1. what are the main issues of interest (themes) in the Dressen case?
We are talking about the case of a company which is on sale and have to choose a quick sell to a Private Equity Fund or a little bit longer selling negotiations to a competitor. Inside this decision there’s also the issue of correct company evaluation and sustainability of Private equity leveraged buyot. The main issue on this side is: future growth will sustain this operation from Private Equty fund or not? And also value of the company.
2. why Westinghouse wanted to sell Dressen ?
Westing House has acquired CBS in August 1995 for 5.4$ billion; CEO of Westing House (Michael Jordan) is now in chase of cash to start paying back this acquisition (2$ billion bridge loan due within 2 months in late February 1996)(therefore all non core business were candidate to be solds. Dressen good performance made this company a target for this activity. Westinghouse also want to do this selling quickly to announce it to investor meeting in December 1995 and have cash to payback bridgeloan upcoming duedate.
3. how and why do you rate John Lynch?
John Lynch is a key figure of Dressen since he was the author of changing a dog into a star; he was able to bring back company to profitability (EBIT from -32$ millions to +65$ millions in 3 years). He also has a sales growth plan which is important to substain future growth of company. That’s why Warburg Pincus will bind its buying proposal to the stay of Mr. Lynch inside the company.
4. what are Dressen strong points and improvement prospects? And its eventual weaknesses?
Dressen is a company with premium products :design and hgh quality furniture; it has a strong brand identity and close relationship with its customers. Among its competitors is the only company that give lifetime warranty for its product. It’s improvement will be based on the product...