It was a sunny spring afternoon when USD’s team “Global Opportunities” sailed our war ship onto the shores of Chapman University. The epic battle that played out among our peers a week earlier had provided us with the honor of representing our MBA program based on the unusual solution we presented, and on the out of the box thinking our team applied to the ACG case. The competition on our own campus was tough, and along with our classmates we learned a great deal, but nothing could have prepared us for the next round…
Days of training and hard work in the Copley library war room, and several sleepless nights, readied us to take on our fellow MBA teams from business schools across Southern California. As we stepped into the impressive Chapman business school lounge for a welcome reception, delicious meatballs and the stares of a thousand daggers greeted us. Looks that spelled out that our worthy opponents meant business met us from across the room – they clearly planned on holding back nothing in the quest for the prestigious ACG Cup.
After a warm introduction from the very dedicated representatives and judges from ACG it was our team that took to the field first. I opened with an executive summary that grabbed the judges’ attention, or at least let them know that USD was in the house. Carlo Freschi, our esteemed captain, then dazzled the judges with our valuation skills and explained our method of comparing similar transactions as a measuring stick. Pauline Heyer, a.k.a. the spreadsheet warrior princess, went into the details of how a company should be analyzed next. This all set the stage for our resident strategist and spin doctor, Eric Held, to explain to the judges what a prudent private equity firm would do in this scenario and why. Finally, I closed us out by selling our team’s skills and experience to the judges in an effort to secure the deal. I should mention that while all this was going on we were constantly bombarded by questions from the judges that would make most second year i-bankers cry and that were meant to throw us off our game. After our respective presentations, the teams from different schools came back together in the reception area to bury our hatchets and exchange war stories while networking over a few adult beverages. Upon the judgment hour we were not victorious, but we pulled through strong and fought a worthy battle that represented our great school up on the hill in the best way.
With the satisfaction that comes from a job well done we journeyed home while we recollected the evening’s events and agreed that we had learned the following:
- In terms of the bigger picture, the ACG Cup had a steep learning curve but provided us with priceless skills that we would be sure to apply to our future careers. We were glad to have been given the chance to sharpen our finance and presentation skills, and we believe any opportunity to practice what we learn in the MBA classroom is very valuable experience.
- Specifically regarding the ACG cup and investment banking, we learned that it is not all about the numbers. The numbers are important, but it is expected that as MBAs we would master the quantitative analysis in any reasonable given scenario. What mattered most in creating a distinction for the winning teams was the fact that soft skills like sales and marketing were just as important as the quant skills. Our team had gotten this right in the first round of the competition, but in the semi-finals the judges wanted an even bigger emphasis placed on selling our services as consultants and on selling the respective companies to each other.
In the end I think you can look at mergers and acquisitions like a celebrity marriage, with us as M&A consultants acting as the matchmakers. Both parties come into the relationship with significant assets that need to be protected through an ironclad prenup. You need to find a good match for the partners that would balance their individual strengths and weaknesses to bolster each other’s marketability and create additional profitability through combined synergies (think Brangelina). Both parties also need to be compatible since they would likely share some sort of living environment, just as respective management teams in two parties in an M&A deal would. At the same time it is almost certain that one of the parties, unlike a Kardashian marriage, would be making an exit in 4 to 5 years time (at least in the case of private equity) and needs to know they would leave the arrangement better off than when they entered it. But the most important lesson is that even if two parties are perfect for each other on paper it is still the matchmaker’s job to sell the parties to each other and make them want to rip each other’s proverbial clothes off. You literally have to help them fall in love with each other, and that’s the bottom line.
Rig is in the first year of the International MBA program. He has 10 years of experience in financial advising and investment management.