Technical Data Corporation

Topics: Stock market, Balance sheet, Security Pages: 81 (7916 words) Published: April 16, 2013
Harvard Business School

Rev. December 1, 1987


Jeff Parker was 38 years old, and held BS (1965), Master of Engineering (1966) and MBA (1969) degrees from Cornell University. After receiving his MBA, Parker had been employed in a number of positions in the investment industry. From 1969 to 1971, he worked for Smith Barney



This case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 1983 by the President and Fellows of Harvard College. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of Harvard Business School. Distributed by HBS Case Services, Harvard Business School, Boston, MA 02163. Printed In U.S.A. 1




Jeff Parker



Since it was founded, TDC had proved to be a more successful venture than Parker had thought probable when he started the company. By mid-1982, the company's revenues were running at an annual rate in excess of $1,000,000 and net profits after taxes were at a $270,000 annual rate.





Technical Data had been established in November of 1980. The necessary funds for starting the company had been raised by selling a package of debentures and stock representing 10% of the equity in the company to outside investors for $100,000. Parker retained 85% of the company. The outside investors were all active participants in the bond market.





Interdata Corporation supplied a wide variety of economic data and information services to a broad spectrum of firms. Interdata was a privately-held company with 1981 revenues of approximately $83 million.





Technical Data was a supplier of data analysis services to the financial community specifically, to participants in the bond market, including bond traders, bond salesmen, pension fund managers and bankers.




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Technical Data Corporation

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Scribbled at the bottom of the last worksheet was Parker's initial estimate of the value of his company. His calculations indicated a range of reasonable values from $5 to 10 million. Parker was somewhat aghast at the magnitude of this amount, given the firm's somewhat modest start only one and one-half years previously. When TDC was created in November, 1980 the total capitalization of the company was under $200,000.



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Jeff Parker, President of Technical Data Corporation (TDC), was going over some worksheets he had recently prepared. He was scheduled to meet the next day with Will Hollister, Chairman of Interdata Corporation. Hollister had asked Parker to discuss a possible investment by Interdata in TDC. Eventually, Hollister had said, Interdata was interested in buying the whole company.


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Technical Data Corporation



Technical Data Corporation

Harris Upham as a fixed income securities salesman. From 1972 to 1975, he was Vice President and Manager of the Corporate Bond Department of A. G. Becker. From 1975 to mid-1977, Parker helped develop a west-coast based bond operation for Loeb Rhoades. In mid-1977, Parker left San Francisco to come to Boston to work for Fidelity Management as a senior, fixed income portfolio manager. At Fidelity, Parker was responsible for managing the fixed income portion of a number of large pension fund portfolios.



Virtually all of the data analysis services embodied in TDC's product had been developed by Jeff Parker. During the period he had been employed as a bond trader and as a portfolio manager, he had written a number of proprietary programs to analyze bond data. In 1980, Parker had purchased an APPLE II micro-computer. He transferred all the programs he had...
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