It is Men s athletic footwear is the leading product for Mercury Athletic. -Founded in 1968 by Daniel Fiore -Producer, designer and distributor of branded athletic and 1 March 8, 2017 Harvard E-2720 Mergers and Acquisitions Mercury Athletic Authors: Steven Washburn, Brandon Cobb, Boyu Wu Case Questions a. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Now customize the name of a clipboard to store your clips. The price is the amount of money paid for products or services according to the set/agreed terms and as such is a marketing tool. After being purchased by West Coast Fashions,Inc., Mercury Athletic, a footwear division, did not make satisfying performance on the whole. For example, the “athleisure” trend continues to dominate U.S. consumer spending on athletic footwear: sales of athletic footwear grew 2 percent to $19.6 billion in 2017, and sport leisure is the largest category in athletic footwear. See our Privacy Policy and User Agreement for details. Mercury Athletic Footwear - Acquisition Analysis ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset βeta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Mercury Athletic Footwear: Valuing the opportunity Case Solution. shopping at a particular footwear store (Wong, 2004). China: Revenue in the Footwear market is projected to reach US$66,102m in 2020. Reasons why Mercury is an appropriate target for AGI 4 2. The offer price represents a premium of 34.2% over the closing price of Reebok’s stock on August 2, 2005. Mercury Athletic Footwear . Strategically analyzed the potential acquisition of Mercury Athletic Footwear by Active Gear Inc. In the case discussed, Active Gear Inc. (AGI) is contemplating an acquisition of Mercury Athletic Footwear (MAF). Mercury Athletic Footwear – Acquisition Analysis. Find great deals on Mercury Men's Athletic Shoes when you shop the huge selection of new & used sneakers on eBay.com. This datawill enable him to identify the strengths and weaknesses of this acquisition.First lets look a summary of the operations of both AGI and Mercury Athletics’ actualoperations based on the last year given 2006 before AGI plans of acquiring Mercury. The market is expected to grow annually by 6.4% (CAGR 2020-2025). Each company in the industry today is trying to reduce its manufacturing costs by shifting the production to Asian markets. Looks like you’ve clipped this slide to already. In 2003 the company was sold to West Cost Fashions and one of the first steps after the acquisition was the create an apparel line in an … Reasons why Mercury is an appropriate target for AGI 4 2. Looks like you’ve clipped this slide to already. Men’s athletic footwear is the leading product for Mercury Athletic. 1-5). Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Such a move would result in divesting the corporation of its hold over Mercury Athletic, a wholly-owned footwear subsidiary. Mercury Potential to double revenues Increase leverage with manufacturers Increase long run growth rate Expand presence with key retailers and distributors. Should AGI purchase Mercury? Introduction: Mercury. The newer trend of safety footwear looking and wearing like comfortable athletic shoes and casual dress shoes and boots is also continuing at an accelerated pace. Mercury Athletic Footwear Mercury Athletic Footwear Mercury Athletic Footwear ... 2008, Pp. The athletic footwear market is expected to reach US$ 60.5 Bn by 2026 with 5.3% CAGR during the forecast period from 2018 to 2026. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to roughly double the size of his business. NIKE, Inc. (NYSE: NKE) plans to release its fourth quarter fiscal 2019 financial results on Thursday, June 27, 2019, at approximately 1:15 p.m. PT, following the close of regular stock market trading hours. Due to strategy reorganization, WCF wanted to shed this segment. Mercury Athletic Footwear Case Solution. In order to summarize, due to AGI’s small size, there is a strong risk of being overtaken by the other giant players in the market therefore, if it acquires Mercury, the risk will be minimized and there is a strong opportunity that the company will grow steadily. BIRMINGHAM, Ala.--(BUSINESS WIRE)--Oct. 29, 2018-- Hibbett Sports, Inc. (NASDAQ/GS: HIBB), an athletic specialty retailer, today announced that it has signed a definitive agreement to acquire privately held City Gear, a city specialty retailer of premium athletic footwear, apparel and accessories with 135 stores in 15 states. Is Mercury an Appropriate Target for AGI? If you continue browsing the site, you agree to the use of cookies on this website. RE: Mercury Athletic valuation and acquisition recommendations. There will be no requirement for separate financial statements for Mercury. Given AGI’s stated merger and a cquisition goals, the size of Mercury, the market segment served, geography, and the price all appear to fit. 4 a. 1. TAF®, previously known as The Athlete's Foot®, was the world's first franchisor of athletic footwear stores. Mercury competes in four main product lines: men s and women s athletic and casual footwear. Business The Deal Makers: 2020's Top M&A Players 12 hours ago Business Evans Is the First Arcadia Brand to Be Sold — Here's Its New Owner 4 days ago The Business plan on Mercury Athletic Case. (TSE:2670), Japan’s leading retailer of athletic, business and casual footwear, announced today the successful completion of its acquisition of LaCrosse Footwear, Inc. (NASDAQ:BOOT), a … Athletic footwear refers to those shoes that are designed for sports and other outdoor activities. Global Athletic Footwear Market is expected to reach $114.8 billion by 2022, growing at a CAGR of 2.1% during the forecast period 2016 - 2022. (The final amount is … The owner of Famous Footwear and brands such as Sam Edelman and Dr. Scholls announced today that it has acquired comfort footwear label Vionic for $360 million. Producer and supplier of products and services for correctional facilities. In January 2007, West Coast Fashions, Inc., a huge designer and promoter of branded clothes, made public a strategic restructuring that would lead to the divestiture of their completely owned footwear subauxillarysidiary, Mercury Athletic. About Race Roster. Reasons why Mercury is an appropriate target for AGI 4 2. Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. If you continue browsing the site, you agree to the use of cookies on this website. Free shipping on many items. Active Gear, a mid-sized athletic and casual footwear company, is looking into the possible acquisition of Mercury Athletic as it might be the opportunity for … Now customize the name of a clipboard to store your clips. The company's products include seafood, snacks, soup, nuts, skin & hair-care products, personal care products, apparel, athletic footwear and electronics. This analysis allows for the evaluation of cash in-and-outflows to assess Mercury´s current financial performance by discounting them back to present value, and adding a “Terminal Value”. Daniel Fiore, the founder of Mercury, sold the company to West Coasts Fashion, a large designer of women’s and men’s branded apparel, in late 2003. The strategic merit is that both companies Mercury and AGI, are footwear companies that attract the youth market. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Case Meeting – Discussion of Group Case #4h Mercury Athletic Footwear Case - The case uses the potential sale of Mercury Athletic Footwear (hereafter, MAF), a mid-size athletic and casual shoe company, to teach undergraduate and the first-year MBA students the basic discounted cash flow valuation using the WACC. The Global Luxury Footwear Market size is expected to reach $46. Mercury Athletic Footwear: Valuing the Opportunity Active Gear, Inc. (AGI) is a privately held footwear company and is contemplating the possibility of acquiring Mercury Athletic Footwear.West Coast Fashions Inc., a large designer and marketer of men’s and women’s branded apparel recently announced that it plans to shed its Mercury Athletic Footwear subsidiary. Imports are also affected by the various styles and trends followed by consumers. DOWNLOAD HI-RES / PHOTO DETAILS. Introduction: Mercury. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to … Spring Semester, 2016. Mercury is specialized in designing and distributing the branded athletic and casual footwear. We believe Mercury Athletic Footwear is an appropriate target for AGI to achieve such a goal for following reasons. 4 a. Estimation of the weighted average cost of capital 5 b. Mercury Athletic Footwear Case Solution. Mercury Athletic Footwear Case Solution. Therefore, Liedtke believes that if they takeover Mercury will doubleAGI’s revenue, increase it’s leverage with contract manufactures and expand its presencewith key retailers and distributions. If you continue browsing the site, you agree to the use of cookies on this website. With the recent changes in footwear trends, this study hopes to analyze all possible effects of factors on the brand image, price, perceived value, service quality, customer Mercury Athletic Footwear: Valuing the opportunity Mercury Athletic Footwear: Valuing the opportunity Mercury Athletic Footwear: Valuing the Opportunity CASE ANALYSIS: MERCURY ATHLETICS FOOTWEAR: VALUING THE OPPORTUNITY Merrill Lynch’s Acquisition of Mercury Asset Management Newmont Mining Corp. and a Mercury Spill in Peru (A) Mercury Athletic Footwear Valuing a Business Acquisition … That is why customer satisfaction and loyalty are very important to Belle international company’s future. U.S. Exports Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If the acquisition price is less than the present value of future cash flows then Active Gear Company should proceed with the investment. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Active Gear, Inc Mercury AthleticRevenues $470, 286 m $431,121 m% Of Revenue Product 42 % athletic / 58 % casual 79 % athletic / 21 % casualOperating Income $60.4 m $42,299 mRevenue Growth $2-6% 12.5 %. AGI Mercury Athletic Footwear $470.3 Million Sales Revenue in 2006 42% Revenue - Athletic Footwear 58% Revenue - Casual Footwear Among the best profit margins in the Industry Prosperous, Active, and Fashion-Conscious Brand Image. 1. Mercury Athletic Essay Sample. [6] The selling price of a manufactured product consists of two items: its cost to the manufacturer and the manufacturer’s profit. MERCURY ATHLETIC FOOTWEARProblem statement:West Coast Fashions, Inc a large business of men’s and women’s apparel decided todispose of one of their segments; Mercury Athletic. First, through the acquisition AGI can take the advantages of some existing synergies. Please place the order on the website to get your own originally done case solution If the acquisition price is less than the present value of future cash flows then Active Gear Company should proceed with the investment. 1-5). John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to … Race Roster was founded by five childhood friends with a combined … JB Gough 4 a. Footwear market size was valued at $365.5 billion in 2020, and is estimated to reach $530.3 billion by 2027 with a CAGR of 5.5%. 4050 SEPTEMBER 18, 2009 TIMOTHY A. LUEHRMAN JOEL L. HEILPRIN Mercury Athletic Footwear: Valuing the Opportunity In March 2007, John Liedtke, the head of business development for Active Gear, Inc., a privately held footwear company, was contemplating an acquisition … This is just a sample partial case solution. In 2017, Asia Pacific led the athletic footwear market and is estimated to be the fastest growing region between 2018 and 2026. Air Force clothing initial issue section chief Vernalynne Carter and 502nd Logistics Readiness Squadron Commander Air Force Lt. Col Ernest Cage issue new American-made athletic footwear to Air Force recruits Daniel Sterling, right, and Ryan Padro, second right, at Joint Base San Antonio-Lackland, Texas, Jan. 3, 2019. See our User Agreement and Privacy Policy. The objective of the acquisition is to improve firm size, increase growth rate and expand market share. Target customers are urban and suburban family members aged 25 to 45. You can change your ad preferences anytime. Acquiring Organization: Hibbett Sports Headquartered in Birmingham, AL, Hibbett Sports has a simple philosophy: it's all about the customer. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to roughly double the size of his business. Is Mercury an Appropriate Target for AGI? Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. We believe that Mercury is an appropriate target for AGI since an acquisition can be an excellent growth opportunity. The strategic merits of acquiring Mercury from Liedtke’s perspective. Consumer interest in safety shoes, steel toe rubber boots and overshoes now drives a new market that removes a noticeable gap between safety and casual footwear. The concept, founded in 1971 in Pittsburgh, Pennsylvania, began domestic franchising in 1972 and opened its first international store in Adelaide, Australia in 1978. Adidas has come a long way over the decades and is now positioned second largest & most popular player in the athletic footwear industry. https://www.slideshare.net/JBGough/acquisition-of-mercury-athletic [4] Net prices do not include any City Gear City Gear is a specialty retailer of premium athletic footwear, apparel and accessories. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to roughly double the size of his business. Harvard Business School case study completed for my Intro to Finance course final project. ... We assume a premium of 10% for the purchasing price … John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to … Mercury Athletic Footwear’s Men’s Casual sector was disrupted by bad weather and strikes ... WACC Calculations Acquisition Rationale. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details. ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset ?eta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 Why or why not? Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Mercury Athletic Footwear: Valuing the Opportunity 3861 Words | 16 Pages. Mercury Athletic Footwear: Valuing the Opportunity Active Gear, Inc. (AGI) is a privately held footwear company and is contemplating the possibility of acquiring Mercury Athletic Footwear. Following the news release, NIKE management will host a conference call beginning at 2:00 p.m. PT to review results. However of late, there has been some drop in sales because In January 2007, West Coast Fashions, Inc., a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. John Liedtke, head of the businessdevelopment for Active Gear, Inc saw it has a possible opportunity for them to acquire it.The footwear industry is very competitive, with low growth and stable profit margins.AGI is very profitable but it is smaller than its competitors, which is becoming adisadvantage. The price per earnings ratio was then applied to the 2006 Mercury net income. Women’s casual footwear is Mercury’s worst performing product that is may help AGI to achieve a lower acquisition price. Mercury Athletic Footwear - Acquisition Analysis ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset βeta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 CASH FLOW AND OPERATING ASSUMPTIONS Athletic footwear is mainly designed for sports or other forms of physical exercises and are used by athletes and climbers. Acquisition of Mercury Athletic 8% CAGR during the forecast period. NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a … Mercury has some characteristics that should be considered: Mercury, is a footwear company that aim at urban and youth market, one of the most lucrative customer target in the industry. West Coast Fashions, Inc. (WCF), a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization. Liedtke is evaluating the company in order to find outwhether the future benefits justify or surpass the present value of the investment inMercury.Analysis:In order for Liedtke to get a broader picture on the acquisition of Mercury, he needs tocompare and analyze a list of financial data from 2006 to 2011; projected balance sheetaccounts, operating results and free cash flows, and cost of capital calculations. This is just a sample partial work. For footwear players, the time to buy — and sell — could be now. Is Mercury an appropriate target for AGI? Active Gear, a mid-sized athletic and casual footwear company, is looking into the possible acquisition of Mercury Athletic as it might be the opportunity for … Athletic Footwear Market Overview. Customer Code: Creating a Company Customers Love, Be A Great Product Leader (Amplify, Oct 2019), No public clipboards found for this slide, Attended Mayo College Girls' School, Ajmer. Business The Deal Makers: 2020's Top M&A Players 12 hours ago Business Evans Is the First Arcadia Brand to Be Sold — Here's Its New Owner 4 days ago Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Clipping is a handy way to collect important slides you want to go back to later. 4 a. 1. Daniel Fiore, the founder of Mercury, sold the company to West Coasts Fashion, a large designer of women’s and men’s branded apparel, in late 2003. Placed 1st out of 100 total competitors. 4050 SEPTEMBER 18, 2009 TIMOTHY A. LUEHRMAN JOEL L. HEILPRIN Mercury Athletic Footwear: Valuing the Opportunity In March 2007, John Liedtke, the head of business development for Active Gear, Inc., a privately held footwear company, was contemplating an acquisition opportunity. Active Gear, Inc. (AG), a privately held footwear company, was contemplating an acquisition opportunity. By Dineo Faku Jul 16, 2019 You can change your ad preferences anytime. Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Reasons why Mercury is an appropriate target for AGI 4 2. Mercury Athletic Footwear Mercury Athletic Footwear Mercury Athletic Footwear ... 2008, Pp. Mercury Athletic Footwear Case Solution. The NPV is finally calculated as $2,361,366.68, thus the estimated value of mercury is calculated to be $2,361,366.68. Mercury is specialized in designing and distributing the branded athletic and casual footwear. 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The situation properly, a wholly-owned footwear subsidiary relevant ads and User Agreement for details lower acquisition price is leading. Shoes that are designed for sports or other forms of physical exercises and used... Business School case study completed for my Intro to Finance course final project is estimated to the! Brands for the purchasing price … Mercury Athletic footwear refers to those shoes that designed...

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