PWP Interview Prep
Tell me about a recent transaction that has interested you (Windstream)
1) Perella Weinberg Partners acted as financial advisors to the Official Committee of Unsecured Creditors in the $5.8 billion restructuring of Windstream Holdings, a telephone service company. Windstream holdings successfully shed $4 billion in debt and $2 billion in hand to fuel new growth as a private company. I found this deal interesting as Windstream's bankruptcy resulted from a lawsuit not market conditions like most other restructurings currently. 2) Windstream Holdings filed for bankruptcy protection on Monday after losing a legal battle with an asset management firm over a spinoff of its assets into a real estate investment trust. 3) This deleveraging and new financing will allow Windstream to re-focus its allocation of resources on growing the business and better positioning the company for long term growth
Tell me about a recent transaction that has interested you (KKR and Coty)
1) Perella Weinberg Partners served as financial advisor to KKR in its $4.3B acquisition of Coty's Professional Beauty and Retail Hair Businesses and its $1B investment in Coty. This deal interested me because it involved brands I use like OPI and ghd. 2) Coty was in need of cash given the headwinds caused by the pandemic which gave KKR the opportunity to buy some its business at a discount. KKR hopes to leverage Coty's assets and sell it again in a few years to make a profit. Looks to make inroads in Asian markets, which are ahead in COVID recovery, with its successful colorant business. 3) One major issue with KKR's deal logic was the fact that it found itself in a bidding war with Henkel, a German consumer goods brand. Henkel might have outbid KKR if the beauty industry was not hit so hard by the pandemic. Ultimately this transaction will involve spinning off some of Coty's brands into a new company, Wella, which KKR will hold a majority stake in. 4) Ultimately, this deal benefits Coty by giving them a significant cash injection to strengthen their balance sheet and position them to overcome pandemic headwinds. This deal makes slightly less sense for KKR, given that Coty's discount was effectively neutralized by engaging in a bidding war with Henkel. At the same time, Coty is embarking on a cost cutting campaign so it is possible KKR will be able to generate returns with this acquisition as the beauty industry recovers.
Tell me about a recent transaction that has interested you (Mesa BioTech)
1) Perella Weinberg Partners served as the exclusive financial advisor to Mesa Biotech on their sale to Thermo Fisher Scientific. All cash deal with $450 million in cash and an additional $100 million after the completion of certain objectives. I found this story interesting given that Mesa Biotech is located approximately 20 minutes away from my childhood home. Annual revenue for Mesa Biotech is around $45 million while revenue for Thermo Fisher Scientific is around $25 billion. 2) Thermo Fisher Scientific provides scientific instrumentation, reagents, and consumables to labs. On the other hand, Mesa Biotech is a privately-owned molecular diagnostic company which has developed PCR-based rapid tests for COVID, the flu, and other respiratory illnesses. Thermo Fisher bought Mesa Biotech to accelerate the availability of reliable and accurate advanced molecular diagnostics to their clients. Thermo Fisher has long held a large role in the clinical diagnostic space so this acquisition comes as no surprise. In fact, Thermo Fisher had acquired another lab diagnostic business the same week as Mesa Biotech. 3) As a privately-held company, it is most helpful to discuss Mesa Biotech's valuation in relation to comparable companies. Looking at comparable companies, the EV/Sales multiple of similar biotech testing companies is around 7-8x sales. Using this multiple, we can see that Mesa Biotech sold for approximately 12x sales indicating that Thermo Fisher paid a premium for Mesa Biotech. A lot of this could be a result of the demand for rapid testing in the market currently. 4)Ultimately, this deal will allow Thermo Fisher to accelerate the availability of reliable COVID tests to its customers. However, in the long term, this acquisition is one of many in Thermo Fisher's testing arsenal
How would you value that acquisition.
Agora is a small tech startup and not yet profitable with a net loss of $3M in Q3 2020. A DCF could be difficult here given that the company is not yet profitable and it's in a high growth phase. Similarly, the P/E ratio can't be used. I would suggest using a price to sales multiple or another multiple centered on revenue growth while valuing Agora using comparable companies.
What are potential competitors?
Bumble's biggest competitor is undoubtedly Match Group, the parent company of six of the ten largest dating apps including Tinder, Hinge, and OkCupid. However, as mentioned before, Bumble occupies a niche that these companies fail to by appealing to women and offering social connectivity outside of dating. Bumble occupies 20% of market share compared to Tinder's 40%. However, Bumble still has lots of room to grow given that only 10% of its users pay subscription fees. Could also continue to differentiate itself by building out its social connectivity platforms.
What are some business stories that you have enjoyed reading about?
Buzzfeed SPAC in January => talk about SPACs Tesla buys $1.5B in crypto => talk about contactless payment Diversify cash and cash equivalents US oldest bank BNY Mellon to deal in crypto for asset management clients MasterCard, Square, PayPal Dozens more companies to follow Walmart and Oracles bid to buy TikTok US operations on hold indefinitely Walmart will likely continue to use TikTok as a way to follow trends, create stoppable content, and strengthen its brand with teens AI algorithm Clubhouse: fast-growing audio based social media app Conversations between people like Elon Musk and Kanye West Raised $12M in venture funding in May and reached a $1B valuation after an additional funding round last month "Deep, spontaneous, respectful conversations"
Why are you interested in PWP? What attracted you to the firm?
I first became in PWP after speaking with one of my mentors who I met through Tiger Investments. I was asking her about her perspective on the banking industry and we were discussing the advantages and disadvantages of boutiques and bulge bracket banks. I knew she was going to work at Perella Weinberg Partners though she had previously interned at a bulge bracket bank. I asked her why she chose Perella Weinberg and she emphasized that the firm offers fantastic experience to analysts. With lean deal teams, accessible senior bankers, and a culture that emphasizes collaboration, I thought Perella Weinberg would be a fantastic fit for my preferences given that I enjoy working and small groups and getting the opportunity to really know my peers.
What are some recent trends that interest you (SPAC).
I have been really interested in the SPAC IPO trend. In 2020, there were around 250 SPACs listed on US stock exchanges with around $83 billion in capital raised. I understand that Perella Weinberg announced that the firm was going public via SPAC in December for around $1B For a firm like Perella Weinberg that runs a sustainable business, a SPAC is a rational business decision given that the SPAC offers a quicker, less expensive way to go public. Undoubtedly SPAC allows cash starved companies to raise capital quickly. However, the SPAC trend becomes concerning when you consider the volume of pre-revenue and young tech forms going public via SPAC at inflated valuations SPACs have a fundamental flaw which is that voting rights and redemption rights can be separated while allowing investors to hold in the money warrants. So investors can vote in favor of a deal and then sell their shares before the merger concludes while holding onto their warrants. Ultimately this allows hedge funds to vote for a deal, sell their shares in the media frenzy following the merger announcement and then capture the upside using their warrants. These warrants ultimately dilute the already costly structure of SPACs and drain cash from the target company. Despite these flaws, I predict companies will continue to use SPACs to go public given the current market environment and then current demand for capital
What is your current approach to learning about finance and the markets?
I recently changed my approach to learning about finance and the markets after listening to a really inspiring speaker at a women in finance panel. Essentially this is an active approach to following the news called Morning Market Update. Basically I start my morning by reading the WSJ and Morning Brew and then recording the movement of major indices, gold, oil, and the 10 YR t note. I will also record the top stories of the day. As for learning more about the finance industry, I get a lot of value out of my club tiger investments where we learn new financial concepts weekly.
What are your skills values and how do they align with PWP?
I would say the values that are most important to me are hard work, grit, and community. I would also say I place a lot of value on nerve. Looking at my resume, I would have to say my greatest strengths are that I am detail-oriented, I can lead in team environments, and I can stick to my goals with discipline. Hard work and grit: Athletic commitments, GPA and extracurriculars, grittiness, ability to work through adversity to achieve my goals (EX: Cornell bus ride during midterms) Have the necessary work ethic to overcome challenges and produce results in the firm's lean deal teams. I understand the demanding nature of the industry and I think my experience balancing obligations has positioned me well for an analyst position Community/ Teamwork: PWP is a boutique firm and as such cooperation and teamwork is essential. Looking at my resume, most of my extracurriculars involve working in teams. I have really found the communities I am involved with to be extremely beneficial in promoting my personal and professional development. I think this background attracts me to Perella Weinberg Partners given the firm's emphasis on collaboration and relationship building. I've been lucky enough to have found fantastic mentors through my finance related activities on campus and I hope to have a similar experience in the Women's Prep Program as I meet female leaders. (EX: VB Champions 2019, VPO Resignation mess) Detail oriented: I believe that one of my greatest strengths is my attention to detail. Many of my leadership positions require me to consider large amounts of information and reduce that to a concise, digestible form. I do this when accumulating resources and events for my Princeton WEP newsletter, writing the newsletter for the volleyball team, and completing reports for Pi Beta Phi. In all these cases, I am expected to transmit precise information regarding important dates and notices with accuracy and as such I have developed a keen eye for detail. Nerve: leadership positions, sending cold emails
Walk me through the business model of a company you're interested in (Bumble)
Interest I've been really interested in Bumble's business model. I have been really inspired by Bumble's CEO Whitney Wolfe Herd and the company is particularly given its recent $8B IPO. This IPO was particularly interesting given that Bumble was only the third company with a female founder out of the last 560 IPOs in the last 12 months. Business Model Bumble basically operates off a freemium model: it has free services for matchmaking, Bumble BFF for making friends, and Bumble Bizz for networking. Bumble also offers in-app purchases and generates recurring revenue through its premium subscription service. Bumble currently has around 22 million active users with 2 million who pay for subscriptions. Distinctive Features Bumble distinguishes itself from competitors because it is a space designed to make women comfortable. There is a requirement that women initiate contact - this cuts down the amount of sexual harassment and abuse that plagues online dating sites. Bumble is also unique in that it is not only a platform for dating, but for socializing and networking as well. First app of its kind to combine these different social connectivity's into one platform.
What's an acquisition the company should make?
Match Group began its expansion beyond online dating through its acquisition of South Korean social media company Hyperconnect. Bumble could work on improving its social connectivity platforms by making an acquisition of a company like Agora, which focuses on in-app voice and video connectivity. Expanding its social connectivity services would allow bumble to draw in more users and encourage people to sign up for premium services.
Why are you interested in investment banking?
My interest in investment banking is a long time coming. When I was 16, I worked my first ever job scooping ice cream and I took some money I made over the summer and I put it in an S&P 500 index fund. This small investment led me to take an active interest in markets. I became fascinated by the way stock prices rose and fell so quickly and became interested in learning more about the determinants of market movement. I had always planned on studying medicine, but shortly after I entered college I found my passions leading me elsewhere as I followed major news stories like the failed 2019 WeWork IPO. Ultimately this interest led me to switch my major to economics and set out to learn more about finance by joining groups on campus like WEP and Tiger Investments. Ultimately, I am interested in investment banking because I love thinking about financial transactions and want to develop my valuation and financial modeling skills. I think there is no better place to start my career than a firm like Perella Weinberg Partners which will provide my a fast-paced environment that will allow me to learn quickly while working alongside a motivated group of peers.
Tell me about yourself.
My name is Olivia Schewe and I am a sophomore at Princeton University pursuing a concentration in Economics with a certificate in Finance. On campus, I am a varsity athlete on the Women's Volleyball team and hold officer positions in Princeton Women in Economics and Policy and Pi Beta Phi. I am also involved in finance-related extracurriculars like Tiger Investments and the Julis Rabinowitz Center for Public Policy and Finance. Professionally, I have some background in financial services. Last summer, I worked in corporate development researching M&A strategies, performing due diligence, and analyzing the investment portfolios of peer companies. Next summer, I plan on pursuing my interest in the markets as an equity research analyst at an asset management firm in Los Angeles. Other things about me - I am originally from San Diego, CA. I love staying active and spending time outdoors - whether it be backpacking like I did with my dad last summer or just walking around Princeton's campus like I do now.
What do you know about the firm?
Perella Weinberg Partners is a global independent advisory firm founded in 2006 by Joseph Perella and Peter Weinberg. Perella Weinberg Partners offers services like M&A, Strategic Advisory, Financial Restructuring and more. The firm is currently headed by Robert Steel and is known for having lean deal teams, accessible management, and a culture of collaboration.
What are some recent trends that interest you? (Contactless payment)
The trend towards contactless payment is undoubtedly not new, but has been dramatically accelerated by the pandemic. In my own life, myself and my peers rarely use cash. Instead contactless payment platforms like Venmo, Cashapp, and Square have taken precedence. This is reflected in the massive revenue boost Square and PayPal have gotten from Q1 to Q3 2020. This trend is interesting in the context of America's historical payment options. Compared to Asia and Europe, America is years behind in contactless payment infrastructure. In most of Asia, you pay for almost everything using QR codes on your phone. It will be interesting to see if the pandemic has any lasting effects on America's contactless payment infrastructure. Another interesting implication of this trend is that that increased use of contactless payment has raised concerns about privacy. Tracking payments, losing the anonymity of cash. Though I am endlessly skeptical of Bitcoin, it is undeniable that the anonymity of Bitcoin could become more appealing as privacy concerns increase regarding contactless payments. This is furthered by the fact that Bitcoin is gaining legitimacy as companies like PayPal, Square, and Tesla invest in the cryptocurrency. It will be interesting to see how the cryptocurrency moves as we continue to transfer to digital payment platforms given that investors have treated Bitcoin as more of a speculative asset than a currency.
What do you hope to learn through this program?
Through the Global Women's Prep Program, I hope to gain technical knowledge, mentorship, and peer connections that will help me best position myself for summer analyst recruitment. As an officer of Princeton Women in Economics and Policy, I greatly value diversity and inclusivity and work to promote these ideals in campus by providing resources and mentorship opportunities for undergraduate women. For this reason, I am really eager to learn more about diversity and inclusion efforts at Perell Weinberg. I basically think this program presents both an incredible educational experience and a great opportunity to connect with a diverse group of peers.
