COURSE NUMBER: MBA236E.1
COURSE TITLE: Mergers & Acquisitions: A Focus on Value
Creation
UNITS OF CREDIT: 2
INSTRUCTOR: Peter Goodson
E-MAIL ADDRESS: petergoodson@good-assoc.com
GSI: Tay Feder tay@berkeley.edu
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 aReader. 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.