Understanding Sell-Side

The sell-side and buy-side of wall street could not operate without each other and are interdependent. Each relying on the other for smooth operations just like two-sides of the same coin.

including placements of private debt and equity, in the mix. Sell-side professionals are, therefore, investment banks and brokers who design and service these financial products and sell them to the buy side, usually through institutional and individual investors.

Sell-Side?

The sell side is that part of the financial sector which creates and markets financial instruments, like stocks, bonds, and foreign exchange, in the public market. It also incorporates private capital instruments,

Risk assessment – Examine the risk factors rela
ted to the business and the environment including operational, market, financial and policy related risks.

3. Market position- Understand the competitive stance of the company, its market share and the dynamics of the industry.
Understand the management’s capabilities, and managerial depth.
Growth Potential: Assess the potential for growth in terms of market, new products or projects.

1.Financial analysis- Get and analyze the income statement, balance sheet of the company concerned as well as the cash flow statement.
Find historical revenues, earnings or flows of cash and their tendencies.

2. Valuation Methods- Valuation through Comparable Analysis look into the peer group of companies in the same sector to derive valuation multiples like EV/EBITDA, P/E info.
-Industry Practice Valuation: Look for similar sized companies that were acquired and utilized this valuation in the market.
Discounted Cash Flows (DCF): Estimate future flows of cash and find the present value using a specific rate of discount on the future cash flows.

Valuing a company in the course of mergers and acquisitions (M&A) is a task that is broken into several methods and tasks. Here are the main stages and methods that are generally employed.

Valuation method of merger and acquisitions are divided into three classes:-

1- Market Based
2- Income Based
3- Asset Based

In the event of acquisition, the target company is integrated and ceases to operate as a separate entity. This concept is essential owing to its effect on the way the target company will be valued and for what purpose. Valuation in M&A means the values relative of the selling firm(s) under reorganization aimed primarily to assist the negotiators in arriving at a transaction.

they present.

A merger happens when two companies join forces in order to create a new company. An acquisition, on the other hand, represents the purchase of a company usually smaller in size by a larger one