...Executive Summary - Valuation of Manufacturing Plant of American Chemical Corporation (ACC) Problem Statement This report discusses; 1- Determination of weighted average cost of capital (WACC), cash flows and NPV of ACC’s Collinsville Plant with and without Laminate technology. 2- Evaluation of plant’s acquisition proposal on economic grounds. 3- Evaluation of plant’s acquisition proposal on strategic grounds. 4- Strategic issues associated with the proposal. 5- At the given price and terms, should the proposal accepted. Alternatives, if any. Discussion Determination of WACC: For the purpose of determination of cash flow’s present value, WACC is determined as 16%, as shown in the attached Exhibit B. Present value of cash flows: The workings also show calculation for 5 years however, the plant have an expected life of 10 years and therefore, the cash flows are projected over 10 years. Without laminate technology, present value of 10 years free cash flows from plant (Exhibit C) is $9.2 million. The laminate technology enhances present value of plant’s free cash flows (Exhibit E) by generating $5 million over the period of 10 years mainly due to the savings accrued (which are net of tax) in power and graphite costs, giving relief (17.5% power cost is saved due to the introduction of laminate). The tax consequence of plant’s depreciation and scrap value (nil) and also enhances the laminate benefits. Terminal Value & NPV: For 10 years, Terminal value (Exhibit D) of the...
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...Authors: Philip Larson American Chemical Corporation I prepared my answers by myself before discussing the case with anyone else. I only consulted other members of this class and this work is my own. In particular, I consulted Matt Thompson. 1) Do the circumstances surrounding the sale of the Collinsville plant play any role in your willingness to buy the assets? If so, how, if not, why not? On the one hand, the circumstances of the sale make me less willing to buy. In particular, both Universal and the federal government think that American’s acquisition creates antitrust issues. If this is the case, American could use its market power to change the nature of the market and make Dixon’s new plant unprofitable by setting lower prices for sodium chlorate in its other plants. On the other hand, the circumstances make me more willing to buy the assets because American has to divest the plant to comply with a court order. Therefore, they have less leverage during the sale because there are only a limited number of purchasers and American must sell. I would be more willing to purchase the plant given that demand for sodium chlorate is expected to continue increasing. On the other hand, power costs which account for the majority of manufacturing costs were rising making it more expensive to produce. 2) Which firms are relevant for obtaining an asset beta for the Collinsville...
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...Dixon Corporation, an American specialty chemicals producer, wants to buy Collinsville plant in October 1979 from American Chemical Corporation, another typical chemicals company. This plant initially costs $ 12 million, and additional optional $ 2.25 million needed to buy and install laminate technology to increase efficiency and profitability of the plant in order. A firm that is operating in the interests of its shareholders should accept all projects that increase the wealth of the shareholders. In the case of Collinsville, we have used the Net Present Value to make our recommendations. We could also have used another criterion: the Internal Rate of Return (IRR). All the details of the calculation of the NPV are in appendices attached (calculation of the WACC, which is 14,183%, and the NPV with and without laminate technology). Based on our calculations, without the laminate technology, the NPV of Collinsville turns out to be negative ($ 1 714.13 thousands). Thus, we do not recommend investing in this project since it is against shareholders’ interests. However, with the laminate technology that enables to cut power costs (which are the main charge) and eliminate graphite costs, the NPV of the project becomes positive ($ 2 409.23 thousands). In that case, we do recommend acquiring Collinsville plant, because it increases the wealth of the shareholders and it enables Dixon to complement its strategy of supplying chemicals products to the paper and pulp industry. Moreover...
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...En junio de 1979, American Chemical Corporation anunció una oferta pública de todos y cada uno de los acciones de la Corporación de papel Universal. Estadounidense fue uno de los mayores química diversificada empresas en los Estados Unidos (Anexo 1). Universal era un papel de gran tamaño y de la empresa de celulosa (Anexo 2). Gestión de Universal se opuso a la toma de posesión y, entre otras cosas, demandó en una corte federal tienen la oferta de compra bloqueado por motivos de que la adquisición de American de Universal violaría la Ley Clayton de las leyes de competencia de EE.UU.. Las dos empresas dedicadas a la producción de clorato de sodio. Universal, alegó que su adquisición por parte estadounidense reduciría sustancialmente la competencia en el sodio clorato de negocio, especialmente en el sudeste de mercado de los EE.UU., donde las dos empresas se competidores. El gobierno de EE.UU. se unió a Universal en la búsqueda de un mandamiento judicial para poner Oferta estadounidense de licitación. A pesar de que negó las acusaciones, American impedido preliminar orden judicial al acordar la venta de su planta de clorato de sodio, situado cerca de Collinsville, Alabama, en el evento adquirió Universal. Estadounidense posteriormente fue un éxito en la adquisición de más del 91% de Acciones de Universal. En octubre de 1979, American comenzó a buscar un comprador para la planta de Collinsville. Una serie de los posibles compradores se acercó, incluyendo la Corporación...
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...American Chemical Case The American Chemical Corporation wanted to buy any and all shares of the Universal Paper Corporation because of their combined efforts in the production of sodium chlorate. To do so without violating the Clayton Act, American agreed to sell their Collinsville production plant to Dixon Corporation. Dixon wants to buy the Collinsville plant to help diversify its specialty chemical product line. This plant initially cost 12 million dollars with an additional 2.25 million dollars needed to buy laminate technology to increase efficiency and profitability of the plant in order. Cash flow analysis with and without the laminate technology will show whether or not Dixon should go further with purchasing the plant. The cost of equity can be calculated as follows. In the case, the yield on Treasury bonds is 9.5%, which is assumed to be the risk free rate. Using a historical equity risk premium 8.4%, the CAPM method says the cost of equity for this project is 9.5%+1.38*8.4% = 21.26%. Since little information about Dixon’s debt is provided in the case, I assumed that all debt Dixon intends to borrow is used in the acquisition of Collinsville plant at 11.25%. We also assume that debt is issued at par. The after-tax cost of debt is (1-0.48)*11.25% = 5.85%. Dixon’s target level of debt-to-asset ratio is 35%, which is used to find the cost of capital: WACC = D/V*After-tax cost of debt + E/V*Cost of equity = 0.35*5.85%+0.65*21.26% = 15.87%. Calculating NPV without...
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...fire you have to use foam, water, or a dry chemical. Class B fires are flammable liquids and gases and have to be extinguished with a dry chemical, Bromotrifluoromethane, and other halogenated compounds, foam, and CO2. Class C fires are electrical and to put out an electrical fire you have to use Bromotrifluoromethane, CO2, or a dry chemical. Class D fires are combustibles, easily oxidized metals such as aluminum, magnesium, titanium, and zirconium and to extinguish these you have to use specialized powders such as graphite, sand, limestone, soda ash, sodium chloride. 2. Choose and describe five different sections contained within a MSDS. In general, describe the contents found within those sections that you have chosen to write about. Section 1: General information. This section contains directory information about the manufacturer of the substance, including the manufacturer’s name and address, telephone number of an emergency contact person, a nonemergency telephone number for information, and a dated signature of the person who developed or revised the MSDS. Section 2: Hazardous ingredients. This section should contain the common name, chemical name, and Chemical Abstracts Service (CAS) number for the substance. Chemical names are the scientific designations given in accordance with the nomenclature system of the International Union of Pure and Applied Chemistry. The CAS number is the unique number for giving chemical that is assigned...
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...ll high school students and international equivalents are invited to submit an essay about the recent effects and future promises of science in our society. Write about particular discoveries, events, or persons from science in current events or present a more general account of the changes and developments. Each essay must be accompanied by a statement of acknowledged validity by a teacher in the field of the sciences, technology, engineering or mathematics. Students must submit their essays and entry forms electronically on or before the contest deadline of September 30th, 2013. Students who have family members affiliated with the Journal, or serving as contest judges are not eligible to participate. 2013 ISEC Prompt: Scientific dilemmas today occur on a global stage and require international cooperation. Please choose one pressing scientific issue and explain: the problem as it exists today, the point it can reach before action must be taken, some potential courses of action to combat the problem, and the global implications of solving or avoiding the issue. Topic suggestions include, but are not limited to: alternative energy sources, global climate change, increased rate of species extinction, and development of extreme weather conditions. Note that judges look favorably on unique topics. No literary form other than an essay will be accepted. Each essay must reflect the contestant’s own writing and original thinking. No graphs, images, or illustrations...
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...Dr Thomas Mensah Profile: Name Mensah Other Names Dr Thomas Date of Birth 1950-00-00 Place Kumasi Detailed Biography Photo None Dr. Thomas Mensah, a world renowned inventor with 7 US and worldwide patents in Fiber Optics over a period of six years, was born in 1950 in Kumasi, Ghana. He won the French Government Fellowship in 1974 to do graduate studies in Chemical Engineering at Montpelier University France, after receiving his undegraduate degree in the same field from UST Kumasi ( 1970-74). Prior to his undergraduate work, Dr. Mensah attended Wesley College practice school, Kumasi and Adisadel college Cape Coast. Dr. Mensah who is fluent in French won the National French competition in Ghana, both at the O Levels (1968) and A Levels 1970. held at Accra. He holds Ph.D in Chemical Engineering from Montpelier University 1978, and a Certificate in Modeling of Chemical Processes from the Massachusetts Institute of Technology. (1977). He has held high level engineering positions in US industry first at Air Products and Chemicals (1980-83), then Corning Glass Works, in Fiber Optics research Sullivan Park, New York 1983-1986, where he built the the fastest Fiber Optics draw and coating process, 50 meters per second. He holds 4 patents for this effort. He joined AT&T Bell laboratories in 1986 and led the the program to develop fiber optic reels used in the guided missile program. This effort led to the development of a system that was successfully...
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...Case Study: Lincoln Savings and Loan Association In 1978, Charles Keating, Jr. began focusing his time and energy on his business endeavours when he founded the real estate firm, American Continental Corporation (ACC). Six years later, ACC acquired Lincoln Savings and Loan Association, which was headquartered in Phoenix, although its principal operations were in California. In his application to purchase Lincoln, Keating pledged to regulatory authorities that he would retain the Lincoln management team, that he would not use brokered deposits to expand the size of the savings and loan, and that residential home loans would remain Lincoln's principal line of business. After gaining control of Lincoln, Keating replaced the management team; began accepting large deposits from money brokers, which allowed him to nearly triple the size of the savings and loan in two years; and shifted the focus of Lincoln's lending activity from residential mortgage loans to land development projects. On 14 April 1989, the Federal Home Loan Bank Board (FFILBB) seized control of Lincoln Savings and Loan, alleging that Lincoln was dissipating its assets by operating in an unsafe and unsound manner. On that date, Lincoln's balance sheet reported total assets of $5.3 billion, only 2.3 percent of which were investments in residential mortgage loans. Nearly two-thirds of Lincoln's asset portfolio was invested directly or indirectly in high-risk land ventures and other commercial development projects. At...
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... Had regular performance reviews with my professor. | Starbucks Coffee Company East Greenwich, RI Shift Supervisor February 2006-July 2007 | Manage a team to ensure rapid customer turnaround. Training new employees per company guidelines. Trained cash controller. Promote long-term goal of customer’s loyalty and satisfaction. | The Chocolate Delicacy, LLC East Greenwich, RI Technology Manager February 1994-Current | Ensure stability and function of process control equipment, network. Build multiple site to site virtual private networks. Design of “Chocolate Temper Testers,” a process quality control device to find chocolate crystallinity. | Education | University of Rhode Island Chemical Engineering, biological track. (120 credits) GPA: 3.66 (GPA...
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...close Translate [[missing key: loadingAnimation]] OverlayEnd S. Mitchell is Associate Provost for Graduate Studies and Research, and Professor of Brian Chemical and Biomolecular Engineering at Tulane Univ. (New Orleans, LA), where his research interests include nanostructured materials and materials processing. He is the author of 50 journal articles, two U.S. patents, and one textbook. Full Text ● Translate Full text Translate Press the Escape key to close Translate [[missing key: loadingAnimation]] ● OverlayEnd on search term navigation Turn In March, AlChE's Board of Directors conferred the title of Fellow on seven members of the Institute. These tenured members join a roster of respected chemical engineers who have made significant contributions to the profession. Here are some of the newly elected Fellows. More Fellows will be introduced in future issues of CEP. For more information about AIChE Fellows, visit www.aiche.org/About/OurMembers/fellow.aspx. Peter Paul Howell, P.E., is President of Mark V, Inc. (Hurricane, WV), where he specializes in accident investigation, process safety management, risk management, and safety and health issues related to hazardous materials and hazardous waste site remediation. He previously gained industry experience in the design, operation, maintenance, and management of chemical facilities, and has ten publications and three patents to his credit. He serves...
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...HERNANDEZ, LEIN AIRA M. Registered Chemical Engineer License No.: 0029716 Blk 5 Lot 4 Hinch Ville Subd., Sta. Rita, Batangas City E-mail Address: leinairahernandez@yahoo.com Mobile Number: +639274234275 CAREER OBJECTIVE | To have great opportunity of a challenging position with progressive company that will enhance my knowledge and skills in Chemical Engineering and implement them through procedures, activities, and techniques to meet goals. PERSONAL INFORMATION | Gender : Female Date of Birth : August 20, 1991 Place of Birth : Batangas City Status : Single Citizenship : Filipino Height : 5’0” Weight : 54 kg Religion : Roman Catholic EDUCATIONAL BACKGROUND | TERTIARY : BATANGAS STATE UNIVERSITY (BatStae-U) Neptune Rd, Golden Country Homes Subd., Alangilan, Batangas City Bachelor of Science in Chemical Engineering 2008-2013 Thesis: Design and Development of Simultaneous Saccharification Fermentation – Distillation Apparatus SECONDARY : STA. TERESA COLLEGE Kapt. Ponso St., Bauan, Batangas 2004-2008 ELEMENTARY : ST. BRIDGET COLLEGE M.H Del Pilar St., Batangas City 1998-2004 PROFESSIONAL EXPERIENCE | * Nestle Philippines Inc. (Lipa Factory) Quality Assurance Analyst II August 2014-Present * Provide coverage for sensory...
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...Compliance Audit Report Public Version ExxonMobil Corporation-Baton Rouge NERC ID # NCR00128 Confidential Information (including Privileged and Critical Energy Infrastructure Information) – Has Been Removed Date of Audit: July 17-19, 2012 Date of Report: August 11, 2012 Confidential information (including Privileged and Critical Energy Infrastructure Information) – Has Been Removed TABLE OF CONTENTS Executive Summary ........................................................................................................ 3 Audit Process .................................................................................................................. 3 Objectives ................................................................................................................................................ 3 Scope ....................................................................................................................................................... 4 Confidentiality and Conflict of Interest ................................................................................................ 4 Methodology............................................................................................................................................ 4 Company Profile ..................................................................................................................................... 5 Audit Participants ...............................................
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...(1) What (if any) are the problems confronting the company? Dixon Corporation planned to buy Collinsville plant from American Chemical Corporation for $12 million and another $2.25 million of installation cost of laminated electrodes. The problem is if Dixon should purchase the Collinsville plant with the laminated electrodes program based on the pro forma financial statements they conducted. (2) How did the problems arise? When American Chemical Corporation tried to buy the Universal Paper Corporation, Universal’s management sued that American’s acquisition of Universal would violate the antitrust laws. At the end, American agreed to divest its sodium chlorate plant located near Collinsville, Alabama. After the acquisition, Dixon Corporation agreed to buy the Collinsville plant because it fitted well with Dixon’s strategy of supplying chemicals to the paper and pulp industry. Sodium chlorate would complement Dixon’s existing product lines. But the development and application of the new technology of laminated electrodes generates much uncertainty on the costs and the future returns. In addition, the $12 million would be financed by debt capital, which would generate interest costs and increase the debt ratio over the targeted one. (3) Does the management adequately understand the problems and their causes? Yes. The management already generated pro forma financial statements for the Collinsville plant and the cost of the acquisitions. (4) What (if any) solutions...
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...The Marketing of Fast Food and the Rise in Health Problems As we know, globalization of fast-food and processed food corporations have become somewhat of a problem for various reasons. While many countries have the same choices Americans have, it is easy to see that over advertising of fast and processed foods causes Americans to be lazy in food preparation, which causes health problems, which is why large food corporations should limit their advertising. This chain of events is all too familiar in modern American culture, but not necessarily exclusive. Through research, it has been found that Americans are more susceptible to marketing and advertising of this type of food than most countries. Many ask, “Why?” While there is no precise answer everyone can agree on, we can point out 3 defining factors as to why Americans are more likely to purchase fast food rather than having a home-cooked meal. Compared to the rest of the world, Americans consume more fast food than even China which has almost as many fast-food restaurants as America does. The fad of fast-food can be explained as something that has gained momentum over the years of economic downfall, apathy towards health, and a collective divide on what we has humans should eat to stay healthy and live longer. Advertising is at an all-time high for not only fast-food corporations, but for processed-food companies such as Kraft or General Mills. The “evil genius” mentality behind their marketing is in that their target markets...
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