The Wisconsin chapter of the Association for Corporate Growth (ACG) recently held its first Wisconsin ACG Cup, a case study competition between MBA students that asked them to examine a theoretical private equity purchase of a company.
The competition featured teams from the Marquette University Graduate School of Management, the University of Wisconisn-Milwaukee Lubar School of Business and University of Wisconsin School of Business. The event will serve to better educate future buy-sell professionals and create a pipeline for potential employers to access the best and brightest candidates.
“This was a great opportunity for ACG Wisconsin to connect to the educational centers of the state and create an entry point,” said Chris Nolte, vice president for Marcus Investments and an ACG Wisconsin member who organized much of the competition. “This is the beginning of a relationship with those entities and universities, and creates an opportunity to expose students to professionals locally and compete nationally.”
Teams of students were asked to examine the company’s cash flow, debt capacity and marketability, and were asked to come up with specific recommendations on whether or not the investor should buy it, an appropriate price range and several exit strategies.
The UW team won this year’s competition and was awarded $5,000 for its efforts.
“There were people in the audience in the finals who saw value and opportunity in the students who presented,” Nolte said. “It was a tryout. It really tests people in appropriate ways. It’s not too different from what they do (in real life).”
Linda Mertz, managing director of Mertz Associates and president of the state ACG chapter, agreed.
“Many of the students liked the opportunity to work with business leaders – they are thirsting for knowledge from a practical perspective,” she said. “This is something that creates direct contact and intimacy (with those leaders). They don’t always have the opportunity to apply their judgments to real life cases and have feedback from real life judges.”
Ian Elfe, an MBA student at UW who was a member of the winning team, said the realism of the competition forced the competitors to give their presentations extra thought and consideration.
“There was a much higher level of polish than you would have put into something for a school presentation,” he said. “It was a fairly complex and technical case dealing with a lot of debt instruments and financial leverage to enhance returns in a private equity investment. I thought it was, for most of the teams involved, the first heavy duty analysis in leveraged buyouts.”
The Los Angeles ACG chapter began holding its ACG Cup about four years ago, and the Wisconsin chapter is one of a few nationally that have started similar competitions. The national organization is planning to hold a national ACG Cup in 2010, Nolte said, and the winner of the Wisconsin competition will be invited to compete.
Next year’s competition will also be expanded, both Nolte and Mertz said. Officials from both UW-Parkside and Waukesha-based Carroll University have approached ACG about being included in the competition.
The event will likely help shape curriculum at the UW-Milwaukee Lubar School of Business, said Janice Miller, associate professor and associate dean of academic affairs.
“There is the possibility that next year it might be part of a course,” she said. “That’s still being talked about. We have some advanced financing courses and we also have a master’s in accountancy where it might fit. There is an ongoing dialogue – we were really thrilled with the student interest.”
For more information, visit www.acgwicup.org.