Market value of debt and equity: Due to they are in the same industry, they can share the market budget and use same customer bases so that they can increase their purchasing power.
By combining the products that Timken and Torrington have, it creates more value to products, and therefore more earning for the company. In summary IR have to faces the risk of how free cash flow of Timken will be after synergy. Epilogue Ingersoll-Rand was extremely motivated to dispose of Torrington.
As the lockup period came to an terminal. Torrington with Timken Company If Timken successfully acquired Torrington, it would become 3rd largest bearing manufacturer in the world. In the year ofthe company was deciding in acquiring the Torrington Company from Ingersoll-Rand Company because they want the synergies to support their growth.
As a result, price of imported bearing were expected to increase.
What is more, after this merger, the combined company will have increased market shares, and then the company will be a leader company in the global market. As mentioned in the case, it would be very difficult for Timken to raise the needed cash without significantly raising the level of debt based on the cash condition on its balance sheet.
From exhibit 7, we found the change in stock performance are similar between Timken and Ingersoll-Rand. Torrington offered a alone chance for farther cost nest eggs ensuing from the added graduated table.
After tax cost of debt: To the extent that this ratio can be driven lower. Exhibit TN6 compares cardinal fiscal ratios for Timken relation to the average values for industrial houses. Timken should utilize the scope of values created by a sensitiveness analysis of the cardinal value drivers as a usher for the assurance direction should hold in the rating estimations.
Timken could have more power in negotiation with customers and suppliers. If there were jobs about Torrington that IR did non unwrap during the due-diligence procedure.
Introduction Timken Company was a bearing company who was the manufacturer and also the developer at the same time. Enhancing basic products with additional component to add more value could be an opportunities for Timken to fight with foreign competitors which only offer simple products.
And for Cost of Equity we use Risk premium rate at 4. The Bearing Industry The bearing industry had matured into a planetary market with comparatively few participants in Gordon East, IT Manager, Timken Business Needs Timken, a year-old company, is a longtime leader in the production of antifriction bearings and specialty steel.
The company began as a carriage maker before the advent of the mass production of automobiles. The Timken Company to Acquire Torrington Essay Words | 4 Pages The Timken Company to Acquire Torrington This memo will examine Timken Company's decision to acquire Torrington by examining the stand-alone value of Torrington, the synergies of this acquisition and the effect on Timken's investment grading.
The Timken Company This summary highlights basic information about Timken company: In this year, Timken reported a net income of $ million on sales of. The Timken Company Case 46 Essay GENEVA BUSINESS SCHOOL Master of Science in Finance Final Assignment June The Timken Company Student: Nguyen Hoang Ngoc Anh Professor: Dr.
John Heptonstall Subject: Strategy and Financial June I. 1 - Timken Company Torrington Company Case Essay introduction. How does Torrington fit with Timken?
Timken Company is one of the biggest companies in bearing industry, and it is considering expanding, and Torrington is a good choice for Timken. Torrington is a company focusing on making sewing-machine needles. The Timken Company to Acquire Torrington Essay Words | 4 Pages.
The Timken Company to Acquire Torrington This memo will examine Timken Company's decision to acquire Torrington by examining the stand-alone value of Torrington, the synergies of this acquisition and the effect on Timken's investment grading.Download