Mercury Athletic Case. Both companies compete in the footwear industry which is a highly competitive industry characterized by low growth and stable profit margins (Luehrman & Hielprin, p. 1). The tax rate is assumed as 40%. Note that the projected operating expenses include depreciation. The last page of the Mercury Athletic case mentions at least two possible sources of value creation not captured in Liedtke’s base case scenario: a significant reduction in Mercury’s days sales in inventory (DSI) and a possible combination of Mercury’s and … Fail to progress? Mercury Athletic Overview The footwear industry is a mature, very competitive with low growth and stable profit margins Active Gear, Inc. is a privately held footwear company which is a profitable firm in the industry with $470.3 million revenue in 2006. Case question] The aim of the case is to value Mercury Athletic. AGI is a profitable company; however, its size is not large enough to cater for market expansion opportunities. Content writing is a style of writing in which a person has been required to do lots of research study, and that research can on occasion influence your own writing style. Due to unspectacular financial reports, the division was going to be sold. 1. AGI has used the growth rates that are largely not representative of the growth rates based on the historical data that can be seen as per the calculations. Are they appropriate? Using Liedtke’s projections for Mercury Athletic in Exhibit 6, what will be Mercury’s EBIT in 2007? Athletic Training Definition of an Athletic Trainer An Athletic trainer can work for high schools, colleges, universities, and also for professional sports teams. Mercury marketed and branded their products as a whole instead of individual products. 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. Should AGI purchase Mercury? Mercury Background 2003 - acquired by West Coast Fashions (WCF) Attempted brand extension through apparel line Business stalled Mercury CEO eager to return exclusively to footwear Four footwear product lines Men’s/Women’s athletic Men’s/Women’s casual 2006: Revenue - $431.1 million EBITDA - … Aumento del valor de las acciones. Is Mercury an appropriate target for AGI.docx; Azusa Pacific University; ACC 211 - Fall 2016. Communal harmony essay citizen kane analysis essay on the cost with the significance of this services reviews: measure your office cubicles. Its revenue on 2006 is $431.1 million and total asset is $270.6 million on 2006, Operating income (EBIT) is $42.3 million and net income is $25.9 million. Both companies compete in the footwear industry which is a highly competitive industry characterized by low growth and stable profit margins (Luehrman & Hielprin, p. 1). This preview shows page 1 - 3 out of 5 pages. £180.00. You may also pause the movie frequently to make certain you do not miss anything. Dec. 15, 2020. Mercury Athletic Footwear designed and distributed branded athletic and casual footwear, principally to the youth market. Mercury Athletic Footwear: Valuing Opportunity Case Summary: John Liedtke, head of business development for Active Gear Inc. (AGI), is evaluating the acquisition of Mercury Athletic (Luehrman & Hielprin, 2009). One of their segments was Mercury Athletic Footwear. How would you recommend modifying them? Blog. The strategic merit is that both companies Mercury and AGI, are footwear companies that attract the youth market. Just from $13,9/Page. Dec. 15, 2020. More so than the other British colonial powers, The British promoted education and employed skilled indigenous people throughout the civil service. John Liedtke, head of the businessdevelopment for Active Gear, Inc saw it has a possible opportunity for them to acquire it.The footwear industry is very competitive, with low growth and stable profit … Free cash flows are calculated based on the projected data whereas,depreciation is added back. 5 pages. Mercury Athletic Case.docx; Indian Institute Of Management, Kozhikode; STRATEGY SM-09 - Spring 2017. Get this from a library! A few of the movies do not possess the best plots, but it doesn’t make the movie bad. Mercury...appropriate target? Mercury Athletic Footwear: Valuing the Opportunity Case Solution. Mammut Mens Osura Low GTX Shoe. … Mercury’s athletic shoes became popular due to extreme sports enthusiasts and the exposure of the X-Games. 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. 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. Should AGI purchase Mercury? 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. However, the highest value for the enterprise has been calculated by the discounted cash flow method. 4. 1 pages. 322997523-Mercury-Athletic-Footwear-Valuation.pdf, University of Maryland, College Park • BUFN 750, East Tennessee State University • BUSINESS MKTG 3310, Copyright © 2020. This quiz will focus on the necessary ingredients of the valuation. WOMENS LADIES LIGHTWEIGHT COMFORT MESH WALKING GYM SMART NEW MENS TRAINERS SHOES. Mercury Athletic Footwear Case Solution. Reasons why Mercury is an appropriate target for AGI 4 2. Don't use plagiarized sources. 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. THE U.S. Home » Case Study Analysis Solutions » Mercury Athletic Footwear: Valuing the Opportunity. The combined business will result in EBIT of 9% and revenue growth of 3%. Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1.  Mercury Athletic Footwear: Valuing the Opportunity Terran Knox Measurements II MBA-634 Northwood University DEVOS Program Dr. Adam Guerrero 4 March, 2015 Problem Statement Mercury Athletic is the footwear division of West Coast Fashions (WCF), a designer and marketer of men’s and women’s apparel. At first, the revenue of Mercury is, similar to AGI, so it is potential to double the revenue after acquisition. 2 pages. Based on all these assumptions, the projections were made. Question: Cash Budget The Controller Of Mercury Shoes Inc. Instructs You To Prepare A Monthly Cash Budget For The Next Three Months. Thus, changes in working capital are also adjusted in the free cash flows. Active Gear had recently increased its supplier concentration to improve its negotiating position because AGI’s small size was becoming a competitive disadvantage. Liedtke knew that acquiring Mercury would have many benefits. Under this method the revenues for all the future years from 2007 to 2011 have been calculated. Mercury Athletic Case.docx . Mercury Athletic Footwear Case Solution is just one of the most basic approaches to earn money writing. So he wanted to complete his own rough evaluation. The NPV is finally calculated as $2,361,366.68, thus the estimated value of mercury is calculated to be $2,361,366.68. 6. 246074802-Mercury-Athletic-Footwear-2. Mercury Athletic Case. Study on the go. It is further assumed that same degree of leverage that AGI has will be applied to Mercury, thus the cost of debt will then be 6%. Trouvez votre hélice Mercury idéale en 5 étapes ou moins. Therefore, the projections might not be appropriate asitwill not reflect the true worth of the company. Brand: Mercury Colour: Pink Department: Women. Mercury athletic footwear was acquired by the West Coast Fashion in late 2003. Mercury Athletic Footwear: Valuing the opportunity Case Solution. 9. Comparable data is used to calculate the beta value therefore,WACC is calculated to be 10.8%. Mercury had revenues of $431.1 million and EBITDA of $51.8 million during 2006. Mercury Athletic Footwear. "Mercury Athletic Footwear Caso Harvard Valuing" Essays and Research Papers . Mercury competes in 4 segments: casual men’s, athletics men’s, casual women’s, and athletic women’s footwear. Valuing Mercury Athletic. Moreover, it is assumed that the women’s casual footwear will be removed from the operations. Top Rated Plus. AGI did not sell The strategic merits of acquiring Mercury from Liedtke’s perspective. Why or why not? Mercury Athletic Case.docx . 19 The detailed formulas and numbers are shown in the appendix Estimation on; University of Maryland, College Park ; BUFN 750 - Spring 2016. In his preliminary valuation and analysis, Liedtke came up with a basis of making financial projections based on the revenue forecasts and operating income for all the four Mercury’s major segments namely; the men’s athletic footwear, men’s casual footwear, women’s athletic footwear and women’s casual wear. MERCURY ATHLETIC FOOTWEARProblem statement:West Coast Fashions, Inc a large business of men’s and women’s apparel decided todispose of one of their segments; Mercury Athletic. Is Mercury an appropriate target for AGI.docx; Azusa Pacific University; ACC 211 - Fall 2016. In addition to this, the terminal value is calculated by assuming the growth value.The average growth rate was calculated based on the given data. Mammut Womens Nova Tour II High GTX Shoe. It has four lines of products, which include Men and Women casual and athletic footwear. Get Your Custom Essay on . The industry is same, products are similar, markets are similar, greater ability to merge each other’s operating efficiencies and improve deficiencies, therefore it is evident that these factors confirm that Mercury is … One of their segments was Mercury Athletic Footwear. Mercury’s athletic shoes became popular due to extreme sports enthusiasts and the exposure of the X-Games. £180.00.   Terms. In this, process, we have to distinguish the useful and useless data and make assumption about risk, free rate and so on. Mercury Athletic Footwear - Acquisition Analysis SENSITIVITY OF NPV - WITH BASE CASE CASH FLOWS N P V TARGETED DEBT-TO-VALUE RATIO N P V 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% ESTIMATED ASSET BETA 0.50 $587,481 $594,970 $602,650 $610,527 $618,610 $626,905 $635,422 $644,170 $653,159 $662,397 $671,896 $681,668 TERMINAL PERIOD (POST-2011) GROWTH RATE … For making a decision regarding the acquisition being appropriate or not, the facts and side effects of acquisition should be considered first. Mercury Potential to double revenues Increase leverage with manufacturers Increase long run growth rate Expand presence with key retailers and distributors. Active Gear had recently increased its supplier, concentration to improve its negotiating position because AGI’s small size was becoming a, competitive disadvantage. an ag em en t. Active Gear Demographics. The finest thing about writing a newsletter is you do not require to compose much whatsoever. Mercury Athletic Footwear: Valuing the Opportunity. WCF wanted to dispose off this segment. 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. Athletic Trainers prevent, examine, and treat injuries of athletes. Review the projections by Liedtke. Mammut Mens Mercury Tour II High GTX Boot. Top 10 blogs in 2020 for remote teaching and learning; Dec. 11, 2020 -Founded in 1968 by Daniel Fiore -Producer, designer and distributor of branded athletic and Study on the go. Mercury Athletic Footwear Ashutosh Dash Firm Value & Cash Flow Unlevered Free Cash Flow • FCF = EBIT (1-t) + DEP - ∆NWC - CAPEX Or • FCF = EBIT (1-t) - ∆NFA - ∆NWC • EBIT (1-t) or NOPAT is debt free income • Where do we pick up the interest tax shield? Mercury Diesel. AGI sells its brands through certain retail stores but does not sale through; Harvard University; BUSINESS 2720 - Summer 2016. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Mercury Athletic Footwear: Valuing the opportunity Case Solution. WCF has acquired Mercury during its strategic expansion plan. Course Hero is not sponsored or endorsed by any college or university. Mercury Athletic Footwear: Valuing Opportunity Case Summary: John Liedtke, head of business development for Active Gear Inc. (AGI), is evaluating the acquisition of Mercury Athletic (Luehrman & Hielprin, 2009). Reasons why Mercury is an appropriate target for AGI 4 2. Mercury Athletic Footwear Case. 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. Radio biology homework help students prepare wild. 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