Spyder Active Sports - 2004 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Spyder Active Sports - 2004 Case Solution

Introduction and Problem Statement

Spyder Active Sports was founded by David Jacobs in the year 1978. Moreover, Spyder Active Sports is considered as a high-end ski apparel company.The company achieved significant growth in last seven years through strategic means and through its operations such as the partnership with a private equity firm CHB Capital Partners, which made Spyder Active Sports a premium producer of Skiwear.

It is expected that currently the company is operating in the niche high-end skiwear market and it is a very profitable industry therefore, the number of competitors is increasing continuously in this industry which created problem for the management of the company. Hence,Jacobsis considering the financing options in order to support the future growth of the company and evaluating alternative equity transactions in order to sell the any part of the company or to build a larger capital base.

It is expected that the management of the company is facing the problem of valuations and management of the company is considering that skiwear industry is a continuously growing industry and number of larger competitors are entering in to the market.Therefore, they could get the right amount for the CHB’s option which the management of the company is currently looking to sell.

Therefore, the management of the company is considering an appropriate valuation approach that could provide benefits to both buyer and sellercompany, whereasthe company also hasthe alternate option of liquidation is that sale it to financial buyers also.

Thecompany’sinsolvency is the significant and substantial issues and it should deal with such a way that the management of the company would generate higher enterprise value by selecting the right exclusive alternative.

Q1)

Different Alternatives

It is expected that Spyder Active Sports is growing continuously and sales revenues and gross profit margin of the company are also growing significantly. By looking at the market conditions, future and strategic need of the organization, there are many alternatives instead of selling the CHB option that the management of the company could pursue in order to meet the financials needs and in order to minimize the risk that is creating due to increase in the competition.

Sales trend and the business nature of the company are highly seasonal and the size of the firm is also small, therefore IPO is an most unlikely alternative in this respect however, in order to undertake this option, the management of the company needs an substantial size and less seasonal nature of the business.

It is expected that the sale to a strategic buyer could also be an alternate option in this respect as strategic buyer would most certainly demand a controlling interest and could have resource and vision, which definitely will help the company in the current facing problem.

Moreover, the management of the company could also use the option of private placement with a financial buyer,which could help the company in order to generate cash and could also help the Jacobs to realize cash from the business.

In addition to this, the management of the company could also maintain the controlling interest and it is expected that by maintaining the controlling interest, it will help the company in order to generate cash and in order to influence the future direction of the company......................

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