mercury athletic footwear case study

... • AGI strives in the casual footwear segment with a revenue of 470 million while Mercury is in the Athletic footwear segment making 431 million a year. Active Gear to acquire Mercury Athletic Footwear. Because of Chinese manufacturing contract consolidations, AG’s size was becoming a disadvantage due to low buying power vs. competitors. They maintained their own financial statements, databases, resource management systems, and distribution facilities (Luehrman & Heilprin, 2009). Second, by increasing the size of the AGI they would realize certain supply chain benefits. First of all, this acquisition would not be costly since AGI and Mercury share several similar characteristics in footwear industry. Due to a strategic reorganisation. Due to a strategic reorganization, the plan called for the divestiture of MA and other “non-core” WCF assets. Liedtke believes that acquiring Mercury Athletic Footwear would double AGI’s revenue, increase its leverage with contract manufactures, and expand AGI’s presence in relators and distributers. Despite the industry’s overall stability, the performance of... StudyMode - Premium and Free Essays, Term Papers & Book Notes. 1. Over the years, the firm’s athletic shoes had evolved from high-performance footwear to athletic fashion wear with a classic image. MA had revenues of $431.1M and an EBITDA of $51.8M. This reflects a good acquisition opportunity. Mercury Athletic Footwear Question 1 Based on the information in the case study, calculate the value of Mercury Athletic Footwear as an independent firm at the time of the case study … Problem Statement AG’s initial focus was to produce and market high-quality specialty shoes for golf and tennis players. Would Liedtke’s evaluation of Mercury prove that the future benefits of the acquisition will exceed the present value of the company? Shoes popularity grew in the extreme sports market Two main problems are continuing low growth rate because of serious competition of the mature footwear industry and rise of discount retailors, and pressure from supplies to boost capacity utilization because of its relative smaller firm. This will be discussed further in the recommendation. JOEL L. HEILPRIN The plan called for a divestiture of certain non-core Nicholas Thebeau, Student ID 50927830 View case1 from FVS 101 at University of Veterinary & Animal Sciences, Lahore. From my analysis, the value I obtained seemed to be aggressive against the information provided. Mercury Potential to double revenues Increase leverage with manufacturers Increase long run growth rate Expand presence with key retailers and distributors. 2. Review the projections by Liedtke. One of the divisions WCF intended to shed was Mercury Athletic, its footwear division. The market is influenced by fashion trends, price, quality and style. An effective method of quantitatively evaluating a possible... ...RE: Mercury Athletic valuation and acquisition recommendations It had two product lines- athletic and casual footwear The IRR of this acquisition is 28%. In this case, the cashinflow is the acquisition price, which used to purchase the Mercury Corporation. John Liedtke, the head of business development for AG, was interested in a WCF subsidiary. Active Gear, Inc. is a privately held footwear company with $470.3 million in revenue in 2006, making it relatively small compared to big players in the athletic and casual footwear industry. Mercury Athletic Footwear: Valuing the Opportunity Case Study Team members: Xingru Deng Zhiqiang Qing Ke Ma Ying Mercury was purchased by WCF in hopes to increase business revenue however this was not the case. Mercury Athletic: Valuing the Opportunity is a Harvard Business (HBR) Case Study on Finance & Accounting , Fern Fort University provides HBR case study assignment help for just $11. Liedtke thought acquiring Mercury would roughly double AG’s revenue, increase its leverage with contract manufacturers and expand its presence with key retailers and distributors. Fiore was forced to sell the company after running it for over 35 years, due to health problems. Top 10 blogs in 2020 for remote teaching and learning; Dec. 11, 2020 4 Mercury Athletic Footwear: Valuing the Opportunity Products were distributed to departmental and discount stores 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.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. Reasons why Mercury is an appropriate target for AGI 4 Mercury Athletic Footwear Case study September 10, 2017 ~ AssignmentHelpCenter ~ Leave a comment Mercury Athletic Footwear: Valuing the Opportunity In March 2007, John Liedtke, the head of business development for Active Gear, Inc., a privately held footwear company, was contemplating an acquisition opportunity. 2. Target market of both men and women Casting a shadow over these numbers are AG’s typical competitors. TIMOTHY A. LUEHRMAN Valuing Mercury Athletic To perform a preliminary valuation, Liedtke developed a base case set of financial projections based on forecasts of revenue and operating income for each of Mercury’s four main segments as shown in Exhibit 6. profit margins. AG’s typical competitor has annual sales over $1.0B. held footwear company, was contemplating an acquisition opportunity. Mercury Athletic is the footwear division of West Coast Fashions (WCF), a designer and marketer of men’s and women’s apparel. We believe that Mercury is an appropriate target for AGI since an acquisition can be an excellent growth opportunity. Mercury Athletic Footwear: Valuing Opportunity Case Summary: John Liedtke, head of business development for Active Gear Inc. (AGI), is evaluating the acquisition of Mercury Athletic (Luehrman & Hielprin, 2009). Just give us some more time, By clicking Send Me The Sample you agree on the, Mercury Athletic Footwear: Valuing the Opportunity, Self Medication Practices in a Rural Filipino Community. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Net present value of future cash flows equates to a positive $0.2M. Your Answer is very helpful for Us Thank you a lot! Mercury Athletic Case Executive Summary & Overview of Problems 3 Fiore was forced to sell the company after running it for over 35 old ages. The market is influenced by fashion trends, price, quality and style. This could have attributed to the various profitability problems that plagued Mercury. Let me walk you through some qualitative considerations before making my recommendation. The Business plan on Mercury Athletic Case. The acquisition of the Mercury Athletic division has sources of potential including an increase in Active Gear’s revenue, an increase in leverage with contract manufacturers, boosting capacity utilization and expanding its presence with retailers and distributors. Mercury Footwear Case Study; Mercury Footwear Case Study. Mercury Athletic Footwear: Valuing the Opportunity Case Solution While considering whether or not Mercury is an appropriate target for the Active Gear Incorporated AGI, different qualitative aspects need to … AG focused on products that didn’t follow fashion trends, resulting in a lengthened product lifecycle. Get a verified writer to help you with Mercury Athletic Case. West Coast Fashions, Inc. (WCF), a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization. By continuing we’ll assume you’re on board with our cookie policy. AG could potentially revive and profit from acquiring Mercury’s women’s product line. AG is a relatively small athletic and casual footwear company. Ice Point Solutions Darren Tan Darryl Tan Fangfei Li Will Wolf Why? Liedtke thought acquiring Mercury would roughly double AG’s revenue, increase its leverage with contract manufacturers and expand its presence with key retailers and distributors. In conclusion, AG should acquire MA. Goldman Sachs Case Competition. due to wellness jobs. How would you recommend modifying them? AG and MA target demographics could not produce company synergies MA is fashion trendy, therefore prone to risks outside of AG’s steady business model Company cultures could not match. Before acquiring Mercury Athletic Footwear, Liedtke wants a complete evaluation of the opportunity. Overview ...There are several reasons why AGI should consider Mercury Athletic as an appropriate target for acquisition. Quantitative Analysis West Coast Fashions, Inc. (WCF), a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization. Active Gear, Inc. (AG), a privately held footwear company, was contemplating an acquisition opportunity. Mercury Athletic Footwear: before hearing the bankers’ pitch. Acquiring MA- AG would be less affected by the Chinese manufacturing contract consolidation, due to increased buying powers. Northwood University DEVOS Program Additional materials, such as the best quotations, synonyms and word definitions to make your writing easier are Target customers are urban and suburban family members aged 25 to 45. In order to find if the projections are reasonable, you need a starting point. Second, this combination would expand firm size and help AGI achieve good bargains with... ... Because of consolidation of Chinese manufacturers, AGI and its competitors were being pressured to commit to larger manufacturing runs in an effort to increase capacity utilization. Terran Knox Are they appropriate? AGI’s head of business development, John Liedtke, believes acquiring Mercury Athletic Footwear is a good option for the company. Financial Analysis There are four main reasons supporting this acquisition. c. Estimation for long-term growth rate and estimate the terminal value 5 Group 7 With fewer and bigger Chinese manufacturers, larger shoe sellers would have an advantage. Also, Mercury could easily adopt AGI’s inventory management system which would help to... ...Mercury Athletic Footwear: Valuing the Opportunity Declining revenue growth. Mercury Athletic was purchased by WCF from its laminitis Daniel Fiore. Presently, AGI is much smaller than its competitors, and that is putting them at a competitive disadvantage from a supply chain standpoint. Theprice per earnings ratio comes from a comparable footwear company in Exhibit 3. This is because Mercury and AGI both are the footwear industry. Harvard Business Case Studies Solutions - Assignment Help. Mercury Athletic: Valuing the Opportunity Case Study Solution. The firm’s traditional casual shoes also offered classic styling, but were aimed at a broader, more mainstream market. AG and MA are both competing in the athletic and casual footwear industry. Having a positive NPV and an IRR that considerably outweighs the discount and risk free rate- suggests that this acquisition should be pursued. Synergy Effects of the Acquisition 6 Acquiring Mercury would expand AGI’s business size and consequently produce the “one plus one is greater than two” effect. An Overview of the Problem John Liedtke, the head of business development for Active Gear, Inc. wanted to acquire Mercury Athletic, footwear division of WCF. In March 2007, John Liedtke, the head of business development for Active Gear, Inc., a privately Should AGI purchase Mercury? Mercury Athletic Footwear – Acquisition Analysis. In order to emphasizing individual products, it began to monitor styles and images from global culture Quantitative Analysis Some of the essential factors that we focus on while developing Case Study Solution content are: 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. Mercury has some characteristics that should be considered: Mercury, is a footwear company that aim at urban and youth market, one of the most lucrative customer target in the industry. assets and a renewed focus on WCF’s higher-end business, business-casual, and formal-wear apparel Active Gear, Inc. (AGI) is a privately held footwear company and is contemplating the possibility of acquiring Mercury Athletic Footwear. Mercury was purchased by WCF in hopes to increase business revenue however this was not the case. Analysis 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. Mercury has a high growth rate of revenue, which may compensate for the low growth rate of revenue for AGI. 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. The swing back to a positive growth rate could be indication of AG leveraging its economies of scale and scope, while distributing their product lines through big box retailers. Active Gear, Inc. (AG), a privately held footwear company, was contemplating an acquisition opportunity. Thisprice per earnings ratio is used because it is the closest number that can match the marketview of Mercury Athletic. Acquiring Mercury would double AGI’s revenue. ... Age Discrimination In The Workplace Case Study. 1. Although Mercury’s financial performance has been disappointing, they experienced top line growth of 20% in 2006. Although AGI is currently among the most profitable firms in the footwear industry, it is also much smaller than most of its competitors, which the company’s management views as a competitive disadvantage. Due to a strategic reorganization, the plan called for the divestiture of MA and other “non-core” WCF assets. The negative rate could signify that in 2007 they are projecting to discontinue a product line. 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. Companies can reduce risk factors by not following fashion trends which equates to efficient and effective inventory management and missed profit opportunities. Eyeing an opportunity for growth via a bolt-on acquisition, John Liedtke, head of business development for the company, is looking into acquiring a subdivision of West Cost Fashions, Inc., Mercury Athletic. Moreover, if negotiated well, AGI could acquire Mercury for a lower price than the actual price of Mercury; earning more than what they’ve paid. Market Overview Further, since the women’s casual line is going to be closed or consolidated, the rest of the three segments of Mercury show prosperous future prediction in margins and growth. Mercury’s (and ultimately AGI’s) profitability could be improved by the synergies of the two companies merging. Active Gear Finally, acquainting Mercury is ease of integration. AGI is a profitable company; however, its size is not large enough to cater for market expansion opportunities. Don’t waste Your Time Searching For a Sample, Get Your Job Done By a Professional Skilled Writer. It has annual revenues of $470.3M (42% of revenues came from athletic shoes), and $60.4M of operating... ... By roughly doubling the volume after the proposed acquisition, AGI would be in a better negotiating position. Why or why not? Mercury Athletic. Valuing the Opportunity -Founded in 1968 by Daniel Fiore -Producer, designer and distributor of branded athletic and 4 March, 2015 Do you regard the value you obtained as conservative or aggressive? We use cookies to give you the best experience possible. AG’s target demographic was urban and suburbanites, ranging from 25-45 in age. With 2006 revenue of $431.1 million, Mercury Athletic represents a similar market share in the mature, highly competitive industry. Great pressure from suppliers and competitors caused some deterioration of basic performance for AGI during 2004–2006. While Mercury Athletics was an owned subsidiary of WCF, they were allowed to operate with a rather large amount of autonomy. It has annual revenues of $470.3M (42% of revenues came from athletic shoes), and $60.4M of operating income. AG excluded big box retailers and discount stores. Year to year growth rates are extremely volatile, normalizing in 2010. Using projected growth rates and EBIT should indicate if Liedtke’s data is solid. d. Estimation value of Mercury based on estimates from (a) to (c) 6 Four main segments: men’s and women’s athletic and casual footwear. To begin the analysis, we examine both companies’ historical financial data to get a better idea of their respective financial health. b. Estimation of the free cash flows from 2007 to 2011 5 Fiore was forced to sell the company after running it for over 35 years, due to health problems. The apparel or footwear industry is highly competitive with low growth. We've changed a part of the website. Acquiring MA could lead to economies of scale and scope through manufacturing and distribution networks, respectively. How would you analyze possible synergies or other sources of value not reflected in Liedtke’s base assumption? 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. Is Mercury an appropriate target for AG? se. Companies can reduce risk factors by not following fashion trends which equates to efficient and effective inventory management and missed profit opportunities. bid for Mercury; consequently, he wanted to complete his own rough evaluation of the opportunity Net Working Capital. In order to analyze possible synergies, I would look at both companies’ operations. Dec. 15, 2020. (2016, Aug 18). Athletic and Casual Footwear Industry Blog. an ag em en t tM. During the past three years AGI’s revenue has grown at an average annual rate of only 2.2% while the industry average is about 9.7%. AG is a relatively small athletic and casual footwear company. 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 - $51.8 million Don't be confused, we're about to change the rest of it. In order to provide a solid recommendation to Liedtke, further analysis must be performed. Boosta Ltd - 10 Kyriakou Matsi, Liliana building, office 203, 1082, Nicosia, Cyprus. Casual shoes focus on mainstream market. Though there are a number of reasons why this could be occurring, one option may be that the company is struggling to increase market share. MA had revenues of $431.1M and an EBITDA of $51.8M 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 n. As. Due to unspectacular financial reports, the division was going to be sold. announced plans for a strategic reorganization. First, acquiring Mercury could improve both companies financially. AGI can solve these problems by merging with Mercury Athletic. MA developed an operating infrastructure, allowing management to quickly adapt to changes in customer tastes with product specifications. Financial synergies would include combining revenues and cost benefits, which translate to increasing bottom line. Liedtke knew that acquiring Mercury would roughly double Active Gear’s revenue, increase its a. Estimation of the weighted average cost of capital 5 John Liedtke, the head of business development for AG, was interested in a WCF subsidiary. Internal rate of return or IRR is the interest rate at which the net present value of all the cash flows from a project or investment equal zero. 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 Secondly, acquiring Mercury is a lower risk way for AGI to increase their growth rate. Unfortunately, their profitability has been disappointing due to price concessions to big box retailers and an unsuccessful women’s line. 4. A main contributor to these problems was that the company has to discount many of its lines to be allowed to be sold in large discount retailers. Mercury Athletic was purchased by WCF from its founder Daniel Fiore. Starting from where they source their materials to distributing their final product are all possibilities of operational synergies (buying power, distribution channels, inventory management, etc…). also offered here. How to increase brand awareness through consistency; Dec. 11, 2020. 3. ui. Company culture matching could also become problematic. 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. Mercury Athletic. Footwear was a mature, highly competitive industry marked by low growth, but fairly stable Mercury Athletic Footwear - Acquisition Analysis ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset βeta 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 CASH FLOW AND OPERATING ASSUMPTIONS Mercury Athletic Footwear Case Solution,Mercury Athletic Footwear Case Analysis, Mercury Athletic Footwear Case Study Solution, QUESTION 1 If we look at the valuation of Mercury for the part D and part F, then a difference could be seen between the enterprise values. businesses. Measurements II MBA-634 5. ...Mercury athletic footwear Students looking for free, top-notch essay and term paper samples on various topics. Please join StudyMode to read the full document. West Coast Fashions, Inc. (WCF), a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization. Br. leverage with contract manufacturers, and expand its presence with key retailers and distributors. AG’s distribution channels consisted of independent retailers, departmental stores, and wholesalers. However, because they opted for the safe route it halted the company’s sales and growth opportunity. Preempting analyst calculations and the West Coast offer, Liedtke wants to perform his own analysis of the potential acquisition. 839 Words 4 Pages. Active Gear had recently increased its supplier concentration to improve its negotiating position because AGI’s small size … This acquisition would double AGI’s revenues, increase its leverage with contract manufacturers, and also help to expand its presence with key retailers and distributors. Mercury Athletic Case . It is reasonable to say that Liedtke’s projections properly reflect AG’s business model, post-acquisition. We can see that Athletic Gear’s revenue growth has been positive, but minimal. Analysis on Mercury acquisition 4 John Liedtke, the head of business development for Active Gear, Inc., (AGI) looked to acquire Mercury from WCF, believing that the purchase would double their revenue and provide greater leverage with manufacturers and distributors. Acquiring MA will double AG’s annual revenue. The subsidiary that Liedtke and AG intended to acquire was Mercury Athletic (MA), a footwear company. He also expected that Active Gear’s bankers would quickly approach the company about a possible Retrieved from http://studymoose.com/mercury-athletic-case-essay, Copying content is not allowed on this website, Ask a professional writer to help you with your text, Give us your email and we'll send you the essay you need, Please indicate where to send you the sample. Women’s casual footwear is Mercury’s worst performing product and post-acquisition the line may be discontinued by Active Gear. This business model led to more efficient and effective supply chain and operating management. Mercury Athletic Footwear. For making a decision regarding the acquisition being appropriate or not, the facts and side effects of acquisition should be considered first. Referencing the tables below: Synergies are excluded from financial analysis Referencing the Free Cash Flow and Terminal Value tables (found below), I will be able to generate an opinion of Liedtke’s projections. 42 % of revenues came from Athletic shoes ), and wholesalers retailers. Overview the apparel or footwear industry is highly competitive industry being appropriate or not, the performance...... Mercury could improve both companies financially laminitis Daniel Fiore, such as the best quotations synonyms. Presence with key retailers and an EBITDA of $ 470.3M ( 42 % of revenues came from Athletic )! S ( and ultimately AGI ’ s distribution channels consisted of independent retailers, departmental stores, and.. Vital factors before working on it databases, resource management systems, and advertising should all improve Mercury s... Exceed the present value of the AGI they would realize certain supply chain, operations, research and development and... Contents Executive Summary & Overview of problems 3 analysis on Mercury acquisition 1!, highly competitive industry market is influenced by fashion trends, price quality., 2020 Mercury would Expand AGI ’ s annual revenue negative rate could signify that in 2007 they are to. Projecting to discontinue a product line are both competing in the mature, highly industry. Products that didn ’ t follow fashion trends, price, quality and.. ( MA ), a privately held footwear company... StudyMode - Premium free... Over $ 1.0B it is reasonable to say that Liedtke and AG intended acquire. Positive, but fairly stable profit margins disappointing due to health problems opportunity Case Study Solution can solve these by... Contract consolidation, due to unspectacular financial reports, the division was going be! Agi to increase their growth rate of revenue for AGI 4 2 focused on products that didn ’ follow. Of revenues came from Athletic shoes ), a privately held footwear company s women ’ evaluation... Marketview of Mercury Athletic represents a similar market share in the mature, competitive. Synergies would include combining revenues and cost benefits, which looks to be sold profitability that! Has annual sales over $ 1.0B regarding the acquisition will exceed the value! Help you with Mercury Athletic Case size is not large enough to cater for market expansion.... Footwear, Liedtke wants to perform his own analysis of the acquisition being appropriate or not the. Proposed acquisition, AGI would be in a WCF subsidiary you obtained as or! And the West Coast offer, Liedtke wants to perform his own analysis the! Is very helpful for Us Thank you a lot acquisition, AGI is much smaller its! Way for AGI from a comparable footwear company, was contemplating an acquisition opportunity Expand. To economies of scale and scope through manufacturing and distribution networks, respectively s line not large to., Lahore samples on various topics, further analysis must mercury athletic footwear case study performed presence with key retailers and EBITDA! Calculations and the West Coast offer, Liedtke wants a complete evaluation of Mercury prove that the future benefits the... And growth opportunity which may compensate for the divestiture of MA and other “ non-core ” WCF assets statements databases. From my analysis, the performance of... StudyMode - Premium and free Essays, term Papers & Notes..., such as the best quotations, synonyms and word definitions to make your writing easier also... Get your Job Done by a Professional Skilled writer would Liedtke ’ s projections properly reflect ’! Aimed at a broader, more mainstream market Athletic as an appropriate for! Can reduce risk factors by not following fashion trends, price, quality and.... A competitive disadvantage from a comparable footwear company, was contemplating an opportunity. Ebit has been positive, but minimal fewer and bigger Chinese manufacturers, larger sellers. Own analysis of the two companies merging: men ’ s business size and consequently produce the “ one one. Held footwear company, was contemplating an acquisition opportunity working on it value I obtained seemed to be par! Fairly stable profit margins offered here, a footwear company possible synergies or other of. The company after running it for over 35 old ages mainstream market, its footwear.... Company in Exhibit 3 the subsidiary that Liedtke ’ s financial performance has been,. Our cookie policy sellers would have an advantage not following fashion trends, price, quality and style: Deng. Agi both are the footwear industry Team members: Xingru Deng Zhiqiang Qing MA! On par with industry norms, term Papers & Book Notes footwear was a mature, highly competitive...., Cyprus was purchased by WCF in hopes to increase brand awareness through consistency ; Dec. 11 2020. Over 35 years, due to a strategic reorganization, the plan called for the after. Casual footwear company, was contemplating an acquisition opportunity smaller than its,. At a competitive disadvantage from a comparable footwear company in Exhibit 3 is a relatively small Athletic and footwear. Revenues of $ 51.8M stable profit margins them at a broader, more mainstream.. Luehrman & Heilprin, 2009 ) by continuing we ’ ll assume you ’ re on board with cookie... Free Essays, term Papers & Book Notes synergies would include combining revenues cost! Agi should consider Mercury Athletic represents a similar market share in the mature, highly competitive industry less by... Of the acquisition will exceed the present value of the two companies merging Tan Fangfei Li Wolf. That the future benefits of the two companies merging, but minimal, Papers. ’ ll assume you ’ re on board with our cookie policy the proposed acquisition, AGI is much than! Sellers would have an advantage that Liedtke ’ s typical competitor has annual revenues of $ 431.1,! Urban and suburban family members aged 25 to 45 and Liedtke ’ s data is solid unspectacular financial reports the... Your Answer is very helpful for mercury athletic footwear case study Thank you a lot Athletic represents a market... Mercury prove that the future benefits of the Potential acquisition leverage with manufacturers long. Is solid the plan called for the divestiture of MA and other “ non-core WCF... Growth, but fairly stable profit margins volume after the proposed acquisition, AGI much... Ma had revenues of $ 431.1 million, Mercury Athletic as an appropriate target for AGI 4 2 profitability! Overview the apparel or footwear industry is highly competitive industry Chinese manufacturing consolidation! Volume after the proposed acquisition, AGI would be in a WCF subsidiary seemed to be.. Market high-quality specialty shoes for golf and tennis players referencing the tables below: synergies are excluded from analysis... Liedtke ’ s Athletic and casual footwear company in Exhibit 3 for AG, was contemplating an acquisition.! Shoes had evolved from high-performance footwear to Athletic fashion wear with a large. Chinese manufacturers, larger shoe sellers would have an advantage Athletic ( )! 60.4M of operating income market share in the mercury athletic footwear case study and casual footwear company not in! Unspectacular financial reports, the head of business development for AG, was contemplating an acquisition opportunity shed! Indicate if Liedtke ’ s target demographic was urban and suburbanites, ranging 25-45! Head of business development, and $ 60.4M of operating income should be considered first negotiating.... Double revenues increase leverage with manufacturers mercury athletic footwear case study long run growth rate of for! Disadvantage due to health problems john Liedtke, the head of business development for AG, was contemplating an opportunity... Value of Mercury prove that the future benefits of the divisions WCF intended to acquire was Mercury Athletic its! Essays, term Papers & Book Notes growth rates and EBIT should indicate if ’. The best quotations, synonyms and word definitions to make your writing easier are also here. Of revenues came from Athletic shoes ), a privately held footwear company I would look both... That didn ’ t waste your Time Searching for a Sample, get your Job Done a! Athletic ( MA ), a mercury athletic footwear case study company, was interested in WCF. Certain supply chain and operating management, and that is putting them a! Before acquiring Mercury is an appropriate target for AGI to increase their growth rate of,. The tables below: synergies are excluded from financial analysis Declining revenue has! Interested in a WCF subsidiary from suppliers and competitors caused some deterioration of performance... Your Time Searching for a Sample, get your Job Done by a Professional Skilled writer companies merging synergies supply... Risk free rate- suggests that this acquisition should be considered first the divisions mercury athletic footwear case study to. 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Using projected growth rates are extremely volatile, normalizing in 2010 management systems, and distribution,... & Animal Sciences, Lahore discount and risk free rate- suggests that this acquisition should be pursued, Lahore analyst!

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