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Adam Boone

Badgers Teaching Badgers Through Experiential Learning

by Adam Boone Friday, May 29, 2015

Class lectures and business case analysis provide a great foundation for MBA students. But these methods cannot hold a candle to speaking with a finance professional about real work experiences. On Friday, May 1st, the Nicholas Center welcomed Chris Yarbro to discuss recent financing activities at Promega Corporation.

Chris is a double-Badger, having earned a BBA and Master's in Accounting from the Wisconsin School of Business. Chris is currently serving as the Treasurer of Promega Corporation. Promega Corporation is an international Biomedical research supply company founded and based in Madison, WI. The company is privately owned but does have shares outstanding from a variety of transactions over past thirty years.

In 2014, Chris was tasked with orchestrating a share buyback in an attempt to decrease the number of outstanding share holders. The ask was not small as Promega is doing well financially and is forecasted to have strong future earnings. On the corporate side, the firm is still run by the founder and has an engaged board of directors. To finance the tender offer, Chris recommended the company issue debt to cover the expense. With strong cash flows and interest rates being at remarkably low levels, it was an easy decision for the company to take on a manageable level of debt.

For the sake of a blog post, it is not possible to walk through the entire process of the tender offer. For Promega, the process took months and our in-class session with Chris was a full 2.5 hours. But for me as a student, what was most interesting was the portion on deciding how much debt to take out as an organization. Individuals will always have differing opinions as to what the ideal amount of leverage is and for those making the decision it was a matter of juggling the valuation, risk exposure, tax shield, and overall capital structure of the firm. We as MBA students have spent countless hours learning these subjects in our different finance classes. And then in the matter of a lecture, we saw how a finance professional actually executes the concepts to help finance the activities of an organization. For first year students, it was a fantastic way to wrap-up the school year.

Our many thanks to Chris Yarbro for taking a morning from his busy schedule to the meet with our class. His special topics discussion was a highlight of the semester and we hope he is able to return for future discussions with the Nicholas Center.