John M Case

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JOHN M. CASE COMPANY Mergers and Acquisitions OCTOBER 6, 2015 FINA 5513D - MERGERS AND ACQUISITIONS Syed Ali Ahmad (100978220), Long Thanh Dinh (100986227) Zeeshan Halim (100986227) Table of Contents Executive Summary .................................................................................................................. 2 Why the J.M.C. Company is an Attractive Target for the Firm’s Management ............... 3 Why purchase the J. M. C. Company by LBO ...................................................................... 4 Target Selection ...................................................................................................................... 4 Industry…show more content…
Company ..................................... 11 Appendix E– Valuation of the Expansion Plan .................................................................... 12 1|Page John M. Case Company Executive Summary As John M. Case (J.M.C.) is looking to retire from his commercial desk calendar business he is looking to go about initiating the sale of his business. Given the opportunity that the acquisition of this company would provide, the VP of finance and administration Anthony Johnson, VP of marketing August Haffenreffer, VP of manufacturing William Wright and the company controller Richard Bennink were looking to find the financing to support the deal. Given their combined equity of only $500,000, a leveraged buyout (LBO) looked like the most appropriate means for acquiring the company. The J.M.C. Company is an attractive target for the management team as it is a stable company in an established industry, has considerable market share, dependable cash flows, new assets requiring little maintenance and strong potential for future expansion into a related industry. Valuation of the LBO reveals that the firm has a present day value of $20.32 M, outweighing the asking price of J.M.C. by $320K. This transaction is therefore favourable from the perspective of the management buyers. Given that the four J. M. C. Managers have a combined $500K in cash they will effectively have to raise a further $19.5M on the market. With a bank
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