...1. Do you think Mercury is an appropriate target for AGI? Why or why not? Mercury is an appropriate target for AGI. AGI is looking to increase its revenue and profit by utilizing synergies. The initial aim of AGI for acquiring Mercury Athletics is to increase leverage with contract manufacturers and to boost the cooperation with the retailers and distributors. AGI was one of the most profitable and successful companies in the market segment, but the firm’s size re mained rather small in comparison with the main competitors. Therefore, with the acquisition of Mercury, AGI planned to build competitive advantage. Besides, the target company had well developed operation infrastructure, impressive labor facilities in China and numerous possibilities in reaching the markets in Asia. 2. Review Liedtke’s projections stated in the case. Are they reasonable? How would you rec ommend modifying them? [Hint: Calculate ratios and margins for the projections and compare these to the historical relationships.] Mercury’s EBIT margin for 2006 was 9.8%. Liendke’s 2007 projected EBIT reflects a conser vative increase in EBIT of 9% compared to the average industry growth rate of 10%. According to the forecast for 2007 to 2011, the company is forecasted to show gradual and stable growth of consolidated income from $479.3 million to $597.7 million. This growth rate was estimated by assuming that men’s athletic department sales will be declining from 15% in 2007 to 5% in 2011. Similar trends...
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...1) Is Mercury an appropriate target for AGI? Why or why not? Explain. It can be recommended that Mercury could acquire AGI. Revenues of AGI ($470,286) and Mercury ($431,121) are somewhat similar, so acquiring Mercury will increase the sales. In addition, the remarkable part of the Mercury’s revenue comes from athletic shoes segment whereas AGI positions itself as a brand for more casual footwear. Thus, acquiring a brand specialized in a segment in which AGI is some kind of weak, might be a wiser decision. Moreover, by acquisition AGI can expand its distribution channels. Mercury spends lower amount of capital to production, acquiring may lower the production costs of AGI. In that case AGI can decrease its prices to some extent and relieve the pressure from suppliers and competitiors. 2. Review the projections formulated by Liedtke. Are they appropriate? How would you recommend modifying them? Justify. They are appropriate to some extend. However, assumptions that they made may not be come true. Especially, the one that winding down the women’s casual footwear within one year. 3.Estimate the value of Mercury using a discounted cash flow approach and Liedtke’s base case projections. Be prepared to defend additional assumptions you make. Rd=6% T=40% Wd=20% We=80% WACC= wdxrd(1-T) + wsrs rs=rRF + (rM- rf)xb Assumptions: b= industry average= 1.5578 rM= industry average=9.7% rRF= US Treasury(10-20 years maturity)=4.83% rs=4.83 + (9.7 -4.83)x1.5578 = 12.42% ...
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...VALUATION IN CORPORATE FINANCE BUFN 750 Case 1: Mercury Athletic Footwear Section: 0502 Group members: Wenqi Fan (114332905) Shuhan Luo (114016706) Ruidong Li (114212986) Siyao Tian (114218377) Shuang Yang (114349156) Executive Summary: Mercury Athletic is the footwear division of West Coast Fashions (WCF), a designer and distributer of branded athletic and casual footwear, targeted at youth market. Due to strategy reorganization, WCF wanted to shed this segment. In the meantime, Active Gear, Inc., (AGI) looked to acquire Mercury from WCF, believing that the purchase would double its revenue and provide greater leverage with manufacturers and distributors. This case illustrated that Liedtke used base case assumptions to value Mercury, and also wanted to consider the value of possible synergies as well to justify that whether investing in Mercury would significantly improve AGI’s business. In order to achieve the above set goal, our group estimate financial data of the merged company from 2007-2011 based on each’s historical data. Regarding the DCF model valuation, using a WACC of 12.17% and long term growth rate 7.42% for the terminal value, then we concluded value of $458.31 million at the end of fiscal 2006. In addition, we primarily considered potential benefits and opportunities based on horizontal acquisition, which could bring about scale effect and resource complementary. Finally, these possible synergies should be taken into account to adjust...
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...MGMT E 2720 Mergers and Acquisitions Supplemental Case Questions 1. The New York Times a. Why is there so much family control in the newspaper business? b. How did the Sulzberger family manage to retain control on the NYT after it went public? c. How does the NYT dual class structure differ from the one used by Dow Jones, prior to its takeover by Rupert Murdoch? d. What explains the behavior of the NYT institutional shareholders – not just Morgan Stanley but also Private Capital Management, T Rowe Price and Vanguard? e. How should Arthur Sulzberger, Jr. respond to Morgan Stanley’s proposal? 2. Valuing AOL Merger a. The Merger was completed on January 11, 2001. Was it a good idea? Did AOL stockholders receive value? Did Time Warner shareholders receive value? b. Do you believe the new company will succeed? If so, how will value be created short and long term? c. What could go wrong with this “mega merger”? What are the most significant threats on the horizon for AOL Time Warner? d. Do you believe the company will achieve its aggressive goals for 2001? e. Any advice for AOL Time Warner execs in summer of 2001? 3. Upjohn Case a. Evaluate the strategic reasoning behind the merger. Will the merger effectively address the strategic alliances faced by Upjohn? b. How do you interpret the stock market reaction to the announced deal? What is the magnitude of performance improvement the...
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...Mercury Athletic Footwear: Valuing Opportunity Case Summary: John Liedtke, head of business development for Active Gear Inc. (AGI), is evaluating the acquisition of Mercury Athletic (Luehrman & Hielprin, 2009). Both companies compete in the footwear industry which is a highly competitive industry characterized by low growth and stable profit margins (Luehrman & Hielprin, p. 1). Liedtke’s initial assumptions was that the acquisition of Mercury Athletic would double AGI’s revenue, increase its leverage with manufacturers and expand its distribution. In order to evaluate these assumptions and determine if the acquisition would be a good decision, Liedtke generated pro forma income from Mercury’s four main segments and key balance sheet account for the years spanning 2007 through 2011. In preparing these, he made the following assumptions: • Mercury’s women’s casual footwear would be merged with AGIs within the first year. • Overhead to revenue ratio would conform to historical averages • Capital structure would follow AGI post acquisition • Discount rate was calculated using AGI’s leverage and tax rate Additionally, he was counting on synergies between the two companies with respect to inventory management and the women’s casual footwear line. Using this information, he calculated projected EBIT margin of 9% and revenue growth of 3%. Case Questions: a. Is Mercury an appropriate target for AGI? Why or why not? According to Liedtke, Mercury is...
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...Industrial Grinders N.V. Identifying the problem or the issue to be addressed: 1. Production Changes a. Plastic rings versus Steel rings 2. Inventory a. Steel rings b. Raw steel 3. Management Concerns a. Sales Manager / Development Engineer b. Plant General Manager/Parent Company 1. Production Changes Analyzing the cause of the problem or situation With the introduction of less costly plastic rings by company, Henri Poulenc, Industrial Grinders is faced with a decision of a total changeover from steel rings to plastic rings for their machines that would also fit similar machines manufactured by other companies. Henri Poulenc has introduced the less expensive plastic rings in a small market affecting 10% of Industrial Grinders’ sales . Industrial Grinders believes the market will eventually change-over to all plastic rings. Industrial Grinders must decide a timeline for changing production. It is estimated that production could begin by mid-September. With raw steel and steel rings already in inventory, IG must sell-off existing inventory before changing total production to all plastic rings. a. Plastic Rings versus Steel Rings * Steel rings last approximately 2 months * Plastic rings last approximately 8 months * 100 steel rings cost $263.85 to produce * 100 plastic rings cost $66.60 to produce * At a weekly profit/Loss, Net income for 690 steel units would be $390.00 * At a weekly profit/Loss, Net...
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...Matching Of Charts: A New approach By Tej K. Zadoo, India Volunteer: Maurício Avila, Brazil W Dr. Tej K. Zadoo born on Deepawali day 1948 at Srinagar, Kashmir in a Brahmin family. Got introduced to astrology in 1966, mostly self study of classical texts, he has a Ph.D. degree in Physics, was working in the education dept. of J&K Govt. as a teacher and retired recently. Besides astrology he is interested in 'Ramal' shastra and paranormal subjects. He can read write Urdu, Hindi and Sanskrit. His article BCP & Longevity was praised by senor astrologers as one of the finest articles ever to appear in any magazine. hile commenting on the author's article "3 simple rules of marital disharmony"1 an astrologer friend asked the author: "By using the rules given in your article one can see whether a person is prone to tension in his or her married life or not. If the native has combinations in his or her chart which indicate a troublesome married life the solution you have suggested is to match the charts. But the problem is that we usually use "Guna Milan" method and this method doesn’t give correct results all the time. There are charts where the number of points (Gunas) that are matching are very high but the married life is miserable or there is separation; and there are charts where number of points (Gunas) that are matching are very low and there are doshas like Nadi dosh, Gana dosh etc. but the couple is leading a very harmonious and blissful ____________________________ ...
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...Observing Surface Features of the Sun for Amateur Astronomers Nikhil Anand Mustafa Shahid B.Tech Aerospace Engineering, IV Sem Indian Institute of Space Science and Technology Email: nikhil.myindia@gmail.com B.Tech Avioncs, IV Sem Indian Institute of Space Science and Technology Email: mustafashahid4@googlemail.com Abstract—Viewing the sun through a telescope is a very underrated astronomical practice. This paper will focus in detail on the relevance and significance of observing the sun. The various features on the sun are explained along with appropriate methodologies for safely viewing them. Three techniques are deployed to safely observe the sun. Further scope and interpretations of this experiment are also discussed. I. I NTRODUCTION Looking at the sun with naked eyes can be extremely dangerous, but with the right equipment, several interesting features of the sun can be revealed. Some of the notable features include sunspots, granulation and corona of the sun. To view the surface, three techniques are used. each has its own advantage. A. Surface features 1) Sun Spots : Sunspots are temporary phenomena on the photosphere of the Sun that appear visibly as dark spots on the surface. They correspond to concentrations of magnetic field that inhibit convection and result in reduced surface temperature compared to the surrounding photosphere. Sunspots usually appear as pairs, with each spot having the opposite magnetic polarity of the other...
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...Mercury Athletic Footwear: Valuing the Opportunity Team 10 / Mergers and Acquisitions West Coast Fashions, Inc (WCF) was a large business, which dealt with men’s and women’s apparel. One of their segments was Mercury Athletic Footwear. WCF wanted to dispose off this segment. They just wanted to divest because they wanted to focus more on their core business and move it up to the elite class. John Liedtke was the Business Development Head at that time in Active Gear Inc. He had a clear idea that acquiring Mercury will shoot up AGI’s revenues for sure. It would also ensure an expansion of the key business. In order to get a clearer picture on the acquisition, he needed to compare and analyze the company’s financials well. By this he could gauge the pros and cons of this acquisition. Are the strategic reasons behind the Merger good enough? Explain As a team, we had different views on this question. Some reasons make us think that it may be beneficial for AGI to grab the opportunity but some make us think that it might not be as promising as it seems. Let us see why we feel it is a good idea for AGI to acquire Mercury. | |Active Gear Inc. |Mercury Athletic Footwear | |Revenue |$470,285mn |$431,121mn | |% Revenue Product wise |42% Athletic 58% Casual ...
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...Toxicology and Industrial Health http://tih.sagepub.com Mercury vapor inhalation and its effect on glutathione peroxidase in goldsmiths exposed occupationally K. Jayaprakash Toxicol Ind Health 2009; 25; 463 originally published online Jul 31, 2009; DOI: 10.1177/0748233709106769 The online version of this article can be found at: http://tih.sagepub.com/cgi/content/abstract/25/7/463 Published by: http://www.sagepublications.com Additional services and information for Toxicology and Industrial Health can be found at: Email Alerts: http://tih.sagepub.com/cgi/alerts Subscriptions: http://tih.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.co.uk/journalsPermissions.nav Citations http://tih.sagepub.com/cgi/content/refs/25/7/463 Downloaded from http://tih.sagepub.com at SAGE Publications on November 9, 2009 Mercury vapor inhalation and its effect on glutathione peroxidase in goldsmiths exposed occupationally K Jayaprakash Toxicology and Industrial Health 25(7) 463–465 ª The Author(s) 2009 Reprints and permission: http://www. sagepub.co.uk/journalsPermission.nav DOI: 10.1177/0748233709106769 tih.sagepub.com Abstract In the gold ornaments manufacturing cottage industries, the gold metal grain dust waste particles are recovered from mercury (Hg) amalgam. The results on air samples from these industries during the recovery process have shown a high prevalence of Hg vapor (42.7 mg/m3). The blood concentration...
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...Case Study 2 TLMT 381 06/07/2015 Brian Russell Case Study 2 In reading this case about MERECO in upstate New York it is interesting to see that a problem was known about hazardous waste and it contamination in to a water source but took several years to get the problem resolved and clean up underway. Mercury is not a forgiving chemical. It can cause a lot of health issues and including death. The human body does not dispose of mercury very well or tolerate big dose of it. This is why the United States government has regulated it heavily. In 1996 congress passed a law requiring no mercy to be used in rechargeable batteries any more. This was a public health issue along with disposal issues once the batteries were no longer good. Congress also passed a law in 2008 to stop the export of mercury for industrial uses. The us was the largest manufacture of mercury at the time. This law was passed in efforts to protect the workers in gold mines in other countries. These miners would use mercury in the process of refining and collecting gold. But the disposal of it was not handle or regulated by these countries thus causing health problems for local communities and miners including death. What we can learn from this is we need to act faster when it comes to cleaning up sites once they have been identified. The problem that interferes with that is big business has deep pockets to stop congress from passing laws that affect them. In the end our environment is in much better shape...
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...Sam Mirza CASE 9.2 Style of Case and Citation: Midler vs. Ford Motor Co. 849 f.2D 460 9th Cir. 1988 Court Rendering Final Decision: U.S. District Court Identification of Parties and Procedural Details: Ms. Midler (plaintiff), suit against Ford and Young & Rubicam for appropriation. The District Court entered judgment for Ford and Young & Rubicam, and Ms. Midler appealed. Discussion of the Facts: In 1985, Ford Motor Company and its advertising agency Young & Rubicam, Inc., advertised Ford Lincoln Mercury with series of 30 or 60 seconds TV commercials. Different popular songs of the 70s were used, and the agency tried to get the original singers to sing them. It failed to get the original singer, the agency used ‘sound-alike.’ Young & Rubicam requested that Ms. Midler sing the song, and she refused. Young & Rubicam hired a sound alike, instructing her to imitate Ms. Midler to the best of her ability. After the commercial aired, Ms. Midler and the sound alike were told by numerous people that it sounded exactly like her. Ms. Midler name and likeness were not used in the commercial, and Young & Rubicam had obtained permission from the copyright holder to use the song. Statement and Discussion of the legal Issues and Disputes: Ms. Midler pursued a common law claim against Young & Rubicam and Ford Motor Co., using her distinctive voice in an advertisement, which she had not authorized. She did not seek damages for use of the song, which would have been...
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...Abstract What could be more innocent than a last minute trip, on a privately-owned jet, to a privately-funded research facility, in northern Alaska to see the magnificent auroras? After Matt’s best friend and college roommate, Bartholomew Jacob Hunt, the third, convinced him that it was the chance of a lifetime, they would surely find out. During their flight to Alaska, the boys are notified that Halley’s Comet’s orbit has been altered by the sun’s photosphere and is headed straight for the research station’s space elevator. There is no time to bring in additional scientists, so Matt and Barty must be willing to help. Using a chemical rocket and magnetic sail, three of the scientists at the research center will enter space and attempt to change the orbit of Halley Comet, while Matt and Barty operate the command center with the help of the lead scientist. This is the day they single-handedly saved two planets and created a new habitable environment on Mercury’s surface. [Student’s Name] [Professor’s Name] [Class Number] [Today’s Date] The Day We Saved Two Planets 10:20am. “It’s 2068! It is a mistake to ignore an occurrence that only transpires once every 11 years. Do you know what an aurora is!? I’ll tell you what an aurora is. An aurora is a disturbance in the magnetosphere produced by solar winds (source). You see, the electrons… remember electrons, Matt? They are the charged particles we talked about in chemistry. Right. You see, the electrons collide with atoms in...
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...organic compound. The boiling point of a liquid is the temperature at which the pressure of the vapor above a liquid equals the existing pressure. As we heat a liquid, the pressure of the vapor above the liquid slowly increases. When this pressure equals the pressure existing in the container, the liquid begins to boil– the liquid turns to vapor. If not contained, the vapor will “escape” into the atmosphere. In other words, the liquid evaporates. If the vapor is contained, and then passed through an area where the temperature is lower, the vapor will “condense” and enter the liquid state again. This would be a distillation. Atmospheric pressure is approximately 760 mm Hg; i.e., the weight of a column of mercury measuring 1 mm2 and 760 mm tall. This equates to about 29.7 inches of mercury. If we reduce the pressure above the sample that we are heating, we can reduce the boiling point of the liquid. This is referred to as a vacuum distillation or carrying out a distillation in vacuo. For example, while water boils at 100oC (or 212° F) at 760 mm Hg, it boils around 22oC at 20 mm Hg. The boiling point of a liquid is a physical characteristic of a compound. Many factors go into the estimation of the boiling point of a liquid such as the shape (round, oval, elongated), the mass and most importantly, hydrogen bonding (H-bonding). Methane with a mass of 16 does not engage in H-bonding and is a gas at room temperature while water (mass 18) boils at 100oC. While we can often guess the relative...
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...Title: American muscle Purpose: After listening to my speech my audience will be familiar with the three American muscles of the 60’s. Thesis: Although there were many American Muscles cars created in the 60’s only three were widely recognized. I. Introduction A. Attention Getter: A loud roar is heard in the distance as the driver revs his engine. Eight cylinders of Intense power with its five speed transmission. Cars that are meant to be raced and compared to each other. In an adrenaline pumping race of performance. According to Fast Muscle by Gabbard and Gabbard, “The decade began with Ford, GM, and Chrysler in an expanding cubic inch and horsepower war. C. Thesis statement: Although there were many American Muscle cars created in the 60’s only three were widely recognized. D. Credibility statement: 1. I have worked and studied American muscles since I was 11 years old. 2. I have read and have done further research to develop this speech. E. Preview of main points: 1. Today I will discuss the muscles cars of Ford, 2. GM 3. and Chrysler Transition: “Now let us start our engine with Ford in the American muscle race.” II. Body A. Ford motor company 1. History I. Ford motor company was created in June 16, 1903 when some investor decided to sign article of incorporation for Ford motor company. II. The company was founded by Henry Ford Sr. ...
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