The Timken Company to Acquire Torrington This memo will examine Timken Company’s decision to acquire Torrington by examining the stand-alone value of Torrington‚ the synergies of this acquisition and the effect on Timken’s investment grading. Acquiring Torrington seems to fit well with Timken’s long term growing strategy. Torrington and Timken share 80% of their customers but only overlap 5% in their product offerings. Not only would this allow customers to make Timken a one stop shop for
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The Timken Company Top management of Timken hires you as consultants to perform an independent analysis and recommend the best‚ in your opinion‚ course of action in the proposed acquisition of the Torrington Company. Your task is to write a report that will address their questions and concerns‚ in particular: 1. 2. 3. 4. How does Torrington fit with the Timken Company? What are the expected synergies? What is your stand alone valuation of Torrington? What is your with-synergies valuation of Torrington
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Executive Summary From our DCF calculations‚ the value of Torrington as a stand-alone entity is $1.181 billion. However‚ the maximum purchase price for Torrington should only be $641 million. The optimum debt amount for this transaction would be $301 million. This amount of debt would result in a total debt to capital ratio for Torrington of 47%‚ within the range for a BBB “investment grade” debt rating. The combined entities‚ Torrington-Timken‚ would produce an interest coverage ratio of 3.2‚ and a
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NYSE: TKR THE TIMKEN COMPANY Investment Thesis The Timken Company is the largest tapered roller bearings manufacturer in the world and one of the largest manufacturers of alloy and specialized steel in the world. The company reports revenues in three business segments: Steel (31% of 2005 revenue)‚ Automotive (32%)‚ and Industrial (37%). I feel that Timken is capable of delivering solid EPS and top-line revenue growth over the next two years‚ driven largely by demand for industrial bearings and
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1) How does Torrington fit with The Timken Company? What are the expected synergies? Timken‚ is the inventor of the tapered roller bearing‚ and Torrington‚ the pioneer and leading global producer of needle roller bearings‚ have only a 5% overlap in their product offerings; together would make Timken a formidable company. The acquisition of Torrington will substantially broaden Timken’s product portfolio and enable deeper penetration of the global market. After the acquisition Timken will be listed
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MASSON FINC 624 BUSINESS VALUATION SUMMER II – 2015 Timken Co. Case Writeup Fatmah Alyami Wenting Yu Meshal Alyami Shengxu Li Tongkai Zhang Yuqing Zhang Timken Case WriteUp ● How does Torrington fit with The Timken Company? o What are the expected synergies? We believe that Torrington fits in with Timken Co. and this acquisition will generate positive operating synergies for Timken Co. The reason being is that they both operate in the same i
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whether Timken should acquire Torrington company from Ingersoll-Rand by cash‚ issuing share to public or issuing share directly to IR. IR wanted to divest Torrington and Timken aim to acquire it. After merging with Torrington Timken will be world third largest company in bearing industry and Timken would gain more sales as Timken and Torrington has about 80% of overlapped customer. Moreover after the synergy they can reduces cost‚ increase market shares and have more production lines. As Timken leverage
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The Timken Company Due Date: Tuesday‚ Sept 17th‚ 2013‚ 5pm. Presentation Date: Sept 18th‚ in class. Please e-mail me an electronic copy of the report before the deadline. At the beginning of the class on Wed.‚ please also submit a printed copy. The names of all group members should be specified at the top of the report. For Lead Group: case report should be no longer than six pages of text (double space‚ Font 11‚ 1 inch margin on all sides). You should also include any additional financial
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Individual Case Brief-The Timken Company Main Issue The Timken Company was intended to acquire the Torrington Company from Intersoll-Rand (IR). If the acquisition succeeded‚ Timken would get synergies such as boosting world market share and cutting costs substantially. However‚ considering the large size of this acquisition‚ Timken would face the stress of below-investment-grade rating and series of future financing problems if IR required a cash deal. A feasible financing structure must be considered
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THE TIMKEN COMPANY In 2002‚ The Timken Company was considering acquiring The Torrington Company from Ingersoll-Rand. The acquisition would make a clear statement to the market about Timken’s commitment to remain a worldwide leader in the bearing industry as it would result in the combination of more than 100 years of bearing manufacturing and development experience. Because the two companies shared many of the same customers but had few products in common‚ customers would surely appreciate the
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