| HBS Case Collection
(Revised from original 2000 version)
Health Development Corporation
Health Development Corp. (HDC) owns and operates health clubs in the Greater Boston area. HDC engaged a local investment banker to explore a sale of the company. The most likely buyer views HDC's prior purchase of real estate as a negative. HDC's management is convinced the purchase enhanced value, and a discounted cash flow analysis confirms that it was a substantially positive net present value decision. Nevertheless, the real estate reduces the valuation according to the approach used by the potential buyer. The challenge is to structure a transaction that allows HDC to realize its full value.
Keywords: Cash Flow;
Business Exit or Shutdown;
Ruback, Richard S. "Health Development Corporation." Harvard Business School Case 200-049, January 2003. (Revised from original May 2000 version.)