The BIOPHARM

Topics: Sewage treatment, Sales, Wastewater Pages: 3 (743 words) Published: February 20, 2015
The BIOPHARM-SELTEK NEGOTIATION
7 Step Negotiation Plan
1) Asses the Situation
Annual turnover - $150 million
Developed only one successful compound - Petrocheck which is sold to the oil industry with a present value of between $5-7million Product can be used in sewage treatment plant with no present value but very lucrative (Opportunity). We plan to only concentrate on conventional pharmaceuticals

Very hard to sell plant because it is uniquely configured
Plant can be used for making comp chips but highly unlikely manufacturer would buy it Option 1
Rebuilding plant: 6months, cost 3million and value at 10m and net yield of 7million. Option 2
Sell the plant to Biopharm as they will keep operating it as a pharmaceutical company to preserve our current workforce which will save the company 1million. Biopharm has expressed an interest but no prove to show that they have genetically engineered compounds. 2

Sell patent to elf for 4million
Option 4
After one year 50% chance of selling to EXXON for 5million
Both are not interested in plant
Option 5
We prefer to sell patent for 4million to Biopharm and sell plant aswel. To complete sale, $200000 needs to be paid off by either of us Financial calculations
Real estate valuation
Building and land: 20,000,000
Market decline (20M * 20%)4,000,000
--------------
Plant Value 2yrs ago16,000,000
----------------
Public Valuation
Plant current value (16m - 4m(assuming 20% decline again))12m Insurance paid by Seltek 8m
2) Goals and Objectives
We need to sell off U.S plant because it barely break even. The sooner we sell the plant the better.
we need to turn our attention to full conventional pharm. manuf. we need to free up funds for other strategic projects
we need to sell the plant and the petrocheck patent
we desperately need funds to invest in new projects, so selling plant and patent is an immediate priority! NO LEASING! 3) Prioritise Issues (In...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Biopharm Essay

Become a StudyMode Member

Sign Up - It's Free