Case Background
The key people, location, time period of the case.
What are Carol Smith, James Scarletti, Brooke Nestor, Cynthia Buck, Grant Buck?
What is Toronto, Canada?
What is March, 2016?
The season that the bulk of retail sales occurred in.
What is summer?
The main decision that Smith was considering for Buck.
What is accepting Sentry's offer to purchase Buck?
The two valuation methodologies that can be used to value Buck.
What are precedent transactions and discounted cash flow model?
The company that was responsible for over 50% of Buck's sales.
What is Walmart?
The price range Buck sold its products at.
What is mid-range?
The company that revised its verbal offer and the amount of that new offer.
What is Sentry Works Products' offer of $30MM (free of debt)?
The amount that Sentry offered to purchase Buck in their updated offer.
What is $30 million?
The environmental costs impacts the value of Buck in this direction.
What is decreases the enterprise value?
The valuation multiple that Sentry was trading at.
What is 11.0x EV/EBITDA?
The countries Buck sourced its raw materials from.
What is US, South America (1970s, 1980s), China (1990s, 2000s)
This was the plan of the mergers and acquisitions intermediary that approached Buck in 2014.
What is approach selected U.S.-based private equity firms who were cash-rich and eager to purchase a stable firm like Buck?
A major fear that Buck held when dealing with McDonald and Sentry.
What is use the rumour of the potential sale of Buck for Sentry's advantage?
Name one of the target companies that serve as a comparable for a precedent transaction.
What is Aristocrat Products, Franston, Specialty Care, Direct All, or Venator?
What is 6%?
This is how Buck was able to keep its overhead costs low.
What is operate a small office in Toronto, keeping bulk of inventory stored at Barrie warehouse, keep facility non-unionized?
In 2014, a small private equity firm made an offer of $40MM with two main conditions. These two conditions led to the deal falling through.
What are reduce its net working capital during high seasons to issue dividends and environmental and financial due diligence?
The characteristics that U.S.-based private equity funds look for when buying a company.
What is high-performing, stable businesses?
The two methodologies that can be used to calculate the terminal value of Buck.
What are exit multiple and perpetuity growth model?
The reason why Buck had to factor in environmental costs.
What is the historic oil and fluid leaks in the surrounding soil at the Barrie plant?
The falling Canadian dollar relative to U.S. dollar had minimal impact on Buck because...
What is most products sourced from low-cost countries, majority of costs incurred during manufacturing at Barrie facility in Ontario, Canada?
The reasons why there was an underwhelming market response to the transaction.
What are low growth prospects, customer concentration, and lack of management depth?
The favorable advantage for Buck working through an intermediary.
What is shopping around for the best price while also keeping the news of the potential sale out of the industry’s rumour mill?
This is the problem with using the current comparable transactions given to value Buck.
What is Direct All is an outlier (10x multiple, whereas average is 5x)
The average environmental remediation cost between 2011 and 2014.
What is $980,000/year?