Booth Claims Victory in JP Morgan M&A Case Competition
By Lauren Silva '14 | february, 2013, Issue 1
Booth students claimed victory in the JP Morgan Case Competition in January.
Last month, Chicago Booth took home the championship in the JP Morgan Case Competition, where first-year banking recruits compete against Northwestern University's Kellogg School of Management for cash prizes and bragging rights. Following three years of Kellogg defeat, many felt Booth needed this positioning to recapture its prowess in investment banking case competitions. Indeed, several competitors believed Booth's very reputation against Kellogg was on the line.
As the culminating competition of investment banking internship recruiting, the J.P. Morgan M&A Case Challenge is a rite of passage to the start of interview season. And as the final investment banking competition, the challenge requires aspiring first year recruits to call on everything they learned from day one of recruiting as well as the technical knowledge gained through a rigorous first quarter curriculum. With the support of the J.P. Morgan Booth recruiting team and the Investment Banking Group (IBG) second year students, the Booth participants had the right set of tools to take on the challenge.
The challenge began the morning of Jan. 10 when Booth and Kellogg Team Leads met with J.P. Morgan to go over ground rules and information necessary to complete the case. Afterwards, team leads met with their fellow teammates to go over the objectives of the case and game-plan the next 24 hours. The case's main objective charged participants with advising a public packaging company 60% owned by a financial sponsor on two potential bids, one cash/stock from a strategic buyer and one all cash from another financial sponsor.
Acting on behalf of J.P. Morgan, teams were to recommend to the packaging company's board which (if any) offer to take. The analysis required the use of several valuation methodologies learned up to that point, including Discounted Cash Flow (DCF) and Leveraged Buyout (LBO) analysis. Working until the wee hours of the night and again through Friday morning, the teams put together their presentations to submit by Jan. 11 at 12:30pm. Team presentations then took place in two rooms in the J.P. Morgan building at 21 S. Clark Street between 2:30pm and 5:30pm.
Standing out from the rest of the teams was Accretive Aptitude with Team Lead, Pete Vitale, and Team Members Chuck Wu, Lauren Silva, Nate Hamilton, Howard Sun, and Sebastian Moenninghoff. The winning team put together their recommendation to counteroffer the stock/cash one for a greater cash consideration. Since the current sponsor had held onto the asset (i.e., the packaging company) for more than 10 years at the point of the case without returning any money to its Limited Partners (LPs), the team argued to appease them by boosting their internal rate of return (IRR) through the increased cash offer versus not fully cashing out through the sale to the financial sponsor, which the team felt undervalued the asset. The strength of the team's valuation analysis and clarity of presentation won them first place in their respective room judged by Booth and Kellogg professors such as Merle Erikson, professor of accounting at Booth, as well as J.P. Morgan professionals.
Fortunately, Accretive Aptitude was not the only winner of the day, as Booth teams Breakfast Club and Equities in Dallas pulled off first and second places, respectively in the other room. This meant that Booth was the victor against Kellogg for the first time this decade. Booth's triumph ultimately extended beyond the case competition and into the interview room – Booth will be sending seven summer associates to the JP Morgan's Investment Banking Division this year.