Spin Master Toys Going Public the IPO Case Study Solution
Memorandum
To: Investors
From: Financial Advisor
Subject: Financial Evaluation of Spin Master Toys Going for Public IPO Process
Positioning
The company pre IPO issue wants to position itself as a growth oriented company with a global growth mindset. It is important to clearly position itself to make it more attractive for investor before the co-founders move the public IPO request. The compound Annual Growth Rate (CAGR) of Toy market segment shows growth of 104% in terms of gross product sales during the last two years (2012-2014) as shown in Exhibit 1. Toy market represents 33% of the total market, this clearly represents that the market is expanding. This segment also shows the highest CAGRof the last 5 years. The company also have technical expertise of this segment as well. As the company wants organic growth with global mindset it can position itself as a toy company, before IPO process to gain confidence of investors.
Business Model
Having a successful growth & diversification history of business in toy market, followed with entertainment content development & recently added consumer products. The company is performing well in all the three segments with increasing revenue trend and surplus cash flows. It should position itself as a toy company this will add more value to its business.
Spin Master Toys Going Public the IPO Harvard Case Solution & Analysis
Enterprise Value
The enterprise value of Spin Master Toy would be $ 6140.58 approx. as per financial date given in case study (Exhibit 4 & 5).
The enterprise value of Spin Master Toy in case of Debt Financing would be $ 7079.75 approx. as per financial date given in case study (Exhibit 4,5 &6).
Share Price
Similarly the share price would be translated as under:
In case of Equity Issue $ 63.30 per share
In case of Debt. Issue $ 72.99 per share
Support available in excel file for reasoning the computations.................
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