According to Exhibit 9 in the case, the yield of BB rating is 9. Is Ingersoll-Rand likely to want a cash deal or a stock-for-stock deal. When valued as a sempiternity.
Through model calculation, debt weight is As mentioned in the case, it would be very difficult for Timken to raise the needed cash without significantly raising the level of debt based on the cash condition on its balance sheet.
Exhibit TN9 compares Timken. Economic recession decreased automotive demand, thus decreased bearing demand. For the last option is by issuing share directly to IR would benefit Timken as it will change capital structure reduce debt more equity.
Another reason is that make merger and acquisition with Torrington can achieve cost saving. A good usage of clip during the category is to research other value drivers by carry oning a sensitiveness analysis.
The 2nd measure in gauging a growth-based terminal value is the appraisal of the longterm relationship between capital outgos and depreciation. A more typical agreement with an investing bank would hold been a 4. Debt and equity weight in capital structure: Through model calculation, after tax cost of debt is 4.
As the lockup period came to an terminal. What is Stand-Alone valuation of Torrington.
The norm of this ratio This was a quite challenge to Timken Company. With small chance of important top-line growing in new-product development or bing merchandises. The bank would have no committee and would purchase the portions at a 1.
More essays like this: The investors will not buy these kinds of bonds due to the high interest risk. If Timken decides to go forward with the acquisition, how should Timken offer to structure the deal. The terminal value estimated in Exhibit TN3 uses a constant-growth theoretical account. Before tax cost of debt: The investors will not buy these kinds of bonds due to the high interest risk.
Timken could not adapt their business in economic recession so well. Torrington with Timken Company If Timken successfully acquired Torrington, it would become 3rd largest bearing manufacturer in the world. Timken direction had arranged a true underwriting in which the bank bought and sold the portions from its ain history so that a downward market motion of more than 1.
If there were jobs about Torrington that IR did non unwrap during the due-diligence procedure. Timken viewed the acquisition of Torrington as both a strategic and a fiscal drama:. Timken Company is one of the biggest companies in bearing industry, and it is considering expanding, and Torrington is a good choice for Timken.
Torrington is a company focusing on making sewing-machine needles. In conclusion, the $ million debt has a negative impact on Timken, since it lowers company’s investment-rating scale. If Timken decides to go forward with the acquisition, Timken should structure the deal with both cash and stock-for-stock offering.
The Timken Company to Acquire Torrington Essay Words | 4 Pages. The Timken Company to Acquire Torrington This memo will examine Timken Company's decision to acquire Torrington by examining the stand-alone value of Torrington, the synergies of this acquisition and the effect on Timken's investment grading.
1 - Timken Company Torrington Company Case Essay introduction. How does Torrington fit with Timken? Timken Company is one of the biggest companies in bearing industry, and it is considering expanding, and Torrington is a good choice for Timken.
Torrington is a company focusing on making sewing-machine needles. The Timken Company Essay Sample. In this case we analyst whether Timken should acquire Torrington company from Ingersoll-Rand by cash, issuing share to public or issuing share directly to IR.
IR wanted to divest Torrington and Timken aim to acquire it. Gordon East, IT Manager, Timken Business Needs Timken, a year-old company, is a longtime leader in the production of antifriction bearings and specialty steel.
The company began as a carriage maker before the advent of the mass production of automobiles .The timken company essay