Reference no: EM132348299 , Length: 10 pages

Case Study Assignment

Questions:

1) Describe in detail Brazos' strategy from entry to exit.
a) Acquire
b) Grow
c) Exit

2) How does the Tri-Northern deal fit with Brazos' strategy?

3) Whether or not the dual-acquisition of Tri-Ed and Northern Video is consistent with the core tenants of Brazo's strategy is arguable. When is it appropriate to deviate from your proven execution strategy?

4) How do you justify the acquisition of Tri-Ed and Northern Video to your Limited Partners?

5) There are three basic ways (techniques) to profit from a buyout transaction. In the Hertz case we studied two of the three ways. Based on the financials presented in case Exhibits 13 & 14, if Brazos were to accept the buyout offer giving an enterprise valuation of $220 million and exit in March 2012, they would be profiting from all three techniques. List the three ways a private equity firm can profit from a buyout transaction.

6) Did Brazos get a good deal? Using EBITDA, explain why or why not.

7) Following the dual-acquisition, in what ways did Brazos create value at the combined distributor?.

8) Following the dual-acquisition, are there still opportunities for Brazos to create further improvement? If "yes," describe them.

9) Based on the financial projections provided in Exhibit 14, perform a DCF valuation through and including 2015 using the following assumptions:
• Tax rate = 35%
• WACC = 15%
• Terminal growth rate "g" = 6% Show your PV result in 2011 dollars

10) If Brazos accepts the $220 million offer and exits in March 2012 (time of the case), that would be a "2-year hold":
• What would be the EBITDA multiple based on the March 2012 TTM EBITDA shown in Exhibit 13?
• What would be the MoIC? (Net Debt from Exhibit 13) based on the data in the March 2012 TTM column
• What would be the IRR? (Net Debt from Exhibit 13) based on the data in the March 2012 TTM column

11) Comparing your answers to question #9 (2-year hold) to Exhibit 9, which shows a "3- year hold" period and a "5-year hold" period, at which holding period, 2-years, 3- years or 5-years do you recommend Brazos sell? - Explain the trade-offs (pros and cons of each holding period) in term of MoIC and IRR, and provide the rationale to justify your selection.

12) If the Brazos decides to sell in March 2012, at what price should they sell?

Provide the rationale for your selling price.

Attachment:- Questions for the Brazos Partners Case Study.rar