one of the largest cable operators in the U.S., prepared to acquire the AirThread. Connections (ATC), a large regional cellular provider. Although this acquisition. By early , Zimmerman was considering the possibility of acquiring AirThread Connections, one of the largest wireless companies in the United States. This case can be used as a capstone valuation exercise for first-year MBA students in an introductory finance course. A senior associate in the business.
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A large portion of wireless network operating costs related to moving traffic from cell towers to central switching offices using either landlines leased from competitors or technically cumbersome microwave equipment. And we use the equity in earnings of affiliates of AirThread to multiple Zhang was well aware that the terminal value was likely to be the single largest component of the valuation.
As a result, American Cable became an aggressive acquirer. The cash flows of these five years combine the stand-alone cash flows and the synergy cash flows.
Erik Stafford and Joel L. As seen in Table 3, compared with its primary rivals, AirThread had lower operating and EBITDA margins, which largely reflected the previously discussed competitive disadvantages. American Cable currently offered video, internet, and landline telephony, but did not have any kind of wireless offerings. If you need this or any other sample, we can send it to you via email.
Valuation of AirThread Connections | Zakir Pashayev –
Table 2 Return on Net Operating Assets 3. Tax ID No He was well aware of several high profile takeovers that had ended in bankruptcy or considerable loss of shareholder value, and overpaying for a target company was one of the quickest ways routes to disaster.
Finally, because most businesses required reliable high-speed internet and landline telephony service, the recent trend toward bundled services had, to a large extent, frozen ATC out of the op business market. Competition among the carriers was generally based on price, service area size, call quality, and customer service. As a result, Jennifer believed that the investments could be valued using a market multiple approach3.
Valuation of AirThread Connections. Over the period —, we find that 1 unlevered bank assets underperform passive portfolios of maturity-matched U.
Featured case – Valuation of AirThread Connections | The Case Centre, for educators
In addition, the handwriting was on the wall in terms of service offering convergence. Jurek and Erik Stafford.
During that meeting, Elliot Bianco pitched the idea of op American Cable buying out AirThread Connections, a large regional cellular provider. Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us?
Valuation of AirThread Connections
Finance General Management Marketing. Required rates of return in such an equilibrium can dramatically exceed those suggested by traditional models, affecting inference about the attractiveness of these investments. How about make it original? In addition, AirThread had an extensive set of roaming agreements with other carriers to provide its customers with coverage in areas where the company did not operate a network. The increased size would not only help insure that ACC would remain a viable industry player but would also help improve profitability through better network utilization.
Hi, I am Sara from Studymoose Hi there, would you ajrthread to get such a paper? Students learn the basic valuation concepts including DCF discounted cash flow using APV adjusted present value and WACC weighted average cost of capital and they must choose the appropriate approach for situations in which the capital structure is changing or assumed to be constant.
We are very pleased to receive this award as it means that we are being acknowledged as having made a pedagogical contribution in the area of airthreqd case method. The wider debate is about how and when certain valuation methodologies should be employed. In contemplating this issue Jennifer believed that it may be necessary to follow the customary practice of employing a private company discount. However, unlike ACC, AirThread was feeling the pressure No more immediately in the form of higher customer acquisition and retention costs, plus slower growth.
Your Answer is very helpful for Us Thank you a lot! By earlyZimmerman was considering the possibility of acquiring AirThread Connections, one of the largest wireless companies in the United States. These competitors included all of the national wireless carriers, which had substantially greater financial, marketing, sales, distribution, and technical resources.
All fields Reference no. Heilprin, Illinois Institute of Technology Finance Professor and Managing Director of 59th Street Partners prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management.