Flinder Valve Case Study Essay

739 Words3 Pages
W.B. “Bill” Flinder, the president of Flinder Valves and Controls Inc. (FVC), and Tom Eliot, the Chairman and CEO of RSE International are currently in the midst of negotiating a merger of FVC and RSE. Both companies are aware of the benefits, but also remain apprehensive due to the risks of completing an acquisition in the struggling economy. Prior to 2008, the U.S. manufacturing industry had experience a decrease in consumer demand because of tighter borrowing standards and a weak housing sector in the past year, according to a recent analyst. However, before May 2008, the U.S. began to experience better economic conditions, which provided FVC a better environment to introduce its new, hydraulic-controls system called the “widening…show more content…
RSE is also financially stable and has a greater purchasing power, which is what FVC lacks. Through this merger, FVC could reduce their materials and in-process costs while gaining more access to the marketing and distribution network. In addition to the financial gains, Tom Eliot shows no intentions just acquiring FVC’s brand name. FVC’s management team is what attracted Eliot in the first place. If Bill Flinder is to merge with another company, why not merge with one that is run by a respected man who actually plans on preserving FVC and its employees? After carefully analyzing the data given, we believe that FVC’s value is roughly $270 millions, including synergies. The company’s stand-alone equity value is more than $158 millions. The synergies that derive from this acquisition are extremely beneficial to both FVC and RSE. RSE’s purchasing power would help to reduce material costs for FVC. The acquisition would also bring in estimated tax savings of $2 millions the first year and $4 millions thereafter. RSE’s new project, CORE, is expected to improve and save in-process costs for FVC, making it more efficient and helping to increase the company’s bottom line. Moreover, FVC could utilize RSE’s marketing power and strategies to advertise their new advanced hydraulic-controls system or “widening gyre”. Flinder believed that the
Show More
Related

  • Flinder Valve

    2342 Words  | 10 Pages

    Contents: 1. DESCRIPTION AND GOALS OF THE CASE 2. QUESTIONS YOU MUST ANSWER IN YOUR REPORT 3. APPENDIX 1: CONFIDENTIAL SUPPLEMENTARY INFORMATION FOR MANAGEMENT OF FLINDER VALVES AND CONTROLS 4. APPENDIX 2: CONFIDENTIAL SUPPLEMENTARY INFORMATION FOR MANAGEMENT OF RSE INTERNATIONAL 5. SUPPLEMENTAL TECHNICAL NOTE: VALUATION AND MERGER NEGOTIATION CASE 43: FLINDER VALVES AND CONTROLS INC. DESCRIPTION AND GOALS SET IN MAY 2008, THIS CASE REFLECTS THE SEPARATE PERSPECTIVES OF CHIEF EXECUTIVE

    Read More

  • Casae Flinder Essay

    2344 Words  | 10 Pages

    Contents: 1. DESCRIPTION AND GOALS OF THE CASE 2. QUESTIONS YOU MUST ANSWER IN YOUR REPORT 3. APPENDIX 1: CONFIDENTIAL SUPPLEMENTARY INFORMATION FOR MANAGEMENT OF FLINDER VALVES AND CONTROLS 4. APPENDIX 2: CONFIDENTIAL SUPPLEMENTARY INFORMATION FOR MANAGEMENT OF RSE INTERNATIONAL 5. SUPPLEMENTAL TECHNICAL NOTE: VALUATION AND MERGER NEGOTIATION CASE 43: FLINDER VALVES AND CONTROLS INC. DESCRIPTION AND GOALS SET IN MAY 2008, THIS CASE REFLECTS THE SEPARATE PERSPECTIVES OF CHIEF EXECUTIVE

    Read More

  • Flinder Valves and Controls Inc

    2607 Words  | 11 Pages

    In this case study, we will talk about negotiate a possible acquisition of Flinder Valves and Controls. Inc by RSE International Corporation. To know why they gave that decision and how they could do it. We will have an overview of these two companies. 1. Overview of Flinder Valves and Controls. Inc and RSE International Corporation 1.1 Flinder Valves and Controls. Inc Flinder Valves and Controls. Inc (FVC) was an American company, located in Southern California. FVC was an outgrowth of

    Read More

  • Flinder Valves and Controls Inc

    2614 Words  | 11 Pages

    In this case study, we will talk about negotiate a possible acquisition of Flinder Valves and Controls. Inc by RSE International Corporation. To know why they gave that decision and how they could do it. We will have an overview of these two companies. 1. Overview of Flinder Valves and Controls. Inc and RSE International Corporation 1.1 Flinder Valves and Controls. Inc Flinder Valves and Controls. Inc (FVC) was an American company, located in Southern California. FVC was an outgrowth of a small

    Read More

  • Valves Question

    863 Words  | 4 Pages

    FIN 465, Fall 2010-11 PROJECT # 3, FLINDER VALVES AND CONTROLS CASE STUDY In this project, you will estimate the value of a target company in an acquisition and propose a range of exchange ratios acceptable for the target and the acquirer. Please find the full assignment below. You can use only Excel for all calculations. You can use Word for a write-up. There is no limit on the length of the write-up, but I ask you to be concise. Please annotate your Excel calculations so

    Read More

More about Flinder Valve Case Study Essay

Open Document