Fin370 Berry's Bug Blasters Team Assignment

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Berry’s Bug Blasters
FIN 370
January 18, 2010

Berry’s Bug Blasters
Berry’s Bug Blasters is a privately held pest control company that has been in business since at least 2005. They offer customers one time treatment and monthly service plans, as well as chemicals to allow customers to complete some treatment on their own to eradicate a variety of pests, including: roaches, termites, ants, scorpions, rodents, armadillos, snakes, bed bugs, silverfish and bees. In 2005, the company had a negative net income of ($380.65), but has successfully expanded since then, earning $293,475.56 in net income in 2006, then $769,000.80 in 2007, and $493,139.75 in 2008. The company now seeks to further expand their operations, and is considering three possible options. Berry’s Bug Blasters may offer equity in their company thru an initial public offering purchase another business in the pest control industry, or merge with another pest control company. Each alternative has strengths and weaknesses, and presents opportunities and threats to the company’s continued growth. Strengths of Each Approach

Berry’s Bug Blaster has been thinking what method to use to be able to expand their business and get more costumers. The three options that Berry’s Bug Blaster has in consideration are the use of IPO, Acquiring another organization in the same industry, or Merging with another organization. For Berry’s Bug Blaster it is very important to make the right decision on which option they are going to pick. Some of the straights the Initial Public Offering has are that as soon Berry’s Bug Blaster listed their company to the public view, people will invest for capital. Another advantage of using IPO will be that Berry’s Bug Blaster will be allowed to tap a wide pool of stock market investors; this will provide them a large volume of capital for future growth. It will also give the company chipper assets for capital and contrast it will help...
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