mercury athletic footwear case solution - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. Is Mercury an appropriate target for AGI? The strategic merit is that both companies Mercury and AGI, are footwear companies that attract the youth market. Investment in WC 4,567 2,649 9,805 8,687 6,233 Net FCF 21,240 26,727 22,097 25,473 406,171 Mercury Athletic Footwear: Valuing the Opportunity Active Gear, Inc. (AGI) is a privately held footwear company and is contemplating the possibility of acquiring Mercury Athletic Footwear.West Coast Fashions Inc., a large designer and marketer of men’s and women’s branded apparel recently announced that it plans to shed its Mercury Athletic Footwear subsidiary. Mercury Athletic Case . Reason. Mercury Athletic was purchased by WCF from its founder Daniel Fiore. Home » Case Study Analysis Solutions » Mercury Athletic Footwear. Thisprice per earnings ratio is used because it is the closest number that can match the marketview of Mercury Athletic. Under this method the revenues for all the future years from 2007 to 2011 have been calculated. CAPEX 11,983 12,226 13,303 14,258 14,943 Tax rate has also been assumed for the future years and deducted from profit before tax. If partnerships could be formed with the Chinese manufacturers then greater leverage could be realized. There are a number of Synergies that could be created once the merger takes place. The library’s lower level is home to an extensive archival collection. 1. Based on the information given in the case, Liendke’s EBIT projections for 2007 through 2011 reflect an accurate growth in earnings for Mercury Athletic. Actual FCF 7,049 21,305 24,022 27,086 30,540 Mercury Athletic Footwear: Valuing the Opportunity Case Solution. On the other hand, the multiple method is based on actual values of the year 2006. In January 2007, West Coast Fashions, Inc., a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. Harvard Business Case Studies Solutions - Assignment Help. These expenditures have then been subtracted with their incremental effect over the years and the final free cash flow is calculated. The team finds this to be an appropriate estimation, but we also understand the limitations and possible inaccuracy of this value, which is a large weight in our enterprise value. WC 104,117 108,684 111,333 121,138 129,826 136,059 Mercury Athletic Footwear: Valuing the Opportunity Team 10 / Mergers and Acquisitions West Coast Fashions, Inc (WCF) was a large business, which dealt with men’s and women’s apparel. SHORT TITLE OF PAPER (50 CHARACTERS OR LESS) 2 Mercury Athletic Case Analysis Liedtke has a decision to make. The intended purpose of calculating the market premium is to estimate the additional risk or cost between the … Actual AGI is a profitable company; however, its size is not large enough to cater for market expansion opportunities. Mercury Athletic Footwear: Valuing the Opportunity Case Solution communicate just what they need to say and tell readers precisely what they’re likely to do. Due to a strategic reorganization, the plan called for the divestiture of MA and other “non-core” WCF assets. Similarly, the operating expenses, depreciation and the corporate overhead expenses have also been calculated. Shipments of the COVID-19 vaccine are arriving, with frontline health care workers getting immunized — some for the cameras — across the United States Monday. Reasons why Mercury is an appropriate target for AGI 4 2. Email us directly at: casesolutionsavailable(at)gmail(dot)com Please replace (at) by Partnerships could be formed with the suppliers of AGI and better terms could be agreed upon. If the days sales in inventory is decreased, then extra revenue could be generated which could be computed with inventory turnover ratio for all the future years. The price per earnings ratio comes from a comparable footwear company in Exhibit 3. footwear). The valuation for Mercury Athletic Footwear has been performed by two different method. This price per earnings ratio is used because it is the closest number that can match the market view of Mercury Athletic. Estimate the value of Mercury using a discounted cash flow approach and Liedtke’s base case projections. MA had revenues of $431.1M and an EBITDA of $51.8M WC 104,117 124,791 140,707 158,652 178,886 201,701 Analysis Mercury Athletic’s EBIT margin for 2006 was 9. Submit Close. All the expenses have then been subtracted from the revenues to calculate the profit before tax. In order to summarize, due to AGI’s small size, there is a strong risk of being overtaken by the other giant players in the market therefore, if it acquires Mercury, the risk will be minimized and there is a strong opportunity that the company will grow steadily. The most important of these synergies are: With the available information, the calculation could be performed for the reduction in days sales in inventory. : 6/1/2005 Completion Date: 7/31/2006 Challenges is calculated Questions: 1 enough to cater for market expansion opportunities market. Founded in 1956 and started off by producing high quality specialty shoes for and! $ 5,199,843 Start Date: 6/1/2005 Completion Date: 6/1/2005 Completion Date: 7/31/2006 Challenges 2011. Costs are cash charges therefore they have not been added back with the suppliers AGI... 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