Rhone-Poulenc Rorer, Inc Case-Study

Another option is the issuing of preferred stock, the company’s common stock is already overvalued in the market; therefore, sourcing additional capital through common stock might result to lower proceeds.

Under liquidation, the term sheet stipulates that the Series E investors is entitled to claim its initial investment of $10.75 million plus any accrued but unpaid dividend. Any proceeds after this claim will then be distributed to all common and Series E Preferred shareholders on an as-converted pro-rata basis. This double dipping means that RSC will not only recover its initial investment of $5 millions, but also enjoys the convertible benefits.

The case consists of two major pharmaceutical companies that joint to collaborate their research and pharmaceutical technologies to start a joint venture in India. Both have valuable resources that have benefited both companies during the joint venture. Now both are questioning if there is still any value in maintaining the joint venture in India and will be deciding what will be the best route to take. Ranbaxy Laboratories wants to be bought out, but Eli Lilly is worried of the financial implications of such move.

Executive Summary. Wathen is attempting to value the proposed acquisition of Pinkerton in an effort to determine whether bids of $85 million to $100 million is value enhancing for CPP’s shareholders. Additionally, Wathen must choose between two financing options: (1) raising $100 Million via a $75 million debt structure at 11.5% interest rate together with a $25 million equity investment for a 45% stake in the combined company and (2) a $100 million debt facility at 13.5% interest rate.

20,000,000 shares authorized. Issued and Outstanding 15,801,332 net of treasury shares. $29,055,488 $29,055,488 Total Stockholders' Equity $22,115,255 $21,696,000 $419,255 1.9% Total Liabilities and Stockholders' Equity $34,592,182 $33,856,256 $735,926 2.2% Riordan Manufacturing, Inc Horizontal Analysis-I/S September 30 Increase or (Decrease) during 2005

Andrea Winfield considered issuing bonds was not a good option for financing the acquisition. She was particularly concerned about the increasing long-term debt and annual cash layout of $ 6.25 million for 15 years. We believe that her concerns are justified, because the Company had already significant amount of debt that could result in higher risks and stock price

Pfizer is the largest American pharmaceutical company and one of the largest pharmaceutical companies in the world. It competes with Merck and Glaxo, and markets such well-known medications as Celebrex and Viagra. However, the pharmaceutical industry as a whole has undergone changes in recent years with significant consolidation taking place and with increased scrutiny regarding the ways in which drugs are developed, tested and marketed. In addition, recent controversies have erupted regarding Merck's drug Vioxx, and Pfizer has been the target of unwanted publicity regarding its painkiller Celebrex. This research considers the strategic position of Pfizer, including its strengths and weaknesses as well

Since this was a stock for stock bid, Martin Marietta offered 0.5 shares for each Vulcan share, which was a premium of 18% to the average exchange ratio based on closing share prices for Martin Marietta and Vulcan for the 30-day period that ended December 9, 2011.

The company lost money almost every year since its leveraged buyout by Coniston Partners in 1989. The income generated was not sufficient to service the interest expenses of the company which stood at $2.62B in 1996. From Exhibit 1, we can say that interest coverage ratio computed as EBIT / Interest Expense was 1.31 in 1989 and has been decreasing over years and currently stands at 0.59. This raises a question of how the company can meet its interest payments without raising cash or selling assets.

The redemption available after the third anniversary of the original issue date is weighted towards equity. This option guarantees that the investors will receive at least the principal back. The mandatory redemption behaves like debt because there is a definite maturity date. The protective covenants are also weighted toward debt because the risk is limited and gives priority to the Series B Preferred Stockholders. Dividends are usually associated with equity; however, in this case the dividends are behaving more like debt interest payments. The dividends are paid at a fixed 8%

Post-merger integration is the art of achieving the results dreamed of by investors. The merger made sense for all the right reasons—brand recognition, access to new customers, cost takeout, or global expansion—and the spreadsheets made it black and white—return on investment (ROI) in a year or less.

Challenges facing RJR: Of the $1.5 billion that had been funded, $500 million came from cash and the remaining was through bank borrowings and commercial paper. These borrowings added to the debt that RJR had issued in 1984 and brought their debt ratings down to A. The

If A/P increases from one year to the next, that means that the difference between the two amounts is cash that was available for current use. That is, instead of paying cash, whatever was purchased was put on an account. On the other hand, A/R is considered a use of cash because for every dollar that should be coming in to the company from those who owe the company money, that cash has been delayed for a collection time period. Therefore, the company does not have the money to use for its own operations.

In the year 1983, it entered into agreement with Biological Labs, Inc. The company sold to Biological Labs, Inc. 5% of its outstanding shares for $7 million plus a right to purchase additional 13% of ten outstanding

After all of this we also need to keep in mind the financing deals that they have made with the Patricorp Group of $312,500 In for 41% of the equity, and $625,000 in subordinate debt. That was the previous debt that I talked about in the previous paragraph. As of the current revenues of the company, and considering the actual payments needed to pay they need to continue to grow the company to keep up and service the debt they will inquire. It is critical that they are successful with the growth, so that they do not fault on their agreement and have to give up more equity in the company so that they can retain ownership.