Cases
Twelve landmark deals
Each case is a decision to be made, not a story to be read. Work the numbers, form a view, and defend it. The cases are grouped by the technique they teach and span LBOs, M&A, and distressed situations.
The case library
Work at least one case per week, mapped to the module you just completed. Each entry gives the deal, the themes it teaches, and the exercise that turns it into a skill.
RJR Nabisco
1988The archetypal leveraged buyout and the deal that defined the 1980s. A management-led buyout collides with a hostile bidder in a bidding war that pushed the price far beyond intrinsic value.
Themes
Exercise
Reconstruct the sources and uses, estimate the sponsor IRR, and argue whether the winning price was justified by cash flows or by auction dynamics.
Hertz
2005A leveraged buyout of a capital-intensive rental business with a large fleet. The deal tested whether a sponsor could generate returns in a business that eats cash.
Themes
Exercise
Model the fleet as the key working-capital driver and test whether the business can service the debt through the cycle.
Safeway
1986A leveraged buyout of a supermarket chain followed by aggressive asset sales and restructuring. A study in how operational improvement, not financial engineering, drives value.
Themes
Exercise
Quantify the value from store disposals and margin recovery, and separate it from the value created by leverage.
Revco
1988A drugstore chain LBO that ended in bankruptcy. The canonical case of a deal that overpaid and under-delivered, and a lesson in the limits of leverage.
Themes
Exercise
Identify the assumptions that broke the deal and build the base case that would have kept it solvent.
Sealed Air
1989A defensive leveraged recapitalization of a packaging company. The case shows how a company used debt to change behavior and create value without a change of ownership.
Themes
Exercise
Evaluate the recap as a value-creation event and quantify the change in operating behavior it induced.
Federal Express
1973-1975The early days of FedEx, when the company nearly ran out of cash. A study in forecasting cash needs and the value of a network business at the edge of survival.
Themes
Exercise
Build the cash-flow forecast that shows when the company ran out of money and what the equity was worth at each stage.
Disney-ABC
1995Disney's acquisition of Capital Cities/ABC. A strategic merger that combined content with distribution and paid a large premium for synergy.
Themes
Exercise
Estimate the synergies the deal required to justify its premium and assess whether they were realistic.
Exxon-Mobil
1998The merger of Exxon and Mobil, a mega-merger that combined two integrated oil majors. A benchmark for cost synergies at enormous scale.
Themes
Exercise
Model the cost synergies and accretion, and evaluate how the market priced the deal at announcement.
Kraft-Cadbury
2010Kraft's hostile acquisition of Cadbury. A cross-border deal with a contested price, a large premium, and a hard look at post-deal value.
Themes
Exercise
Assess whether the price paid for Cadbury was justified and what Kraft needed to deliver to make it work.
Vodafone-Mannesmann
1999-2000The largest hostile takeover in history, a cross-border telecom deal fought with stock. A landmark in valuation under uncertainty and in the power of equity as currency.
Themes
Exercise
Value both companies and analyze the exchange ratio, then judge which side got the better terms.
Microsoft-LinkedIn
2016Microsoft's acquisition of LinkedIn at a substantial premium to market. A strategic bet on a network asset and a test of how to value a business with modest near-term cash flow.
Themes
Exercise
Build the DCF that supports the purchase price and identify the growth assumptions the market had to believe.
Union Carbide-Dow
1999-2001Dow's acquisition of Union Carbide and the subsequent restructuring. A case in industrial M&A, integration risk, and the gap between announced and realized value.
Themes
Exercise
Analyze the deal's announced synergies against what was actually delivered and explain the gap.