Cooper Industries Case Study Introduction: Cooper Industries Inc., is considering an acquisition of Nicholson File Company, a candidate for the company’s diversification program. Cooper CEO Robert Cizik approached Nicholson three years prior and was rejected, but the circumstances have changed and there is a real opportunity for Cooper to acquire Nicholson. Our team of analysts will evaluate the company’s financials to determine whether or not this is a smart acquisition for Cooper. Based off our research we believe Mr. Cizik of Cooper Industries should try and gain control of Nicholson File Company. Below we will show why we believe this is a smart acquisition. The reason Cooper should work to acquire is the vast amounts of synergy …show more content…
Nicholson currently has a value of $44 and a Book Value of $51.25. For this reason we believe we can offer just above the book value, $52 a share to the current stockholders, 16% more than what it is currently being traded for, and still be attractive from Cooper’s perspective. This is $10 more than what was offered by H.K. Porter company earlier in the year. By offering this much it satisfies Nicholson while still keeping the company attractive to Cooper’s shareholders. 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. Cooper (29,000): Concerns: Cooper, through the support of the votes from Porter is looking to acquire Nicholson. Their concerns are on getting the necessary votes and
Clarkson Lumber Company’s biggest problem by far is the fact that Mr. Clarkson had agreed to buy out Mr. Holtz for $200,000 with semi-annual installments of $50,000. It wasn’t necessarily a bad idea for Mr. Clarkson to buy out Mr. Holtz altogether, but the $100,000/year of payments is an unrealistic amount for Clarkson Lumber at this point in time. Between 1993 and 1995, there hasn’t been a year where they have realized more than $77,000 in net income, so the payment of $100,000/year is clearly unrealistic and a sure problem for the company. Another problem, which isn’t nearly as important as the former, is that net income is growing
You have recently been hired as the HR manager responsible for two separate Ontario locations belonging to Wilson Brothers Limited. You have been asked by the HR Director at the head office in Brandon, Manitoba, to quickly provide a report on any initial HR issues related to Recruitment and Selection, Compensation and Benefits, Health and Safety, Training and Development and Labour and Employee Relations that are affecting or will affect the Cambridge operation and the new plant in Scarborough. The HR Director has made it very clear that Wilson Brothers would like both the Cambridge location and the new plant in Scarborough to remain union-free and are willing to offer very competitive wages and benefits
It may turn out that it will cost them more to satisfy one of the other member’s requests (like union quotas or compensation to other ports) and so they may agree to satisfying one or both of my priorities (industry mix and ecology impact). Additionally, it looks like I have opportunity to talk to The Unions and Other Ports in the region, where we can align our interests since any of us independently may not be as strong as us combined.
Beginning in 1990, the “Danish Clog” was brought to life in the United States. It began as a small company selling the shoes at horse shows but quickly grew larger than was imagined. Expansion of the product went from a single closed back clog to over 3000 products being sold in over 3,500 retail locations. During the past fifteen years there have been many offers to sell interest in the company. You are now becoming concerned that the company that was such as success all of these years may not be structured appropriately to promote further growth. You are now faced with a decision on how to can move forward. Should you consider a merger that will allow growth and a more conventional way of operations?
Columbus Custom Carpentry is a relatively small family-owned business that was started in 1946. The organization is rooted in the Midwest area of the country and focuses mainly on the production of antique and custom contemporary style doorwork. The organization currently has four locations and employs 135 employees. Even though the company operates in a niche market, Columbus Custom Carpentry has experienced great success resulting in annual sales of 15 million dollars. The organization is composed of several different departments, which are grouped into four different units. These units are administration, marketing, manufacturing and warehousing. Columbus Custom Carpentry has numerous problems dealing with internal and external compensation equity. The following team research conducted will examine identified human resource management issues dealing with topics such as pay equity, turnover rates, market pricing, and pay structure. The research will offer
This case study examines the proposed merger of Vulcan Materials and Martin Marietta both providers of construction aggregates. A stock-for-stock merger had the potential of making the company a global leader in construction materials, but was marred by disagreements over executive succession, location of new headquarters and the stock exchange proposed by Martin Marietta. Furthermore, as negotiations deteriorated Martin Marietta attempted a hostile takeover of Vulcan and also tried to get its directors appointed to
Based on our projections for the years 2002-2004, the biggest driver that effects debt is the company’s operating expenses. Based on the history of the upward trend of operating expenses, our recommendation is that The Body Shop needs to concentrate on lowering the operating expenses, and keeping those expenses around 45% or lower in order to avoid borrowing money. Our 45% recommendation includes a safety net which will prevent having The Body Shop borrowing cash if sale do not continue to climb at a significant rate.
Set in May 2005, this case invites the student to assess Berkshire Hathaway’s bid, through MidAmerican Energy Holdings Company, its wholly owned subsidiary, for the regulated energy-utility PacifiCorp. The task for the student is to perform a simple valuation of PacifiCorp and to consider the reasonableness of Berkshire’s offer. Student analysis readily extends into the investment philosophy and the remarkable record of Berkshire’s chair and CEO, Warren E. Buffett.
1 – To accept the lowest bid of $430 from West Paper. By doing so would result in the best interests for the Northern Division as it would gain the most profits .
Ted received a call from his boss, Townsend “Sandy” Beech, the head of his four-person deal team and founding member of the firm. Sandy requested Tad, on a Friday afternoon, to review three presentations for possible buyout targets. Tad was to make a presentation at the partners’ meeting on Monday morning, recommending only one (1) investment and detailing the strengths and weaknesses of all three.
2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?
David Jacob should analyze the situation with different interests in mind. Since he was looking for an exit from this business that he built from perseverance and hard work, it would be to his benefit to obtain the maximum amount of money possible from the sale. This makes the strategic buyers more favorable. However, His sons who currently work for the company would probably lose their jobs. Finally, taking in consideration of his age of 70, which is an age where he would probably want to just enjoy his life as much as possible, we would say that he should choose to sell to the strategic buyer and take the higher premium and just leave the business completely.
1 We recommend Cumberland Metal Industries capitalize on their evolving position as a leader in the curled metal industry and effectively launch their new curled metal cushion pads to be positioned as the “new industry standard” in the pile driving market. In order to successfully launch this product, we first and foremost recommend that CMI acquire a patent to prevent this product from being copied and imitated, thus avoiding the entry of competitors. The associated value and advantages of CMI’s metal cushion pads are evident from the results of the two comparative performance tests by Colerick and Fazio. CMI pads drove piles 33 percent faster than asbestos per hour and lasted the entire job while also eliminating the downtime required
1. If you were Mr. Cizik of Cooper Industries, would you try to gain control of Nicholson File Co in May 1972?
head man in charge—began extra-careful examination and declared there was a vital defect in the machines; he claimed the