Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Therefore, the company is in a need to focus on its expansion strategy and searching for the market opportunities. Mercury had revenues of $431.1 million and EBITDA of $51.8 million during 2006. 9-410-S14 Spanish language Subject category: Finance, Accounting and Control Mercury Athletic: Valuing the Opportunity. Do you regard the value you obtained as conservative or aggressive? 3: Mercury’s manufacturing costs are quite low in comparison with AGI. your own Pins on Pinterest Therefore, it can help AGI to raise its post acquisition growth rate. Mercury Athletic Footwear: Valuing the Opportunity Case Solution. Overview: Nike’s Five Forces Analysis. Mercury is specialized in designing and distributing the branded athletic and casual footwear. The head of the business development for Active Gear, Inc, John Liedtke, view this event as a good opportunity to acquire Mercury Athletic. Operating Income. View Longzhan Ji’s profile on LinkedIn, the world's largest professional community. Longzhan has 3 jobs listed on their profile. 1 The Value of Synergy Aswath Damodaran Stern School of Business October 2005 2 The Value of Synergy Many acquisitions and some large strategic investments are often justified with the argument that they will create synergy. $470,285mn. Athletic footwear refers to those shoes that are designed for sports and other outdoor activities. 2020 © CaseProfessors.com. Men’s casual segment growth rate is projected at 2.5%, which seems very appropriate as this segment brings the highest profit margin for Mercury and after acquisition, the growth rate should increase. And 5'8.5 in shoe hence nearly 5'9. 4: Additional cost is to be entertained to synergize the inventory management systems. Mercury Athletic Footwear: Valuing the Opportunity Case Study Solution & Analysis Why Almost Everything You’ve Learned About Mercury Athletic Footwear: Valuing the Opportunity Case Solution Ideas Is Wrong and What You Should Know. The projected growth rates for men’s athletic and women’s athletic seem very pessimistic. It made it the most valuable brand in the sports businesses. Mercury case 1. Just because it’s cold, snowy, rainy, or a downright blizzard outside doesn’t mean the treadmill is your only option. For making a decision regarding the acquisition being appropriate or not, the facts and side effects of acquisition should be considered first. Always be ready to take total benefit of the stream of ideas as soon as it starts to gush. 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. Download case solution or order custom case analysis for Case Study Solution. MGMT S-2720 Assignment 1: Mercury Athletic Footwear Questions 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. Executive Summary Great pressure from suppliers and competitors caused some deterioration of basic performance for AGI during 2004–2006. Mercury Soccer will be hosting tryouts from October 24 - November 7. Furthermore Mercury Athletic Footwear Valuing The Opportunity Case Solution & Analysis it allows the stakeholders to see the other options if the given set of alternative does not work, thus saving the time, effort and the working from scratch, hence making it cost effective in nature. At the same time, the acquisition will help AGI to gain more market share and expand its business operations. This acquisition can help AGI gain more market share and size so that it can contend with the leading competitors. analysis, building models in Excel, and writing. Active Gear was one of the most successful firms in terms of profitability, in the footwear industry. Mercury Athletic Footwear Case Solution. Excel University City. 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 Athletic Footwear Case Excel Nissan Factory Warranty Coverage Lung Flute Icons Oporanho Guitar Chords Cricket Captain 2008 On Mobile; News Channel 12 Edgefield Sc Can You Watch TV On Psp 1000 Bud Sports Vivitar 25 215 Reviews Best Dvd Video Creator Ubuntu Liedtke wants to make sure that besides the ‘evident synergies’, there should be some financial benefit of acquiring Mercury. Discussion Materials For Additional Coverage of the Topics Please See Your Professor Or E-mail me at jheilprin@hbs.edu Harvard Business School Joel L. Heilprin 59th Street Partners LLC. Business did not do as expected, WCF was then eager to abandon its apparel. You're going places with this cycling collection. 1: Mercury will help AGI to roughly double its revenue. Mercury Athletic Footwear Case Solution. ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset ?eta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 2: For calculations of the acquisition price, the P/E is taken to be 8.6. Mercury Background 2003 - acquired by West Coast Fashions (WCF) Attempted brand extension through apparel line Business stalled Mercury CEO eager to return exclusively to footwear Four footwear product lines Men’s/Women’s athletic Men’s/Women’s casual 2006: Revenue - $431.1 million EBITDA - … 42% Athletic 58% Casual. 2: Mercury has a higher growth rate than AGI. - Inhouse team of MBAs and CFAs (not reliant on freelancers), We are the Number 1 Case Study Solution Provider In the Case Study Help Niche, Kendall Square Research Corp. 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Executive Summary Great pressure from suppliers and competitors caused some deterioration of basic performance for AGI during 2004–2006. The footwear industry is very competitive, with low growth and stable profit margins. Q1) Is Mercury an appropriate target for AGI? There are three basic assumptions for the projections. Mercury Athletic Footwear Case Essay Sample. 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. In January 2007, West Coast Fashions, Inc., a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. Reasons why Mercury is an appropriate target for AGI 4 2. Anything more then 5'9 is scientifically impossible due his roots from India. Men’s athletic projected rate is way below than the historical average which does not looks appropriate. THus Freddie mercury height in shoes would be close to 5'9. Is Mercury an appropriate target for AGI? Boat part number 1075757 is a new exhaust tube bellow from Mercury Quicksilver, part number 32-44348001 . Mercury was purchased by WCF in hopes to increase business revenue however this was not the case. Come join us and watch your young athlete rise. Mercury Athletic Valuing the Opportunity Case Solution, ... United States, Footwear, Athletic Apparel, Footwear. It earned US$30.601 billion in 2015. $42,299mn. The industry is same, products are similar, markets are similar, greater ability to merge each other’s operating efficiencies and improve deficiencies, therefore it is evident that these factors confirm that Mercury is … Yes, we don’t store any card details or other financial information with us. Let us do a pestle analysis example of Nike to know where it stands. 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. Blog. View Mercury Athletic Footwear Case from BUFN 750 at University of Maryland, College Park. 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). Introduction: Mercury. The net cash flow at the end of 2011 is used to calculate the terminal value. Kit yourself out in cycling's biggest names, including Muddyfox, Oldo, Kross and Radial. 5: The acquisition will help AGI expand to more retailers and distributors. • Both the companies are dealing in the similar industry and products. Let’s review all the projections one by one. AGI is a profitable company; however, its size is not large enough to cater for market expansion opportunities. John Liedtke saw this as an … A valuation report, counting for 10%. View Mercury Footwear Excel Spreadsheet FINAL from FIN 555 at DePaul University. When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.In January 2007, West Coast Fashions, Inc., a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. With continuous efforts, the company succeeded in identifying the customers’ need and fashion pattern which resulted in growth in the revenue and EBITDA. Daniel Fiore, the founder of Mercury, sold the company to West Coasts Fashion, a large designer of women’s and men’s branded apparel, in late 2003. Should AGI purchase Mercury? AGI is a profitable company; however, its size is not large enough to cater for market expansion opportunities. For making a decision regarding the acquisition being appropriate or not, the facts and side effects of acquisition should be considered first. Mercury Athletic Footwear: Valuing the Opportunity. Read More 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. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to roughly double the size of his business. How would you analyze the possible synergies or other sources of value not reflected in Liedtke’s base case assumptions? Perfectly protected by light but durable gear from DYNAFIT. 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). 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