I’m pleased to announce that Tuck’s ‘Buyout Brigade’ achieved multiple successes at this year’s MIT Private Equity Competition.
On a rainy November morning, five of us battled the elements and hiked across town, arriving at MIT Sloan to take on some of the world’s top business schools. Having thought that it was a good idea to participate in a case competition on top of a full class workload and intense recruiting efforts, several of us questioned our judgment as we strode into Sloan soaking wet. We all came from vastly different backgrounds and none of us had yet competed in a case competition. We were excited to get started nonetheless. Our goal was to leverage each person’s skill set to put us in a position to do well in the competition.
This year’s case was an Investment Committee recommendation on the proposed buyout of Seaboard Corporation, a Fortune 500 Company. Our objective was to deliver a go/no-go decision on the buyout along with analyses to support our recommendation. We ultimately declined the investment, primarily due to our LBO model not supporting a realistic take private premium. Additional reasons to reject the buyout included doubts in long term earnings growth as indicated by market trends, a significant risk of multiple compression given timing in the current cycle, and the portfolio concentration for the Private Equity Fund we were representing given the size of the deal.
Ultimately, we delivered a presentation that received generous praise from the judges. Our ability to answer questions clearly and succinctly during the Q&A period added to the believability of our thesis, and we advanced to the final round. However, several teams had proposed more dynamic solutions to structure the deal—namely they advocated for carving out a part of the business rather than a simplistic rejection of the opportunity as we had outlined. Our less creative take on the buyout likely contributed to us missing out on the top spot. However, we were delighted with our standing given the high quality of presentations we had seen that day. Following a more detailed evaluation of the buyout models we submitted, we were awarded a separate prize of first place for the LBO Model Competition sponsored by Lateral Investment Management.
We enjoyed drinks in the seventh floor lounge that overlooked the Charles River and Boston’s skyline and basked in the glory of our day’s work. Overall, it was a fantastic learning experience where we could apply lessons from the VCPE course and various other parts of the Tuck curriculum to strengthen ties with other top business programs and bring pride to Tuck.
Case Competition participants included T’20s Gavin Loudfoot, Kevin Grant, Daniel Tanaka, Brodie Stone, and Nirali Desai.