Arch Communications Essays

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Applied Corporate Finance FIN 246A Assignment #8 – Arch Communications & LOLWA ALBOHAMAD Arch Communications Group Inc. Evaluate Arch's industry and its strategic position vis-avis its major competitors. What does your analysis imply for Arch's future investment requirements and the company's ability to earn profits greater than its cost of capital? Arch Communications became the 3rd largest paging company in the US, with 3 million subscribers in 1996. The core activities included; building networks, distribution through resellers and retailers, sales and marketing through direct channels, backend billing operations and support services. The rivalry among players within the industry is relatively high. There is limited…show more content…
Since the industry is not likely to have enhanced growth rates in the future, Arch Communication’s future investments require high levels of capital expenditures in order to sustain growth through acquisitions and upgrading of existing networks. Sealed Air Corporation Why did Sealed Air undertake a leveraged Recapitalization? How much value was created? Where did it come from? Sealed Air Corp. has undergone a program to improve its production efficiency and product quality through elevated borrowing. The company undertook the leveraged recapitalization for a number of reasons: * Payout the special cash dividends ($40/share) * Provide working capital * Refinance existing debt The company decided to undertake this step mainly because of increased competition within the industry in the mid 1980’s. The company achieved that through introducing the WCM-World Class Manufacturing, which eventually increased the company’s cash. Sealed Air had substantial amounts of cash and limited opportunities for investments and mergers and acquisitions, therefore, the company faced difficulties in managing the extensive amounts of cash available on hand. Management believed that the recapitalization was a good idea since increased competition compelled the company to undergo such a step because competitors started exploiting the patents that were previously
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