and one of 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
Premium Investment Weighted average cost of capital Financial ratios
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
Premium
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
Premium Balance sheet Asset Revenue
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? ....................
Premium 1916
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 disadvantage‚ so that AGI saw it has a possible opportunity for growth via acquire Mercury Athletic which represents a similar market share in the mature‚ highly competitive industry. Executive Summary There are several reasons why Mercury Athletic is an appropriate target for AGI since an acquisition. Firstly‚ AGI and Mercury are dealing
Premium Discounted cash flow Weighted average cost of capital Net present value
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
Premium Free cash flow Discounted cash flow Cash flow
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
Premium Asset Free cash flow Balance sheet
Mercury Athletic Case Nicholas Thebeau‚ Student ID 50927830 Presented to: Professor Kevin Wall West Coast Fashions‚ Inc. (WCF)‚ a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization. Active Gear‚ Inc. (AG)‚ a privately held footwear company‚ was contemplating an acquisition opportunity. John Liedtke‚ the head of business development for AG‚ was interested in a WCF subsidiary. The subsidiary that Liedtke and AG intended to
Premium Net present value Discounted cash flow Cash flow
Mercury Athletic Footwear: Valuing the Opportunity Active Gear‚ Inc. (AGI) is a privately held footwear company and is contemplating the possibility of acquiring Mercury Athletic Footwear. 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. AGI’s head of business development‚ John Liedtke‚ believes acquiring Mercury Athletic Footwear is a good option for the company. Although
Premium Net present value Cash flow Discounted cash flow
There are several reasons why AGI should consider Mercury Athletic as an appropriate target for acquisition. First‚ acquiring Mercury could improve both companies financially. Acquiring Mercury would double AGI’s revenue. Although Mercury’s financial performance has been disappointing‚ they experienced top line growth of 20% in 2006. Unfortunately‚ their profitability has been disappointing due to price concessions to big box retailers and an unsuccessful women’s line. Mercury’s (and ultimately
Premium Discounted cash flow Revenue Cash flow