Mercury Athletic Footwear – Assessing the Opportunity Mercury Athletic Footwear
Objective and Focus

Comm 401 – Individual Assignment

The focus of this exercise is to undertake a broad level assessment of the strategic fit of Mercury Athletic Footwear into the Active Gear Inc. portfolio. In addition, a preliminary valuation assessment needs to be made as to the value of this potential acquisition. In regards to this: 1. Is Mercury Athletic Footwear an appropriate target and strategic fit for AGI? Why or why not? 2. Are John Liedtke’s projections appropriate and acceptable for decision-making purposes? Do you have any concerns with the assumptions made or computations offered for analysis? If so, what are they? 3. What preliminary valuation estimate (can be stated as a range) would you place on the value of Mercury Athletic Footwear? Do you consider your estimate to be conservative or aggressive? 4. Where do you feel AGI can leverage synergies should they decide to acquire Mercury? Which of these, if any, would you expect AGI to position its acquisition rationale around in making its pitch for financing support? Can you illustrate a valuation of potential cost savings or revenue generation opportunities resulting from your synergy assessment? 5. Identify what you feel are the top five (5) decision criteria which would guide your thought process as to whether Mercury Athletic Footwear should be acquired. 6. Based on your analysis, do you recommend that Athletic Gear Inc. move forward with this acquisition? Be sure to validate this response with a short descriptor of reasons why. Your response is to be prepared in a management brief format. Your brief is to be written to the attention of John Liedtke, who has asked you to provide an opinion on this potential opportunity. The questions are for guidance purposes only and may be restructured in order to best frame the delivery of your opinion to Mr. Liedtke. It is okay to use bullet-point format where you feel it is appropriate to do so. The key metric is whether you have validated your position. There is no right or wrong answer, per se. Keep your response clear and concise. Focus on clarity and delivery of key information points, conclusions, and recommendation validation. The focus is on assessing the situation and providing a logical, credible, and fully-validated commentary as to what you feel AGI should do. The evaluation of your management brief is based on the completeness of your analysis (7 points), and on the clarity of your communication to John Liedtke (3 points). Assignment Due Date: Any time prior to November 22, 2010, at 4 pm. The attached Declaration of Ethical Behaviour is to be signed and attached to your submission. Fall 2010 Page 1

Comm 401 – Individual Assignment Confidentiality Form – Comm 401 – individual Assignment

DECLARATION OF ETHICAL BEHAVIOUR
I hereby certify that, in developing my response to this individual assignment, I have not: a) used any written work of another person, regardless of whether it is in draft, note or final submission format. b) worked directly with another person or persons in formulating my responses to the individual assignment questions, beyond a general macro-level discussion as to approach and response position. c) had another person review my submission for the purpose of critique and or content evaluation. d) used any calculations developed by another person, or had assistance from another person in developing the calculations presented in my individual assignment response. I further certify that I did not, and will not, provide any information concerning my submitted responses to this individual assignment to any other student in Comm 401 (sections A, B, C). I understand that should it be found that I have violated this Declaration of Ethical Behaviour, I will be subject to formal disciplinary action as per the policy on Academic Dishonesty and Professional Conduct as outlined in the Commerce Program calendar within the School of Business of Queen’s University. Name (Please Print) Date and Time: Signature: ______________________________________________ ______________________________________________ ______________________________________________

This declaration is to be completed and attached to your individual assignment submission.

Fall 2010

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