Submitted by: Submitted by footballguru40
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Category: Business and Industry
Date Submitted: 04/21/2011 07:49 PM
FLINDER VALVES AND CONTROLS INC.
Confidential Supplementary Information for Management of RSE International
Flinder Valves was the first among several potential targets identified by Catherine MacAvity,
RSE’s vice president of Business Development, and the architect of the acquisition program. Eliot
approved the choice and believed a smooth and successful acquisition of FVC was critical to RSE’s
expansion plans. Recent news in the U.S. credit markets had been grim. MacAvity worried that the news
in the financial markets might chill the ongoing talks. If the merger fell through after going this far, Eliot
feared his board might become discouraged. On the other hand, if FVC was acquired at too high a price or
failed to produce adequate returns, the RSE board would be unlikely to give its full support to future
mergers.
In planning RSE’s expansion, Eliot had considered several companies as possible acquisition
candidates. Eliot was seeking a small, well-managed manufacturer that could offer RSE strong growth
opportunities and bring it more specialized, higher-technology products that would be less susceptible to
succumbing to the competition. Although RSE had done well, Eliot felt the company lacked the ability to
be innovative. No new products had been developed over the past two years, and Eliot personally felt that
the research and development (R&D) group at RSE International had fallen behind its competitors. FVC,
with its proven management and engineering skills, seemed to offer the R&D capabilities and growth
prospects that Eliot sought. Eliot realized that time was of the essence, especially since other competitors
were also interested in Flinder Valves. Nonetheless, he wanted to be certain that acquiring it would truly
place RSE in a better competitive position. One concern was how well FVC’s employees would handle
the transition from working in a small, entrepreneurial company to a much bigger place...