Cooper Industries Case Analysis Essay

As a member of management Clive Jenkins is responsible for boosting employee morale to ensure that company goals are met

Cooper Industries Inc. is the manufacturer and leading producer of engines and big compressors for oil and gas extraction industry. The firm had been heavily dependent on oil and gas sector for its sales and major earning; fluctuations due to cyclic nature of industry concerned its management. Although long-term sales and earnings growth for Cooper had been above average, its stock was less attractive to investors due to higher risk and earnings volatility. Cooper’s earlier acquisitions resulted in diversity of markets but did not result in reduction of earnings volatility.To reduce the risk, management initiated an acquisition strategy to diversify its product portfolio. An acquisition

MTC initially needed to obtain substantial investment capital due to two main factors: a research-heavy industry, and the need to create most of the markets for its products. Although the founders' goal was to become a major manufacturing company, they did estimate that the company would need $50 million in capital before it would become self-sufficient. Their initial financing model was to first recruit a superior technical team, use that to attract additional equity investment and development funding from interested corporations, and then develop manufacturing capabilities. Commercial sales began 2.5 years after inception, and MTC is nearing the break-even point in 1990.

The difficult thing for Cooper is that they do not need to convince one group to sell them their shares, but five altogether: H.K. Porter; Nicholson Family and Management; shares owned by VLN; shares owned by speculators; and shares existing that are unaccounted for. Our team has broken down each of these groups, describing what the concerns and bargaining positions of each group are, and what Cooper must offer in order to acquire their shares.

With an increase in business, the firm recruited widely. The firm, which had employed 2,000 people in 1982, tripled to 6,000 people by 1987.” Due to excessive focus on generating revenues, one insider put it as, “competing fiefdoms replaced interconnected businesses.” and “Making money was mostly what mattered.”

They even made sure that they were deeply involved in all the acquisitions they made so that they do not end up making mistakes by acquiring a wrong company.

This analysis will review one of America’s largest and oldest organizations. Black & Decker Corporation (BDK) has had numerous acquisitions and mergers that have allowed it to become the organization as we know it today. Given past performance and growth excellence, it appears almost a certainty that BDK should be in an individual’s portfolio.

K. Smith, Inc. (KSI) a small floor refinishing business that provides a specialty coating product for ceramic tile and marble floors. KSI is a Jacksonville, Florida based flooring contractor that has chosen residential new homes as their niche. KSI will be able to handle any service request for specialty flooring needs and custom coating products for ceramic tile and marble floors. By planning for government contacts, KSI will be able to rapidly gain market share, demonstrating proficiency and professionalism in serving both commercial and government spaces.

How has Aurora Textile performed over the past four years? Be prepared to provide financial ratios that present a clear picture of Aurora’s financial condition.

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* From the firings, we can see that management does not share Arnell’s plans for massive changes.

Paulson E. (2001). “Inside Cisco: The real story of sustained M&A growth”, John Wiley & Sons, Inc.

Johnson Controls have lost more than a quarter of its value and Tyco’s shares have also fallen by over 30% (TheGlobeandMail, 2016). In order to improve growth, they have taken rationalization measures aimed at saving costs by reducing its workforce and selling off other lower margin units to enable a more competitive and sustainable cost structure in the future (Investopedia, 2015).

The automobile industry has a long history of mergers, acquisitions, partnerships and alliances. In 1904 Ford Motor Company partnered with a Canadian carriage-maker. Though not a vertical merger, the partnership increased Ford’s production efficiency. The most recent automobile