The Timken Company
Due Date: Tuesday, Sept 17th, 2013, 5pm.
Presentation Date: Sept 18th, in class.
Please e-mail me an electronic copy of the report before the deadline. At the beginning of the class on Wed., please also submit a printed copy. The names of all group members should be specified at the top of the report.
For Lead Group: case report should be no longer than six pages of text (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e. tables) that you would like to attach. The lead groups will also prepare a 20 minutes in-class presentation. The presentation should cover the background of the case, analysis of Timken’s bidding decision and bidding strategy, valuation, and your conclusion.
For Support Groups: the report should be no longer than three pages of text each (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e. tables) that you would like to attach.
Summary and Objectives
The Timken Company was considering acquiring The Torrington Company from its parent, Ingersoll-Rand. The management of The Timken Company mainly faces two decisions: 1)
Investment decision: Should Timken acquire Torrington given its value and the synergy between the two firms? And if yes, what would be the bidding price? 2)
Financing decision: If Timken decides to go forward with the acquisition, how should Timken offer to structure the deal?
The report should cover, but not limited to, the following aspects of Timken and Torrington: A.
What is the estimated stand-along valuation of Torrington? Should Timken care about the stand-along value? B.
What would be the synergy between Torrington and Timken? From the Timken management’s point of view, what is the potential value of acquiring Torrington? C.
How should Timken structure the deal to make it more advantageous to its shareholders? What type...
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