CASE STUDY 2 Wildwood Manufacturing Company is in rural Virginia involve in distribution of wood for furniture products. After a 50 years period of stable progress, Wood involves in the acquisition of other businesses which is the wood chemical industry. Later Wildwood was transformed to a distributor of a wide range of a wood furniture products and wood chemicals industry operating across United States. Later, after spending 5 years incorporating past acquisitions, decreasing expenditures and growing margins, the board of directors of Wildwood recognized that the company was ready to get on a new phase of progress and to continue the company former tactic of acquiring existing businesses which is related to their core of businesses. Subsequently, after reviewing the company strength, weaknesses, opportunities and threat, and the opportunity of generating more profit and more shareholder value, the board has decided to search for the new acquisition target that would increase the value and profit by providing access to the new entry market. The company recruited a merchant banker to assist them finding the new acquisition target which can be quickly executed. Within 2 months, they select Douglas Refinery, a company that dominated the wood treatment chemicals market in Germany. The company was very attractive because an analysis indicated the only way for a new competitor to break into the market of European Union would be to acquire Douglas Refinery. The merchant banker approached the property owner of Douglas Refinery and there are indication of willingness to consider the selling of the company. Wildwood embarked on a more detailed examination of Douglas Refinery to determine whether the acquisition will add value and profit, and also determine on how much they should pay to obtain the business. Question. In your opinion, what are the concerns that need to be addressed by Wildwood in acquiring the Douglas Refinery?
CASE STUDY 2
Wildwood Manufacturing Company is in rural Virginia involve in distribution of wood for furniture products. After a 50 years period of stable progress, Wood involves in the acquisition of other businesses which is the wood chemical industry. Later Wildwood was transformed to a distributor of a wide range of a wood furniture products and wood chemicals industry operating across United States.
Later, after spending 5 years incorporating past acquisitions, decreasing expenditures and growing margins, the board of directors of Wildwood recognized that the company was ready to get on a new phase of progress and to continue the company former tactic of acquiring existing businesses which is related to their core of businesses.
Subsequently, after reviewing the company strength, weaknesses, opportunities and threat, and the opportunity of generating more profit and more shareholder value, the board has decided to search for the new acquisition target that would increase the value and profit by providing access to the new entry market.
The company recruited a merchant banker to assist them finding the new acquisition target which can be quickly executed. Within 2 months, they select Douglas Refinery, a company that dominated the wood treatment chemicals market in Germany. The company was very attractive because an analysis indicated the only way for a new competitor to break into the market of European Union would be to acquire Douglas Refinery.
The merchant banker approached the property owner of Douglas Refinery and there are indication of willingness to consider the selling of the company. Wildwood embarked on a more detailed examination of Douglas Refinery to determine whether the acquisition will add value and profit, and also determine on how much they should pay to obtain the business.
Question.
- In your opinion, what are the concerns that need to be addressed by Wildwood in acquiring the Douglas Refinery?
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