Illumina and GRAIL Acquisition
Each year Nicholas Center students participate in a consulting practicum that consists of two major projects: 1) analyze and advise on a public financial transaction, and 2) serve as consultants for a specific company. This year, second-year MBA students (Hector Aviles, Goncha Muradli, Henry Jeong, Xander Kessler) and undergraduate student (Kiran Jacob) had the opportunity to learn from CFIB alumni and Nicholas Center Advisory Board member Roberto Morales (Adage Capital Management) by analyzing the Illumina and GRAIL acquisition.
Illumina, a publicly traded (NASDAQ: ILMN) gene sequencing company, acquired GRAIL, a privately held company developing a multi-cancer screening test, in 2021. However, it did so without regulatory approval, which led to activist investor involvement, leadership and board shakeups, regulatory fines, a forced divestiture order, and major destruction of Illumina’s shareholder value.
As a team, under Nicholas Center Director Barb Bolen’s guidance, we analyzed Illumina’s motives behind the acquisition, Illumina’s and GRAIL’s valuation, regulator’s role in both medical approvals and M&A, as well as Illumina’s outlook post-GRAIL. Given such a technical case, we fortunately had the opportunity to meet with Roberto, a life sciences industry expert and portfolio manager, on a weekly basis to gain insights and test the viability of our ideas. At the completion of this project, we presented to the Nicholas Center Advisory Board members. Through this experience, we learned about the life sciences industry, regulation, activism, board governance, and financial analysis. One key lesson we learned from Roberto is to always be willing to take a step back to question and scrutinize assumptions before making important business decisions.
On behalf of the team, we thank Roberto Morales (Adage Capital) for developing this case study, allowing us to learn from him, and extending the opportunity to tour Exact Sciences (a cancer diagnostics company and GRAIL competitor).
Allstate Life Insurance Business and TSA Outlook
The second part of the consulting practicum involved a collaborative effort comprising of the same team members as part one, but for the insurance company Allstate and their divestiture of Allstate’s life insurance business to Blackstone. Allstate challenged the team with four key deliverables related to the Life Insurance industry and post-divestiture transition services agreements (TSA).
Throughout the project, Tom McDonnell (Nicholas Center Advisory Board member) and his team provided us with ongoing guidance through regular weekly meetings, answering our questions and providing us with the resources we needed to develop our recommendations.
The experience yielded notable improvements in our team’s skills and knowledge as we navigated complex and ambiguous challenges. The team’s critical thinking skills improved as we sought innovative strategic solutions to advise Allstate on the outlook of life insurance and effectively executing TSAs.
In examining the dynamics of TSAs, we conducted research and applied our critical thinking abilities to formulate informed assumptions to offer a life insurance outlook both domestically and internationally, utilizing historical data, along with a multitude of interconnected factors such as interest rates.
Related to TSAs, we demonstrated initiative by proactively engaging with an industry expert to gain insights into the intricacies of TSA for life insurance companies and its broader implications. Special recognition is extended to Rebekah Hunker, who generously allocated time from her schedule to share tried-and-true information with our team, greatly enriching our understanding of TSAs.
Lastly, the process of delivering results enabled us to define and control the project scope as required. By project completion, we successfully compiled a comprehensive portfolio of actions that Allstate can incorporate into their future endeavors.
Categories: