...Group Inc. Valuation (Amtelecom Communication) Presented by: Table of Contents Executive Summary3 What does it mean when a company "trades at a discount"? Is AMT really trading at a discount? 4 Do you agree with AGI's decision to break up the company? To sell the communication business rather than the courier business? 4-5 Size up the communication s industry and identify key success factors. Size up strengths and weaknesses of AMT?5-7 Assess the value of AMT using all available methods. Which valuation method is most appropriate for each sales alternative? What are the expected net proceeds from each alternative? (Exhibit A & B)8 As Stanley Stewart, what sales proposal would you recommend? How would you pitch it to the board? How would you market it to the potential investors/acquirers? 9 . * AGI strategic intent is to divest Amtelecom Communications, a wholly-subsidiary of AGI, in order to increase value for AGI shareholders. * AGI board unanimously approved to market off the business, but it subject to three conditions; * Retirement of current debt in full; * Payment of a reasonable dividend to AGI shareholders; and * The courier business had to be left with sufficient capital to stay in business. * Proposal To address the above situation, we propose the following valuation: * TEV/EBITDA multiple for both ICS and Amtelecom Communications * METHOD #1 - Using the Stock Price / Dividend Yield. * METHOD #2 -Average...
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...Adolfo Rogel Gabriel Sánchez Gerardo Cabada Problem Identification and Situation Analysis Problem Definition and Objectives Curled Metal Inc. - Engineered Products Division (CMI), Company had grown from selling metal as a finished product to one that used it as a raw material, with sales increase from $750,000 usd in 1991 to over $55 million usd by 2007. To date, CMI strongly relies on Slip-Seal, used as a high-temperature product seal in cars. Even considering CMI 80% market dominance for this product, management moved to diversify. A new product application for curled metal technology, a cushion pad, could be the key for this purpose. After closely reviewing, management needs to define a pricing and channel marketing decision for metal pile cushions utilized during pile driving. The new product it’s a metal pads which has significant efficiency advantages over usual pads available (hardwood blocks) to date in the market. CMI needs to consider several marketing decisions. First, they must determine a method for pricing and ultimately a price for the new metal pads. Second, the company must decide which channels to market the pads based on the selected pricing strategy. Third, CMI must determine how much to invest in manufacturing equipment by estimating market penetration and considering the costs and benefits of investing in pad producing equipment. Situation Analysis and Diagnosis Potential Clients.- The construction engineers and contractors are...
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...NIBC Valuation Memo Analysis of valuation methodologies Comparable company analysis compares trading and operating performance of the Wynn Resort to its peers. We used this valuation method to determine how the market has valued the earnings and cash flows of similar companies and allow us to analyze other parameters such as book value, leverage and margins. The main benefit of this valuation methodology is that market efficiency ensures that the trading multiples are similar for companies in a related industry, geography, and have similar market cap and growth rates, thus the company in question can be valued based on its close trading comparables. Disadvantages include an inability to find exact comparables, as no two companies are the same; thinly traded stocks may not fully reflect the fundamental value of the company, or extreme market volatility may cause deviation from intrinsic value, and an entire industry could be undervalued or overvalued as a result. Precedent transaction analysis determines the values offered in past acquisitions of similar companies and determines the pricing associated with past deals as compared to the target’s financial performance and current market value. The pro is that comparable transactions reflect reality as it has occurred in the past. This method gives you an accurate sense of how past transactions were successfully completed at certain premiums, which indicates a range of plausible premiums. Trends such as consolidating acquisitions...
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...The Medicines Company Case Write-Up: Terence Cho, Felipe Duarte, Aleks Loiko, Robert Shaw, and James Wang Section 4, Group 10 Medicines Company’s drug, Angiomax, outperforms Heparin, but incurs significantly higher costs to produce, making the drug difficult to attractively price. This difficulty in pricing stems from a poor positioning strategy for Angiomax which does not maximize the perceived value (PV) that the drug provides to its key customer segments. Therefore, Medicines Co., must develop a positioning strategy that maximizes the perceived value of Angiomax. Medicines Co. must first determine the critical characteristics its key customer segments (doctors, hospital administrators, and pharmacists) value in an anticoagulant (Appendix A). Medicines Co. should then develop a positioning statement that highlights Angiomax’s strengths for its most compatible customer segment – doctors. The positioning statement for doctors would be “Angiomax outperforms Heparin in high-risk patients resulting in significantly fewer complications while performing angioplasty procedures”. The focus should be on doctors because of the high overlap between Angiomax’s benefits and doctors’ values in an anticoagulant. Additionally, by providing doctors with information (Appendix B) that quantifies the cost savings from reduced complications in high-risk patients, Medicines Co. bridges the gap between the true economic value (TEV) and the PV that doctors have for Angiomax. This solution...
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...Klein is well recognized as a high-end brand in Asia, and regional licensees are committed to a minimum sales level, according to our interview with local licensees. International licensee Warnaco is still aggressively opening new stores in the new markets. We believe that certain international markets will recover from the global slowdown sooner than the US and will continue to contribute strong growth to PVH. Furthermore, the licensing business contributes a 100% gross margin, which improves overall profitability when the licensing business grows faster than other segments. Margins Maintained Due to Established Relationships with Distributors and Retailers: During the 2000 downturn, distributor‟s margins decreased about 10% and branded companies and retailers‟ margins decline 1 to 2%. This recession is more severe but PVH will be able to pressure distributors and absorb the negative impacts with retail partners due to its established position in the value chain. In our worst case, assuming wholesale gross margins decrease 5% and retail gross margins decline 6% for the next 3 years, our...
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...Overview In this project, I will assume AMD as a private company and determine a price I would like to pay for acquiring AMD on control basis. My report starts with an introductory analysis of the company and industry, focus on three methods I used to evaluate AMD and all related assumptions to support these methods. After all, I’ll conclude a price I would like to pay to acquire and control AMD on Mar-31-2013. Please read it of more. This is Gong Chen’s final project of Valuation Model and Practice for summer 2013. Hope you enjoy it! Company Overview 1. Background Founded in 1969 and headquartered in Sunnyvale, California, Advanced Micro Devices (AMD) operates as a semiconductor company worldwide. It operates in two segments, Computing Solutions and Graphics. The company designs, develops, and sells microprocessor products, such as central processing units (CPU) and accelerated processing units (APU) for servers, desktop PCs, and mobile devices. Advanced Micro Devices, Inc. also offers embedded processor products for vendors in industrial controls, digital signage, point of sale/self-service kiosks, medical imaging, set-top box, and casino gaming machines. In addition, it provides chipset products with and without integrated graphics processors for desktop PCs and servers, and AMD controller hub-based chipsets for its APUs; and graphics, video, and multimedia products for use in desktop and notebook computers. The company serves original equipment manufacturers, original design...
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...buddies, etc. prior to the submission!! The submitted answers must be your own work. Show all your work for partial credit. Important: As future financial economists, analysts, captains of industries, etc., you must be able to present your results in a clean, concise, and understandable manner. Therefore, it is your responsibility to make sure that I understand the way you interpret your work, logic, etc. Unreadable and/or unclear work will be awarded with zero points. All answers should by TYPED. Good luck! Prepare a (typed) report on valuation of Oxford Learning Centres (OLC) utilizing the data from the case “Oxford Learning Centres Inc.: The Childtime Alternative”. Address all of the following questions (attempt to structure your analysis to specifically answer each of the questions, one after another). (Since I want to make your life a little easier, note that the end of this document contains electronic copies of the most important case exhibits, as well as one extra Exhibit A (containing data on most recent acquisitions in the supplemental education industry): a) Is this a good time for Mr. Whitehead to sell a significant stake of OLC to Childtime? How did OLC perform in the recent past? (You may want to analyze the following factors using data in Exhibits 2 and 3: liquidity (using current assets/current liabilities ratio), various efficiency ratios (CAPEX/Sales, Costs/Sales, Working Capital/Sales), profitability (growth in revenues, growth in EBITDA, growth in...
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...buddies, etc. prior to the submission!! The submitted answers must be your own work. Show all your work for partial credit. Important: As future financial economists, analysts, captains of industries, etc., you must be able to present your results in a clean, concise, and understandable manner. Therefore, it is your responsibility to make sure that I understand the way you interpret your work, logic, etc. Unreadable and/or unclear work will be awarded with zero points. All answers should by TYPED. Good luck! Prepare a (typed) report on valuation of Oxford Learning Centres (OLC) utilizing the data from the case “Oxford Learning Centres Inc.: The Childtime Alternative”. Address all of the following questions (attempt to structure your analysis to specifically answer each of the questions, one after another). (Since I want to make your life a little easier, note that the end of this document contains electronic copies of the most important case exhibits, as well as one extra Exhibit A (containing data on most recent acquisitions in the supplemental education industry): a) Is this a good time for Mr. Whitehead to sell a significant stake of OLC to Childtime? How did OLC perform in the recent past? (You may want to analyze the following factors using data in Exhibits 2 and 3: liquidity (using current assets/current liabilities ratio), various efficiency ratios (CAPEX/Sales, Costs/Sales, Working Capital/Sales), profitability (growth in revenues, growth in EBITDA, growth in...
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...some key issues: Late 2007 Yahoo! rejected partnerships or merger proposal from Microsoft 31/1/2008 Microsoft announced its bid for Yahoo! at US$31/share 11/2/2008 Yahoo! rejected the offer, saying that it undervalued the company 28/2/2008 Google released news that with willingness to acquire 20% Yahoo share 6/4/2008 Final call from Microsoft – threatened Yahoo! Board with a proxy battle 2/5/2008 Yahoo! asked for US$37, Microsoft rose to US$33 4/5/2008 Microsoft withdrew US$47.5 buyout offer 5/5/2008 Yahoo!’s value dropped to $34 billion 17/5/2008 Yahoo! accepted the price $33-34, but Microsoft only interested in search business, Yahoo decided instead to sign a search advertising deal with Google. Microsoft’s Motivation of Acquisition After the failure of the deal, Steven Ballmer was made fun by the public that his greatest contribution during his tenure was: not able to close the deal. Why would Microsoft pay such high cost to acquire Yahoo! at the first place? As we know, Google was the dominant player in this industry and it kept consolidating its dominance through acquisition. Microsoft was eager to content against its biggest rival. The combination will create a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and...
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...Security BigData 160 SaaS Internet Digital Media 150 140 130 120 12% 110 100 90 80 5/7 6/7 7/7 8/7 9/7 10/7 11/7 12/7 1/7 2/7 3/7 4/7 IT Security SaaS Internet/Digital Media NASDAQ Big Data IT Infrastructure 43% 31% 25% 23% 6% 5/7 4% Source: CapIQ 5/4/15 IT Security Index: AVG, SYMC, CHKP, FTNT, PANW, FIRE, IMPV, VDSI, PFPT, FEYE, QLYS SaaS Index: CRM, N, ATHN, ULTI, JCOM, TRAK, BCOV, DWRE, GWRE, LOGM, CTCT, CSOD, LPSN, MKTG, VOCS, IL, TNGO, SPSC, SQI, ZIXI, ELLI, NOW, WDAY, MDSO, LOCK, FLTX, QLYS, RALY, MKTO, MRIN, MODN Big Data Index: EMC, TDC, INFA, MSTR, SPLK, DWCH, ATTUF, NTAP, SPLK, DATA, FIO, FALC Internet & Digital Media: 66 companies IT Infrastructure Index: VMW, CTXS, NTAP, CA, RHT, SWI, INFA, OTEX, CVLT, CPWR, QLIK, PEGA, MVSN, PRGS, JIVE, NTCT, BLOX, GUID, MGIC, FALC, FIO, GIMO, SSNI, CYNI, RALY © 2015, Centaur Partners │Confidential │ 2 Technology M&A Trends Key M&A Statistics Technology M&A – Transactions Since 2006 Number of Transactions 2,400 2,000 $165 1,600 1,441 $166 $150 1,281 1,216 1,200 $80 901 $83 $136 1,411 1,402 2,056 $177 200 160 1,448 120 $96 800 80 400 40 0 2007 2008 2009 2010 Number of Transactions Volume $160B $80B $80B 2011 2012 2013 0 2014 $140B $135B $166B $176.6 (1) AT&T Target DIRECTV Societe ...
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...9 Risks ........................................................................................................................ 13 Financial analysis ..................................................................................................... 15 Forecast, Valuation and Recommendations .............................................................. 17 Appendix ................................................................................................................. 19 Sources .................................................................................................................... 22 2 1) Business Description - Carrefour SA operates hypermarkets, supermarkets, convenience stores, cash and carry stores, and hypercash stores worldwide. The company also operates food and non-food e-commerce Websites. Its hypermarkets offer food products; and non-food products comprising clothing products, electronic goods, household appliances, multimedia products, furniture, and decorative products. - The company’s supermarkets provide a range of food products and selected non-food products. Its convenience stores offer ready-to-eat products and daily purchases, as well as a range of services; and cash and carry stores and hypercash stores provide food and non-food products, and products for use in catering. - The company operates food and non-food business...
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...Topic 1 The Scope of Economic Analysis Question 1.1 “According to the definition of opportunity cost, the more alternatives that we have given up in undertaking an action, the higher the opportunity cost.” Please comment on this statement and explain your answers using examples. Ans Opportunity cost of an action refers to the value of the best alternative that must be given up in order to undertake that action. That is, the highest-valued option forgone. The statement in the question is uncertain and is determined by situation, because the opportunity cost is the value of the best alternative forgone rather than the sum of all the alternatives forgone. There are two possibilities. Firstly, if the value of one added option is higher than that of original best alternative forgone, the opportunity cost increase. By contrast, if each of the added options’ values is no more than that of original best alternative forgone, the opportunity cost remains constant. Example for the situation that the value of one added option is higher than that of original best alternative forgone: Suppose that you have $5,000 dollars at hand and you are considering spending this money on (Listed in the priority of the action’s value for you) |Original buying list |Value |Added alternatives |value | |1. Buy a notebook |10 |1. Buy a mobile phone |9 | ...
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...step ahead from their competitors. In this benchmarking process, a strong integrated network among all the key partners is involved that in combination makes a supply chain process. The focus of this paper is on the favorable factors elaborating strategic partnerships in supply chain as well as the situations where companies prefer arm’s length relationship. Nowadays most of the companies and corporations try to get a competitive edge in the market and rely more on partnerships but there are some conditions where they prefer an arm’s length relationship. This paper illustrates the important factors about the issues regarding partnerships in supply chain management (SCM), the reason for selecting arm’s-length relationship and also the difference between the two. This study provides an overview for making correct and reliable decision regarding partnership. Keywords: Supply chain management, Partnerships, Arm’s length relationship, Competitive edge. 1. Introduction Different strategies have been adopted by various firms to maintain their competitive edge and also to not only survive but excel in today’s dynamic environment. Strategies adopted by the companies are set towards a particular goal that needs to be met. For a long lasting relationship with partners, it is important to smoothly run the internal business processes. To deliver the final product to the end consumers, a firm needs to focus on its entire Supply Chain Management (SCM) as a core competence. This also...
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...CHINA “UNBALANCED” In this case study, we will attempt to answer what measures China took in preparation for acceptance into the WTO and how it adjusted to its eventual admittance in December of 2001. We will also review some of the problems associated with China’s economic growth strategy. We will begin our analysis of these questions by examining China’s economy at the time of Deng Xiaoping’s accession to power in 1978 and the economic growth strategy he and his successor implemented which ultimately led China to ascension into the WTO. We will then review various conditions imposed upon China by the WTO and how China reacted to those changes and to what extent these lead to China’s current status and interaction with its principal economical partners .. We will conclude our analysis by outlining some of the problems associated with China’s growth strategy and the missing components that would be needed in order to become a free economy and to achieve sustainable growth in the future. During the time of Mao Zedong’s term in power, China was a communist state that had a closed economy, a population of just fewer than one billion and state-owned companies that were financially unsuccessful and a drain on the economy. The choice of economic systems is based on the belief that the system will bring the highest goods to the majority of the people, most of the time. Mao Zedong adopted a Chinese nationalist and anti-imperialist outlook with which he ruled China. In this...
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...not see volatility as an occasional, random element added to the cost of doing business in an interconnected global marketplace. We plan for volatility. We prepare for it. We have learned how to profit from it. Lorenzo Zambrano, CEO of CEMEX.1 In 1990, Cementos Mexicanos was a Mexican cement company that faced trade sanctions in its major export market, the United States. By the end of 1999, CEMEX operated cement plants in 15 countries, owned production or distribution facilities in a total of 30, and traded cement in more than 60. Non-Mexican operations accounted for nearly 60% of assets, slightly over 50% of revenues and 40% of EBITDA (earnings before interest, taxes, depreciation, and amortization) that year. CEMEX’s sales revenues had increased from less than $1 billion in 1989 to nearly $5 billion in 1999, and it had become the third largest cement company in the world in terms of capacity, as well as the largest international trader. Growth had been achieved without compromising profitability: in the late 1990s, its ratio of EBITDA to sales ranged between 30% and 40%—ten to fifteen percentage points higher than its leading global competitors. In addition, the company was celebrated as one of the few multinationals from Latin America, and as a model user of information technology in an otherwise low-tech setting. CEMEX executives sometimes characterized the company’s international operations as a “ring of grey gold,” comprising commitments to high-growth markets...
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