Brazos

Brazo 1. Is cheddar cheeses an attractive coronation? Did Brazos underpay, overpay 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 red-blooded bullion flow and good management. Cheddars had al demeanors been economic through that it had ever closed a coquet along-owned store and had shown fast(a) increases in sales and customer counts over time. in addition it has a source of income from its franchise stores which could grow at a swift rate. Cheddars estimated EBITDA was $12.0 million in 2003 and it had a projected EBITDA of $18.9 million in 2007. Cheddars in addition had an mediocre EBITDAR of $1,027k which was much higher(prenominal)(prenominal) than its competitor Chilis which was $723k. At the grease ones palms price of $60.5 million, we spate also confirm that the Market harbor/EBITDA (5.4) of Cheddars is h igher than its competitors (2.6) when we comp ar multiple ratios, which manner Cheddars is overvalued. 2. What are your major concerns with the proposed deal? Should Brazos let in the friendship to sell the managers some stock? Is the real terra firma assistant a good idea? If the managers pervert more stock, what is the assume 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 tote up that a manager can hold stocks sho uld be limited because the ownership would ! be split in this way as it is not good for Brazos itself to decrease its ownership. The real estate hyponym 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 assets 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 blanket(a) essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper