Brazos

Brazo 1. Is cheddar cheeses an attractive coronation? Did Brazos underpay, pay or get it just right in their sign coronation? The proposed LBO deal of Cheddars is an attractive investment for Brazos because it fits into Brazos tasty spot- a reasonable outlayd follow with unwavering bullion flow and good management. Cheddars had al demeanors been economic through that it had ever closed a flirt along-owned store and had shown fast(a) increases in sales and customer counts over time. overly it has a source of income from its franchise stores which could grow at a swift rate. Cheddars estimated EBITDA was $12.0 billion in 2003 and it had a projected EBITDA of $18.9 million in 2007. Cheddars in addition had an norm EBITDAR of $1,027k which was much higher(prenominal)(prenominal) than its competitor Chilis which was $723k. At the leveraging price of $60.5 million, we spate also confirm that the Market tax/EBITDA (5.4) of Cheddars is higher than its competitors (2.6) when we comp ar multiple ratios, which performer Cheddars is overvalued. 2. What atomic number 18 your major concerns with the proposed deal? Should Brazos supply the accompany to sell the managers some stock? Is the real terra firma appurtenance a good idea? If the managers pervert more(prenominal) stock, what is the take price?

There are two major concerns which are gaining competitive advantage and determining comparable valuations. Brazos should allow the company to sell the managers some stock of the business to benefit the managers. that the amount of money that a manager can hold stocks should be expressage because the owne! rship would be split in this way as it is non good for Brazos itself to decrease its ownership. The real estate subordinate is a good idea that Brazos could purchase it as an plus and they can still control the operation and employees. Since Brazos can not only buy tangible summations but also intangibles asset which is Goodwill $34.7 million. Brazos could amortize it and have tax benefit. If the managers buy more stock, the price given should...If you want to get a generous essay, order it on our website: OrderCustomPaper.com

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