Analysis: Cooper Industries‚ Inc. MBAD 6235 Section 11 December 3‚ 2014 Elisabeth Goodson‚ Lynette Hammond‚ Wanting Hou‚ Sam Inman‚ Qian Jin‚ Weisi Sun‚ Shumin Xu‚ and Yuru Zhang I. Summary of the Problem Cooper Industries was founded in 1919 as an equipment and heavy machinery manufacturer. Over time‚ Cooper Industries experienced significant growth through acquisitions. Nicholson File Company had been on Cooper’s shopping list for years as a company to acquire. What made Nicholson so attractive
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Cooper Industries’ is truly in the business of value-added manufacturing. From its criteria used to select acquisitions to its organizational structure‚ Cooper Industries is constantly trying to uncover opportunities to acquire and divest companies in the pursuit of increasing economies of scope and profitability. Acquisition Guidelines for Diversification Cooper has specific‚ detailed guidelines for its diversification approach. It will only acquire firms that will fit easily into their
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PIPER Cooper Industries‚ Inc. In May 1972 Robert Cizik‚ executive vice president of Cooper Industries‚ Inc.‚ was reviewing acquisition candidates for his company’s diversification program. One of the companies‚ Nicholson File Company‚ had been approached by Cooper Industries three years earlier but had rejected all overtures. Now‚ however‚ Nicholson was in the middle of a takeover fight that might provide Cooper with a chance to gain control. Cooper Industries Cooper Industries was organized
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Cooper Industries’ Corporate Strategy Case Analysis Company Vision The vision of Cooper Industries‚ as stated in the case‚ was to do an ‘outstanding job at the unglamorous part by making necessary products of exceptional quality.’ The goal was to operate in industries that had become somewhat of a necessity for consumers. Examples of such industries include: power transmission‚ hand tools‚ drilling and others. Cooper industries had started in 1833‚ as an iron foundry‚ and had existed most of
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Case Analysis Cooper Industries Cooper Industries was organized in 1919 as a manufacturer of heavy machinery and equipment. By the mid-1950s it was a leading producer of engines and massive compressors used to force naturalgas through pipelines and oil out of wells. Management was concerned‚ however‚ over its heavy dependence on sales to the oil and gas industries and the violent fluctuation of earnings caused bythe cyclical nature of heavy machinery and equipment sales. Although the company’s
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The purpose of DCF-Valuation is to determine the value of a company in terms of its future cash flows. The cash flows are adjusted with certain items (e.g. those not related to company´s core businesses or those with no cash effect) in order to make sure the flows reflect the actually generated cash as good as possible. This document describes DCF valuation in detail and in our valuation model. If you would like to get an overview of valuation in general or practical examples (numerical and graphical)
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OVERVIEW: Cooper Industries is a broadly diversified manufacturer of electrical and general industrial products‚ and energy related machinery and equipment. The company operates in three different business segments with 21 separate profit centers. These segments include electrical and electronic‚ commercial and industrial‚ compression‚ drilling and energy equipment. The product line is consisted of cheap fuses to $3 million compressor tribune sets along with products such as hand tools and light
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HOW ATTRACTIVE IS THE INDUSTRY ? An attractive industry with a high average return on investment will be difficult to enter because entry barriers are high‚ suppliers and buyers have only modest bargaining power‚ substitute products or services are few‚ and the rivalry among competitors is stable. An unattractive industry like steel will have structural flaws‚ including a plethora of substitute materials‚ powerful and price-sensitive buyers‚ and excessive rivalry caused by high fixed costs and a
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1. If you were Mr. Cizik of Cooper Industries‚ would you try to acquire Nicholson File Company in May 1972? Why? If I were Mr. Cizik of Cooper Industries‚ my decision would be trying to acquire Nicholson File Company. Why? For 3 reasons: 1. Nicholson File Company is a company that is financially healthy. With increase in sales in the last 5 years. Today is a very liquid company. Their liabilities are very well controlled. Opportunity cost reduction due to the merger and thus increases margins
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• Coopers strategy: Cooper Industries is a broad company that uses the M&A strategy of diversification by acquiring companies that posses their own strong assets and exhibit stable earnings. As stated by the Corporate Role the company’s acquisitions had guidelines of companies that served a broad customer base‚ had stable earning and proven manufacturing operations using well-known technologies and had brand name product from market leaders. • How does it create value: As stated by Cooper
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