COURSE
NUMBER: MBA 236E.1
COURSE
TITLE: Mergers & Acquisitions
UNITS
OF CREDIT: 2
INSTRUCTOR:
Peter Goodson
E-MAIL
ADDRESS: petergoodson@good-assoc.com
GSI:
Adam Valainis (adam_valainis@mba.berkeley.edu)
CLASS
WEB PAGE LOCATION (HTTP URL): http://bspace.berkeley.edu
MEETING
DAY(S)/TIME: Wednesdays, 8:00-11:00AM, 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 January 29) 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 Adam Valainis (adam_valainis@mba.berkeley.edu)
prior to the first class session on Wednesday, January 20th 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 Adam 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 & 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 – small
teams - 3 on a team maximum
The
objective of the course is to offer experience-based lessons in order to create
shareholder value and avoid making costly pitfalls in buying and selling
businesses. The course emphasis is on…
1.
Developing
judgment …Sharing lessons in distinguishing
practices that create value from those that result in loss
2.
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
3.
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 emphasis is
placed more on the behavioral aspects 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.
ABSTRACT
OF COURSE'S CONTENT: FACULTY VIDEO
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.