Weighted Average Cost of Capital and Yeats
Extra Credit Assignment:
Yeats Valves and Controls Inc.
Completed as a Group with the Following Individuals: (in alphabetical order by last name)
Adetunji Adeniyi Tung F. Cheng Gregory Chiu Rashmin Patel WenHao Zhang
Course Title: Accounting and Finance Course No./Section: MG6093 Instructor: Frank X. Apicella November 28, 2012
Yeats Valves Question
The following are questions which should focus the groups on important aspects of the Yeats Valves case. Note the actual case name is Yeats Valves and Controls, Inc. The case number is UV0094. There is also a spreadsheet - that number is UV0184.
As mentioned - the corresponding case is TSE International Corp. - case # UV0114.
1. What is the situation that this company faces?
Yeats Valves and Controls, Inc. is currently considering a merger with TSE International Corporation. The founder, who is Chair and CEO, W.B. “Bill” Yeats, is about to reach his 62nd birthday and does not have a succession plan. He is concerned with the future of his company as none of the other executives can take his place because they are all specialists. Bill Yeats believes that TSE can provide stability to Yeats as he is reaching retirement, and TSE is a larger company with better marketing and global distribution channels. However, he is concerned with the fit of the two companies even though he thinks TSE is a better partnership than other alternatives.
2. What are the strengths and weaknesses of Yeats and its counterparty, TSE?
Unlike TSE, which is more global-oriented with indirect distribution channels, Yeats has a stronger national and direct distribution channel. TSE has a larger mass market production system (high volume) while Yeats has a more customized market production (lower volume). In addition, Yeats has a strong R&D, having many patents for multiple applications, particularly with its latest development of the
Yeats Valves and Controls Inc.
Completed as a Group with the Following Individuals: (in alphabetical order by last name)
Adetunji Adeniyi Tung F. Cheng Gregory Chiu Rashmin Patel WenHao Zhang
Course Title: Accounting and Finance Course No./Section: MG6093 Instructor: Frank X. Apicella November 28, 2012
Yeats Valves Question
The following are questions which should focus the groups on important aspects of the Yeats Valves case. Note the actual case name is Yeats Valves and Controls, Inc. The case number is UV0094. There is also a spreadsheet - that number is UV0184.
As mentioned - the corresponding case is TSE International Corp. - case # UV0114.
1. What is the situation that this company faces?
Yeats Valves and Controls, Inc. is currently considering a merger with TSE International Corporation. The founder, who is Chair and CEO, W.B. “Bill” Yeats, is about to reach his 62nd birthday and does not have a succession plan. He is concerned with the future of his company as none of the other executives can take his place because they are all specialists. Bill Yeats believes that TSE can provide stability to Yeats as he is reaching retirement, and TSE is a larger company with better marketing and global distribution channels. However, he is concerned with the fit of the two companies even though he thinks TSE is a better partnership than other alternatives.
2. What are the strengths and weaknesses of Yeats and its counterparty, TSE?
Unlike TSE, which is more global-oriented with indirect distribution channels, Yeats has a stronger national and direct distribution channel. TSE has a larger mass market production system (high volume) while Yeats has a more customized market production (lower volume). In addition, Yeats has a strong R&D, having many patents for multiple applications, particularly with its latest development of the