個案總覽

In 2018, AB InBev faced a difficult decision: whether to keep its $8 billion dividend program or cut dividends either partially or in full. This case facilitates a theoretical discussion and practical application of dividend policies and their role in value creation for firm stakeholders. Students gain experience formulating a dividend policy and understanding its effects on debt, cost of capital, and company valuation. A widely recognized global leader of the beer industry, AB InBev had built a global presence and a broad brand portfolio through carefully selected mergers and acquisitions of brewers, from small local craft breweries to large multinationals. 2016 marked the epitome of AB InBev's success-the company had successfully completed the acquisition of SABMiller. This $104 billion merger was enabled by the largest corporate bond offering to date-$61.9 billion. But in October 2018, the financing side of this landmark deal had become the pain point for the company's management. Unexpectedly deteriorating economic conditions in Latin America, fluctuations in commodity prices, and changing consumer tastes slowed the growth in the company's EBITDA, undermining its ability to delever. The company's persistently high debt levels became the talk of the town, and the corporate treasury team was certain that leverage would have to be brought down to move AB InBev's price in a positive direction. But what sounded very simple was not an easy feat. Cutting dividends was one of the avenues AB InBev could pursue, but was it the best one? This case has been successfully taught at the University of Virginia Darden School of Business in the Financial Policy module of ""Financial Management and Policies,"" a course in the first-year MBA core curriculum.

Spreadsheet Supplement for Case UV8724

Yi Hua, the leader of an impact-investing initiative at Goldman Sachs, was examining a new financial arrangement in a proposed public-private partnership called the Rikers Island Social Impact Bond (SIB). The proposed SIB was the result of a partnership between Goldman Sachs, the New York City (NYC) Department of Correction, Bloomberg Philanthropies, and three nongovernmental organizations (NGOs)-MDRC, Osborne Association (Osborne), and the Vera Institute of Justice (Vera). The investment that Goldman Sachs was considering would finance the implementation of a cognitive behavioral therapy program for teens (aged 16 through 18) incarcerated at Rikers Island. The goal of the program was to lower the likelihood of those teens returning to jail following their release (i.e., recidivism). If predetermined outcome-based metrics, which focused on lowering recidivism, were reached, the NYC government would repay Goldman Sachs its contributed capital along with a return. The case helps students develop an awareness of the growing innovative financial structure that attracts private capital to finance governmental efforts to address social issues: SIBs. Alongside SIBs, the following related issues could be discussed: financial and social returns, models of investing for social impact, measuring social impact, private-sector financial resources used for public benefit, and private debt vehicles. This case can be used as an introduction to SIBs in an MBA course or in undergraduate electives dedicated to impact investing, public-private partnerships, or other related courses covering the role of business in society. The material can also be used in executive education around issues of cross-sector collaboration to address social issues.

This case requires students to evaluate alternative dual-share-class corporate structures that allow companies and entrepreneurs to pursue profit with purpose. The case explores Impact Makers, an IT consulting company based in Richmond, Virginia. While original founders of the firm hold all voting rights, the cash flow rights belong to two nonprofits setting the stage for a Newman's Own model of management consulting. The case discusses whether and how the alternative corporate structure aids the firm's overall strategy to attract top-quality employees, pay them competitive salaries, and provide superior service to its clients while donating 100% of its lifetime value to charitable causes, largely through partnerships with various nonprofit organizations. More importantly, the case asks students to evaluate how such a dual-share-class and dual-purpose company can raise capital to fund continued growth. The case opens with CEO Michael Pirron reminding himself of all the questions he had run through to execute a strategy to further grow Impact Makers' consulting business both through expanding a menu of services and through conquering new geographical markets. To do either, or both, the company needed a cash infusion. Internal cash was limited, as up to 40% of it flowed to charitable partners, demonstrating Impact Makers' commitment to its mission. Raising debt for a company without fixed assets was challenging and time consuming. Complicating it all was that being structured as a nonstock corporation rendered equity raising difficult. Could Impact Makers raise money to grow and stay true to community values at the same time?

This case can be taught alone or as an epilogue to "Impact Makers (A): The Newman's Own of Management Consulting" (UV7805). The case is based on Impact Makers, an IT consulting company headquartered in Richmond, Virginia. The company focus on creating value for a community led to an innovative corporate structure where original founders of the firm hold all voting rights, while the cash flow rights belong to two nonprofits, setting the stage for a Newman's Own model of management consulting. The case asks students to evaluate whether a board member should invest in Impact Makers' growth effort. The case opens with Impact Makers seeking up to $3 million in preferred-equity financing to grow its geographic presence, expand areas of practice, and convert intellectual property into tools that would increase margins and profits in digital health care markets. The protagonist, David Wade, is a rational mainstream investor. Yet he is a strong supporter of the company who had participated in previous company (bridge financing) debt offerings. The material requires students to explore the expected return of the proposed offering and evaluate the implicit and explicit discounts Wade would be making if he invested.

This note discusses valuation in the context of business mergers and acquisitions. It builds on standard methods of business valuation to consider the unique questions arising in a merger or acquisition setting. The note focuses on valuation using the discounted cash flow (DCF) approach and the comparable-firm-multiples approach and presupposes an understanding of the principles of business valuation. The note provides and reviews the details of an acquisition valuation case example. At Darden, it is used in the First Year core Finance course in a module covering Corporate Finance.

Spreadsheet for UV5625

On the eve of the Blackstone Group's much anticipated initial public offering (IPO), a Wall Street portfolio manager contemplates his commitment to purchase 20,000 units at $31.00 each. As one of the largest IPOs in recent history and the first major PE fund to go public in the United States, the offering had stirred up significant media and congressional interest, some of which was potentially damaging for the PE industry. Even taking the uncertainty of the tax law into consideration, the manager thought the market would respond positively to Blackstone's newly traded units. But there were still risks to consider.

It supplements case UV5622

The case is designed to explore the structure and rationale behind the standard compensation arrangements in the private equity (PE) industry. It effectively introduces students to commonly used terms of limited partnership agreements (LPAs), such as fees, carried interest, and preferred terms or hurdle rates. The backdrop for the Oregon Public Employees Retirement Fund (OPERF) case is the changed market conditions following the 2007 financial crisis that spurred a reevaluation of the basic terms of LPAs across the PE industry. This case has been taught in a second-year elective course on entrepreneurial finance and private equity and would be suitable for similarly focused courses on venture capital, private equity, or entrepreneurship. The case can also be used in an investment class designed to explore private equity as an asset class.

This case is written from the perspective of a member of Oracle's valuation team during Oracle's bid to acquire Sun Microsystems in 2009. Sun was an industry leader in the IT sector, and it had many suitors, including IBM. Oracle had distinguished itself as the world's largest and most reputable sellers of database management systems and other related software, and it had recently acquired several low-margin companies and turned them into higher-margin operations. Combining Sun and Oracle had the potential to create the Wal-Mart of the enterprise software industry. A supplemental student spreadsheet is available to verified users.

Spreadsheet supplement for case UV5626.

Husk Power Systems, a young but widely celebrated firm based in India, needs $1.5 million to $2.5 million of expansion capital to grow quickly beyond the small footprint it had established in northeast India. It is a successful green energy enterprise that aimed to provide electricity to millions of rural Indians in a financially viable way. With 10 "mini power plants" that use rice husks as a fuel source and a presence in 25 isolated Indian villages as of April 2009, the company's goal was to reach 350,000 to 400,000 consumers in 400 villages by the end of 2011. It is offered a convertible note financing structure by a cleantech private equity firm and needs to assess whether it suits the company's and founders' interests.

Recommended for MBAs, this case is one of a pair of cases used in a merger negotiation exercise. It is designed to be used with "Mars, Incorporated" (UVA-F-1612), but it can also be used on its own. One-half the class prepares only the Wrigley case, and the other half uses the Mars case. Wrigley and Mars are considering a merger and are in the process of negotiating a merger agreement. Macroeconomic assumptions, particularly forecasting future sugar prices in an uncertain environment, and assumptions about Wrigley's value make Wrigley's future cash flows difficult to predict.

Recommended for MBAs, this case is one of a pair of cases used in a merger negotiation exercise. It is designed to be used with "Wm. Wrigley Jr. Company" (UVA-F-1607), but it can also be used on its own. One-half the class prepares only the Wrigley case, and the other half uses the Mars case. Wrigley and Mars are considering a merger and are in the process of negotiating a merger agreement. Macroeconomic assumptions, particularly forecasting future sugar prices in an uncertain environment, and assumptions about Wrigley's value make Wrigley's future cash flows difficult to predict.

Spreadsheet Supplement for UV4276

Spreadsheet Supplement for UV4277

The case introduces students to the nature of collateralized debt obligations (CDO) and the CDO origination process, with emphasis on the corporate structure of the special purpose vehicles, cash flows to various CDO tranches, and motivation behind CDO origination. Students will learn to quantitatively evaluate the risk-return profile of CDO tranches with emphasis on the equity tranche (also known as "toxic waste"). This is ideal for MBA and advanced undergraduate level courses on financial markets, financial institutions, and investments. In the case, an associate at the Debt Capital Markets desk of Lehman Brothers prepares a CDO issuance for Western Asset. Western Asset had been contacted by a group of commercial banks eager to sell senior secured bank loans and high-yield corporate bonds to lower their capital requirements and free up capital for additional lending.

Spreadsheet Supplement for UV1094.