Grove

Case Solution for Pacific Grove Spice Company

Complete Case details are given below :
Case Name :      Pacific Grove Spice Company
Authors :           William E. Fruhan, Craig Stephenson
Source :             HBS Brief Cases
Case ID :            4366
Discipline :        Finance
Case Length :    11 pages
Solution sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
Pacific Grove Spice Company is a profitable, rapidly growing manufacturer, marketer, and distributor of quality spices and seasonings. The company’s business model requires significant investment in accounts receivable, inventory, and fixed assets to support sales. Although the company is profitable and all of its net income is reinvested in the firm, the firm must utilize significant amounts of debt to fund the necessary growth in assets to support sales. The bank is concerned about the total amount of interest-bearing debt on Pacific’s balance sheet and has asked the company to provide a plan to reduce it. Debra Peterson, president and CEO, believes the current four-year financial projections are reasonable and attainable. She is also considering three opportunities: sponsoring a cable cooking show, raising new capital by selling shares of common stock, and acquiring a privately owned spice company. Students must analyze the company’s financial projections to determine if the reduction in debt meets the bank’s requirements. They must also analyze the opportunities and consider their individual and combined impacts on the company’s financial position. The case illustrates the interaction between investment and financing decisions.
 
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Case Solution for Private Equity Case: Merger Consolidation

Complete Case details are given below :
Case Name :      Private Equity Case: Merger Consolidation
Authors :           Hugh Grove, Tom J. Cook
Source :             North American Case Research Association (NACRA)
Case ID :            NA0030
Discipline :        Finance
Case Length :    10 pages
Solution sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
The purpose of this case was to determine whether ACE Private Equity Partners, a mid-size private equity fund, should acquire two physical therapy companies in order to develop them for subsequent sale to a larger private equity firm. This situation represented another opportunity for ACE’s general partners to implement their “merger consolidation” investment strategy for their fund investors or limited partners. This investment strategy was to buy several private firms in the same industry, develop them for three to five years with revenue growth and cost saving synergies and, then, sell this larger consolidated company. This investment strategy was summarized by three major tactics: 1) build more valuable companies through growth and consolidation, 2) use arbitrage to buy smaller companies at lower private company EBITDA multiples and, then, sell them as a larger combined enterprise at higher public company EBITDA multiples, and 3) leverage the acquisitions with debt to spread risk and enhance returns.

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Case Solution for Exiting AmData Software China Ltd.: Sell Now or Later?

Complete Case details are given below :
Case Name :      Exiting AmData Software China Ltd.: Sell Now or Later?
Authors :           Hugh Grove, Yuhua Hao, Tom J. Cook, Tomas C. Klett
Source :             North American Case Research Association (NACRA)
Case ID :            NA0011
Discipline :        Finance
Case Length :    24 pages
Solution sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
In March 2008 the CEO had just received a surprising and unsolicited offer from a Japanese company to purchase his AmData Software China company which owns the exclusive mainland China franchise to distribute this U.S. vendor’s software. The Japanese company owns a similar exclusive franchise in Japan. After preliminary negotiations, including a demand by the Japanese company to state the business sale amount in U.S. dollars, the initial $2.5 million offer was raised to $5.5 million. However, this amount was not yet agreed to by both parties and a business valuation analysis would be critical to the key decision of the case: should the CEO sell the company now or continue to develop it for sale at a future date? Such a subsequent sale might be an IPO on one of the Chinese stock exchanges.

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