October 1988
Case
HBS Case Collection

Harris Seafoods Leveraged Buyout

Format:Print
| Pages:47

Abstract

Describes set of issues confronting Alison Lassiter, who is trying to help Charlie Harris arrange a leveraged buyout of the shrimp company he runs, a division of a publicly traded company, Katy Industries. Lassiter has prepared a memorandum discussing and analyzing the company in detail and performed some preliminary analyses on the economics of the transaction. Many issues remain, including: 1) What is the maximum price Harris should pay? 2) How and when should he approach Katy with a proposal? 3) What should the elements of the proposal be? 4) From whom should the equity funds be raised and how much should be raised? 5) What lenders should be approached and how? 6) How should the pie be sliced? (i.e., What proportion should management get? The equity investors? The lenders?) 7) Assuming the deal can be pulled off, what will the critical success factors be? Presents an opportunity to hone analytical skills and, more important, to discuss how to manage the process so that a deal acceptable to all parties can be structured. Students may be asked to take different perspectives--management, lenders--and be prepared to discuss them.