Flinder Valves and Controls Inc. Acquisition
In early May 2008, talk began between president of Flinder Valves, Bill Flinder and Tom Eliot, chairman and CEO of RSE about a possible acquisition of Flinder Valves by RSE. The industrial manufacturing industry had taken a hit due to rough economic times and the acquisition made sense. Both leaders were very concerned about the challenges and risks of the deal. Flinder was a company that engineered and manufactured specialty valves and heat exchangers. These products required extensive research and development and they were one of very few firms working in these types of applications. A bullk to FVC’s sales came from defense and aerospace applications. They were known for their …show more content…
A couple disadvantages we found with the acquisition would be an increase of debt or decrease in cash holdings, depending on how we decided to fund the acquisition. Some people within our company worry about the dilution of our shares. We currently have close to 63 million shares outstanding and acquiring an additional 2.4 million will not dilute our earnings. Another concern we have is how well FVC employees will be able to adapt to our company culture and size of our company. FVC is a smaller, more entrepreneurial company and we are cautious of the risk that FVC engineers work ethic and productivity could change due to working for a bigger firm with a different cultural environment. As for some alternatives to not reaching a deal, we feel as though it would be best to reinvest money back into RSE or invest in other projects. Our R&D department has been extremely weak the past two years and we could benefit from investing in that. There have not been any recent new innovations within the company, and with reinvestment into the R&D department, we are confident that new innovations will be right around the corner. RSE has had their eyes on many other companies in the industry so we will not rule out possible acquisitions of those companies as an alternative to FVC.
We are aware of a few risks with this possible merger that concern both
Click here to unlock this and over one million essaysGet Access
Joe Hinrichs, a recent Harvard Business school graduate, was hired in February 1996 to run the General Motors’s the Fredericksburg Torque Converter Clutch (TCC) manufacturing plant. At 29 years old, Hinrichs was GM’s youngest plant manager. Hinrichs was inheriting a poor performing plant that continually underachieved, losing money year after year. Improvements were desperately needed to increase the efficiency of the manufacturing process and reduce operating costs. GM had considered shutting down the plant; however, when a new bonding process, using carbon fiber, for the TCC was approved in 1995, GM instead invested thirty million dollars into the Fredericksburg plant to incorporate the new process.
Competition – Accuflow has long been a market leader in the hydraulic valves market that commanded a premium price for its products. In recent years however, consumer preference have begun to change from buying hydraulic valves from suppliers to buying full hydraulic systems instead. Accuflow has its roots in its “groove casing” technology historically and does not have the same competitive lead in integrating its products into one such system whose demand has recently surfaced. The management team has looked hard into this issue and Accuflow is en route to diversifying its product lines to increase its competitiveness. Given Accuflow’s superior products and brand name, it is difficult to tell whether Accuflow will lose the race in diversification of its products.
SET IN MAY 2008, THIS CASE REFLECTS THE SEPARATE PERSPECTIVES OF CHIEF EXECUTIVE OFFICERS TOM ELIOT AND BILL FLINDER AS THEY APPROACH THE NEGOTIATIONS OF RSE INTERNATIONAL CORPORATION TO ACQUIRE FLINDER VALVES AND CONTROLS INC. YOUR TASK IS TO COMPLETE A VALUATION ANALYSIS OF THE TARGET AND BUYER AND TO NEGOTIATE A PRICE
In that case, Sailed Air would perform in a safe zone with well-known products and respect its culture of innovative products manufacturer. However, we found that this strategy would not acknowledge the reality of the change in the market, which is the strong demand of cheaper product and the growing presence of GAFCEL. Eventually, Sealed Air could compromise its leadership by allowing GAFCEL to develop and expand to become a significant market player.
This case analysis explores the possibility of Breezy, a leading supplier of carburators and air filters in North America, the possibility of developing offshore busines in countries where car manufacturing is growing. The report is structured as follows: First, there are five important questions that Breezy must consider and ask itself before developing a relationship with a new customer. After Breezy decides to go offshore, it will have to go through the negotiating process, which involves five steps. Breezy then, must have capabilities of how an offshore business is organized, consider the many different costs and risks involved in the implementation and decide how it will finance the project. The report also talks
Fluor Corporation is one of the top, major companies that deliver a variety of services, including integrated engineering, acquiring goods, fabrication, construction, and vastly reaching out to private and governmental sector clients in regards to the various maintenance and project management solutions. (Fluor Corporate Information, 2017) This company was founded by a family of Swiss immigrants who had the brilliant idea to set up a construction business in the western part of the United States. This very small, family business eventually became Fluor Construction Company before evolving to the modern-day, Fluor Corporation. Fluor prides themselves on the development and implementation of groundbreaking solutions for diverse project issues
First, they need to review their strategic plan. If they didn’t complete a situation analysis before deciding on the buyout, they should now. Special attention should be placed on environmental scanning as they will be entering new markets, so it is important to understand their target markets. Second, they need to evaluate their mission statement, vision, and value proposition to assess whether they are accurate and reflect who the company is. Third, they need to re-evaluate an existing business-unit strategy or develop a new one if the situation warrants.
Any reward does have its risks. I can foresee a few problems with an acquisition. Besides the fact that we’ve told that over 70% of mergers and acquisitions fail, we also know that sometimes payback on any acquisition can be long (10 years). Additionally, there can be some negative effects on R&D because of cultural differences between corporations. As is with any M&A, due diligence, integration planning and execution are the keys to any success.
A heart valve allows blood to flow in only one direction through the heart. Tissue heart valves are harvested from pig heart valve or a cow heart sac. These tissues are treated, neutralized, mounted on a frame or stent so the body will not reject them. A tissue valve lifetime is 10-15 years. An advantage in a tissue heart valve replacement is that there are fewer requirements for anticoagulation therapy which reduces an incidence of bleeding. Mechanical heart valves are made out of pyrolytic carbon and last up to 20-25 years. A mechanical heart valve requires warfarin anticoagulation therapy and there is a risk for bleeding (Silberman, 2008).
Cooper’s President, Gene Miller’s ideology was to not restrict operations to the production of engines only. This was reflected in the business decisions when Cooper began to diversify and widen its product ranges. Cooper’s acquisition strategies were well planned and they were not left to the professional managers on the grounds that they could do justice to any product categories or manufacturing processes. Great importance was given on understanding the culture and customs of the areas in which Cooper operated and diversification only took place when the prospects looked profitable. There was a limit to diversification and special attention was paid to the timing of acquisitions. Most of the companies that Cooper aimed at acquiring were market leaders who maintained records of high quality manufacturing. Cooper’s journey was not about acquisitions and additions only. After a business had served its useful purpose, it was divested because clinging to the past would only reduce chances of future success. Between 1970 and 1988, Cooper divested 33 businesses.
MRC, Inc. is a Cleveland based manufacturing company specialized in power brake systems for trucks, buses, and automobiles; industrial furnaces and heat treating equipment; and automobile, truck and bus frames. As till 1957 most of MRC's sales were made to less than a dozen large companies in the automotive industry, it was exposed to the risk inherent in selling to a few customers in a very cyclical and competitive market. To minimize the risk and to explore new business opportunity MRC's management decided to diversify their business operation. After their fifth successful acquisition, the CEO of MRC Archibald Brinton faced with a dilemma of whether to buy American Rayon, Inc.
Ray Zuckerman is an experienced entrepreneur, US Army Veteran and business developer. Over the last 30 years he has, as a member of senior management, established and directed profitable and successful manufacturing companies and technology consulting firms. Among his accomplishments, he revamped a 300-person commercial injection firm from a history of failure to profitability, reducing downtime by over 90 percent; increased the size of a manufacturing firm by 600 percent within 10 years, enabling a profitable sale; and revamped the procedures and technical design of a long-distance transport system for a subsidiary of Litton Industries, Inc. such that they competed successfully in a market previously dominated by foreign companies.
Brazilian multinational corporation, Metalfrio Solutions S.A., is one of the world’s largest manufacturers of plug-in commercial refrigeration equipment. They seek differentiation through innovation and customer relationships, through their brands of Metalfrio, Derby, Caravell and Klimasan, to meet the different needs of their customers (“Metalfrio”). In addition, Metalfrio goes beyond just their point of sales, as they include services along with their products, adding value and uniqueness to the company. However, it has taken many years to get to where they are now.
So with business going so well for Solectron, how did everything go wrong for the company starting in 2001? Revenue fell from $6.5 billion in 3rd quarter 2000 to $2.2 billion in the same quarter of 2001. The company laid-off 20,000 employees; its stock plummeted; it was faced with plant closures, excess inventory and reduction of floor space. Was it a case of poor planning and management or just the company a victim of an economic downturn? This case analysis will explore what Solectron did wrong and what they could have done and offer some suggestions. It is also interesting to note the Solectron foresaw a pending boom in the Asia (China & India) markets and that if it was able to weather the prevailing storm, Solectron stood a chance of rising up again and succeed.
Northern Alberta, the oil sands development area surrounding Fort McMurray, is the fastest growing economic area in Canada for several years. Obviously Bolster’s total market share in this area was the highest with one third of the total market share it held national wide. Vickers based in Edmonton, Alberta covered 50% of the local market share and 75% of servicing in that area in spite having a national distributor, National Electronics (National). Also local firms preferred to do business with Vickers than National which has their nearest warehouse in Calgary, Sothern Alberta around 750 Km from Fort McMurray. (Exhibit 1)