Syllabus for Spring 2016
Professor: Lloyd Levitin
Office: Acc. 301E
Office Phone: 310-740-6524
E-mail:
TA: Erika Johnson (email:
Lecture Class
Tuesday and Thursday / 2:00 – 3:50 P.M. Room: HOH2
Office Hours
Tuesday and Thursday / 4:00 – 5:00 P.M.
I. COURSE OBJECTIVE
This course covers the broad field of mergers, acquisitions, and divestitures. The primary objective of the course is for each student to gain a well-rounded understanding of the major strategic, economic, financial, and governance issues of mergers and acquisitions.
Takeovers and mergers are a daily fact of life and have evolved into a critical part of every CEO or manager’s strategic toolbox. Every person who enters the corporate world will most likely be affected by a merger or acquisition at some point in their career. Students will apply learned content to real mergers and acquisitions and have the opportunity to present to the class their findings and conclusions.
Specific academic course objectives include:
· Examining the role that M&A plays in the contemporary corporate world, and its use as a strategic tool to provide growth, enhance competitive position, transform a company or industry, and create shareholder value.
· To provide the student a framework for analyzing transactions including understanding strategic rationale, valuation methodologies, deal structures, bidding strategies, and the need for a value proposition.
· Show how M&A can be used successfully as well as its pitfalls, dangers and risks.
· To identify ways to increase shareholder value through M&A and corporate restructuring.
The course will utilize a combination of lectures, readings, cases and student projects.
II. LEARNING OBJECTIVES
This course will help you to:
· understand the role that M&A plays in the contemporary global market, and its use as a strategic tool to provide growth, enhance competitive position, transform a company or industry, and create shareholder value.
· develop a framework that can be used for analyzing M&A transactions including understanding strategic rationale, valuation methodologies, deal structures, bidding strategies, and the need for a value proposition.
· foster an understanding of the M&A process from target selection to doing the deal (including due diligence, integration planning, negotiating the agreement, announcing the deal), to closing and integration.
· recognize the advantages and disadvantages of alternative deal structures.
· have an understanding of commonly used takeover tactics and defenses.
· choose a path for restructuring that will meet corporate goals and create shareholder value.
· understand the practical limitations of the various valuation approaches.
· minimize the risk that a merger or acquisition will not meet expectations.
· understand how value is created (or destroyed) as result of corporate mergers, acquisitions, and restructuring transactions.
· understand the role played by corporate boards and third parties (consultants, investment bankers, analysts, and institutional investors) in M&A deals
III. WHO SHOULD TAKE THIS COURSE
Those who are seeking to become entrepreneurs, financial analysts, chief financial officers, operating managers, investment bankers, business brokers, portfolio managers, investors, corporate development managers, strategic planning managers, auditors, venture capitalists, business appraisers, consultants, or who simply have an interest in the subject.
IV. PREREQUISITE
BUAD 215 or BUAD 306
V. REQUIRED MATERIALS
Required Text: Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions, 8th edition, Donald M. DePamphilis, Elsevier/Academic Press, San Diego, Ca., 2015 (ISBN: 9780128013908). For the textbook’s companion website, go to: http://booksite.elsevier.com/9780123854872/section6.php
Course packet containing cases is available at the HBS website. Use this link: https://cb.hbsp.harvard.edu/cbmp/access/43880679
Course Notes: Copies of lecture slides and other class information are available through your Blackboard account.
VI. TEACHING METHODS
This course is taught through a combination of readings, cases, lectures and group projects. We begin each session with a discussion of current events. You are encouraged to read the Wall St. Journal and to visit dealbook.nytimes.com before each class to obtain a grasp of recent news.
VII. ABOUT THE INSTRUCTOR
Lloyd Levitin is a Professor of Clinical Finance and Business Economics at Marshall. He was Executive Vice President and CFO of Pacific Enterprises from 1982-1995 (now Sempra Energy), and was actively involved in the firm’s diversification program which included numerous acquisitions. He testified as an expert on utility diversification to the Senate Finance Committee of the U.S. Congress and has been a consultant for JurEcon, Inc., a nationwide consulting and research firm for management and counsel. He has a MBA from Wharton and a JD from University of San Francisco. He practiced as a CPA after receiving his MBA, and as a tax attorney after receiving his JD.
VIII. GRADING SUMMARY:
/ PointsMidterm / 25
Final Exam / 30
Team Project: Evaluation of a Recent Merger / 25
Peer Evaluation / 10
Class Participation / 10
TOTAL / 100
Final grades represent how you perform in the class relative to other students. Your grade will not be based on a mandated target, but on your performance. Three items are considered when assigning final grades:
- Your average weighted score as a percentage of the available points for all assignments (the points you receive divided by the number of points possible).
- The overall average percentage score within the class.
- Your ranking among all students in the class.
Midterm and Final Exam
The midterm and final exam will be closed book, closed notes. The final exam is cumulative from the beginning of the course. Laptops or any hand-held device with email capabilities cannot be used. You should bring a calculator to perform calculations.
If you are unable to take a midterm, the following rules apply:
1. If you fail to inform me in writing before the midterm begins, you will receive a zero grade, even if you have a valid excuse. An exception will be made if you have a note from your doctor that you were unable to communicate your excuse.
2. If you inform me in writing before the midterm begins, and you have an acceptable excuse, then the final exam will count for 55% of your grade.
Team Project: Evaluation of a Recent Merger and Acquisition Deal
You are to evaluate a merger between two publicly-traded companies that took place between 2009-2013. This study should give you valuable perspectives on how deals are put together. Your group will prepare a paper on the acquisition selected and present your findings to the class.
This project is to be handed in to the instructor by April 12 and is worth 25 points (15 points for written report; 10 points for oral report to class).
An outline of the topics your paper should cover is stated on pages 9 and10:
Oral reports will be given during the period April 14-21. Your team will be notified of the date of your presentation by my TA by March 29.
The purpose of the oral presentation is to share with the class the highlights of your written report. Include the most important lessons you learned from this project. Use PowerPoint slides and plan to spend 20 minutes and then take questions for 5 minutes.
Groups for Team Project and Approval of Selected Merger
Students will divide themselves into “teams” of 4-8 students each by January 21 and select a team leader. Any student who cannot find a team should inform my TA by January 21 and the TA will assign you to a group. . The group team leader is to email the TA your first, second and third choice by February 4. The TA will inform you of your assigned acquisition by February 9.
Peer Evaluation on Group Projects (10% of your grade)
Study groups provide a valuable learning experience – how to work effectively and efficiently in groups (a common practice in Corporate America), learning from others, and sharpening a student’s ability to communicate with others. However, human nature being what it is, some students are tempted to relax and let others carry their load. In order to provide an incentive for all students to make maximum contributions to the Pitch Book team project, students will be asked to grade each team member’s contributions on the Pitch Book project on a 1 to 10-point scale (10 representing the best performance).
This evaluation is to be submitted by email to the Instructor before the last day of classes. Any team member who does not email his (her) evaluation of team members will be deemed to have given a 10-point score to each member of the team.
Class Participation (10% of your grade).
Attendance and participation are essential for success in this course.
You may earn up to 10 points for class participation. Each of you will be awarded these 10 points on the first day of class. Your objective will be to keep these 10 points throughout the semester. This requires attendance at classes and your participation in class discussion of the assigned cases.
Seven cases have been assigned, a copy of which is in the HBS course packet. These cases are listed on page 11.
Each student has an assignment to read the case and be prepared to discuss the case in class. These cases are not to be handed in. The issues and questions to be discussed in class for each case are itemized in the syllabus on pages 12 to 16.
To help me out, you should bring a name card and place it on the desk in front of you. After the enrollment in the course has stabilized, I will pass around a seating chart. At that point, I ask that you remain in that seat for the rest of the semester. This will help assure that class participation is accurately recorded and rewarded.
IX. ACADEMIC INTEGRITY
USC seeks to maintain an optimal learning environment. General principles of academic honesty include the concept of respect for the intellectual property of others, the expectation that individual work will be submitted unless otherwise allowed by an instructor, and the obligations both to protect one’s own academic work from misuse by others as well as to avoid using another’s work as one’s own. All students are expected to understand and abide by these principles. SCampus, the Student Guidebook, (www.usc.edu/scampus or http://scampus.usc.edu) contains the University Student Conduct Code (see University Governance, Section 11.00), while the recommended sanctions are located in Appendix A.
Students will be referred to the Office of Student Judicial Affairs and Community Standards for further review, should there be any suspicion of academic dishonesty. The Review process can be found at: http://www.usc.edu/student-affairs/SJACS/ . Failure to adhere to the academic conduct standards set forth by these guidelines and our programs will not be tolerated by the USC Marshall community and can lead to dismissal.
X. STUDENT DISABILITY
Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to be as early in the semester as possible. DSP is located in STU 301 and is open 8:30 AM to 5:00 PM, Monday through Friday. The phone number for DSP is (213) 740-0776. For more information visit www.usc.edu/disability.
XI. TECHNOLOGY POLICY
Laptop and Internet usage is not permitted during academic or professional sessions unless otherwise stated by the professor. Use of other personal communication devices, such as cell phones, is considered unprofessional and is not permitted during academic or professional sessions. ANY e-devices (cell phones, PDAs, iPhones, Blackberries, other texting devices, laptops, iPods) must be completely turned off during class time. Videotaping faculty lectures is not permitted, due to copyright infringement regulations. Audiotaping may be permitted if approved by the professor. Use of any recorded material is reserved exclusively for USC students registered in this class.
XII. RETENTION OF GRADED COURSEWORK
Final exams and all other graded work which affected the course grade will be retained for one year after the end of the course if the graded work has not been returned to the student (i.e., if I returned a graded paper to you, it is your responsibility to file it, not mine).
XIII. CLASS NOTES POLICY
Notes or recordings made by students based on a university class or lecture may only be made for purposes of individual or group study, or for other non-commercial purposes that reasonably arise from the student’s membership in the class or attendance at the university. This restriction also applies to any information distributed, disseminated or in any way displayed for use in relationship to the class, whether obtained in class, via email or otherwise on the Internet, or via any other medium. Actions in violation of this policy constitute a violation of the Student Conduct Code, and may subject an individual or entity to university discipline and/or legal proceedings.
XIV. EMERGENCY PREPAREDNESS/COURSE CONTINUITY
In case of a declared emergency if travel to campus is not feasible, USC executive leadership will announce an electronic way for instructors to teach students in their residence halls or homes using a combination of Blackboard, teleconferencing, and other technologies.
Please activate your course in Blackboard with access to the course syllabus. Whether or not you use Blackboard regularly, these preparations will be crucial in an emergency. USC's Blackboard learning management system and support information is available at blackboard.usc.edu.
XV. MARSHALL GUIDELINESLearning Goals: In this class, emphasis will be placed on the USC Marshall School of Business learning goals as follows:
Goal / Description / Course Emphasis
1 / Our graduates will understand types of markets and key business areas and their interaction to effectively manage different types of enterprises / Moderate
2 / Our graduates will develop a global business perspective. They will understand how local, regional, and international markets, and economic, social and cultural issues impact business decisions so as to anticipate new opportunities in any marketplace / Moderate
3 / Our graduates will demonstrate critical thinking skills so as to become future-oriented decision makers, problem solvers and innovators / High
4 / Our graduates will develop people and leadership skills to promote their effectiveness as business managers and leaders. / Moderate
5 / Our graduates will demonstrate ethical reasoning skills, understand social, civic, and professional responsibilities and aspire to add value to society / High
6 / Our graduates will be effective communicators to facilitate information flow in organizational, social, and intercultural contexts. / Moderate
XVII. CLASS SCHEDULE AND ASSIGNMENTS: FBE 460