CASE WORKSHOP

2024-2025
INTRO TO M&A CASES
Case Interview Overview

Definition: Case interviews are business problem-solving exercises used by consulting

firms and other industries to assess a candidate’s analytical, problem-solving, and
communication skills.

Structure: Candidates are given a real-world business scenario and must analyze the
issue, ask relevant questions, and propose structured solutions.

Common Topics: Profitability, market entry, growth strategy, mergers & acquisitions,
pricing, and operations.
Case Interview Overview

Key Skills Assessed:

Logical and structured thinking
Quantitative and qualitative analysis
Business acumen
Creativity and adaptability
Communication and presentation skills

Companies That Commonly Use Case Interviews:

McKinsey
BCG
Bain
Intro to M&A Case Interviews
Understanding Mergers & Acquisitions in Consulting Interviews

What Are M&A Cases?

Definition: M&A cases assess a company’s decision to acquire, merge, or divest a

business.
M&A cases are a common type of case in consulting interviews, especially in firms with
strong M&A or private equity practices.

Purpose: These cases assess a candidate’s ability to evaluate the rationale, risks, and
financial implications of business transactions.

Why are M&A cases important?

Analyze, structure, and solve complex business problems related to mergers and
acquisitions
Intro to M&A Case Interviews
Understanding Mergers & Acquisitions in Consulting Interviews

Two Types of M&A Cases

Company Acquisition or Merger

A business considers merging with or acquiring another company.
Example: Walmart acquiring an online marketplace for small businesses.

Private Equity Acquisition

A private equity firm evaluates acquiring a company for investment purposes.
Example: A PE firm acquiring a national tattoo parlor chain.
Intro to M&A Case Interviews
Understanding Mergers & Acquisitions in Consulting Interviews

Why Do Companies Pursue M&A?

Gain access to new customers or distribution channels.

Acquire intellectual property or proprietary technology.

Realize cost and revenue synergies.

Remove a competitor from the market.

Diversify revenue sources or talent pool.

Intro to M&A Case Interviews
Understanding Mergers & Acquisitions in Consulting Interviews
Five Steps to Solve an M&A Case

Understand the Reason for the Acquisition

What is the primary goal? (ROI, synergies, market expansion)

Quantify the Specific Goal or Target

Define success metrics (e.g., expected revenue increase, cost savings).

Apply an M&A Framework

Market attractiveness, company attractiveness, synergies, financials.

Assess Risks & Alternatives

Consider integration risks or explore better acquisition targets.

Deliver a Clear Recommendation

State recommendation, justify with key reasons, propose next steps.
Framework Overview
Breaking Down M&A Decisions into Manageable Components

Why Use a Framework?

A framework provides a structured approach to systematically analyze case interview questions, serving as a
foundation that must be tailored to each unique case.

M&A decisions are complex - frameworks simplify the evaluation process.

A tailored framework ensures a structured, case-specific approach.

Avoid memorized frameworks; adapt to the unique case context.

Intro to M&A Case Interviews
Key Takeaways

M&A cases follow a structured and predictable approach.

M&A cases test business acumen, strategic thinking, and financial analysis.

A well-structured framework simplifies M&A evaluation.

Understanding business rationale and financials is key to success.

Use a structured approach: Objective → Analysis → Synergies/Risks →

Recommendation.

Practice with real-world M&A deals and industry trends.

M&A FRAMEWORK
Framework Overview
M&A

Post- Risks &

Market Company
Acquisition Benefits

Revenue How to increase

profits
(strong and Revenues
Growing? growing?) Regulations
Raise prices/avg.
spend Intellectual
Big? Profits
Raise qty Property
Who? (strong and sold/frequency Management
How Many? growing?) Costs team
New Entrants? Market share Decrease fixed
Strategic fit
costs
(strong and Decrease variable
growing?) costs
Market Attractiveness
Is this a good market?
Key Questions to Ask:
Is the market growing?
Look at historical and projected market size.
Growth rate trends (CAGR – Compound Annual Growth Rate).

How big is the market?

TAM (Total Addressable Market), SAM (Serviceable Available Market), SOM (Serviceable
Obtainable Market).

Who are the competitors?

Market concentration: Is it fragmented or dominated by key players?
Key industry players: Strengths, weaknesses, differentiation.

How many competitors are there?

Market share distribution (top 3 players vs. rest of the market).

Are there new entrants?

How difficult is market entry (barriers to entry)?
Any recent startups or disruptors?
Target Evaluation of the Company
Is this the right company?
Key Metrics to Assess the Target Firm’s Strength
Revenue & Profitability:
Is revenue strong and growing?
Are profits sustainable? Trends in EBITDA (Earnings Before Interest, Taxes, Depreciation, and
Amortization).

Market Share & Competitive Position:

How does the company rank in its industry?
Is its market share growing, stagnant, or declining?

Operational Strength:
What differentiates the company (brand, technology, customer base, supply chain)?
Does the company have proprietary technology or unique intellectual property?
Financial Health Indicators:
Debt levels and capital structure.
Cash flow stability and margin analysis
Post-Acquisition
What next?
Once an acquisition is completed, the focus shifts to integration and value creation.
Revenue Growth Strategies:
Increase prices or average customer spend.
Expand product offerings or cross-sell to customers.
Increase sales volume or frequency.

Cost Synergies:
Reduce fixed costs: Consolidate offices, optimize operations.
Reduce variable costs: Improve supply chain efficiency, renegotiate supplier contracts.

Integration Challenges:
Merging operations, systems, and cultures.
Retaining key talent and leadership from the acquired company.

KPIs for Measuring Success:

Revenue and profit growth post-acquisition.
Achievement of synergy targets.
Employee retention and cultural integration metrics.
Risks & Benefits
What could go wrong?

Key Risks and Benefits to Consider Before a Deal

Potential Benefits of M&A:
Access to new markets.
Increased economies of scale.
Technological advancements.
Talent acquisition and stronger management.

Major Risks and Challenges:

Regulatory Risks:
Government regulations, antitrust concerns, and approvals.
Intellectual Property Risks:
Patents, copyrights, and legal disputes over technology.
Cultural and Organisational Challenges:
Clashing corporate cultures, leadership transitions.
Integration Failures:
Systems, processes, and operational challenges.
Overvaluation & Financial Risks:
Overpaying for the target, misjudging financial performance.
Key Takeaways
Things to remember

1. Ask Clarifying Questions Early

What is the buyer’s main goal? (Growth, cost savings, market expansion?)
Are there any constraints? (Budget, timeline, regulatory approval?)
What are the main concerns? (Cultural fit, financial risk, integration complexity?)
2. Focus on the "Why" Behind the Deal
Does the acquisition help the buyer achieve its long-term vision?
Are there clear synergies, or is the buyer just trying to grow for the sake of it?
3. Identify & Prioritize Synergies
Revenue synergies: Expanding market reach, increasing sales.
Cost synergies: Reducing redundancies, lowering operational expenses.
Strategic synergies: Strengthening brand, securing long-term positioning.
4. Look for Red Flags & Risks
Overestimated synergies (Will the cost savings actually materialize?)
Integration complexity (Will IT, HR, or operational differences cause issues?)
Market reaction (Will customers, competitors, or regulators push back?)
5. Have an Exit Strategy
What happens if expected synergies don’t materialize?
Can the acquired company be sold or spun off?
How can financial risks be minimised?
EXAMPLE CASE STUDY
Microsoft’s and Nuance Communications

Microsoft is considering the acquisition of Nuance Communications, a leading AI-driven

speech recognition company specializing in healthcare solutions. Nuance’s technology is
already used by 60% of U.S. hospitals, and Microsoft sees an opportunity to integrate
Nuance’s AI capabilities with its cloud, enterprise software, and healthcare offerings.

Your consulting firm has been hired to evaluate the feasibility of this acquisition. Microsoft
wants to understand the financial, strategic, and operational implications before making a
final decision.
Framework Overview
M&A

Post- Risks &

Market Company
Acquisition Benefits

Revenue How to increase

profits
(strong and Revenues
Growing? growing?) Regulations
Raise prices/avg.
spend Intellectual
Big? Profits
Raise qty Property
Who? (strong and sold/frequency Management
How Many? growing?) Costs team
New Entrants? Market share Decrease fixed
Strategic fit
costs
(strong and Decrease variable
growing?) costs
Microsoft’s and Nuance Communications
Example Steps
Category Example Clarifying Question Data (Revealed Only If Asked)

Market How big is the healthcare AI market? $40 billion (2025 projected)

What is the growth rate? 37% CAGR (2023–2028)

IBM Watson Health (22%), Google Health (18%), AWS Health AI

Who are the key competitors?
(15%), Nuance (10%)

Revenue: $1.5B (2024) → $1.9B (2025 projected) Net Profit: $250M

Company What is Nuance’s financial performance?
(2024) → $320M (2025 projected)

What is Nuance’s competitive advantage? AI-driven speech recognition for healthcare providers

Who are Nuance’s key customers? 500+ hospitals, 60% of U.S. hospitals use Nuance’s tech

Post-Acquisition Cross-sell AI to Microsoft Teams & Dynamics Expand in Europe &

What revenue synergies can Microsoft expect?
Strategy Asia Move Nuance AI to Azure Cloud

R&D consolidation ($80M), Sales & Marketing efficiency ($60M),

What cost synergies are expected?
IT/Infrastructure savings ($40M)

Risks What regulatory challenges exist? FTC/DOJ antitrust scrutiny due to Microsoft’s AI dominance

Nuance’s independent startup culture vs. Microsoft’s corporate

What cultural integration risks exist?
structure

What is Microsoft’s expected financial impact Revenue increase: +20%, Net profit increase: +30%, EBITDA
Financials
post-acquisition? growth: +25%
Microsoft’s and Nuance Communications
Market - Info

Healthcare AI Market: Expected to reach $40B by 2025 with a 37% CAGR

Major Competitors: IBM Watson Health, Google Health, AWS Health AI

Company Market Share (%) Growth Rate (%)

IBM Watson Health 22% 10%

Google Health 18% 12%

AWS Health AI 15% 15%

Nuance (Target) 10% 20%

Other 35% -
Microsoft’s and Nuance Communications
Nuance Features

Feature (Nuance Strength) Potential Microsoft Integration

AI Voice Technology (used in hospitals for Integrate into Microsoft Teams &
medical transcription) Dynamics 365

Speech Recognition & Natural Language Embed into Microsoft Azure’s

Processing Healthcare Cloud

Global Healthcare AI Presence (60% of Microsoft’s international enterprise

US hospitals use Nuance) network

Custom AI for Radiology & Patient Scale with Microsoft’s cloud computing
Diagnostics power
Microsoft’s and Nuance Communications
Nuance Cost Synergies

Cost Factor Before ($M) After ($M) Savings ($M)

R&D Costs 300 220 80

Sales & Marketing 250 190 60

IT & Infrastructure 200 160 40

Total Savings 750 570 180

Microsoft’s and Nuance Communications
Nuance Revenue Synergies

2025 (Standalone
Metric 2025 (Post-Merger) Change (%)
Microsoft)

Revenue ($B) 215 220 +20%

Net Profit ($B) 72 94 +30%

EBITDA ($B) 100 125 +25%

Market Share (%) 5 7 +2%

Microsoft’s and Nuance Communications
Risks

Risks Facts

FTC/DOJ antitrust scrutiny (concern

What regulatory risks exist?
over Microsoft’s AI dominance)

Nuance’s independent startup culture

Will cultural integration be a challenge?
vs. Microsoft’s corporate structure

Could the deal fail to deliver expected Poor integration planning could lead to
synergies? inefficiencies
Microsoft’s and Nuance Communications
Risks & Benefits - Potential Impact

Risk Potential Impact

Regulatory Scrutiny Deal delay, potential fines

Cultural Integration Employee turnover, loss of productivity

Losing hospital contracts due to Microsoft

Customer Retention
transition

Execution Risk AI integration delays

Microsoft’s and Nuance Communications
Synergies - Insight

Topic Fact

Expansion into Microsoft Azure’s healthcare

cloud Cross-sell AI voice tech into Microsoft
Revenue synergies
Teams and Dynamics Grow international
presence using Microsoft’s enterprise reach

Merge R&D functions Reduce sales &

marketing redundancies Integrate AI
Cost synergies
infrastructure into Microsoft’s cloud
ecosystem
Microsoft’s and Nuance Communications
Risks & Benefits - Potential Solutions

Risk Mitigation Strategy

Regulatory Transparent FTC/DOJ compliance

Scrutiny efforts

Cultural Retain Nuance’s leadership for

Integration smoother transition

Customer Dedicated customer success teams for

Retention hospitals

Strong project management & phased

Execution Risk
implementation
Microsoft’s and Nuance Communications
Conclusions
Decision Criteria Assessment
Market Opportunity
High growth market (37% CAGR in healthcare AI)
Financial Strength of Target
Strong revenue growth and profit margins
Post-Merger Synergies
Clear cross-selling and infrastructure synergies
Regulatory & Integration Risks
Moderate risk due to FTC scrutiny but manageable

Overall Recommendation
Proceed with acquisition, ensuring regulatory compliance and smooth integration
Microsoft’s and Nuance Communications
Conclusions
Next Steps for Microsoft
Action Item Priority Level Expected Timeline
Secure regulatory approval (FTC/DOJ) High Within 6 months
Develop integration plan with Nuance leadership High Before acquisition closure
Leverage Azure cloud for Nuance AI Medium 6–12 months post-acquisition
Monitor financial synergies realization High 12–24 months post-merger

Exit Strategy Considerations:

If the acquisition succeeds:
Microsoft can integrate Nuance into its AI and cloud ecosystem, potentially spinning off
a specialized healthcare AI division in the future for further value creation.
If challenges arise:
Microsoft could divest Nuance’s non-core assets, seek partnerships, or sell to a private
equity firm if integration issues persist or regulatory hurdles become unmanageable.