COURSE NUMBER: EWMBA 236E-1

COURSE TITLE: Mergers & Acquisitions

UNITS OF CREDIT: 2

INSTRUCTOR: Peter Goodson

E-MAIL ADDRESS: petergoodson@good-assoc.com

CLASS WEB PAGE LOCATION: bSpace

MEETING DAY(S)/TIME: Tuesdays, 6:10 -9PM, for 10 sessions spread over the term

PREREQUISITE(S):

• In order to earn a passing grade, students must attend the first two classes and submit the first assignment (due on February 2nd which is the last day of add/drops) on time.  All cases are must be turned in on time or failing grade for assignment is given.  No exceptions. If you are thinking about adding the course, send an email to GSI Dominic Phillips (dominic_phillips@mba.berkeley.edu) prior to the first class session on Tuesday, January 19th in order to receive the syllabus and the mandatory assignments due in the first session.
• Do not add this course to your schedule if you have not contacted GSI Dominic Phillips prior to the first class, attended class throughout the add/drop period, and turned in the first assignment on time. 
• Note- the class is usually oversubscribed so if you want to add the class on speculation you must attend the first sessions to qualify for admittance and complete the first assignment (drops usually occur given the toughness of the course).

CLASS FORMAT:  Blend of cases and lectures with visiting practitioners upon occasion.

REQUIRED READINGS: Text and reader- heavy preparation for each class with demanding cold calls to insure accountability

BASIS FOR FINAL GRADE:  Rigorous cold calling in all sessions, 3 written team cases and 1 individual exercise- Note only small teams - 3 on a team maximum

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:

The objective of the course is to offer experience-based lessons on how to create shareholder value and avoid making costly pitfalls in buying and selling businesses. The course emphasis is on:

• Developing judgment: Sharing lessons in distinguishing  practices that create value from those that result in loss.
• Exploring leadership: Directing an insightful acquisition process geared to mitigate risk in order to capture return followed by lessons in managing after closing to operationally improve the results of acquired business.
• Fine tuning acquisition negotiation-related skills: Capturing the advantage in the tradeoffs inherent in doing a deal and in establishing a win-win scenario with the CEO and top managers of the acquired company after the transaction has been completed.

The priority is placed on the behavioral aspects that occur in M&A where there are no “canned formulas” that make real world results easy to obtain.  The “human factor” is dominant, the variables independent, and logic is frequently trumped by blind ambition and/or self-interested advisors.  This is not a corporate strategy course analyzing business combination rationale slogans but rather focusing on measures that create incremental shareholder value in measureable terms.

It is a domain where learned experience proves to be much more valuable than textbook niceties. Therefore, sharing the hard earned lessons gained by the Professor in participating in thousands of mergers and acquisitions over the last forty years is a course cornerstone.  In this field, the most important insight is to teach you to know what to do when you don’t know what to do.

It is also a survey course covering 12 topics, each of which could be taught as an entire course. Each topic is discreet and much of the value of the course is provided in classroom interaction. Attendance of all sessions is critical.

Course Topics
1. Trends, motivations and advisors' roles
2. Price and value... forecasting, measuring and bidding
3. Structuring... tax/accounting and contracts
4. Smart Negotiations... managing the deal process
5. Buyer beware... a look at common deceptions
6. Hostile Takeovers... un-negotiated transactions
7. Private Equity... the use of other people's money
8. Acquisition Financing... the lenders and the process
9. Technology... M&A Distinctions
10. International Deals... global bribes and corruption
11. Merger Arbitrage... investing lessons
12. Managing After Closing... best practices

BIOGRAPHICAL SKETCH:
Professor Goodson was one of six partners at the firm of Clayton & Dubilier, a private equity firm that purchased and managed large industrial companies. The strategy of the firm is to buy under-performing businesses and, through shifts in business strategy and transformation of the beliefs and practices of people, turn losers into winners. Among the $8 billion worth of businesses successfully acquired and values enhanced are prominent examples such as Lexmark – the IBM Information Products business, the Uniroyal Goodrich Tire Company, and the O.M. Scott & Sons lawn care products company. The firm’s investment record produced a compound annual return in excess of 50 percent over its 13-year history. Now devoting his primary efforts to philanthropic and educational causes, Mr. Goodson has been elected a Fellow of the Tuck Business Schools Foster Center of Private Equity & Entrepreneurship and was awarded the Earl F. Cheit Outstanding Teaching award by the students of the Haas Business School 2008-2009. Mr. Goodson also serves as a partner in Dubilier & Company, a private equity firm, applying the strategy of Dubilier & Co. to smaller enterprises, and serves on an Advisory Board Member of Mekong Capital, the leading Vietnamese private equity firm.

Prior to joining Clayton & Dubilier, he was a Managing Director at Kidder, Peabody where he founded the Mergers and Acquisitions Group over 25 years ago. He has personally participated in over 500 corporate assignments. Under his direction, the Mergers and Acquisitions Group completed transactions of approximately $20 billion and enjoyed 12 years of rapid growth and increased market share. Among Mr. Goodson’s merger and acquisition assignments were the $6.2 billion acquisition by Kohlberg, Kravis & Roberts of Beatrice Companies, the $1.2 billion acquisition of Richardson-Vicks Inc. by the Proctor & Gamble Company and the successful restructuring of GenCorp in response to a hostile offer. Mr. Goodson served as co-head of the firm’s Investment Banking Department, engineering a successful reorganization, then spearheaded its successful entrance into Merchant Banking. He was elected to the Managing Committee to oversee the firm’s worldwide business. Mr. Goodson was chosen by his partners to negotiate the $600 million sale of Kidder to GE, the highest relative price paid for an investment banking firm at that time.