Subject category:
Strategy and General Management
Published by:
London Business School
Length: 22 pages
Data source: Field research
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https://casecent.re/p/23046
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Abstract
A venture capitalist has funded an Italian free advertisement newspaper business in syndicate with the original owners of two companies acquired to form the new business. The original intention was to grow the company through further acquisitions, but board disputes, the actions of the managing director and the shareholders' agreement have combined to stall the strategy. Furthermore, the terms of an earn-out, together with uneven trading performances in different parts of the business and lax controls on discretionary spending, have put the business in a tight cash position as regards fulfilling outstanding deferred acquisition payments.
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Abstract
A venture capitalist has funded an Italian free advertisement newspaper business in syndicate with the original owners of two companies acquired to form the new business. The original intention was to grow the company through further acquisitions, but board disputes, the actions of the managing director and the shareholders' agreement have combined to stall the strategy. Furthermore, the terms of an earn-out, together with uneven trading performances in different parts of the business and lax controls on discretionary spending, have put the business in a tight cash position as regards fulfilling outstanding deferred acquisition payments.