Case John M Case Co

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Harvard Business School 9-291-008 Rev. March 20, 2000 John M. Case Company In March 1985, Anthony W. Johnson was working on a proposal to purchase his employer’s firm, the John M. Case Company. The Case Company, with corporate headquarters in Dover, Delaware, was a leading manufacturer of commercial desk calendars. Johnson, vice president of finance and administration, considered the company an excellent acquisition opportunity, provided the owner’s asking price was acceptable and satisfactory financing for the transaction could be arranged. Background A few weeks earlier, John M. Case, board chairman, president, and sole owner of the company, had informed his senior management group that he intended to retire from business and was…show more content…
He was still faced with the problem of raising close to $10 million on an equity base of $500,000 without giving up control to outsiders. Johnson now had three weeks in which to come up with a workable financial plan or lose the deal. He was acutely aware that his own life savings and those of his associates would ride on his judgment and ingenuity. The Company The John M. Case Company was the leading producer of business calendars in the United States. The company was established in 1920 by Uriah Case (John Case’s paternal grandfather) to do contract printing of commercial calendars. John Case had joined the organization in 1946 upon graduation from college, and in 1951 he had inherited the company. Under Case’s leadership, primary emphasis was placed on controlled expansion in the established line of business. By 1984, the company, with an estimated 60% to 65% share of its market, had been for over a decade the largest company in a small but lucrative industry. Operations had been profitable every year since 1932, and sales had increased every year since 1955. In 1984, the most recently completed fiscal year, earnings had amounted to $1,966,000 on sales of approximately $15.3 million. The return on average invested capital in 1984 was around 20%. Over the past five years, sales had increased at a 7% compound rate, while earnings, benefiting from substantial cost reductions, had more than doubled. Exhibits
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