COURSE
NUMBER: MBA236E.1
COURSE
TITLE: Mergers & Acquisitions: A Focus on Value Creation
UNITS OF
CREDIT: 2 Units
INSTRUCTOR:
Peter Goodson
E-MAIL
ADDRESS: petergoodson@good-assoc.com
GSI: Josh Wilcox josh_wilcox@mba.berkeley.edu
CLASS WEB
PAGE LOCATION: http://bspace.berkeley.edu
MEETING
DAY(S)/TIME: Wednesdays, 8:00-11:00AM
NOTE:
Course will meet 10 weeks out of the 15-week semester, thus is worth 2 units of
credit
PREREQUISITE(S):
CLASS
FORMAT: Blend of cases and lectures and two or three visiting practitioners
REQUIRED
READINGS: Text & Reader- heavy preparation for each class with demanding
cold calls to insure accountability
BASIS FOR
FINAL GRADE: Participation 25% of grade- rigorous cold calling in all sessions
with weekly cases for discussion, three written team cases and one individual exercise. Note – small teams – three on a
team maximum.
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 of the acquired company after
the transaction has been completed.
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 throwing out lofty
business combination slogans, but rather a focused study of the leadership
elements necessary to create shareholder value in clearly measureable terms.
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.
It is important to
recognize upfront that many believe this is a 3-unit plus credit class
disguised as a 2- unit class, in terms of the work load. It is indeed a
heavy investment in outside work relative to other classes. There is no doubt
that you will be challenged if you enroll.
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.
International Deals … 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: Mr. Goodson is a pioneer in the private equity discipline as an early
stage partner at Clayton, Dubilier & Rice. One of
the original management buyout firms, CD&R has purchased and transformed
performance at large industrial companies for over 35 years. The strategy of
the firm is to buy under-performing businesses and create value through shifts
in business strategy and hands-on implementation of operating improvements.
Among the acquisitions CD&R assisted managements in achieving enhanced
value are examples such as Lexmark – the IBM Information Products business, the
Uniroyal-Goodrich Tire Company, Hertz Rental Car and Home Depot. The firm’s
active partners include Jack Welch, former CEO at GE, and A.G. Lafley, formerly the CEO of Procter &
Gamble Co., as examples of the operating experience and power housed
in a very small firm with approximately a dozen partners.
Retired but
still active, Mr. Goodson is a lead member of Advisory Boards at Mekong
Capital, the most renowned private Equity firm in Vietnam, the local Bear Fund
and NY based Dubilier & Company. He was elected a
fellow of Dartmouth’s’ Tuck Center for Private Equity and Entrepreneurship. He
has taught or lectured in courses at Tuck, Harvard, Kellogg, NYU Stern School,
Columbia and is teaching currently at the Berkeley-Columbia joint MBA
program as well as at the Haas Business School. He was awarded the Earl F. Cheit Outstanding Teaching award by the students of the
Haas Business School and the Berkeley-Columbia Programs in 2009, 2010 and again
in 2011.
Prior to his private equity career, Mr. Goodson
was one of the first investment bankers to specialize exclusively in advising
on mergers and acquisitions. The M&A department he founded at Kidder,
Peabody & Co. became renown at offering both sage advice and creating
clever tactics aimed at securing the best price and terms for clients. He was
instrumental in the hands on development of the “tricks of the trade” and
disciplines of modern day tactics and acquisition practices used throughout the
world today. He has advised across every business sector and industry. Mr.
Goodson was chosen by his partners to negotiate the $600 million sale of Kidder
to General Electric, which he did, setting a record for the highest relative
price paid for an investment bank on record.
Mr. Goodson
has served as director of Silicon Valley Bancshares,
dELiA*s, Montgomery Ward & Co., New
York Bancorp, Home Federal Savings Bank, Broadgate
Consultants L.L.C., Dial Industries, Stanford University's Athletic Board
and Columbia University's Community Impact Foundation. He continues as a
director of Goodrich Petroleum Corp, Beacon House and the Goodson Family
Foundation.