Fvc Case Study 43
STRATEGY & FINANCE
MID-SEMESTER ASSIGNMENT Dr. John Heptonstall Bao Chau Nguyen Xuan May 2011
I/ Summary of FVC & RSE’s business activities 1. Flinder Valves and Controls Inc. Flinder Valves and Controls Inc. is a small company located in Southern California, manufactured specialty valves & heat exchangers. This company realized an outgrowth in 1980s of previous century from a small company for engineering on an experimental heat-exchanger product. After 7 years, it acquired the properties of the engineering corporation under the leadership of Bill Flinder, an outstanding researcher. He always concentrates on R&D not only to improve current products but also to create new products with patent protection. Moreover, it also owns a reputation for engineering excellence in the most complex phases of the business that helped them reward a U.S government contract on an advanced hydraulic-controls system, code-named “widening gyre”. Especially, in competitive erosion in the mid-2000s, FVC came onto the market many new products for the aerospace & defense industries. As a result, sales in the first quarter of 2008 grew 23% while many other competitors experienced a limited growth. Additionally, FVC’s plants were also organized efficiently with modern constructions. The Auden Company is a large firm which was an important foreign distribution channel of FVC (about 15% of FVC’s sales came from Auden Company). With FVC’s success, in 1996, Flinder Valves decided to take public and obviously, Auden became a big holder of 20% FVC common stock. From 1998, FVC received various merger proposal (Auden company included), but none reached the stage of working out an agreement until the advances of RSE International Corporation. 2. RSE International Corporation RSE International Corporation is considered as a Russell 1000 company is founded by Tom Eliot in 1970. Based on what he perceived to the firm’s challenges, Tom Eliot persuaded RSE’s board to realize an aggressive
MID-SEMESTER ASSIGNMENT Dr. John Heptonstall Bao Chau Nguyen Xuan May 2011
I/ Summary of FVC & RSE’s business activities 1. Flinder Valves and Controls Inc. Flinder Valves and Controls Inc. is a small company located in Southern California, manufactured specialty valves & heat exchangers. This company realized an outgrowth in 1980s of previous century from a small company for engineering on an experimental heat-exchanger product. After 7 years, it acquired the properties of the engineering corporation under the leadership of Bill Flinder, an outstanding researcher. He always concentrates on R&D not only to improve current products but also to create new products with patent protection. Moreover, it also owns a reputation for engineering excellence in the most complex phases of the business that helped them reward a U.S government contract on an advanced hydraulic-controls system, code-named “widening gyre”. Especially, in competitive erosion in the mid-2000s, FVC came onto the market many new products for the aerospace & defense industries. As a result, sales in the first quarter of 2008 grew 23% while many other competitors experienced a limited growth. Additionally, FVC’s plants were also organized efficiently with modern constructions. The Auden Company is a large firm which was an important foreign distribution channel of FVC (about 15% of FVC’s sales came from Auden Company). With FVC’s success, in 1996, Flinder Valves decided to take public and obviously, Auden became a big holder of 20% FVC common stock. From 1998, FVC received various merger proposal (Auden company included), but none reached the stage of working out an agreement until the advances of RSE International Corporation. 2. RSE International Corporation RSE International Corporation is considered as a Russell 1000 company is founded by Tom Eliot in 1970. Based on what he perceived to the firm’s challenges, Tom Eliot persuaded RSE’s board to realize an aggressive