CPI Case Analysis
SunTx Capital Partners’ largest investment, Construction Partners , Inc (CPI), is one of the largest road construction firms in the United States. CPI had grown dramatically in size and value during SunTx’s ownership, and now SunTx is deciding the exit strategy of CPI.
Good Business Model Analysis:
• Market position: As roadbuilding in U.S. is an extremely fragmented business, with each local market having a number of locally based competitors. Although APAC is the largest roadbuilder in every Southeastern state (Exhibit 2a), CPI established strong local market positions by several acquisitions. Thus CPI is a major competitor.
• Market growth: The overall roadbuilding market is stable, with a moderate growth of 5% per year.
• Market share trends: CPI is gaining shares with acquisitions.
• Business Cycle Risk: the roadbuilding market has moderate cyclicality. 2007-2008 financial crisis proved to be a significant negative event for CPI and the industry. It has average cyclical risk. As when there are economic or financial risks, government will have tax cut to stimulate economy, which decreases tax revenue, state budgets to fund highway projects. But CPI recovered quickly after the crisis.
• Unlevered free cash flow generation: CPI has strong positive cash flow. CPI’s organic growth was 70% of its total growth, a level well above market growth rates. From Exhibit 6, CPI revenues keep going up. It shows a good trend. Current
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Robert Chuckrow Construction Company (Chuckrow) was employed as the general contractor to build a Kinney Shoe Store. Chuckrow employed Ralph Gough to perform the carpentry work on the store. The contract with Gough stipulated that he was to provide all labor, materials, tools, equipment, scaffolding, and other items necessary to complete the carpentry work. Gough’s employees erected 38 trusses at the job site. The next day, 32 of the trusses fell off the building. The reason for the trusses having fallen was unexplained, and evidence showed that it was not due to Chuckrow’s fault or a deficiency in the building plans. Chuckrow told Gough that he would pay him to reerect the trusses and continue work. When the job was complete, Chuckrow paid Gough the original contract price but refused to pay him for the additional cost of reerecting the trusses. Gough sued Chuckrow for this expense. Can Gough recover?
Section 179 (a) generally allows a taxpayer to elect to treat the cost of section 179 property as a current expense in the year the property is placed in service, within certain dollar limitations. If the property is used for both business and other purpose, then the portion of the property’s cost that is attributable to the business use is eligible for expense, but only if more than 50% of the property’s use is for business purposes according to reg. section 1,179-1(d). In this scenario, the primary use for the motor home was to transport Jim to and from his motocross races. This scenario does not demonstrate 50% of the property being used for business purpose. It gives no relation how the motor home is used to do no more than advertise the
We determined the WACC of the Lodging business to be 9.70% by using the same method of analysis.
While back I inform you that my sister works for a Real State company “Prism Capital”. They have a 116-acre building that use to be the Hoffmann-La Roche Pharmaceutical building (address: 800 Bloomfield Ave, Nutley. NJ 07110)
CertaSeal Construction Corporation is a full-service roof contracting company that is located in Naperville, Illinois. CertaSeal Construction Corporation serves the Chicago area and the Chicagoland suburbs. The service areas they cover include Schaumburg, Aurora, Naperville, Bolingbrook, Skokie, Palatine, Orland Park, Evanston, Arlington Heights, Wheaton, St. Charles, Hoffman Estates, and Joliet. CertaSeal Construction Corporation also caters the northwest Indiana and southern Wisconsin area. This roof contracting company is a family owned and operated roofing business. CertaSeal Construction Corporation was established in 2008. Their services include commercial roofing, residential roofing, siding, and gutters. CertaSeal Construction Corporation
In accordance with our previous discussion, as promised, attached is our proposal to provide business investment plan for Eagle’s Nest Hotels Inc., prepared by the following staffs: Weng Hong Hoh, Kang Yi, Nicklas Ivarsson and Moneeb Aziz.
Prospect Properties Inc. is a home inspection company that is located in Midlothian, Virginia. This establishment was founded in 2000. Prospect Properties Inc. specializes in energy audits, infrared imaging, and crawl space solutions. They are a member of the American Society of Home Inspectors which requires passing a series of written examinations, continuing education, and adherence to the ASHI Standards of Practice and Code of Ethics.
Rivalry between companies takes the form of competing for position using different strategies i.e. price and advertising competitions and product positioning. This rivalry increases when companies have an opportunity to improve their position or the competitive pressure increases. Companies are mutually dependent, so the pattern of action and reaction may harm all companies and the industry. TSCO’s main competitors are Rural King, Southern States and Orscheln (Logel;Klein, 2015).
1. Adams espouses a “market first” analysis of opportunity by looking for discontinuities. Is this substantive or window-dressing? Do the four types of discontinuities represent applicable guidelines? Are they comprehensive, or are there other discontinuity templates that a venture investor would find useful?
In most of the cases, when it comes to implementing a business idea into reality then hiring a construction contractor becomes an essential need. However, we also cannot hire any commercial builder for the task because this is not an investment that we make every day since it involves a lot of money where we do not want to take any risk. In that case, hiring the best construction agency is very important so that we are going to get a quality and productive result in the end.
Mims & Son Construction LLC was established in 2016, with the vision of serving the community with quality work and years of expertise in masonry. With a combined 20 plus years of experience under my belt, my staff and I strive to make dreams come true, while making every community we build in more beautiful than it was before we entered. Masters of the masonry trade, we provide incomparable labor in block, brick, concrete, stone and stucco. Our purpose in the masonry field is to satisfy every customer with affordable services and exceptional results.
ALEXANDER J. JEREZ, social security No. 721-99-8542 with residence in Harrisonburg, Virginia, hereinafter referred to as the “Assignor” currently holds a fifty percent (50%) membership interest in A 2 Z Properties, LLC, and a Virginia Limited Liability Company.
Students may be familiar with the classic NPV criterion. This case invites them to focus on the internal rate of return (IRR). If the IRR is greater than the project cost of capital, the 7E7 is a positive net present value project.1 A discussion of why this is true provides a solid “big picture” foundation for the case decision. The project IRRs are presented in case Exhibit 9. Therefore, the focus of student analysis should be on determining the benchmark against which to evaluate the IRRs. Thus, this part of the discussion helps to motivate the analysis of WACC. Some students may have voted in a manner that contradicts the IRR versus the cost of capital decision rule. This sets up the next question.