ALAC International

Richard S. Ruback; Royce  Yudkoff; Ahron  Rosenfeld

Teaching Note | HBS Case Collection | June 2018

ALAC International

by Richard S. Ruback, Royce Yudkoff and Ahron Rosenfeld

Abstract

ALAC International (ALAC) was awarded the U.S. distributorship of di-isononyl phthalate (DINP) which provided ALAC an opportunity to increase its sales and profits. But the opportunity required a significant additional investment in working capital. The DINP, shipped by boat from Taiwan, had a four month cash conversion cycle; after purchasing the DINP, it took two month to arrive in the U.S., another month to sell and distribute it, and then another month to collect the receivables. ALAC planned to double the number of shipments in 2011 to twelve from the six in 2010. ALAC needed to estimate its working capital needs and then evaluate alternative ways to finance its needs. Teaching Note for HBS No. 211-065.

Keywords: working capital; Working Capital; Financing and Loans; Growth Management;

Language: English

Format: Print

7 pages

Purchase

Citation:

Ruback, Richard S., Royce Yudkoff, and Ahron Rosenfeld. "ALAC International." Harvard Business School Teaching Note 218-131, June 2018.

Teaching Note | HBS Case Collection | May 2018 (Revised February 2019)

Greg Mazur and the Purchase of Great Eastern Premium Pet Foods

Richard S. Ruback, Royce Yudkoff, Ahron Rosenfeld, Richard S. Ruback, Royce Yudkoff, Ahron Rosenfeld, Richard S. Ruback, Royce Yudkoff and Ahron Rosenfeld

Teaching Note for HBS No. 211-085. Greg Mazur (HBS 1997) identified a small firm, Great Eastern Premium Pet Food, in December of 1998 that fit his search criteria and decided to offer the seller a cash price of $1.2 million plus an earn-out equal to 1% of revenue over the next five years. He planned to invest $500,000 of his own money in the acquisition and finance the remainder with a senior loan in a formal letter of intent.
Great Eastern Premium Pet Food was a regional distributer of pet food products that operated in a highly competitive environment, with low profit margins, and no exclusive products. Great Eastern was barely profitable in 1997 and had profits of about $140,000 in 1998. Mazur evaluated the acquisition using a financial model that assumed a sales growth rate of 12.5% per year, and a gradual improvement in profit margin from 2% to 7.5% over five years. He identified ways to grow sales through changes in the composition and structure of the sales force and to improve margins through managing costs. The case explores the rationale for the acquisition and its evaluation, including the reasonableness of the financial model and its sensitivity to alternative assumptions.

Keywords: Acquisition; Entrepreneurship; Financing and Loans; Negotiation Deal; Strategic Planning; Valuation; Analysis;

Citation:

Ruback, Richard S., Royce Yudkoff, and Ahron Rosenfeld. "Greg Mazur and the Purchase of Great Eastern Premium Pet Foods." Harvard Business School Teaching Note 218-122, May 2018. (Revised February 2019.) View Details

Cite View Details Purchase

Faculty & Research

ALAC International

Abstract

Citation:

About the Authors

More from these Authors