During the past twelve months, nearly everyone has an economic thesis. For some, a rebound is imminent, a nascent bull market is in front of us and everything will be up and to the right: sugarplums
and smiles for all.
For others, comfort is found in words like “double-dip” and unmanageable deficits:
time to avoid risk and hunker down.
Regardless of whether you are a bull or a bear, few would argue the fact that we are in uncertain times. For the technology executive and his/her investors, this makes M&A decisions trickier than ever. In a world of constant innovation and Darwinian funding models, technology firms must consider M&A
from two key perspectives: source of growth and source of liquidity. game correctly is of paramount importance.
In both cases, playing the M&A
From a growth perspective, the business case for acquisition used to be quite simple: growth, innovation, talent-en-masse and spreadsheets that show revenues (and ultimately profits) up and to the right. In a healthy economy, the numbers always seemed to work. It wasn’t that long ago that we talked about instant millionaires who took a company public or sold to a bigger acquirer for phenomenal multiples of revenue. More recently, as hi-tech business models matured and cash flows became more predictable, new sources of capital emerged and for a time it seemed like M&A growth transactions or recapitalizations would be here forever.
Today, the second type of technology M&A is front and center: how best to get liquidity so as to provide investors with a return on investment. This is increasingly important given the arrival of financial sponsors as credible take-private and/or investment partners for technology firms. Following a rapid consolidation and leveraging of technology companies, a number of investors (not just venture capitalists
and entrepreneurs) are seeking liquidity.
With a weakened stock market (at least until the recent rally)
going public was not a credible exit option.
Accordingly, hi-tech executives and their varying board of
directors consider M&A the most likely path to long term riches – and/or a way to avoid running out of time or money on a hi-tech venture.
This course takes a look inside the M&A business process. What drives M&A strategy? How is a target selected? What determines valuation? What other terms are up for negotiation? Who does what? And perhaps most importantly, what drives a successful integration?
These and other questions will form the core of your study. The class will expose you to a number of different perspectives within the M&A ecosystem. Not only will you understand motivations of hi-tech buyers and sellers, you will hear from M&A experts such as investment bankers, M&A lawyers, integration consultants, and financiers.
The course will also explore emerging trends in hi-tech M&A such as private equity backed ‘take private’ transactions (aka, LBOs), hostile takeovers, and will attempt to keep pace with the deal du jour.
This course will have relevance for students of all backgrounds.
Specifically, students with an interest in
corporate strategy, business development, and financial management are encouraged to enroll.
In addition to lectures and in-class exercises, the course will include several outside speakers with particular functional expertise or insights on the M&A business process.