Brazos

Brazo 1. Is cheddar cheeses an attractive coronation? Did Brazos underpay, pay or get it just right in their initial investment? The proposed LBO deal of Cheddars is an attractive investment for Brazos because it fits into Brazos tasty spot- a reasonable outlayd follow with strong bullion flow and good management. Cheddars had al demeanors been economic through that it had ever closed a forge along-owned store and had shown fast(a) increases in sales and customer counts over time. withal it has a source of income from its franchise stores which could grow at a swift rate. Cheddars estimated EBITDA was $12.0 one thousand million in 2003 and it had a projected EBITDA of $18.9 million in 2007. Cheddars in addition had an comely EBITDAR of $1,027k which was much higher(prenominal)(prenominal) than its competitor Chilis which was $723k. At the obtain price of $60.5 million, we spate also confirm that the Market esteem/EBITDA (5.4) of Cheddars is higher than its competitors (2.6) when we comp ar multiple ratios, which pith Cheddars is overvalued. 2. What ar your major concerns with the proposed deal? Should Brazos deliver the attach to to sell the managers some stock? Is the real terra firma aide a good idea? If the managers pervert more than 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 come that a manager can hold stocks should be restrain because the ownership would be split in this way as it is non good for Brazos itself to decrease its ownership. The real estate appurtenant is a good idea that Brazos could purchase it as an asset and they can still control the operation and employees. Since Brazos can not only buy tangible assets but also intangibles asset which is Goodwill $34.7 million. Brazos could amortize it and have tax benefit. If the m! anagers buy more stock, the price given should...If you want to get a encompassing essay, order it on our website: BestEssayCheap.com

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