acquirer. Air Thread Connections (ATC) is one of the options available to be acquired because of ATC owns greater technical resources in wireless service, and it is one of the largest regional wireless companies in the US. This report will analyse the initial valuation of ATC based on discounted cash flow analysis as well as market multiples approach, based on the analyse, it will decide whether the acquisition should be made or not. Body The valuation of Air Thread Connections can be divided into
Valuation of AirThread The valuation of Air Thread is intended to present to it's potential acquirer, American Cable Communication (ACC) for consultation on decision of acquisition purpose. According to the case study, American Cable communications is a large and healthy cable operator which provides the services and products that related to internet, video and landline telephony. The demand of the ACC is high in America as for instance, there are around 48.5 million households installed the ACC
Valuation of AirThread The valuation of Air Thread is intended to present to it's potential acquirer, American Cable Communication (ACC) for consultation on decision of acquisition purpose. According to the case study, American Cable communications is a large and healthy cable operator which provides the services and products that related to internet, video and landline telephony. The demand of the ACC is high in America as for instance, there are around 48.5 million households installed the ACC
AirThread Valuation of AirThread This case deals with the valuation of AirThread Connections Business (ATC) from the perspective of its potential acquirer, American Cable Communication (ACC). ACC is a large cable operator which serves the video, internet and landline telephony needs of millions of users across America. However it is recently looking to acquire ATC which is one of the largest wireless companies in the United States. This acquisition will bring with it certain synergies that both
Valuation of AirThread Connections Group 7 (Shaojin Ding/ Jin Wang/ Wenqi Gu/ Shijia Wu/ Tongtong Yin/ Canran Xie) Given the background of ACC and AirThread, do you think the acquisition is a good idea? Briefly explain your answer. Yes. First, American Cable Communication (ACC) and AirThread could help each other compete in the industry that was moving more and more bundled service offerings. Second, the acquisition could help both companies expand into the business
1 – Methodological Approach In this case, American CC – the intended acquirer of AirThread Connections- will use leveraged buyout (LBO) model, which means the company will finance the acquisition through bank loan or some other borrowing methods. Hence, the debt-to-equity ratio will change in time. Since we will need to estimate the discount rate any time the capital structure changes, neither WACC nor APV would be reliable alone. Therefore, Ms. Zhang should use the combination of WACC and APV
Cable Communication was seeking to acquire AirThread Connections for three reasons. The two companies could help each other become more competitive in an industry that is moving toward bundled package service offerings. The acquisition would help both companies expand into the business market, and lastly American Cable was in a unique position to add value to AirThread’s operations. They could obtain a significant amount of debt financing for an AirThread acquisition. The ATC’s terminal value was
Title: Authors: To: Source: Document Type: Appraisal report of Air Thread connections Jennifer Zhang Robert Zimmerman (Vice President of ACC) New York Business Review, august 2007, volume 3, pp34-89 Appraisal Report ABSTRACT This paper intends to analyze and evaluate the Air Thread Connection (ATC) Company and determine whether the acquisition by the American Cable is acceptable. From the outset, it is observable that, the acquisition would give American Cable access to wireless technology
Valuation of AirThread Connections 1. Methodological Approach to the Valuation a) WACC (Weighted Average Cost of Capital) - When we are supposed to value AirThread Connections with the WACC valuation method we will have to use the following steps: * Determine the unlevered free cash flows of the investment. * Compute the weighted average cost of capital with the following formula: * Compute the value with leverage, VL, by discounting the free cash flows of the investment using
1.1. Valuation methodology ACC is using LBO approach for its acquisitions and desires to maintain this acquisition policy for its latest target AirThread Connections (AC). According to this approach, AC will be financed significantly by debt which will obviously breach leverage ratios maintained by Air Thread/ACC. ACCs plans to bring down the leverage ratio to industry standards steadily to sustainable levels between the years 2008-2012. Owing to the uneven capital structures between 2008