COURSE NUMBER: EWMBA 236E.1

COURSE TITLE: Mergers & Acquisitions: A Focus on Value Creation

UNITS OF CREDIT: 2 Units

MEETING DATES: Course will meet for 10 sessions out of the 15-week semester. Course dates as of 12/20/2016 (may be subject to change): 1/17, 1/24, 1/31, 2/14, 2/21, 2/28, 3/7, 3/14, 3/21, 4/11

INSTRUCTOR: Peter Goodson

GSI: mike_fagan@berkeley.edu

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

CLASS WEB PAGE LOCATION: bCourses

PREREQUISITE(S): 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 and two or three visiting practitioners

REQUIRED READINGS: The text for this course is Investment Banking: Valuation, Leveraged Buyouts and Mergers and Acquisitions, by Joshua Rosenbaum and Joshua Pearl and a Reader. Preparation for each class with demanding cold calls to insure accountability

BASIS FOR FINAL GRADE: Participation 35% of grade- rigorous cold calling in all sessions with weekly cases for discussion, three written team cases and one individual exercise.

COURSE DESCRIPTION: Our purpose is to teach value creation in acquiring or selling a business. Most studies show that the majority of corporate acquisitions destroy the buyer’s value. Sellers enjoy an immense advantage with competitive auctions and the term “winners curse’ is usually very appropriate.

Our mission is to offer experience-based curriculum in order to help students create shareholder value and avoid making costly pitfalls in future acquisition initiatives. Similarly we offer insight as to how to maximize value when selling businesses. The course deliverables are focused on…

1. Developing judgment … Sharing lessons in distinguishing practices that create value from those that result in loss... a sense of enhanced intuition and pattern recognition is often the result.
2. Exploring leadership … Directing an insightful acquisition process geared to mitigate risk in order to capture acceptable return on investment coupled with discipline in operationally improving the results of the acquired business after closing.
3. Polishing acquisition negotiation and 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

This 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 acquisition successes, as well as failures, over the last forty years is a course cornerstone. Because acquisitions frequently destroy value, the most important insight is to guide you to develop your own intuition to be able to detect nonsense and stick to using proven methods of success.

The following 12 course topics will be covered:
1. Trends, Motivations and Advisors’ Roles
2. Price and Value … Forecasting, Operating Improvements and Evaluating
3. Structuring … Tax, Accounting and Legal
4. Smart Negotiation … Managing the Deal Process
5. Hostile Takeovers … Takeovers Utilizing Un-negotiated Tactics
6. Private Equity … Creating Value with The Use of Other People’s Money
7. Acquisition Financing … The Lenders and the Process
8. Technology… Distinctions in Acquiring in the High Technology Space
9. Emerging Markets … Global Stumbling Blocks
10. Due Diligence … Rigorous Investigation of What Matters
11. Acquisition Integration … Consolidation Disciplines to Create Value
12. Managing After Closing … Operating Improvements Drive Value

BIOGRAPHICAL SKETCH: Professor Goodson is a pioneer in the private equity discipline as an early stage partner at Clayton, Dubilier & Rice. One of the first management buyout firms, they have purchased and enhanced value operationally at 65 businesses valued over $100 billion over the last 38 years. Prominent examples would include Lexmark – the IBM Information Products business, the Uniroyal-Goodrich Tire Company, Hertz Rental Car and Home Depot. Operating partners include Jack Welch, the former CEO of GE and Sir Terry Leahy former CEO of Tesco.

Before joining Clayton & Dubilier, Professor Goodson was a Manager Director at Kidder, Peabody & Co., where, at the age of 26, he founded the M&A Group in 1972, and was one of the first to specialize in acquisition advisory services in the industry.  He personally participated in over 800 corporate assignments and was an early innovator in developing state of the art M&A advisory practices at investment banking firms.  Being one of the foremost experts in seller advantaged exits, Mr. Goodson was chosen by his partners to negotiate the $600 million sale of Kidder to General Electric, setting a record for the highest relative price paid for an investment bank on record.

Retiring and relocating to California, Professor Goodson has taught at Haas for the last 9 years.  He is a Distinguished Fellow at INSEAD’s Global Private Equity Initiative and a fellow at the Tuck Center for Entrepreneurialism and Private Equity. He has also taught or lectured at Tuck, INSEAD, Wharton, NYU Stern and Columbia. He was awarded the Cheit Outstanding Teaching award by students several times. He also teaches PE: Value Creation and in the summer block week format the Turnarounds: Effective Leadership.
 
An “adventurer with his own capital and endless curiosity”, he is presently assisting a number of emerging market private equity firms to develop value added measures to improve investment returns. Professor Goodson recently created the Value Optimization Board for Mekong Capital in Vietnam, was appointed to the Tata Capital Growth PE Advisory Board in India and is advising a number of developing enterprises in many of the emerging frontier economies.