Mercury Athletic Footwear: Valuing the Opportunity Group 1 Bushra Javed Butt M. Sharjeel Shahid Mahnoor Malik Uzair Nasir MBA II – Section A Submitted To: Sir Nawazish Mirza Introduction West Coast Fashions‚ Inc. (WCF)‚ a large designer and marketer of men’s and women’s apparel decided to dispose of one of their divisions; Mercury Athletic. John Liedtke‚ head of the business development for Active Gear‚ Inc. (AGI)‚ saw a possible opportunity for his company in acquiring Mercury. The footwear
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Mercury Athletic Footwear Overview Active Gear‚ Inc. is a privately held footwear company with $470.3 million in revenue in 2006‚ making it relatively small compared to big players in the athletic and casual footwear industry. Eyeing an opportunity for growth via a bolt-on acquisition‚ John Liedtke‚ head of business development for the company‚ is looking into acquiring a subdivision of West Cost Fashions‚ Inc.‚ Mercury Athletic. With 2006 revenue of $431.1 million‚ Mercury Athletic represents
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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 lines: men’s and women’s athletic and casual footwear. Men’s athletic footwear is the leading product for Mercury Athletic. Women’s casual footwear is Mercury’s worst performing product and post-acquisition the line may be discontinued by Active Gear. The acquisition of the Mercury Athletic division has sources of potential
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Overview of Active Gear: 1. Active Gear is a relatively small athletic and casual footwear company $470.3 million of revenue and $60.4 million of EBIT compared to typical competitors that sold well over a $1.0 billion annually Company executives felt its small size was becoming more of a disadvantage due to consolidation among Chinese contract manufacturers. Specialty athletic footwear that evolved from high performance to athletic fashion wear with a “classic” appeal. Casual/recreational footwear
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Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Reasons why Mercury is an appropriate target for AGI 4 2. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. 4 a. Estimation of the weighted average cost of capital 5 b. Estimation of the free cash flows from 2007 to 2011 5 c. Estimation for long-term growth rate and estimate the terminal value 5 d. Estimation value of
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Question1 – What does the Ghana Case reveal about why countries progress? Fail to progress? Ghana was organized as a self –supporting entity funded by local resources and loans. More so than the other British colonial powers‚ The British promoted education and employed skilled indigenous people throughout the civil service. The government took a laissez-faire approach to commerce‚ Was opened the first bank in Ghana(Standard Bank now) Cocoa was introduced by Presbyterian missionaries
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Mercury Athletic Footwear: Valuing the Opportunity Terran Knox Measurements II MBA-634 Northwood University DEVOS Program Dr. Adam Guerrero 4 March‚ 2015 Problem Statement Mercury Athletic is the footwear division of West Coast Fashions (WCF)‚ a designer and marketer of men’s and women’s apparel. Due to unspectacular financial reports‚ the division was going to be sold. John Liedtke‚ the head of business development for Active Gear‚ Inc.‚ (AGI) looked to acquire Mercury from WCF‚ believing
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Mercury Athletic Footwear Case Study John Liedtke head of Active Gear‚ Inc. (AGI) is contemplating whether to invest in Mercury Athletic a subsidiary of West Coast Fashions (WCF). Mercury was purchased by WCF in hopes to increase business revenue however this was not the case. Business did not do as expected‚ WCF was then eager to abandon its apparel. John Liedtke saw this as an opportunity to take over Mercury and as result increase its business revenue. In order to determine whether this is
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Net Present Value of Mercury Athletic Enterprise The results of my financial analysis based on the Free Cash Flow Method considering the base case of financial projections and assumptions for Mercury Athletic Footwear collated and developed by John Liedtke indicate that that the project to acquire Mercury Althletic has a positive net present value at $243‚025 (in thousands) [ given by PV(FCF)=86‚681+ PV (Terminal Value) =156‚343] which is also greater than the recommended acquisition price of $186
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California State University‚ Fullerton Department of Economics/MCBE Comparative Economic Systems (ECON 330) Spring‚ 2014 Course Syllabus Instructor: Nek Buzdar‚ Ph.D. Class Meetings: Section 01‚ Schedule # 11872 ( TuTh 11:30 AM -12:45 PM‚ SGMH 1303) Section 02‚ Schedule # 12161 (TuTh 2:30 PM - 3:45 PM‚ SGMH 2501) Section 03‚ Schedule # 12162 (TuTh 4:00 PM - 5:15 PM‚ SGMH 2205) Section 04‚ Schedule # 12320 (TuTh 10:00 AM - 11:15 AM‚ SGMH 1303) Office Location
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