Another reason is that both companies are in business with many of the Sam customers, making it more efficient for these customers to get what they nee d from one company. As stated in the case the two companies have only a 5% overlap their product offerings and the customer lists overlapped by approximately 8 0%, therefore, they will be able to create more value for customers with a more co melee product line. In Addition, this merger is expected to result in 80 million cost saving by the end of 2007, because there will be redundancies in the sales forces that would be minimized.Timeline is also expected to realize significant purchasing synergies by having higher negotiating power with suppliers due to larger volumes.
Furthermore, This acquisition offers Timeline the chance to distinguish itself from their competitors by providing their customers with more completed pr ducts such as combining Timeline cylindrical bearing with flap like parts from Touring ton instead of letting the customers do it themselves, that way they can add neon GHz value to increase margins.Finally, this would increase their market share within the global bearing industry, and make it the thirstiest producer of bearings in the world. Time would also increase its penetration of the global bearing market from 7% to 1 1% because it would be able to sell Torsion’s products internationally through Tinker’s network. What is your standalone valuation of Darlington? Major assumptions are stated in the attached spreadsheet. And there are several further assumptions: Investment in net working capital in 2002 is also estimated as 13. 5% of sales.
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B.Using WAC of Timeline for the standalone valuation of Darlington. The enterprise value equals $ 3, 197. 87 million. What is your wateriness’s valuation of Darlington? A. Assume Tax Rate remains the same (40%) after acquisition b.
Assume Integrating cost for first two years is MOM per year. C. Assume Change in Annual Saving Cost is MOM per year. Should Timeline be concerned about losing its investigated rating? O How do Tinker’s financial ratios compare to other industrial firms in 2002? O How would the ratios change if Timeline borrowed the funds to buy Darlington?