Across the country, class is back in session and students are beginning another year of learning and expanding their minds. But, we shouldn’t be leaving skill improvement to those attending school – after all, ensuring your skills are kept sharp is imperative for any professional in an industry as demanding as M&A. Luckily, this reading list should help keep you at the top of the class.
No M&A professional’s skill set is complete without a solid basis of financial analysis. Whether you’re a seasoned veteran or a relative greenhorn breaking into the industry, brushing up on these skills is imperative for success.
This book covers all the basics of how a company’s financial statements should be read, from analyzing cash flows to adjusted earnings to inventory turnover. While a short read, it is packed with valuable information and is a great reference and guide for anyone regularly valuing a company.
2. Security Analysis (Graham and Dodd)
The go-to book for how to value the debt and equity of a business, this read touches on everything from basic common equity to debt with exotic options. While it does tend to have a bent towards public markets, the solid techniques and processes it provides are invaluable in the private company markets as well, making it a useful guide whether the target acquisition is publicly traded or not. A veritable tome at 700 pages, the book is filled from cover to cover with techniques used by hedge funds, private equity, and even Warren Buffet.
As the world we live in becomes increasingly digital, technical skills in M&A have become increasingly important in parallel. Keeping these skills sharp is an everlasting battle, as technology changes and updates over time, so we recommend focusing on two major components: Excel and VBA.
3. Excel 2016 Bible (Walkenbach)
Everyone, from beginners to power users, will be able to learn something from this book about the ubiquitous spreadsheet program. Whether it’s learning about new functions, memorizing keyboard shortcuts, or boning up on formulae, this book will leave you knowing Excel better than the back of your hand. For those building models, it also contains a helpful section on improving user interfaces, which can help tame even the most unwieldy of spreadsheets.
4. Mastering VBA for Office 2016 (Mansfield)
Painful repetitive tasks are the bane of the workplace, taking up valuable time while introducing a substantial risk of human error. By leveraging the simple, yet powerful, programming language of VBA that’s integrated into the Microsoft Office Suite, you can considerably reduce the valuable time lost completing these tasks while taking advantage of the accuracy provided by automation. This book starts out with the basics for coding beginners, such as data types and basic functions, but also covers more advanced topics and, perhaps most usefully, shows just how integrated the language is within the most popular Windows programs. Excel, Outlook, Word, PowerPoint, and Access, all can be controlled and manipulated using VBA and the ubiquity of these programs ensures that the code you write can be used by virtually anyone in the world. Learning how to program will help keep you ahead of the game in the increasingly competitive world of M&A.
Of course, dealmaking isn’t all technical know-how and financial analysis – there are an enormous number of other things to consider before a deal is closed. The following books will help ensure you stay on task and cognizant of everything that needs to be considered during the process, from start to finish.
For those looking to break into the M&A game, or if you’re interested in selling a business but aren’t sure how, the M&A for Dummies book is a great place to start. By keeping things in plain English, without being so watered down that it’s inaccurate, the book encapsulates the basics of the business cases for why M&A takes place, how valuations are completed, and a variety of other deal-related topics. While industry veterans may scoff at the book, it can still prove to be a valuable resource, by giving an idea of how to communicate these complex topics to an audience less well versed in the lingo and nitty-gritty of the details, ensuring deals are smooth for those buying or selling business, as well as the advisory firms they’ve hired to help them do so.
6. The Art of M&A (Reed, Lajoux, & Nesvold)
Clocking in at a gigantic 1100 pages, this read is the quintessential reference guide for anyone and everyone in the industry. Covering everything from valuation to tax implications to due diligence, and with dedicated sections to special cases like liquidations and bankruptcies as well as soft skills useful in negotiating, there is almost nothing this book doesn’t cover. All of these topics are tackled in a Q&A layout, as well, magnifying its usefulness as a resource by allowing everything to be easily findable. Every M&A professional should have at least read a copy of this book.
Not every piece of literature that’s valuable to M&A professionals needs to be explicitly about the industry. The two books recommended below can help improve your skills by expanding your horizons and improving your thought processes.
7. The Warren Buffet Way (Hagstrom)
This book covers the Oracle of Omaha’s career, covering his investments from the very beginning and the techniques he uses. There’s no denying the successes of Warren Buffet over his career and being able to learn not only from his words but also from his actions can help anyone in the industry see value in a new light.
8. Thinking Fast and Slow (Kahneman)
At first glance, this book may seem an odd choice for this list, given its relative distance from M&A. However, the way this award-winning read discusses the two ways people think, describing one system of fast-paced and emotionally-driven processes and another rooted in logic and reason will have you thinking not only about how you are viewing trends across industries, but how your competitors are, as well. A fascinating read, this book provides valuable insight into how we make our decisions, whether they’re personal or professional, and how to recognize when a choice is being made emotionally rather than through reason.
Build Your Library
This list contains some of our top picks for keeping your skills sharp and helping you ensure your success in the competitive world of M&A. However, there’s no need to stop here – building out your library can help you get, and stay, ahead of the pack, and there are plenty of other great books out there to dive into.