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Introduction

Case
Overview

Assumptions

Analysis

Recommendat
ions
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions

Analysis

Recommendat
ions
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions
Carburetors

Analysis Fuel injection


systems

Ignition systems
Recommendat
ions Sealing systems
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions

Analysis
19,6 % of
Sales
Recommendat
ions
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions
Landing gear assemblies

Analysis Aerospace controls

Gas turbines

Recommendat Jet engine components


ions
Aircraft instrumentation

Firearms
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions

Analysis
Firearms
divison on
strike
Recommendat
ions
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions

Analysis
12,5 % of
Sales
Recommendat
ions
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions
Electric distribution

Analysis Seals, packing and gasketing


materials

Weighting equipement
Recommendat
ions Machine tools
Conglomerate Industrial Company

Introduction

Case
Overview
Automobile Aerospace / Government Industrial
Assumptions

Analysis
Steel business
sold
Recommendat
ions
Introduction

Case
Overview

Assumptions

Analysis

Recommendat
ions
Leverage Operation

Introduction

Case
Overview
Unlock Increase voting
Assumptions shareholder percentage of
value RSP

Analysis

Recommendat
ions
Leverage Operation

Introduction

Case
Overview
Unlock Increase voting
Assumptions shareholder percentage of
value RSP

Analysis

Recommendat
ions

Leverage Leverage Buyout


Recapitalization
Leverage Operation

Introduction

Case
Overview

Leverage Leverage Buyout


Assumptions Recapitalization

Analysis

Recommendat
ions
Leverage Operation

Introduction

Case
Overview

Leverage Leverage Buyout


Assumptions Recapitalizatio
n

Analysis

Recommendat
ions
Leverage Operation

Introduction

Case
Overview

Leverage Leverage Buyout


Assumptions Recapitalizatio
n
General Utilities Rule not
Analysis aplied

FMC Corp. used it and had


Recommendat success
ions
Leverage Operation

Introduction

Case
Overview

Leverage Leverage Buyout


Assumptions Recapitalizatio
n
General Utilities Rule not
Analysis aplied

FMC Corp. used it and had


Recommendat success
ions
Public Shareholders
must own no more
than 74,4%
Leverage Operation

Introduction

Case
Overview

Leverage Leverage Buyout


Assumptions Recapitalizatio
n
General Utilities Rule not
Analysis aplied

FMC Corp. used it and had


Recommendat success
ions
Public Shareholders
premium of 43%
Leverage Recapitalization Operation

Introduction For each


share
Case
Overview
Public Retirement
Assumptions Shareholders Savings Plan
(RSP)

Analysis

Recommendat
ions
Leverage Recapitalization Operation

Introduction For each


share
Case
Overview
Public Retirement
Assumptions Shareholders Savings Plan
(RSP)
One Stub

Analysis One-time cash


distribution

Recommendat
ions
Leverage Recapitalization Operation

Introduction For each


share
Case
Overview
Public Retirement
Assumptions Shareholders Savings Plan
(RSP)
One Stub One Stub

Analysis One-time cash Equivalent in Stubs


distribution

Recommendat
ions
Leverage Recapitalization Operation

Introduction To Finance

Case
Overview
Bankers Trust Colt Industries
Assumptions Company

Analysis

Recommendat
ions
Leverage Recapitalization Operation

Introduction To Finance

Case
Overview
Bankers Trust Colt Industries
Assumptions Company

$ 700 million Term


Analysis Loan

$ 300 million
Recommendat Revolving Credit
ions Facility
Leverage Recapitalization Operation

Introduction To Finance

Case
Overview
Bankers Trust Colt Industries
Assumptions Company
$ 203 million in excess
cash
Analysis
$ 550 million 15 – year
subordinated
debentures
Recommendat
ions
Leverage Recapitalization Operation

Introduction Impact

Case
Overview
Financial Capital
Assumptions Stucture

Analysis

Recommendat
ions
Introduction

Case
Overview

Assumptions

Analysis

Recommendat
ions
Firm Valuation

Introduction

Case
Overview Adjusted
Present Value
Approach
Assumptions

Analysis
D/E ratio not Adding debt to
stable the Firm
Recommendat
ions
Company Rating

Introduction

Case
Overview

Before Operation After Operation


Assumptions
A BB
Analysis + B

Recommendat
ions
Additional Assumptions

Introduction

Case        
Overview   risk premium (assume 5,5%) 5,50% 
thirty years risk free (closest to the
  minimum of 15y) 8,64% 
  Beta of industry (from Damodaran) 1,29 
Assumptions   Fire Sale Devaluation of Assents 20% 
  GDP growth from table 2,73% 
Inflation (we assumed to be equal to
  year 1986) 1,91% 
       
Analysis

Recommendat
ions
Introduction

Case
Overview

Assumptions

Analysis

Recommendat
ions
Introduction

Case
Overview

Assumptions

Analysis

Recommendat
ions