cost Synergies: Reduction in operating costs post-merger (e.g., layoffs, shared offices, bulk
procurement).

 Revenue Synergies: Boost in sales through cross-selling, entering new markets, or bundling
products.

 Capex Synergies: Lower future capital expenditure needs, like avoiding duplicate factories or
systems.

Synergies increase the buyer’s willingness to pay, improve valuation (EV/EBITDA), and boost IRRs in
LBOs.
Risks:
Synergies can be hard to realize due to cultural clashes, poor integration, or overestimation

Merger
A merger is the combination of two companies into one legal entity, done to create synergies,
expand market reach, reduce costs, or improve efficiency. Unlike acquisitions, mergers are often
seen as friendly and equal partnerships, though the structure can vary.

How Shareholding is Determined:

  Based on valuation of both companies.

 The more valuable company gets a larger stake in the merged entity.

 This is decided through a share swap ratio.

Acquisition
An acquisition is when one company buys a controlling stake (typically >50%) in another company.
Unlike a merger, it’s usually not equal — one company (the acquirer) takes over the other (the
target), which may or may not continue to exist as a separate legal entity.

Divestiture
A divestiture is when a company sells or spins off a part of its business — like a division, subsidiary,
or product line — to focus on core operations or raise capital.

- Asset Sale – Selling equipment, land, IP, etc.

- Equity Sale – Selling a stake in a subsidiary.
- Spin-Off – Creating a new independent company and distributing its shares to existing
shareholders.
- Carve-Out – Selling a part of the business to a PE firm or strategic buyer.

What do you understand by deal sourcing and how would you contribute?
Deal sourcing involves identifying potential M&A or investment opportunities by researching sectors,
monitoring news, building networks with investors, and engaging with potential clients. I’d
contribute by conducting industry research, identifying targets based on strategic fit, and helping
build preliminary pitch decks.

How do you approach building a teaser and information memorandum (IM)?

A teaser is a 1–2-page high-level snapshot sent to gauge interest without revealing identity. It
highlights the company’s value prop, sector, key metrics, and growth story.

The IM is much more detailed — it includes company overview, industry analysis, financials,
projections, and transaction structure.

Structure:

 Company overview

 Market landscape

 Product/service details

 Financial summary

 Investment highlights

 Contact info

Which valuation methods do you know, and when do you use them?
I know several valuation methods: DCF for intrinsic value, comps for relative market positioning, and
precedent transactions for deal benchmarks. For example, I used a DCF for Tata Motors and comps
in equity research on Kalyan Jewellers. While I understand other methods like replacement cost and
revenue multiples for startups, my hands-on experience is mainly with DCF and comps.
How would you prioritize tasks across deal sourcing, modelling, and investor queries under tight
deadlines?
I prioritize based on urgency and where the deal stands. If investor interest is high and they have
questions, I handle those queries first to keep the momentum. If the deal is still early, I focus on
building the financial model and preparing the teaser. I keep a simple Excel tracker to manage tasks
and make sure to update the team regularly so everyone’s on the same page.

Valuation

DCF
Start by projecting free cash flows over 5-10 years using revenue, EBIT, taxes, and capex
assumptions. Then, calculate the Terminal Value using either the Gordon Growth Model or Exit
Multiple. Discount all cash flows to present using the WACC. Sum the PV of forecasted cash flows
and terminal value to get Enterprise Value. Subtract net debt to get Equity Value.

 Free Cash Flow (FCF):

Cash available to all capital providers (debt + equity) after operating expenses and
reinvestment.
Formula (Unlevered FCF):
FCF = EBIT × (1 – Tax Rate) + D&A – CapEx – ΔNWC
Where:
EBIT = Earnings Before Interest and Taxes
D&A = Depreciation & Amortization
CapEx = Capital Expenditures
ΔNWC = Change in Net Working Capital

 Projection Period
Usually 5–10 years of forecasted FCFs based on reasonable assumptions of revenue growth,
margins, etc.

 Terminal Value (TV)

Estimates the value of the business beyond the projection period.
Two Methods:
a) Gordon Growth Model (Perpetuity Growth):
TV = FCFₙ × (1 + g) / (WACC – g)
Where:
FCFₙ = Final year projected FCF
g = Terminal growth rate (e.g., 2–3%)
WACC = Weighted Average Cost of Capital
b) Exit Multiple Method:
TV = EBITDAₙ × Exit Multiple
(E.g., EV/EBITDA = 10×)

 Discount Factor & Present Value (PV)

Each FCF and TV is discounted to today’s value using WACC:
PV = Cash Flow / (1 + WACC) ⁿ
Where n is the year (1 to 5/10).

 Enterprise Value (EV)

Sum of all present values:
EV = ∑ PV of FCFs + PV of Terminal Value

 WACC – Weighted Average Cost of Capital

WACC = % of equity x cost of equity + % of debt x cost of debt x (1 - Tax Rate)
The average return required by all capital providers.
Comparable Company Analysis (Trading Comps)

What: Compare the target to similar listed companies.

How: Use valuation multiples like EV/EBITDA, P/E, EV/Revenue.
When to use: Quick benchmarking, widely used in M&A.
Trading comps = Comparing the target company to other similar public companies that are already
trading in the stock market.

Leveraged Buyout (LBO)

An LBO is when a company is acquired mostly using debt, with the target’s cash flows used to repay
that debt.
Private equity firms typically invest a small equity portion and aim for high returns by leveraging the
buyout.
The deal works if the company generates strong, stable cash flows.
Exit usually happens in 3–5 years through a sale or IPO.
The main goal is to achieve a high IRR, typically above 20%.

Ratios (Imp ones only)

1 EV/EBITDA (Enterprise Value to EBITDA)

Formula: EV ÷ EBITDA
Use: Most common M&A valuation multiple (removes impact of capital structure & depreciation)
Interpretation: Lower = undervalued, Higher = expensive

2 P/E Ratio (Price to Earnings)

Formula: Share Price ÷ EPS
Use: Compares valuation based on net profit. Best for stable, listed companies
Interpretation: How much investors pay for ₹1 of earnings

3 ROE (Return on Equity)

Formula: Net Income ÷ Shareholders' Equity
Use: Measures profitability on owner's capital
Interpretation: Higher ROE = efficient use of capital

5 Debt/Equity Ratio
Formula: Total Debt ÷ Shareholders' Equity
Use: Shows financial leverage / capital structure
Interpretation: High = risky, but may mean efficient leverage (especially in LBOs)

6 Interest Coverage Ratio

Formula: EBIT ÷ Interest Expense
Use: Checks how easily a company can pay interest
Interpretation: Less than 1.5 is dangerous; more than 3 is generally safe

7 Current Ratio
Formula: Current Assets ÷ Current Liabilities
Use: Measures short-term liquidity
Interpretation: Less than 1 = liquidity issue; more than 2 = possibly under-utilizing cash

8 Asset Turnover Ratio

Formula: Revenue ÷ Total Assets
Use: Efficiency of asset usage
Interpretation: Higher = better utilization of assets

9 PEG Ratio (P/E to Growth)

Formula: P/E ÷ Earnings Growth Rate
Use: Adjusts P/E for future growth
Interpretation: Less than 1 = undervalued; more than 1 = overvalued

10 Net Debt to EBITDA

Formula: (Total Debt – Cash) ÷ EBITDA
Use: Shows how many years of EBITDA to repay net debt
Interpretation: Less than 3 is good for investment-grade firms

11 ROI (Return on Investment)

Formula: (Net Profit / Investment Cost) × 100
Use: Measures how much return you earned compared to how much you invested
Interpretation: Higher ROI = better profitability and capital efficiency

TAM SAM SOM Framework

How big is the opportunity?

Term Meaning Example

Total Addressable The entire demand for a product or service if there were no limits
TAM
Market (100% market share)

Serviceable Available The part of TAM targeted by your company's products/services —

SAM
Market based on geography, capabilities, etc.

Serviceable The portion of SAM that the company can realistically capture in the
SOM
Obtainable Market near term (market share)

Market Capitalisation
Market Capitalization=Share Price × Total Outstanding Shares

Market Cap
Category
Range

Large Cap $10B+

Mid Cap $2B – $10B

Small Cap $300M – $2B

Micro Cap <$300M

 Culture/HR Discussion

What kind of work environment do you thrive in?

I thrive in a collaborative and intellectually stimulating environment where there's a strong emphasis
on teamwork and continuous learning. I appreciate open communication, constructive feedback,
and the opportunity to contribute meaningfully to team goals. I'm also motivated by challenges and
enjoy working alongside individuals who are passionate about their work and strive for excellence.
From what I've learned about PwC, this seems to be the kind of dynamic and supportive culture you
foster.

How do you typically handle situations where you have multiple deadlines and competing
priorities?
When faced with multiple deadlines, I immediately assess urgency and impact to create a prioritized
plan with actionable steps. I also emphasize proactive communication to manage expectations. A
key example is a case competition where, with two teammates unexpectedly dropping out the day
before, we had six hours to build a full pitch deck. I took the lead in re-delegating and focusing our
efforts. Despite the intense pressure, we delivered a strong presentation the next day, securing
second position. This highlights my ability to prioritize, remain calm, and deliver results even under
significant time constraints.

Walk me through your resume

I'm pursuing a Bachelor of Commerce at Shaheed Bhagat Singh College, University of Delhi, with a
strong academic record, maintaining an SGPA of 8.55. I also excelled in my 10th and 12th grades,
scoring 94% and 95%, respectively, and plan to take CFA Level 1.

My passion for finance is demonstrated through multiple national case competition wins at
institutions like MDI Gurgaon and SSCBS, along with six national finalist positions.

I gained practical experience as a Consultant at Next Horizon Capital, where I prepared an equity
research report on Kalyan Jewellers using DCF valuation. I also completed an internship at DeUS
Tech Services in the SAP domain.

At college, I actively contribute to five societies, including The Placement Cell and 180 Degrees
Consulting, where I facilitated client acquisition and onboarded Big 4 mentors like KPMG.

My key projects include a financial modelling report on Tata Motors, Monte Carlo simulations for
Indian Oil Corporation using Python, and a leveraged buyout model for Dell. This blend of academic
excellence, practical experience, and extracurricular leadership, I believe, makes me a strong
candidate.