Founded in 1982 as a subsidiary of Marshall & Ilsley Corporation, Mason Wells became an independent firm in 1998. Mason Wells is a leading Midwest-based private equity firm that manages over $500 million of capital through two funds: Mason Wells Buyout Funds and Mason Wells Venture Fund.
Mason Wells in in the process of adding the JC Flowers II LP, a new $4 billion private equity fund and tasked Nicholas to think of potential acquisitions/investments for the new fund. In particular, Nicholas was to complete the follwing tasks on behalf to the fund:
- To determnine and report the trends of Private Equity; specificallyin acquisitions, distressed securities and the buyout markets.
- Identify attractive investment areas by analyzing industry trends with the emphasis on larger target companies.
- Identify large acquisition targets for the fund.
The State of Wisconsin Investment Board (SWIB) is a state agency that invests the assets of the Wisconsin Retirement System (WRS), the State Investment Fund and other state trust funds. About 90% of the assets managed by SWIB are from the WRS Trust Funds. The Department of Employee Trust Funds (ETF) determines the impact of investment returns on WRS based on the rate of return as of December 31. SWIB is directed by an independent Board of Trustees and staffed with professional money managers and support personnel.
SWIB tasked Nicholas to develop a model that estimates the equilibrium metrics for a sub-industry. The project is limited to just a few sub-industries, such as one from financials, one from industrials and one from consumer discretionary. The Nicholas team followed the return on equity and the return on invested capital through time, along with six other metrics, for each of 10 sub-industries.
Royalty Pharma is a rapidly growing privately-held company within the biopharmaceutical industry that acquires revenue producing intellectual property in leading pharmaceutical and biotechnology products. Principally, the company acquires royalty interests in marketed and late stage development of biopharmaceutical products.
Royalty Pharma tasked Nicholas to construct a database of all biotech and pharma product approvals over the past four years, and then use the database to analyze data in an effort to identify specific attributes which contribute to a products success or lack of success.
Best Buy is interested in learning more about the use of real options in corporate decision making and tasked Nicholas to do the following:
- Assess the advantages and disadvantages of using real options versus more traditional valuation methods in corporate decision making.
- Assess how prevalent the use of real options is in corporate decision making as well as why companies adopt real options as a decision making tool.
- Assess the primary success factors in using real options to guide investment and acquisition decisions.
- Indicate the key financial factors required when using real options as a valuation method.
- Determine what other consumer retail companies use real options and why they use them.
- Determine what other industries use real options and why they use them.
- Assess the appropriateness and applicability of real options in specific areas of Best Buy.
Medtronic is the world leader in medical technology providing lifelong solutions for people with chronic disease. The company offers products, therapies and services that enhance or extend the lives of 5 million patients annually with conditions such as diabetes, heart disease, neurological disorders, and vascular illnesses.
Nicholas was tasked with providing an outside perspective on how to calculate and use the cost of capital in business decision making. Medtronic was specifically interested in the following:
- What are the key assumptions (beta, market risk premium, etc.) in calculating the cost of capital for Medtronic?
- What about the region/country, or the investment type (acquisition, new product launch, etc.)?
- If so, how would Medtronic determine what cost of capital should be used for each specific sector when evaluating a project?
- What is the cost of capital for Medtronic's key competitors?
- Based on your calculated cost of capital and current Medtronic market value, what do you believe is the implicit earnings growth rate built into the market valuation?
As leader in providing innovative solutions and technical support to the life sciences industry, Promega Corporation's 1,450 products enable scientists worldwide to advance their knowledge in life science research. Founded in 1978, Promega Corporation is headquartered in Madison, Wisconsin, and has branches in eleven countries and over 50 global distributors.
The individual branches have historically been responsible for setting the price of products sold in their respective territory. As a result, global customers were often quoted different prices for the same product sold from different Promega locations. Promega tasked Nicholas to come up with a model that would help determine a common price for each product where revenue is maximized for a given global sales account.
Nicholas was requested specifically to:
- Describe a model for setting revenue maximizing pricing policy for global accounts
- Document limitations of the model
- Test the model using products from at least one global account
- Comment on the relationship between historical sales data, revenue maximizing pricing policy, and competitor's response
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