Executive Summary In this case we analyst whether Timken should acquire Torrington company from Ingersoll-Rand by cash‚ issuing share to public or issuing share directly to IR. IR wanted to divest Torrington and Timken aim to acquire it. After merging with Torrington Timken will be world third largest company in bearing industry and Timken would gain more sales as Timken and Torrington has about 80% of overlapped customer. Moreover after the synergy they can reduces cost‚ increase market shares and
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analysis and recommend the best‚ in your opinion‚ course of action in the proposed acquisition of the Torrington Company. Your task is to write a report that will address their questions and concerns‚ in particular: 1. 2. 3. 4. How does Torrington fit with the Timken Company? What are the expected synergies? What is your stand alone valuation of Torrington? What is your with-synergies valuation of Torrington? Should Timken be concerned about losing its investment-grade rating? How do Timken’s financial
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The Timken Company to Acquire Torrington This memo will examine Timken Company’s decision to acquire Torrington by examining the stand-alone value of Torrington‚ the synergies of this acquisition and the effect on Timken’s investment grading. Acquiring Torrington seems to fit well with Timken’s long term growing strategy. Torrington and Timken share 80% of their customers but only overlap 5% in their product offerings. Not only would this allow customers to make Timken a one stop shop for
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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
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Individual Case Brief-The Timken Company Main Issue The Timken Company was intended to acquire the Torrington Company from Intersoll-Rand (IR). If the acquisition succeeded‚ Timken would get synergies such as boosting world market share and cutting costs substantially. However‚ considering the large size of this acquisition‚ Timken would face the stress of below-investment-grade rating and series of future financing problems if IR required a cash deal. A feasible financing structure must be considered
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Executive Summary From our DCF calculations‚ the value of Torrington as a stand-alone entity is $1.181 billion. However‚ the maximum purchase price for Torrington should only be $641 million. The optimum debt amount for this transaction would be $301 million. This amount of debt would result in a total debt to capital ratio for Torrington of 47%‚ within the range for a BBB “investment grade” debt rating. The combined entities‚ Torrington-Timken‚ would produce an interest coverage ratio of 3.2‚ and
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business operations and also add new products to their portfolio. Torrington Acquisition To fulfill the above stated objectives Timken decided to pursue the acquisition strategy and chose Torrington as its potential target firm. Both Timken and Torrington had more than 100 years of operating experience in anti-friction products. Torrington was therefore chosen to be the good fit for the company‚ primarily because: * Torrington would help Timken gain foothold in Europe from where it derived 17%
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Kaplan University | Thurman Law | Professor Underwood-Criminal Law | | Tari | 1/17/2012 | Tracey Thurman was a Connecticut housewife who survived beatings from her husband and went on to introduce Thurman Law‚ which made sure that police officers acted on all calls of domestic abuse. Tracey also sued the City of Connecticut for not doing their job pertaining to her calling the police to come help her when her husband‚ Charles Thurman‚ was threatening her life. | In 1982‚ Tracey
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TIMKEN COMPANY Teaching Note Synopsis and Objectives The acquisition of Torrington from Ingersoll-Rand (IR) required a strategy that would meet both the investment and the financing objectives of the Timken Company. In that regard‚ the case provides an excellent example of the principle that investment and financing decisions can be considered independently. In effect‚ Timken captured the positive NPV of Torrington even though Timken was required to increase its leverage beyond its capital-structure
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industry‚ is considering acquiring the Torrington Company from Ingersoll-Rand. Torrington – an engineering solutions segment of the Ingersoll-Rand. The main motive of acquisition is to enhance Timken’s market share and product base. Operating synergies are highly expected from this merger with 80 million cost savings by the end of 2007. The presented analysis‚ recommends in our opinion‚ the best course of action in the proposed acquisition of the Torrington Company: * Both companies operate
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