arch communication
Arch Communications
Analysis of a Security Valuation
Derek Webb, Darryl Kraemer
Agenda
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•
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•
•
•
•
•
Background
Strategy Analysis
Accounting Review
Ratio Analysis
Cash Flow Analysis
Forecasting Review
Valuation
Post Script
Background
Background
• Arch Communications Group Inc. founded in
1986
• 3rd largest paging company in USA in 1996
• 3 million subscribers in 1996
• Local, regional and nationwide basis
• 180 of 200 major metro cities
Background
• Current competitive positioning:
• Low cost provider
• Economies of scale for ops, size of subscriber base
• Standard, reliable technology
• Fast follower, proven and somewhat dated tech
• Prompt and efficient delivery
• Resellers, retailers and direct sales
• Invested in expanded networks, and capacity
• Integrate acquisitions successfully
Strategy
Strategy
• Return on Capital Business Strategy +
Corporate Strategy
• Business Strategy Industry Choice +
Competitive Position
Corporate Strategy
• Goals
• To become dominate player in wireless paging segment • Aggressive growth through strategic acquisitions and internal additions
• Strengthen distribution channels and increase capacity • Invest in select technologies
• Geographic expansion
Competitive Positioning
• Product Market Focus
•
•
•
•
Local, regional and nationwide
Major metro areas
Every pager type - 87% digital
Direct, retailer and resellers for distribution channels Competitive Positioning
• Core Activities
•
•
•
•
•
•
Build networks
Distribute through reseller and retailers
Sell via direct channel
Support and service
Backend billing operations
Marketing through direct channels
Competitive Positioning
• Value Proposition
•
•
•
•
Proven, reliable service at a low cost
Fast delivery of messages
Limited to no network downtime
Large geographical coverage
Industry Choice
• Degree of Rivalry – HIGH
•
•
•
•
•
Limited
Analysis of a Security Valuation
Derek Webb, Darryl Kraemer
Agenda
•
•
•
•
•
•
•
•
Background
Strategy Analysis
Accounting Review
Ratio Analysis
Cash Flow Analysis
Forecasting Review
Valuation
Post Script
Background
Background
• Arch Communications Group Inc. founded in
1986
• 3rd largest paging company in USA in 1996
• 3 million subscribers in 1996
• Local, regional and nationwide basis
• 180 of 200 major metro cities
Background
• Current competitive positioning:
• Low cost provider
• Economies of scale for ops, size of subscriber base
• Standard, reliable technology
• Fast follower, proven and somewhat dated tech
• Prompt and efficient delivery
• Resellers, retailers and direct sales
• Invested in expanded networks, and capacity
• Integrate acquisitions successfully
Strategy
Strategy
• Return on Capital Business Strategy +
Corporate Strategy
• Business Strategy Industry Choice +
Competitive Position
Corporate Strategy
• Goals
• To become dominate player in wireless paging segment • Aggressive growth through strategic acquisitions and internal additions
• Strengthen distribution channels and increase capacity • Invest in select technologies
• Geographic expansion
Competitive Positioning
• Product Market Focus
•
•
•
•
Local, regional and nationwide
Major metro areas
Every pager type - 87% digital
Direct, retailer and resellers for distribution channels Competitive Positioning
• Core Activities
•
•
•
•
•
•
Build networks
Distribute through reseller and retailers
Sell via direct channel
Support and service
Backend billing operations
Marketing through direct channels
Competitive Positioning
• Value Proposition
•
•
•
•
Proven, reliable service at a low cost
Fast delivery of messages
Limited to no network downtime
Large geographical coverage
Industry Choice
• Degree of Rivalry – HIGH
•
•
•
•
•
Limited