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Flinders Valves and Controls, Inc

In: Business and Management

Submitted By awhaller10
Words 1628
Pages 7
Group 6
Addison Haller, Noah Passage, Brad Pisarcik, Andrew Tucker, Jun Zheng
Flinders Valves and Controls Inc: Potential Merger and Acquisition with RSE International Corporation
Executive Summary
We are presented with the opportunity to evaluate two enterprises, which are in discussion over a possible acquisition. Flinders Valves and Controls Inc. (FVC) achieved a reputation for engineering excellence from its capability in providing specific applications for the defense and aerospace industries. Because of its reputation and excellence, FVC out-grew its small company, organized in 1980, and in 1996 it went public before a failed merger with Auden Company (which held 20% of FVC Common stock), due to a possible antitrust action. Since then, no other firms have been able to work out an agreement for a merger with FVC. However, RSE International Corporation (RSE), a public Russell 1000 company, had recognized FVC’s disclosure of a U.S. government contract and felt for an opportunity to focus on diversification through an aggressive growth-by-acquisition program.
With both firms having growing concerns about the current state of the economy as they move closer to the opportunity of striking a deal that can be both profitable and affordable for both sides, possible negotiations were within reach. With this opportunity in focus, we analyze the value of the two firms and discuss three concerns; the effects of a merger, what opening offer RSE should make for the acquisition of FVC, and how RSE can raise the capital for such an offer.
Benefits of RSE International Corporation and Flinder Valves and Controls Inc Merger
The benefits of merger and acquisition between FVC and RSE are that the new firm will have an increased market share, which reduces competition. This reduction in competition can be damaging to the public interest, but help the firm to gain more

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