Premium Essay

Flinder Valve Case Study

In: Business and Management

Submitted By yennikim
Words 724
Pages 3
W.B. “Bill” Flinder, the president of Flinder Valves and Controls Inc. (FVC), and Tom Eliot, the Chairman and CEO of RSE International are currently in the midst of negotiating a merger of FVC and RSE. Both companies are aware of the benefits, but also remain apprehensive due to the risks of completing an acquisition in the struggling economy. Prior to 2008, the U.S. manufacturing industry had experience a decrease in consumer demand because of tighter borrowing standards and a weak housing sector in the past year, according to a recent analyst. However, before May 2008, the U.S. began to experience better economic conditions, which provided FVC a better environment to introduce its new, hydraulic-controls system called the “widening gyre,” which can be used in the military industry. With this expensive program still under development, Bill Flinder realized the importance of merging with another company that was financially stable. Other factors contributed the negotiation. In addition to nearing retirement, Flinder also believe a merger with RSE would help the transition years for his employees.
FVC and RSE should follow-through and complete the negotiation because one company’s strengths make up for the other’s weaknesses. Tom Eliot had recently proposed to the board of RSE to focus on diversification. FVC would help diversify RSE; they had the reputation of opening up opportunities for companies looking to diversify, plant capacity, management efficiency, financial resources, or to even counter the effect of a cyclical business. Also, FVC is in a position that would require financial stability. In addition to the required funds for the “widening gyre” program, the increase in the consolidation trend posed as potential problem for FVC because it would give away the company’s competitive advantage. FVC is a small company and could be pushed out of the…...

Similar Documents

Free Essay

Valve Case Study

...1101IBA – Management Concepts Literature Review and Report Valve Case Study By Muhammad Rabani b. Shamsul Khairil s2834180 Semester 2, 2012 1 583 words Table of Content 1. Introduction 3 2. Problem Identification 3 3. Analysis 4 3.1 Vertical Organisation Structure 4 3.2 Horizontal Organisation Structure 5 4. Recommendations 6 5. Conclusion 7 6. Reference List 8 1. Introduction Organisation can be seen as networks of system perform by a collective effort of people in order to achieve to a common purpose. (Schermerhorn et al. 2011, p.11). An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs (Damraks 2009 p.1). Valve has a unique flat organisation structure where it operates. The purpose of this report is......

Words: 1618 - Pages: 7

Free Essay

Case Study Case Study Case Study

...This case study is an excellent example of how different types of parties can be brought together in a large scale transaction and how the original energy of those early meetings can be lost over time. I imagine that when Anthony Athanas was purchasing those old piers back in the 1960s many, if not all, of his colleagues, friends, and family members told him that he was off his rocker. I’m sure Athanas was looking at this land as his family’s ticket to financial prosperity and somewhat of a legacy that he could leave to his descendants for years and years to come. One of the items I wish the case would have divulged is the amount of money that Athanas had invested in the properties. For me this information would have given an insight to his net worth and how much he had riding on this investment. I assume it was substantial given his actions later in the process. Twenty years later Athanas’ dreams came true and all those naysayers were more than likely green with envy. The amount of pride Athanas’ had in his investment at that moment had to have been insurmountable. Being approached by a big time real estate development company and their extremely wealthy client, Hyatt Corporation, must have made Athanas feel larger than life and made him feel like something he isn’t, which is a developer himself. The case doesn’t give much insight into whether Athanas had any representation or anyone consulting him throughout the process. From the beginning, I saw this as matchup...

Words: 1190 - Pages: 5

Premium Essay

Flinders Valves and Controls, Inc

...Group 6 Addison Haller, Noah Passage, Brad Pisarcik, Andrew Tucker, Jun Zheng Flinders Valves and Controls Inc: Potential Merger and Acquisition with RSE International Corporation Executive Summary We are presented with the opportunity to evaluate two enterprises, which are in discussion over a possible acquisition.  Flinders Valves and Controls Inc. (FVC) achieved a reputation for engineering excellence from its capability in providing specific applications for the defense and aerospace industries. Because of its reputation and excellence, FVC out-grew its small company, organized in 1980, and in 1996 it went public before a failed merger with Auden Company (which held 20% of FVC Common stock), due to a possible antitrust action.  Since then, no other firms have been able to work out an agreement for a merger with FVC. However, RSE International Corporation (RSE), a public Russell 1000 company, had recognized FVC’s disclosure of a U.S. government contract and felt for an opportunity to focus on diversification through an aggressive growth-by-acquisition program. With both firms having growing concerns about the current state of the economy as they move closer to the opportunity of striking a deal that can be both profitable and affordable for both sides, possible negotiations were within reach.  With this opportunity in focus, we analyze the value of the two firms and discuss three concerns; the effects of a merger, what opening offer RSE should make for the......

Words: 1628 - Pages: 7

Premium Essay

Valves Question

... FIN 465, Fall 2010-11 PROJECT # 3, FLINDER VALVES AND CONTROLS CASE STUDY In this project, you will estimate the value of a target company in an acquisition and propose a range of exchange ratios acceptable for the target and the acquirer. Please find the full assignment below. You can use only Excel for all calculations. You can use Word for a write-up. There is no limit on the length of the write-up, but I ask you to be concise. Please annotate your Excel calculations so that I can understand them. You can work individually or in couples (groups of two) on this project. Please write the names of group members in the top left corner of the first worksheet in your spreadsheet. The project counts for 15% of your grade. Each student in the group will receive the same grade. The project will be graded based on the quality of your analysis and the use of Excel. The due date is Wednesday, October 27. Please upload the completed assignment file or files to the Blackboard by the end of the due date. Please name your submitted files as “Yourlastnames _Project3.xls” and “Yourlastnames _Project3.doc”. ASSIGNMENT: Assume that you are employed by RSE’s financial department and that you are charged with performing financial analysis of the merger with FVC. You are given the data that are included as Exhibits 1 through 10 in the case study. Your tasks are as follows. 1. Estimate the value of FVC to RSE using the discounted cash flow (DCF) valuation method......

Words: 863 - Pages: 4

Free Essay

Valve

...TABLE OF CONTENTS PATCH 3: CASE STUDY REPORT 1 REFERENCES 9 SELF-ASSESSMENT 11 PATCH 3: CASE STUDY REPORT 1. Introduction Valve Corporation was formed by two former Microsoft employees who are Gabe Newell and Mike Harrington in 1996. At the beginning, they were based in Kirkland, Washington and were a Limited Liable Company (L.L.C) (Giantbomb, 2013). Valve is an American video game development and digital distribution that allocated in Bellevue, Washington. Valve had created six games series in the future years which are Half-Life (1998), Team Fortress (1999), Portal (2007), Counter-Strike (1999), Left 4 Dead (2008) and Day of Defeat (2005). Since Valve Corporation is found, it has expanded both in scope and commercial value. Valve Corporation had been received few award since 2008. On 2008, Valve Corporation announced the acquisition of Turtle Rock Studios. While on 2010, Valve won The Escapist Magazine’s March Mayhem tournament for the best developer of 2010. In 2012, the company acquired Star Filled Studios, a two-man gaming company to open a San Francisco office. In 2013, Valve decides to stop the operation as it was decided to make some benefit for future arrangement. Valve is formed as a company which have around 300 employees but no managers or bosses at all to operate whole company (Suddath, 2012). Hence, this report is written to discuss the organisational culture and organisational structure of valve. The two discussion topic is to be......

Words: 2179 - Pages: 9

Free Essay

Case Study

...Abstract While attending clinical at DMH I used one of my patients to develop a case study. My case study will require me to use the skills I have been practicing to make a connection between medical and nursing problems. Some of these skills include assessment, rationales, critical thinking, and problem solving. In this paper I will go over my patient’s health history, lab tests, pathophysiology, diagnosis, and her medications. I will also provide a detailed nursing assessment, a detailed nursing process and explain reasons and rationales about my decisions involving her care. I. Health History Client Health and History: On April 9, 2014, at Decatur Memorial Hospital, my client was a 76 old Caucasian female with the initials DK. She was born in the small town of Olney, Illinois. Her husband explained that it is about a two and a half hour drive to Decatur Memorial Hospital from their hometown and this was not their first trip here. DK and her husband have been married for 56 years and have three children: two daughters and a son. She worked for McDonalds for 12 years and then retired to be a stay at home mom. My patient was admitted to the hospital based on an abnormal finding from a CAT scan. They CAT scan showed a mass in her right kidney. The patient described that she had no idea of the mass. She went in for a CAT scan because of blood in her urine and experience of her previous diagnosis of kidney cancer, and was informed of the findings. In June of 2013, she......

Words: 4610 - Pages: 19

Premium Essay

Heart Attack Case Study

...Cardiovascular System - Heart Attack From Case Studies for Understanding the Human Body S. Braude, D. Goran, and S. Maxfield Uncle Jake and Aunt Leah were playing golf last week. On the sixth hole, Jake told Leah that he was having unusual pain in his left arm and chest. All of a sudden he felt weak and complained that his shirt was much too tight. A dentist playing one hole behind them examined Jake and found he was short of breath, pale, and sweating. He called 911 on his cell phone and told Jake to lie down and wait for the ambulance. The paramedics rushed Jake to the hospital where he was evaluated by a cardiologist. The tests showed that he had four clogged arteries. He was scheduled for surgery the next day. 1. Describe how the heart as a muscle performs its job of pumping blood. The heart is constantly relaxing (filling up with blood) and contracting (pushing blood out) to pump blood through the four chambers of the heart and eventually to the rest of the body. First, the blood fills the right atrium from either the superior or inferior vena cava. Then, the blood passes through the tricuspid valve and to the right ventricle. The right ventricle then squeezes the blood into the pulmonary artery which splits into two vessels each going to the lungs. The oxygenated blood returns from the lungs and it goes through the pulmonary vein to the left atrium. From here, the blood passes through the bicuspid valve and into the left ventricle.......

Words: 1165 - Pages: 5

Premium Essay

Human Anatomy Case Study

...Cardiovascular Case Study Name ______________________________________________ A 32-year old nurse who has rheumatic fever as a child noticed a persistent tachycardia and light-headedness. Upon examination, chest x rays showed an enlarged left atrium and left ventricle. ECG analysis showed atrial fibrillation. There was also mild pulmonary congestion. Cardiac evaluation resulted in the following information: Cardiac output (CO) 3.2L/min. SV = 40mls Blood pressure (BP) 100/58 mm Hg Left Atrial pressure (LAP) 16 mm Hg Right ventricular pressure (RVP) 44/8 mm Hg Heart sounds revealed valvular regurgitation 1. Answer all questions with material that explains your answer. Yes/no answers receive NO credit. 2. Submit this as a hard copy double spaced typed paper. 3. Total possible 25 points 1. Based on the information provided, which A-V valve is incompetent? Why did you choose this set of valves? What is this condition called? (3pts) Based on the information it looks like the mitral valve is incompetent. According to Web MD, the mitral valve is a valve that lets blood flow from one chamber of the heart, the left atrium, to another called the left ventricle. The mitral valve is most likely to blame here for the regurgitation because of the left atrial and left ventricular problems, which allowed the backflow into the left atrium. This patient’s mitral valve is malfunctioning, this condition is called mitral valve prolapse. Mitral valve prolapse is......

Words: 748 - Pages: 3

Premium Essay

Flinder Valves

...Thornal Coachman Dr. Brent Financial Policy Flinder Valves and Controls Outline I. Statement of the Problem II. Alternative Solutions III. Analysis of Alternatives IV. Final Recommendations V. Appendix I. Statement of the Problem Bill Flinders’ FVC was an outgrowth of a small company organized in 1980 for engineering and developmental work on an experimental heat-exchanger product. In 1987, as soon as the product was bought to the commercial stage, Flinder Valves and Controls Inc. was organized to acquire the properties, both owned and leased, of the engineering corporation. FVC had come to RSE’s attention with the FVC’s disclosure of a U.S. government contract. RSE manufactured a broad range of products including advanced industrial components as well as chains, cables, nuts and bolts, castings and forgings, and other similar products. During the early part of 2008, a series of group meetings had taken place between Tom Eliot and Bill Flinder and their respective advisers. It seemed clear to both parties that both FVC and RSE could profit from the merger. Eliot had persuaded RSE’s board that the company should follow a policy of focused diversification, which would be achieved by an aggressive growth-by-acquisition program designed to create opportunities and entries into more dynamic markets than the ones RSE then served. FVC received various proposals from 1998 on, but none reached the stage of working out an......

Words: 938 - Pages: 4

Free Essay

Flinder Valves

...Case : Flinder Valves and Controls Inc. 1. Overview Kasus Rencana pengakuisisian Flinder Valves and Controls Inc. (FVC) oleh RSE International Corporation (RSE) pada awal 2008. Masa itu adalah masa krisis ekonomi di amerika serikat, kedua perusahaan tersebut merasakan dampak dari krisis tersebut. Tujuan dari dilakukannya akuisisi tidak lain karena kedua pemimpin perusahaan tersebut memikirkan tentang risiko dan peluang dari lingkungan manufaktur yang semakin menantang. Valve memproduksi banyak alat, hanya saja hampir 40% dari penghasilannya dan 50% dari keuntungannya berasal dari aplikasi khusus, yaitu berasal industri pertahanan dan kedirgantaraan. Hal ini tak lepas dari reputasi baik yang dimiliki FVC dalam lingkungan bisnisnya, sehingga mereka memiliki kontrak kerja untuk alat teknis bagi pemerintah. Pada 1980an perusahaan berkembang dibanding perusahaan lain di industrinya. Mereka membeli dan menyewa alat untuk keperluan produksinya, dan akhirnya setelah Bill Flinder melanjutkan tugasnya sebagai presiden FVC, dia mengakuisisi paten yang telah berlisensi. Tak ada masalah yang berarti dalam menggerakkan aktivitas-aktivitas di lingkungan bisnis mereka, baik itu bahan baku yang didapatkan dari supplier yang kompetitif, pemasaran, dan penjualan kepada perusahaan permesinan. Perusahaan Auden merupakan mitra dalam lingkungan bisnis FVC yang mendistribusikan dibawah perjanjian noneksklusif distributor, dimana Auden menjual 15% dari total penjualan FVC. Bahkan......

Words: 2040 - Pages: 9

Premium Essay

Flinder

...evaluation of the pre-merger scenarios of both Flinder Valves and Controls Incorporation and RSE International Corporation and post-merger analysis of the proposed merged company. First, we have analyzed the historical data and found out trends in the financial statements of the Flinder Valves and concluded that in recent years. The company’s revenues have increased by an average rate of 9%, which seems pretty logical because of the recent strong performance. Based on the historical data, we found out the rate of Cost of Goods Sold over Sales was around 70% (average). General and Admin. Expenses were assumed to be around 6% of the sales. Other net income was 1% of the sales. Historical data showed that the Income before taxes or EBIT remained 25% of the sales and that trend was expected to continue in the future as well. Income tax prevailing in the country was approximately 40%. Net operating profit after tax (NOPAT) or earnings after tax was assumed to be 14% (averaged) of the total revenues. Net increase or decrease in the working capital of the company and investment in the fixed assets were given in the question, which increased by 11% each year. For the purpose of evaluating the future financial prospects of the company, we have calculated the weighted average cost of capital (WACC) for the purpose of bringing future cash flows in present terms. For the calculation of WACC, we have assumed the A credit ratings for the Flinder Valves. On the other hand, we have......

Words: 522 - Pages: 3

Free Essay

Case Study

...Kevin Cota Business 109 1/28/16 Case 3: Ducati 1. Product - > Desmodromic valve distribution system, Ducati 750 Super Sport, L-shape desmo engine, Formula Uno-derived tubular trestle frame. Operation - > Purchased by Cagiva, due to financial problems was sold to the Texas Pacific Group. Strategy - > Bring market share to 10%, invest heavily in the products and rationalize production processes, develop a global brand that would appeal a broader spectrum of customers. Distribution - > New strategy to take control of distribution and marketing in strategic markets by establishing totally owned sales and marketing subsidiaries, re-organization of the network of dealers, creation of “Ducati Stores” 2. Ducati can sustain its position in the sport segment, with its new business strategy it an remain an important part of the market. Other companies like Honda cannot stop its growth in the segment, however they can compete with them by imitating their strategies and improving their own companies. As long as Ducati maintains their recent success, they will be an important part of the market. 3. Minoli considered entering the cruiser market which was dominated by Harley Davison. This segment of the industry was highly profitable. In order to enter, Ducati would have to invest up to 43 million Euros. 4. Like Harley did with their brand, I would recommend Ducati to establish their brand as a lifestyle rather than a simple motorcycle bike. A......

Words: 321 - Pages: 2

Premium Essay

Case Study

...Hyeokchan Shin Prof. Cheng 02/24/16 BMGT321 Wilkerson Company Wilkerson Company mainly manufactures water purification equipment. The company’s profitability is resulting from the finished goods of pumps, valves, and flow controllers. However, the company has been experiencing the decline in profits. The overall pre-tax operating income has decreased from a historical rate of 10% to less than 3%. Production process of Wilkerson Company can be simplified into three stages. The company first purchases the semi-finished components from suppliers. Then it machines these component parts and assembles them in the manufacturing facility. The production runs are scheduled to match the customer shipping requirements. Once the production is finished, the company ships product to customers by just-in-time shipping. Among the three products in Wilkerson Company, valves are the original product line, which requires four different machined components. Also, its gross margin has been maintained at a standard 35%. The manufacturing process for pumps was very similar to valves. Wilkerson, however, lowered the prices so that it matches with competitors. The Gross margin on pump sales has fallen below 20%. The reason for matching the competitor’s price reduction is because they do not want to lose their title as a major pump supplier. Lastly, flow controllers require more components and labors compared to other two products. Also, there are more variety in the types of...

Words: 1067 - Pages: 5

Premium Essay

Flinder Valves and Controls Inc.

...purchase of a target firm and we must assess whether the target would be a good investment. Some important questions arise in applying our fundamental concepts: 1. What are the potential sources of value from the combination? Does the acquirer have particular skills or capabilities that can be used to enhance the value of the target firm? Does the target have critical technology or other strengths that can bring value to the acquirer? No tC Potential sources of gain or cost savings achieved through the combination are called synergies. Baseline cash-flow projections for the target firm may or may not include synergies or cost savings gained from merging the operations of the target into those of the acquirer. If the base-case cash flows do not include any of the economic benefits an acquirer might bring to a target, they are referred to as stand-alone cash flows. Examining the value of a target on a standalone basis can be valuable for several reasons. First, it can provide a view of what the target firm is capable of achieving on its own. This may help establish a floor with respect to value for negotiating purposes. Second, construction of a stand-alone DCF valuation can be compared with the target’s current market value. This can be useful in assessing whether the target is under- or overvalued in the marketplace. Given the general efficiency of markets, however, it is unlikely that a target will be significantly over- or undervalued relative to the......

Words: 9453 - Pages: 38

Premium Essay

Case 11 Chicago Valve Company

...Explain the inputs into 1) The net initial investment outlay at year 0? The initial investment at year 0 is $200,000 which includes taxes and delivery, and the cost to install the equipment $12,500. Therefore the total net cost of initial investment outlay at year 0 is $212,500. 2) The depreciation tax savings in each year of the projects economic life? The depreciation tax savings in each year of the project’s economic life will show how much the tax savings will be depreciated each year using the MACRS method. 3) The projects incremental cash flows? These cash flows are those that are relevant to the valuation of the project. In this case it is depreciation. Using the MACRS we can determine for how much the project will be depreciated and what the net cash flows will be after tax and after depreciation. This cash flows are the sum of the depreciation tax saving and the after-tax cost saving. This shows the company’s profit for each of the eight years. 4) What is the project’s NPV? Explain the economic rationale behind the NPV. Could the NPV of this particular project be different for Lone Star Petroleum Company than for one of Chicago Valve’s other potential customers? From the calculations, the NPV is ($17301). (revise) The NPV process helps investors determine whether or not projects are profitable. There is a very important concept in finance: time value of money. One dollar today is worth more than 1 dollar in the future. Since......

Words: 2127 - Pages: 9