‚ will pay $69.25 for each TXU share‚ 15 percent more than the closing stock price on Feb. 23. TXU has only $11 billion of debt with the new $36 Billion debt‚ $22.5 billion of which matures by 2014 the rest $13.5 to mature in 2034. TXU energy post LBO has been renamed as Energy Future Holdings Inc.‚ with the acquisition using a combination of high-yield‚ high-risk loans and bonds. As part of the buyout‚ the electric distribution part of the company will be called Oncor Electric Delivery‚ the electric
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Re: Seagate Technology 1. Describe the main terms of the Seagate Technology buyout? Why is Seagate undertaking this transaction? Is it necessary to divest the Veritas shares in a separate transaction? What are other alternative ways to create value? The primary contemplated terms would be to sell Seagate’s disk drive mfg assets including $765M in cash to Suez Acquisition Company controlled by Silver Lake Partners. The purchase would be financed by equity put up by Silver Lake and also by an‚
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External There are three major external environmental influences that have had a major impact on business over the past three to five years. Data collected from six environments‚ including demographics‚ technology‚ soci-cultural‚ economic‚ political-legal‚ and global identify these three “big deltas”. The information gathered illustrates that the three big deltas are increasing interconnectivity‚ the changing face of America‚ and changing dominant world power. Unless indicated‚ all data points have
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intensive‚ heavy investments which is not feasible if the Seagate Inc. remains a public company The other capital reorganisations alternatives are involving significant tax liability and considering the present nature of events that Seagate is a public Company‚ the tax liability will result to loss of the wealth of the shareholders where the capital restructuring option involves corporate taxes as well as personal tax liability. The stock of Seagate Inc.‚ experience an adverse value gap‚ Such that the
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megabyte of disk storage has gone done 40% per year from 1980-1995. Seagate believes that in order to stay competitive they must aggressively enhance product offerings and reduce prices. They also believe that in addition to that‚ they need to provide timely introductions and reduce production costs. However‚ the surging global demand in this industry is causing some facilities to run at full capacity very frequently‚ so Seagate needs to tailor its manufacturing strategy for these new products they’re
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subjected to whatever the market deemed the appropriate price for the stock was. Therefore‚ from their perspective‚ they had to juggle potential LBO offers with their prediction of what the company would have commanded in the marketplace. Hertz was a prime buyout target for a LBO because the company meets many of the classic criteria for a successful LBO target. It has an extremely strong brand name which consumer markets all over the world have come to know. It was actually listed among Business
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Viet Duong Sybil Cheng 11/17/2011 Holmes Corp: LBO Valuation 1. Sustainability – One of Holmes Corp. major strengths is its long history of steady and predictable cash flow. Over the last five years‚ Holmes’ Net sales have grown from $41MM to $103MM which is approximately a growth rate of 151%. Over the same time frame Holmes’ net earnings have grown from $1M to $6.6M which is approximately a growth rate of 560%. This history of strong earnings means we can realistically expect stable
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Case 9 & 10 Analysis Seagate Technology Buyout The Hertz Corporation Advanced Corporate Finance MW 2:00-3:15 PM Question 1 On page 1‚ the “value-gap” is two-fold. It signifies an under-valuation of Seagate’s core disk drive operating assets due to unfavorable public market investor preferences. Furthermore‚ the value of the Veritas share price has caused the Veritas stake to far outweigh the value of Seagate’s stand-alone market capitalization. Since Seagate does not own at least 80%
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Hertz A: 1. CD&R pursued Hertz for three years only to find itself facing an auction and a complicated deal. Is it worth it? • It is worth it. Because hertz is a mature company with predictable cash flows. Such acquisition provides a great opportunity to generate decent return on equity to sponsors • CD&R had access to available debt avenues to make the company grow • CD&R was able to make operating changes and improve the companies efficiency 2. What are the
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Seagate Case Study Effective Global Strategic Resourcing Analysis The key to a successful supply chain and its integration with customers and supplies lies in its ability to communicate wants‚ needs‚ and realities. Seagate has taken communication to its highest level by creating visibility at every level of its supply chain. This visibility is the Holy Grail for Seagate because it is a form of communication that breeds trust and transparency throughout every level of its supply chain.
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