Putting It All Together — Pitching to Under Armour’s CFO
by Zunail Meredia, MBA ’18 (6/5/17)
Approaching the last week of the Investment Banking Immersion (IBI), our class was tasked with putting together everything we had learned the entire semester to produce a strategic recommendation for our client, Under Armour. Unlike many of our previous assignments, this week we were given free rein. Recommendations could include debt and/or equity issuances, M&A proposals, or partnerships designed to elevate Under Armour’s business.
This case was especially unique for two major reasons. One, three out of the nine IBI teams would be selected to present in advance — the night before the presentations. For every other IBI case, teams were cold-called on the day of class. Everyone was expected to prepare as if they were going to present their cases whether or not they were chosen to do so. The extra day of preparation for this week’s case meant that presenting teams were expected to be much more polished. Second, the three teams selected were going to present to the CFO of Under Armour, David Bergman. This was a special opportunity for the class to understand what it means to prepare a pitch for a real client. We would be exposed to common areas of scrutiny — the types of questions bankers can expect when facing clients — and unfiltered feedback that comes with client interaction particular to a classroom setting. The audience here would be very different from the panel of investment bankers our class typically presented to.
Lo and behold, my team was selected as one of the three presenting teams. While I was excited that our team had produced a pitch that our lecturer, Drew Pascarella, deemed worthy of Under Armour’s attention, I was anxious about presenting.
Would Mr. Bergman and his team believe our pitch was feasible?
Were there any risks, alternatives, or additional considerations our team had overlooked?
Did we know the industry and the companies we were covering in enough detail to excel in the Q&A portion of the presentation?
Our team made sure everyone knew not only the parts they were presenting but also the entire narrative inside and out. We also identified and planned talking points around weaknesses in our pitch that we felt could be scrutinized by Mr. Bergman and his team.
On the day of the presentation we were the first team to present and I had the privilege of kicking things off. I felt very much at ease in front of the class and the Under Armour team. I believe this was a product not only of the work and time our team had put into understanding all aspects of our proposal, but also the extent of preparation previous IBI classes provided. By presenting numerous times and watching my peers present every week, I had developed a clear understanding of what information should be communicated and in what fashion. To me, the comfort with which I could speak to Under Armour executives was a testament to the level of preparation the IBI provides its students and, as a result, how far I had come since the beginning of the semester.
Our team proposed that Under Armour purchase Italian-based footwear company Diadora for a few major reasons:
- Projected growth in the international footwear and sports apparel market over the next five years positioned Diadora to capture positive macro trends.
- Under Armour could mimic what we found to be a robust history of successful brand acquisitions. We specifically analyzed Nike’s acquisition of Converse. Nike grew Converse’s annual revenue from $200 million to $2 billion between 2003 and 2016, and we felt Under Armour could achieve similar success with Diadora.
- An acquisition of Diadora would move Under Armour closer towards some of the strategic goals it outlined in its most recent earnings call. Specifically, Under Armour would achieve more exposure to international markets and the footwear and lifestyle segments.
- With the FIFA World Cup approaching in June 2018, it is the perfect time to acquire a soccer-focused brand.
To my relief, the proposal was very well received and the Q&A that followed made for interesting conversation. The Under Armour team was very candid with their feedback. The panel pointed out both positive aspects and areas for improvement in each presentation, and they shared some of their real-world experiences in working with investment banks.
As our IBI journey came to an end that afternoon, Drew and my classmates looked back on what had made the experience so great. The rigor of the program fostered a camaraderie that brought our group incredibly close to one another. I can say that every person in my IBI cohort is a friend and someone I know I can count on. Drew’s dedication to the program and his willingness to bring different perspectives into the classroom, whether they be IBI alumni currently on the street or relationships built throughout his career (e.g. David Bergman), enriched our experience at Johnson and prepared us extremely well for our internships this summer. I’m excited to see the continued evolution of the IBI and hope I will have the opportunity to give back to the program as an alumnus in years to come.