Landmark Facility Solutions Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Landmark Facility Solutions Case Solution

Benefits associated with acquiring Landmark

The investment to acquire Landmark could prove to be very beneficial for Broadway’s future vision and the success which it wants to acquire. With the help of faster as well as cheaper way, Broadway could be able to improve its sales growth by gaining a huge number of customers.Along with this, it can help the company to expand by opening new branches. With the help of Broadway the company could be able to achieve the economies of scale thereby contributing to minimizing the cost as well as increasing profits for the shareholders of the company. The acquisition can help Broadway in gaining a wide number of customers from all over the world.

Broadway with the help of this acquisition would be able to enhance its technological aspects of the company by extending more energy and engineering solutions which can help attract several new clients for the company which would ensure the increased market share in the east coast division. It would also help the company in gaining exposure towards new markets for major industries. The primary focus of the company to improve its services in its hometown could also be achieved with this acquisition which can ensure the long term goals of the company.

With this ability, Broadway would be able to manage both the companies together. The major problem in Landmark was the inefficiency in cutting the cost of the company which would be covered via this acquisition. The elimination of overheads can have a huge positive effect on the ratio of net working capital of the company to its net sales. Moreover, it was also estimated that Broadway could increase its operations by 3% with the help of cutting the cost of the overall company.

Landmark is a strong brand for its expertise in high quality services and functionality of its management. This shows that Landmark is a reputable firm. The goal to achieve high operating profit margin can be achieved by Broadway by using the name of Landmark. Moreover, high premium prices can be set by management of Broadway to achieve this goal under the influence of brand name of Landmark.

Justification of Mr. Harris of $120 million for acquiring Landmark

The bid of $120 million for acquiring Landmark could be justified with the help of some calculations in order to value the Landmark in both optimistic as well as pessimistic scenarios.The Cost of Goods Sold is 90 % to its sales, which can be minimized by properly handling of cost-management department of Landmark.

In order to come up with the valuation of the company, the terminal growth for the company is taken to be 4.50% in the optimistic scenario whereas, 3.00% in the pessimistic scenario of the company. The value of weighted average cost of capital is calculated using the values of cost of equity, cost of debt and their respective weightages which comes out to be 8.04%.

The optimistic scenario provides the enterprise value of approximately $171.53 million. The figures ensure that the company has the ability to payback with its initial investment. Similarly,by looking at the pessimistic approach by the management, the enterprise value is$83.47 million, which shows the viable opportunity for Broadway to acquire this new company.

This overall calculation concludes the fact that the company by acquiring Landmark would be able to increase its market share as well as its market presence in the major parts of the world. Moreover, it will grow with the help of diversification, portfolio of services, pool of clients, revenues and profit margin....................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution