Fin 370 Paper

Intro

Kudler Fine Foods has three locations in the San Diego area serving a wide variety of gourmet food. Each location provides services from a European Style Bakery to an extensive wine selection. Currently Kudler Fine Foods is privately held, but the company is looking to expand operations. Team A will analyze the opportunity of Kudler Fine Foods expanding and the best way for the company to accomplish this goal. We will discuss the pros and cons ofstrengths and weaknesses of Public trading, mergers and acquisitions will be discussed, the opportunities that are advantageous for the company and any possible threats to the corporation using any of the three approaches.

Weakness of IPO

As Kudler reviews the pros and cons of an Initial Public Offering (IPO ) its discovered that it has many disadvantages. Once in IPO status and the stock is on the market, Kudler will be required to file financial information with the Securities and Exchange Commission (SEC). SEC filings require an enormous amount of paperwork which must be submitted periodically and the fees schedule is extremely expensive. One of the biggest disadvantages is that this now opens up the company’s financial records to the public which include your competitors. New wealth acquired by the company is shared with the public investors. Kudler’s may also lose control of the company to the outsiders whom own stock in the company depending on the amount of stock the holders own. Kudler’s owner would not be able to walk away from the company for a specified period, so an IPO would not allow her to retire immediately if that were her plan. An IPO involves many legal issues that could lead to a lawsuit against Kudler’s owner if all the company facts are not presented in the IPO process.

Weakness of Acquisitions and Mergers

Another avenue that Kudler Fine Foods may consider is being acquired or merging with a larger company. Research by McKinsey & Company found a high rate of...