Manchester seems to know that I am leaving soon. She shows up with sunny face more frequent and more longer than anytime before. Still not used to the bright day at 9pm. People started wearing the short sleeves shirts with short pants, lying on the lawn, enjoying the sunshine out there. But I don’t have the luxury to enjoy it, at least until today.
This few weeks have been another busy peak in my MBA life. Working on 2 big projects simultaneously, exchange preparation, internship application and I even started the fulltime job application. Schedules filled up my diaries from Monday to Sunday, morning to night. Knowing that this is the capstone of the Diploma stage of the MBA, and realise that after this I will be leaving MBS for at least 6 months for internship and exchange, the remaining moments here with friends, the schools and Manchester became so precious.
Just finished the negotiation of the M&A project yesterday. I have to say that this is the course that I enjoy the most in the MBA so far. It was very practical project that you will see what you learned before in accounting, corporate finance, marketing, operation, HR and strategy, all fit together so well to form a powerful tools in the real-life application. That’s the Manchester Method, learning by doing.
The M&A projects started with a series of lectures on valuations, targeting, screening, due diligence, deal structure and finally the negotiation. In the project, we were hypothetically represent a real leading food processing and retailing company in UK looking to acquire another company as part of its corporate strategy for inorganic growth. The project is divided chronologically into 3 stages.
The first stage is the valuation of the food company itself. Not intend to describe the details here, but it was basically the assess of the business performance, forecast the future growth, revenue and other financial data, and estimate the enterprise value based on valuation method like DCF, DDM, Abnormal Earning Model etc.
Second stage is the ranking exercise where the group needs to identify target company for acquisition. This again involve the investigation of the corporate strategy of acquirer, market attractiveness, strategic fit, financial performance, synergy as well as ease of acquisition of target companies. Based on the criteria, the group to ranked the top 3 target companies and presented the rationale to the faculty.
The last stage came in twofold - with the preparation of a justification document; and a negotiation with the target company. The justification document is a report explaining the plan for acquisition, that to be submitted to the top management of acquirer company. The rationale of acquisition, expected synergies, deal structure, management plan after acquisition are the key subjects in the report.
The climax came in with the role play of the negotiation, where we have to negotiate against the faculties who played the roles of the directors of the target companies. It was a long process with 4 separate meetings spread through 2 days. Some groups finished earlier due to walkaway in the middle of negotiation. Our group somehow managed to stay until the last for a deal. The faculties were really hard negotiators. Although we managed to close the deal, the benefit that we, as an acquirer can enjoy after acquisition remains quite thin. Nevertheless, it was a exciting and stimulating process which I gained a lot of learning.
That’s the end of the M&A project. How about the UKCP? Tell you later.