THE O. M. SCOTT & SONS COMPANY Between 1955 and 1961‚ management of The O. M. Scott & Sons Company launched a number of new programs aimed at maintaining and increasing the company ’s past success and growth. Largely in response to these activities‚ Scott ’s field sales force grew from 6 to 150 men‚ several entirely new and expanded production facilities went on stream‚ and the number of products in the company ’s product line tripled. Sales increased from about $10 million to $43 million. In late
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(Table of Contents) 1. 2. 3.LBO 4.TXU 5. LBO 6. (Overview of Leveraged Buyouts) (Mechanics of an LBO Analysis) (LBO Best Practices) (TXU Case Study) (LBO Modeling) (Homework Assignment) (Appendix) 1. Overview of Leveraged Buyouts (LBO) Overview of Leveraged Buyouts An LBO is the acquisition of a company or division of a company using debt for a majority of the purchase price and equity for the remainder. The buyer (the LBO Sponsor or Equity Sponsor) borrows the debt portion of
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he company is facing a good economy as evidenced by the increase in sales. Industry is investing in research and development of products. Competitors are slowly entering the market. O.M. Scott and Sons Company is a business in the lawn care and garden product industry. Currently‚ the company is reviewing the results of 1961 and preparing plans for the 1962 selling season. Sales were increasing and so is net income except for the year 1960 to 1961. he company is facing a good economy as evidenced
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The Leveraged Buyout of RJR Nabisco In 1988‚ a war was launched for the control of RJR Nabisco. It ended at the end of the year when KKR won the bidding war with a $ 109 per share offer and took RJR Nabisco private. Before the details of the leveraged buyout (LBO) are discussed‚ it is important to understand what made RJR Nabisco so attractive. RJR Nabisco was a conglomerate company that was involved in mainly two industries. It had divisions in the tobacco and food industries. In the tobacco division
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Bidding for Hertz: Leveraged Buyout Case The dual-track process used by Ford to initiate “consideration of strategic alternatives” makes the bidding process for Hertz more difficult. The bidding group has to spend more time to gather more information required for the process. To be able to give out an acceptable price‚ which maximizes the value for Ford‚ the cost the group has to put to buyout is also higher. Longer time to collect the information means the group lose its competitive advantages
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BUSINESS CASE ANALYSIS “O.M. SCOTT & SONS COMPANY” SUBMITTED BY: ESTIMADA‚ ANNA GABRIELLA C. Executive Summary The O.M. Scott and Sons company was a company which first started to produce weed-free grass‚ but diversified into other products related to its product line: lawn mowers‚ fertilizers‚ and other garden paraphernalia. It encountered the problem of nationwide distribution‚ finding difficulty in the delivery of its product. The company solve this problem of nationwide distribution
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The O.M. Scott & Sons Company Background * Founded in 1868 * Processes weed-free grass seed * Has a highly seasonal demand for its products * Started experiencing rapid growth in 1945 * Major internal control issues Major Problems * Should S & S keep their current trust receipt program even though sales and accounts receivables are increasing as cash is decreasing? * Will S & S be able to operate as a national firm even though some dealers are acting
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Chapter 17 Mini Case The Leveraged Buyout of Cheek Products‚ Inc (in millions) 2007 2008 2009 2010 2011 PV of UCF 2007-2011 at 14% Sales $1‚627 $1‚824 $1‚965 $2‚012 $2‚106 = (1‚735/1.14)+(1‚519/1.142)+(1‚188/1.143)+(1‚192/1.144)+(1‚251/1.145) Costs 432 568 597 645 680 4‚848 Depreciation 287 305 318 334 340 EBT 908 951 1‚050 1‚033 1‚086 UTV Less taxes (363) (380) (420) (413) (434) = (1
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missed market expectation in 8 of the past 13 quarters‚ and was en-route to disappoint again. The pressure to meet analyst expectations was counter-productive to the company revitalization effort. Given this‚ senior management decided it would be a good idea to take the company away from the public spot light via an LBO so that the company can focus on solving its operational issues without the scrutiny from the market. How is HCA performing? What are the challenges that the firm faces going forward
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Estimating Funds Requirements Short-Term Sources of Funds Subject: O.M. Scott & Sons Company Problem: Should the O.M.Scott company keep with its Trust Receipt Plan in order to maintain 25% growth rate. Options: 1. Sell receivables to a third party at a discount rate to receive cash. 2. Issue preferred equity to help finance retailers in holding higher Inventory levels 3. Reduce growth rate to a sustainable Recommendation:
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