Focusing on the pitch in the M&A process

The pitch is an essential step in the sell-side M&A process. It holds paramount importance for both the potential advisor and the company seeking to sell.

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The role of the pitch

When a company decides to sell, it may engage an investment bank or specialized boutique to advise and guide it through the entire sales process.

Initially, the selling company must choose the investment bank or boutique that will accompany them. To do this, they will request them to present their proposal ("pitch"). Following these presentations, the company will select the partner to accompany them and mandate the chosen boutique.

The pitch thus represents a competitive process among financial advisors in the context of a business sale. During this crucial stage, it is common for a boutique to meet similar competitors. These firms are often specialized either by industry (such as industry, SaaS, communication, etc.) or based on deal size (small cap, mid cap, or large cap).

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Pitch Content

A pitch typically consists of 10 to 20 slides, though this number may vary from one investment bank to another, especially depending on the size of the company being sold. Its aim is to highlight the investment bank, encouraging the seller to choose it. The slides are meant to demonstrate that the bank is the most qualified to handle the client.

The content of a pitch may vary from one investment bank to another, and it is a highly confidential document. It generally includes:

• Presentation of the investment bank and dedicated team members
• Overview of the transaction situation and the client company
• Current market and industry trends
• Valuation of the company using various methods (market comparables, transaction comparables, DCF, LBO, etc.)
• Combined merger and acquisition model
• Potential acquirers
• Outline of the proposed transaction strategy and key considerations
• Relevant industry experience and achievements
• Terms of engagement

Pitch Presentation

The pitch is a document meant to be presented. While the company soliciting the pitch may set a duration, this is not always the case. The duration varies greatly depending on the size and valuation of the company. A larger company is often more complex to understand, present, and value, thus requiring a longer and more in-depth pitch.

During a pitch, the potential advisor presents their work and seeks to convince the seller. It is often a discussion between the advisor and the company, with the latter's goal being to ensure they select the right advisor.

In conclusion, the pitch represents the critical initial step in the sell-side M&A process. Its purpose is to showcase the investment bank and persuade the seller to choose the right advisor to assist with the sale of their company. The content of the pitch, confidential and specific to each bank, plays a crucial role in this selection.