looking for a buyer for the Collinsville‚ Alabama plant after successfully acquiring 91% of the shares of Universal Paper Corporation. Dixon Corporation‚ a specialist chemical company with customers primarily in the paper and pulp industry agreed to the possibility of purchasing the Collinsville plant for $12 million. This purchase will diversify Dixon’s product line‚ adding the sodium chlorate chemical‚ produced at the Collinsville plant‚ needed by its existing customers. Dixon is evaluating different
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GROUP SUBMISSION: Due 27 June 2011 Midnight American Chemical Corporation CASE QUESTIONS Read the American Chemical Corporation case that was handed to you. The underlying question to be answered is should Dixon acquire the Collinsville plant. In your case write-up‚ you can discuss the questions given below. Please note that the given questions are to be used only as a guide for your discussion. You do not need to answer the questions in the sequence they are presented. You can use the spreadsheet
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tender to sell a Sodium Chlorate plant‚ near Collinsville‚ Alabama. Dixon‚ a specialty chemicals company‚ was willing to purchase the aforementioned plant for $12m with the option to invest a further $2.25m on laminate technology. The subsequent investment in Laminate technology was expected to eliminate graphite costs and reduce power consumption at the Collinsville plant by 15% to 20%. We will evaluate the acquisition of the Collinsville by Dixon at the proposed price. Table 1 identifies the
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Executive Summary American Chemical Corporation’s Collinsville plant in Alabama is being sought by Dixon a speciality chemicals company. This plant mainly specialises in Sodium Chlorate production and fits well with Dixon’s strategy of supplying chemicals to paper and pulp industry. It would also complement Dixon’s existing product line. The plant costs $12million in investment and requires up to$ 2.25 million for upgrading to new technology. An in-depth investigation and analysis is conducted
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Introduction: 1) This report considers the potential purchase of the sodium chlorate producing plant in Collinsville‚ Alabama by Dixon Corporation from American Chemical Corporation in October 1979. The reason for this stems from the fact that American Chemical Corporation was attempting at the time to buy a controlling stake in Universal Paper Corporation‚ but the management of Universal contested this on the basis that it would be anti-competitive‚ given that they were both producers of sodium
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Do the circumstances surrounding the sale of the Collinsville plant play any role in your willingness to buy the assets? If so‚ how‚ if not‚ why not? On the one hand‚ the circumstances of the sale make me less willing to buy. In particular‚ both Universal and the federal government think that American’s acquisition creates antitrust issues. If this is the case‚ American could use its market power to change the nature of the market and make Dixon’s new plant unprofitable by setting lower prices
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Applied Corporate Finance Case: American Chemical Corporation The primary issue we are exploring here is the planned sale of the Collinsville Plant by American Chemical Corporation to Dixon at a negotiated price of $ 12 Million (as of end of year ‘79) Q1: Estimate the appropriate cost of capital for the investment To calculate the appropriate cost of capital we assessed Dixon’s purchase investment structure. The steps were as follows: 1. We first calculated the cost of debt of the investment using
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approve the acquisition of the Collinsville plant at the price and on the terms proposed in the case As per an agreement with the government‚ American Chemical Corporation needed to sell the Collinsville plant after the acquisition of Universal Paper Corporation‚ or it be in violation of the anti-trust law. In the case‚ Signal agrees to buy the entire assets of the Collinsville plant at the price of $12 million. The key to solving this case is the valuation of the Collinsville plant. For Signal‚ the purchase
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and WACC is 12.01%. Calculation of NPVs Table 2 and Table 3 show the next 10 years cash flow of the Collinsville Plant without and with laminated graphite electrodes. Using the calculated WACC as the discount rate‚ the NPVs results are approximately -1.1 million without laminated electrodes and 10.3 million with laminated electrodes. According to the NPV calculated from DCF‚ the Collinsville proposal with laminated graphite electrodes looks much more attractive than without them. Issues beyond
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year‚ I went to the Collinsville KC to serve meals for veterans and families of veterans. I helped at the Edwardsville Food Pantry moving and organizing different types of canned or packaged meals. I went to the St. Mary’s auction and served meals and helped with the auction. Lastly I went to the Edwardsville library‚ and I helped set up crafts and helped the kids out while they did their craft I also helped do some other little things around there. The day I went to the Collinsville KC‚ I fulfilled
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