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Allen Lane

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Submitted By macowar
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Describes Allen Lane's search for a business to buy. The case explores several failed attempts and the ethical, business, and tax issues that surround the acquisition business. Endswith a description of a new acquisition candidate, an independent valuation report of this business, and with Allen Lane preparing his bid. Summary of Important Facts After his graduation from a business school in 1965, Allen Lane had a variety of experiences and knowledge regarding business aspects. Allen Lane, spent several years of being a Vice President of Operations with Wagner Electric Co. in Springfield,Massachusetts butdecided to leave the company in 1972 and become an independent consultant. His job focusesbasically on operations-oriented tasks, inventory control systems, manufacturing methods,material control and other aspects. Although, his career in the company can be considered assuccessful, he still decided to leave the company to be able to work with James & Co. basedin New York. One of his reasons in leaving the company is that he becomes tired and boredabout the constant problems he is solving and that he wanted something more to experience. Allen Lane had joined James & Co. in 1985 and worked with a roster of customers andclients and different industries. James had offered him the chance of being involved with moregeneral management responsibilities and issues and strategic problems. However, after fiveyears of working and gaining experience from the company Allen Lane had resigned for a reasonthat he is became frustrated with the burdensome and generally bureaucratic style of thecompany in dealing with the large company/client of James. Allen decided to tell his intentions tothe company and being a generous company, James & Co. had given him a chance to still usethe resources of the firm while looking for other prospects. One of his prospect opportunities is tobe able to run his own business knowing that he is capable enough because of his experiences.Being a true entrepreneur Allen Lane had a thought that he wanted to run his ownbusiness but have no idea where to begin. Moreover, Allen has no friends who had tried owninga business. The knowledge and experiences he gained regarding strategies in managing andrunning a business from the companies he had worked and his financial resources had let himbecome more eager to own and to establish his own business. After deciding to buy his ownbusiness he began searching for a distribution type of business and has faced a deal withSpectronics, Ace Electronics, Gardenpro, and Hydrapress. These deals have all went off and theonly choice forAllen Lane is the Plas-Tek. Hence, this paper will discuss about the analysis of strengths and weakness of his options, Allen Lane's decision. Moreover, this paper will alsoinclude plausible suggestions and recommendations regarding Allen Lane's decision. Analysis of Strengths and Weaknesses Upon realizing that distribution type of business specifically electronic distribution canmake his dream of owning and running his own business come true, he began to make hiscontacts and deals among the potential companies. The following are the analysis of strength andweaknesses that can be faced by Allen Lane in Plas-Tek... One of the strengths of the Plas-Tekcompany is that it can be suitable to knowledge and strategies to be used by Allen Lane, becauseof his experiences and knowledge in management. Secondly, the Plas-Tek company will eventually have staff that could help him run thebusiness and this staff is considered as well experienced with their task. Moreover, AllenLane may have the opportunity for a lesser contingent liabilities as shown in the history of thecompany. Plas-Tek is already 25 years in the business which shows that it is established andrecognized enough in the marketing arena. One of the weaknesses that buying the company of Plas-Tek has is thatAllen Lane couldfaced a bigger problem in running the business if the experienced employees would leave thecompany. In addition, the business is crucial to handle since the company is being divided into

two which means that Allen Lane should have a strategic way in merging the company into oneso that he can easily manage the two. Allen Lane's Option With all the companies that Allen Lane had opted to deal with and failed like theSpectronics, Ace Electronics Co., Gardenpro and Hydrapress, probably, the last option for AllenLane is the Plas-Tek a manufacturer of specialty plastic components owned by Harry Elson.When Elson died in November 1981, he left an estate that was valued at $7 million to a half dozen well-known charitable institutions. Plas-Tek (PTI) is actually two companies: the HEManufacturing and its sister company Plas-Tek Sales Company. Plas-Tek was a under thecontrol of a big New York bank who decided to sell the company. The company is in the marketand was being sold for about $600,000 or more. The bank's trust and estate department had afiduciary responsibility to get the highest price for the deal. The first thing to consider is his strategy. Allen Lane wanted to know the business valuefirst before pricing it. In this manner, Allen Lane wanted to have a higher value and lesser biddingprice to offer in the bank. Next, Allen must determine first if the strategies he knew and themanagement skills plus his experiences and knowledge would be suitable in Plas-TekCompany. Aside from that he should also determine whether he would maintain the oldemployees or find new ones when he was able to acquire the business. Furthermore, AllenLane is also having in mind the profit of the business, potential partners, financing issues andother problems that can be encountered in acquiring the business. Since, Allen Lane is truly eager to run his own business, it can be noticed that he is doinghis best to pursue his plan and dreams. From finding potential companies and facing thechallenges and risks of dealing with the sellers he has become more knowledgeable regardingthe dealing process and has learned and continuously learning about its flow. With his last optionof buying Plas-Tek or not, the decision is his to make and he must be ready to face all theconsequences along the way. R ecommendation Allen Lane have learned and experience many things in his search for a company thatwould best suit his requirements in having his own business and run it all by his experiences fromhis former companies regarding management and other strategic skills. With the details offeredby Plas-Tek Company on the way the business is going it can be seen that the company canmake Allen Lane dream come true. As faced in the situation like this, the study and analysisthat Allen Lane had made and all other issues that he considered to be solved in order tostreamline the Plas-Tek business in his hand is a good start. Knowing the business value andcreating your own strategy to continue the business is a positive approach for owning a business. Hence, it is suggested that Allen Lane should acquire or do his best to acquire thecompany. He must have the guts to bid with the other dealers and try his best to get thebusiness. If he became the owner of the business, then good for him because his dream of having one had come to reality. The only thing he can do is to offer his best to thecompany. Anyway, entering a business is truly means taking the risk and facing theconsequences that might be encountered, but if you are a true blooded entrepreneur, then youdon't have to be afraid of failure. What should matter is the willingness to take the risk andstanding up again and try and try until you become successful. On the other hand, Allen Lane will bid with other dealers and if he failed to get the dealthen he has nothing to lose. The only thing that matter is the ability to try and have the guts tocompete with other which is another characteristic of a true businessman. As mentioned above,the decision is for Allen Lane to make and there's no harm in trying.

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