$60.4mn. 4050 SEPTEMBER 18, 2009 TIMOTHY A. LUEHRMAN JOEL L. HEILPRIN Mercury Athletic Footwear: Valuing the Opportunity In March 2007, John Liedtke, the head of business development for Active Gear, Inc., a privately held footwear company, was contemplating an acquisition opportunity. Reasons why Mercury is an appropriate target for AGI 4 2. 31% of the global athletic footwear market. Amongst the procedur Mercury Athletic Footwear - Acquisition Analysis ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset βeta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 CASH FLOW AND OPERATING ASSUMPTIONS By: Timothy A. Luehrman and Joel L. Heilprin. A Five Forces Analysis, based on Michael Porter’s model, points out that competition, customers and substitutes are the most important external forces in Nike’s industry environment. Samantha McDonald. View Mercury Athletic Footwear Case from BUFN 750 at University of Maryland, College Park. Should AGI purchase Mercury? Mercury Athletic is the footwear division of West Coast Fashions (WCF), a designer and distributer of branded athletic and casual footwear, targeted at youth market. Mercury Athletic Footwear Case DCF VALUATION ANALYSIS Jianqiu … Athletic footwear refers to those shoes that are designed for sports and other outdoor activities. The case uses the potential acquisition of Mercury Athletic as a vehicle to teach students basic DCF (discounted cash flow) valuation using the weighted average cost of capital (WACC). Mercury Athletic Case. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Mercury Potential to double revenues Increase leverage with manufacturers Increase long run growth rate Expand presence with key retailers and distributors. Academic writing is getting a service in itself. 12.5%. 4050. $431,121mn % Revenue Product wise. Opinion & Analysis Jan 12, 2019 9:00AM PT Why Shoe Production May Never Come Back to the US . Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Mercury athletic footwear Group 7 Contents Executive Summary & Overview of Problems 3 Analysis on Mercury acquisition 4 1. Market Analysis: Global Athletic Footwear Market Global athletic footwear market is expected to rise to an estimated value of USD 96.10 billion by 2026, registering a steady CAGR in the forecast period of 2019-2026. Mercury Athletic Footwear Case Solution, Analysis & Case Study Help Mercury Athletic Footwear Case Solution Testimonials basic procedures for estimating terminal price inside the valuation of companies. In the United States, athletic footwear sales grew by 8%, reaching a total of $17.2 billion. C I T E L Y H T AT T U N I : Y R R O R P A P U EE O C R H E TW T M OI N G FOA L U V RECOMMENDED VALUE Range of MERCURY ATHLETIC FOOTWEARProblem statement:West Coast Fashions, Inc a large business of men’s and women’s apparel decided todispose of one of their segments; Mercury Athletic. Nike’s Strengths – Internal Strategic Factors. Mercury Athletic Footwear. Estimation the value of Mercury based on discounted cash flows and Liedtke’s base case projections. Always be ready to take total benefit of the stream of ideas as soon as it starts to gush. 42% Athletic 58% Casual. Revenue. Mercury Athletic Footwear Case Study Analysis is really simple to comprehend it's centered on creating content that can be readily discovered by leading search engines such as Google, Yahoo, and Bing. MGMT S-2720 Assignment 1: Mercury Athletic Footwear Questions By Samantha McDonald. The company also offers other products such as sports equipment and accessories. 79% Athletic 21% Casual. The market is expected to grow annually by 9.6% (CAGR 2020-2025). The athletic footwear market incorporates sportswear, trekking shoes, aerobics shoes, walking shoes, and running shoes. Mercury Athletic Footwear – Acquisition Analysis. (Forbes) #2. Economics Analysis of Nike Abstract Nike leads the market of athletic footwear and apparel. Mercury Athletic Footwear: Valuing the Opportunity 3861 Words | 16 Pages. Mercury Athletic Footwear 2 Harvard Case Study Solution and Analysis of Harvard Business Case Studies Solutions – Assignment HelpIn most courses studied at Harvard Business schools, students are provided with a case study. As a global fashion industry and retail expert, he supports clients on a broad range of strategic and top management topics, as well as on operations and sourcing- related issues. Is Mercury an Appropriate Target for AGI? Abstract. Athleisure Market size was valued at $155.2 billion in 2018 & to reach $257.1 billion by 2026, with a CAGR of 6.7%. $42,299mn. (Forbes) #3. View Notes - Mercury Athletic Footwear Case File from FIN 555 at DePaul University. clothing, textiles, footwear, athletic wear, beauty, accessories and retailers spanning from the value end to luxury. Global shipments were over 3.5 billion units in 2015. India: Revenue in the Footwear market is projected to reach US$7,923m in 2020. Nike Inc. enjoys a top position in the global athletic shoes, equipment and apparel market. This paper covers an economic analysis of Nike, and analyzes different economic aspects of the firm. Nike has captured approx. Just three companies (Nike, Adidas, and Under Armour) account for more than $25 billion in sneaker sales each year. Liedtke assumed that Mercury’s women’s casual footwear would be wound down within one year following an acquisition. Revenue growth . Mercury Athletic Footwear Case Solution,Mercury Athletic Footwear Case Analysis, Mercury Athletic Footwear Case Study Solution, QUESTION 1 If we look at the valuation of Mercury for the part D and part F, then a difference could be seen between the enterprise values. Its swoosh symbol is easily recognized by everyone. Active Gear, Inc. is a privately held footwear company with $470. 4 a. Estimation of the weighted average cost of capital 5 b. Operating Income. Key players include Puma, Nike, Gap Inc., Athletic Footwear Market size was USD 80 billion in 2015 and is forecast to grow at approximately 3% CAGR from 2016 to 2023. In order to summarize, due to AGI’s small size, there is a strong risk of being overtaken by the other giant players in the market therefore, if it acquires Mercury, the risk will be minimized and there is a strong opportunity that the company will grow steadily. It was estimated in 2017, that the apparel market grew by approximately 5.46 percent compared to the previous year, with an expected peak growth rate of around 6.2 percent in 2020. AGI Mercury Athletic Footwear $470.3 Million Sales Revenue in 2006 42% Revenue - Athletic Footwear 58% Revenue - Casual Footwear Among the best profit margins in the Industry Prosperous, Active, and Fashion-Conscious Brand Image. Athletic Footwear Market Overview. Mercury Athletic Footwear: Valuing the Opportunity Case Study Solution & Analysis Why Almost Everything You’ve Learned About Mercury Athletic Footwear: Valuing the Opportunity Case Solution Ideas Is Wrong and What You Should Know. The average selling price of sneakers grew by 5% in 2015, reaching an average unit cost to the customer of $61.15. ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset ?eta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 -Founded in 1968 by Daniel Fiore -Producer, designer and distributor of branded athletic and The rise in the market value can be attributed to rising health awareness, changing consumer lifestyle and technological advancements. Format: Print | Language: English ShareBar. Reasons why Mercury is an appropriate target for AGI 4 2. 3 million in revenue in 2006, making it relatively small compared to big players in the athletic and casual footwear industry. Due to strategy reorganization, WCF wanted to shed this segment. An outstanding content it can constantly work in drive optimum traffic to your website causing development in organisation in 2018. $470,285mn. Active Gear was one of the most successful firms in terms of profitability, in the footwear industry. Mercury Athletic: Valuing the Opportunity Case Solution, This Case is about FINANCIAL ANALYSIS, MERGERS & ACQUISITIONS PUBLICATION DATE: September 18, 2009 PRODUCT #: 4050-PDF-ENG When pupils have the English More Stories … Mercury Athletic: Valuing the Opportunity Case Solution,Mercury Athletic: Valuing the Opportunity Case Analysis, Mercury Athletic: Valuing the Opportunity Case Study Solution, When pupils have the English language PDF of this Brief Case in a coursepack, they are going to … Mercury Athletic Footwear  Mercury Athletic Case Nicholas Thebeau, Student ID 50927830 Presented to: Professor Kevin Wall West Coast Fashions, Inc. (WCF), a large designer and marketer of men’s and women’s branded apparel recently announced plans for a strategic reorganization Active Gear, Inc. (AG), a privately held footwear company, was contemplating an acquisition opportunity. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. In the first excess free cash flow analysis ran for Mercury Athletic Footwear, as can be seen in Exhibit 1, we used the assumptions given by Liedtke. Mercury Athletic Footwear Case Solution. The last page of the Mercury Athletic case mentions at least two possible sources of value creation not captured in Liedtke’s base case scenario: a significant reduction in Mercury’s days sales in inventory (DSI) and a possible combination of Mercury’s and … 2% to 6%. Global Athletic Footwear Market is expected to reach $114.8 billion by 2022, growing at a CAGR of 2.1% during the forecast period 2016 - 2022. Majo Mercury Athletic Footwear, Inc.: Valuing the Opportunity: Brief Case No.

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