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Case from journal
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Reference no. NAC2105
Authors: Hugh Grove
Published by: NACRA - North American Case Research Association
Published in: "The Case Research Journal", 2001
Length: 16 pages
Data source: Field research

Abstract

Students are challenged to make a recommendation concerning the acquisition of a company that enhances a core competency of the acquiring company. This acquisition recommendation must include both a financial business valuation of the company and a marketing or negotiating strategy to close the deal. The students take the role of the chief financial officer (CFO), who is in charge of making this recommendation to the chief executive officer, who wants to close the deal quickly. However, the acquiring company is under severe pressure to make the quarterly earnings projections of the financial analysts, especially because the company recently went public with an initial public offering and has had huge swings in its stock price. The CFO must consider the earnings impact of the acquisition under purchase and pooling accounting acquisition methods.

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Abstract

Students are challenged to make a recommendation concerning the acquisition of a company that enhances a core competency of the acquiring company. This acquisition recommendation must include both a financial business valuation of the company and a marketing or negotiating strategy to close the deal. The students take the role of the chief financial officer (CFO), who is in charge of making this recommendation to the chief executive officer, who wants to close the deal quickly. However, the acquiring company is under severe pressure to make the quarterly earnings projections of the financial analysts, especially because the company recently went public with an initial public offering and has had huge swings in its stock price. The CFO must consider the earnings impact of the acquisition under purchase and pooling accounting acquisition methods.

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