Hbs Four Deals

Debrief of Four Deals

10/Mar/15 18:50

FOUR DEALS Abstract This research has been done to give advice to a potential investor in relation to four companies. These are Redmay Tack sellers, Argent Audio, The Quixote Company and the Santa Rosa Plant, and Cardigan Canisters and Aegix Labs. In giving advice as to whether or not the investor should consider these companies or not, we consider the financial feasibility of each of them. The main drive of any investor is to know whether the investment will help them maximize profits. Besides this, the investor determines whether the current status of the company under consideration is good enough for them to buy it. Are the debt levels manageable? Is the management a team that they can work with? These are some of the considerations that have been made in advising the potential buyer with regards to the mentioned companies.

Redmay Tack sellers Good qualities: The foundation of the business: The founder, Red had good judgment as evidenced by the fall out of the colt at his previous working place. The boss went against Red’s judgment which later proved to be a fatal mistake. Thus, it means that red made a wise judgment in establishing his business. The hiring of professionals with both financial acumen and knowledge about horses was a good decision. It ensures that professionalism is upheld. Acquisition of the company through Leverage Buyout (LBO) means that I as an investor stand the chance of making huge profits based on the company’s financial standing. As explained by Wadadekar, successful LBOs create value as the firm earns abnormal returns at the same time; the investor earns excess returns between the buyout completion date and initial public offering or resale date (2008). Based on the company’s predictable cash flow, acquisition of the company through LBO would be a smart strategy since the company would be able to pay off the own debt through its earnings. Red flags: The role of Brad Delaney in the company:...