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.