las líneas de alta tecnología para el tenis y golf‚ que luego pasó a la línea casual. • West Coast Fashion‚ compañía diseñadora de ropa. • Mercury Athletic‚ división de calzado deportivo de West Coast Fashion Puntos relevantes: En marzo de 2007‚ Active Gear está contemplando una oportunidad de una adquisición. Con la adquisición de Mercury Athletic‚ Liedtke espera: • Aumentar los ingresos de Active Gear al doble. • Incrementar el apalancamiento con las manufactureras. • Expandir la presencia
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4050 SEPTEMBER 18‚ 2009 TIMOTHY A. LUEHRMAN JOEL L. HEILPRIN Mercury Athletic Footwear: Valuing the Opportunity In March 2007‚ John Liedtke‚ the head of business development for Active Gear‚ Inc.‚ a privately held footwear company‚ was contemplating an acquisition opportunity. West Coast Fashions‚ Inc. (WCF)‚ a large designer and marketer of men’s and women’s branded apparel had recently announced plans for a strategic reorganization. The plan called for a divestiture of certain non-core
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Executive Summary The footwear industry is highly competitive industry with fairly stable profit margins. Active Gear is a profitable firm in the industry; however Active Gear is a smaller firm than many other competitors and its small size is becoming a competitive disadvantage. The rise of large retailers has also endangered Active Gear’s growth. Mercury Athletic Footwear designs and distributes athletic and casual footwear dominantly to the youth market. Mercury competes in four main product
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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. West Coast Fashions‚ Inc is a large business of men’s and women’s apparel decided to dispose of one of their divisions: Mercury Athletic with $431.1 million revenue in 2006. AGI is very profitable but it is smaller than other competitors‚ which is becoming a competitive
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Mercury Athletic Footwear Valuing the Opportunity [Author] CASE ANALYSIS Mercury Athletic Footwear Table of Contents 1. Is Mercury an appropriate target for AGI? Why or why not? ............................ 3 2. Review the projections by Liedtke. Are they appropriate? How would you recommend modifying them? ....................
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RE: Mercury Athletic valuation and acquisition recommendations We believe that Mercury is an appropriate target for AGI since an acquisition can be an excellent growth opportunity. First‚ through the acquisition AGI can take the advantages of some existing synergies. Acquiring Mercury would expand AGI’s business size and consequently produce the “one plus one is greater than two” effect. This acquisition would double AGI’s revenues‚ increase its leverage with contract manufacturers‚ and also help
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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? • Estimating FCF requires – Developing a reorganized Balance Sheet A Complex Reorganized Balance Sheet Assets Excess Cash NWC Liabilities 000 Debt 104117 Others 000 000 NFA (PPE) 32618 Hybrids Others 77332 Equity 214067 214067 Capital
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Mercury Footwear Questions 1. Is Mercury an appropriate target for AGI? Why or why not? Yes‚ we do think so. In the case‚ we could find some characteristics of footwear industry: (1) It is a mature‚ highly competitive industry marked by low growth‚ but stable profit margin. (2) Performance of individual firms could be quite volatile for they need to anticipate and exploit fashion trend. (3) Except some global footwear brands‚ athletic and casual shoes market is still fragmented‚ which
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Collection Athletic Footwear: United States April 2012 Highlights Industry Overview Product Segmentation | Market Segmentation | Product Development Retail and Distribution | Trade Industry Trends and Forecasts Market Environment | Product Forecasts | Market Forecasts Industry Structure Industry Composition | Industry Leaders | Additional Major Companies Cited Resources www.freedoniafocus.com ATHLETIC FOOTWEAR: UNITED STATES ABOUT THIS REPORT Sources Athletic Footwear: United States
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the divisions it intended to shed was Mercury Athletic‚ its wholly owned footwear subsidiary. John Liedtke‚ the head of business development for Active Gear‚ Inc. (AGI)‚ a privately held athletic and casual footwear company‚ contemplated an acquisition opportunity of Mercury that would significantly improve his business. So‚ he wanted to evaluate this opportunity. This paper introduces the basic situation and feathers of current athletic and casual footwear industry and raises that active management
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