| HBS Case Collection
(Revised May 1993)
BW/IP International, Inc.
Less than a year after completing a leveraged buyout of their own company, the managers of BW/IP International were presented with an attractive acquisition candidate. To buy the target company, however, BW/IP would have to borrow more money and take on more administrative problems at a time when its managers are already very busy. The case asks students to consider how BW/IP can convince its lenders that the acquisition is a good idea. Presents two straightforward valuation exercises. Also permits a careful comparison of the capital allocation processes at a large, low-leveraged, public company, versus a small, highly-leveraged, private company.
Keywords: Leveraged Buyouts;
Luehrman, Timothy A., and Andrew D. Regan. "BW/IP International, Inc." Harvard Business School Case 293-058, November 1992. (Revised May 1993.)