Piper Sandler IB Interview Questions

Answer in three slots, in this order. Details: give the dry facts fast, in a short opening. Name the acquirer and target, the deal size, the premium (how much above the target's pre-announcement share price the buyer paid), the valuation multiple (enterprise value, meaning equity price plus net debt, divided by revenue or by EBITDA, a measure of operating profit before interest, taxes, depreciation and amortization), and whether it was paid in cash or stock. Hook: say "I found this interesting because..." and tie the deal to a trend or company you follow. Rationale: cover the strategic reasons, such as synergies (cost savings or extra revenue from combining the two businesses) or a defensive move against a competitor. Then the financial reasons, such as accretion (the deal raises the buyer's earnings per share), tax benefits, or a good use of excess cash.

Value it with the same tools you'd use for the established company, adjusted for its stage. Build a longer DCF (discounted cash flow, which forecasts the cash a business will generate and discounts it back to today), with revenue growth slowing year by year and margins rising toward the mature peer's before you calculate the terminal value (the value of all cash flows after the forecast ends). For comparables, the growth company's current EBITDA (earnings before interest, taxes, depreciation and amortization, a rough measure of operating cash profit) is often small or negative, so use forward multiples: enterprise value (the value of the whole business to all its investors) divided by next year's or a later year's revenue or EBITDA. A higher discount rate can reflect the extra risk too, but only on top of these changes.

EBITDA falls from $100 to negative $100, net income falls $150, and cash rises $50. The $200 of receivables (money customers owe you that you already booked as revenue) is written off as a bad debt expense inside operating costs, so it comes straight out of EBITDA. Pre-tax income drops $200. Tax at an assumed 25% rate gives back $50, so net income drops $150. On the cash flow statement you start at negative $150 and add back the $200 fall in receivables. That cash was never collected. None of it left the business, and operating cash flow lands at positive $50. The balance sheet then shows cash up $50 and receivables down $200: assets fall $150 against a $150 fall in retained earnings, the running total of profits kept in the company.

Answer in three slots. Details: the acquirer (the buyer) and the target (the company it bought), the deal size, the premium (how far the price was above the target's share price before the deal), the multiple paid (price divided by revenue or by EBITDA, which is operating profit before depreciation and amortization), and whether the buyer paid in cash or stock. Hook: one line that starts with "I found this interesting because..." and ties the deal to a trend or company you follow. Rationale: give your verdict first. Then back it with strategic reasons (synergies, meaning cost savings or extra revenue the combined company gets, and defensive moves) and financial reasons (accretion or dilution, meaning whether the deal raises or lowers the buyer's earnings per share, though accretion alone does not show value creation; tax effects; and whether this was a good use of cash). The script below is a template. Swap its example for a named real deal and its verified figures.