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An airline was approached by a group of entrepreneurs. The entrepreneurs offered the airline to invest $100MM in their software company for 20% equity, and also be the first customer for the software they develop.
The software is an e-market place where airliners and spare parts suppliers could meet to improve the purchasing capabilities of the airlines and to reduce the purchasing costs.
Aircraft parts are obviously a hugely important part of the airline business, as airlines struggle to keep planes in the air as much as possible, minimize downtime and control costs.
What should the airline do?
If you asked for a tough case, you got it! In this Bain M&A case study, the client is an airline that has approached you to advise it on a massive investment decision. The client is considering buying into a software company that could potentially help improve the purchasing capabilities of the airline, and reduce purchasing costs. You need to ultimately give the client a strong yes/no recommendation on the investment.
In an M&A case like this, pay attention to the type of buyer you’re serving – corporate or financial. They have different goals!
We recommend using the M&A Framework to solve this case, but don’t stop there. Show what you bring to the table by creating a unique framework that utilizes your framework knowledge and prior business experience.
This case has no math exhibits. The qualitative difficulty is 3 out of 4 and will prepare you for a final round Bain interview.
Bain Interview Tips
Bain looks for candidates that showcase a sense of practicality in their workflows. Imagine yourself as a Manager assigning out the work-streams from your structure buckets to a team of analysts. Would the work-streams make sense in a real-world scenario?
In the case, focus on concise communication and overall polish.
If you need help polishing up your casing skills, book a session with one of Management Consulted’s expert interview coaches.
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