Stanley Black And Decker Ma Analysis Merger Finance Essay

Stanley Black And Decker Ma Analysis Merger Finance Essay This paper seeks to conduct an MA analysis of the merger between The Black Decker Corporation and Stanley Works. It also seeks to provide details of the announcement and various reactions it elicited in the corporate market. The paper conducts a thorough research on available data on the companies and uses it to conduct the MA analysis to show the possible projected reactions in the market due to the merger. It also looks at the actual current data after the merger and compares the two. The paper concludes that the shareholders of Black and Decker Corporations got a good deal from the acquisition of the company while also the shareholders of Stanley Works experienced increased market capitalization and has had increased share value and dividend earnings. The paper adds knowledge to the already existing body of knowledge. Introduction A merger is the joining up of two or more firms into a single entity. Most companies usually use this strategy in order to increase the competitiveness of the two companies by increasing market share and enjoying economies of scale. Others merge in order to enjoy increased financial synergistic benefits (McDonald, Coulthard and De Lange, 2006). As the world economy is recovering from the 2008 recession, there is increased demand for provision of goods and services. Most companies try to fulfill this demand through various strategies of growing the companies further. Some of those companies do this through mergers and acquisitions. In the past months a merger between The Black Decker Corporation and Stanley Works has graced most of the corporate circles. Black Decker was acquired by the Stanley Works for $ 4.5 billion (Walker, 2011) and the merger completed in March 12, 2010 (Stanley Black Decker Inc Form 10-K, 2011). This paper seeks to conduct an MA analysis of the two companies. It also seeks to provide details of the announcement and various reaction it elicited in the corporate market. Analysis Studies done by Shukla and Gekara (2010) showed that horizontal merges between two multinational firms have various effects on the value of the shareholders wealth. A few days before merging, the share prices were found to be performing very well but a few days after the merge the share prices were found to perform below market portfolio. The share holders would therefore face losses at certain periods after the merge, and depending on market conditions and decisions made by the management, the share prices would probably raise afterwards. Cigola and Modesti (2008) used a static model to conclude that most likely the share prices of companies would increase after mergers. The KPMG report of 2003 (McDonald, Coulthard and De Lange, 2006) also supported this view, by pointing out that, 34% of mergers increased stockholders value, while 32 % reduced. The remaining 34% caused no changes in shareholders value. In the case of Stanley works and The Black Decker Corporation, the announcement for the merger was made officially on November 2, 2009, was completed in March 12 2010 and became effective on December 3, 2010 (Stanley Black Decker Inc Form 10-K, 2011). The two companies merged to create an 8.4 billion dollars business leader in its industry. Over 350 million dollars in cost were the expected synergies during the merger with the Black and Decker shareholders set to get a fixed share ratio of 1.275 shares of Stanley Works for each of their share (Townson, 2009). The shareholders of Black Decker Corporation welcomed the merger and voted in its favor. In order to fully understand the impact of this merger to the shareholders of Stanley Works and The Black Decker Corporation, a financial analysis of the position of the two companies needs to be done. MA analysis Before the merger took place the viability of the merge would have been evaluated using MA analysis. From the data in the MA analysis, it can be clearly deducted that: 1. The value shareholder value at risk (SVAR) and value at risk will be as shown below; The value of shareholders value at risk (SVAR) and value at risk of the merger between the two companies is very important in analyzing the viability of the merger and acquisition. The Black and Decker shareholders received 1,275 shares of Stanley works share for each share they owned at Black and Decker Corporation. This implied that as at October 30, 2009, they got get a premium of 22.1 % (Townson, 2009). From the MA analysis sheet, the percentage of post merger owned by Black and Decker shareholders assuming price at closing date reflects no synergies is 27.7% while that of Stanley Works would be 72.3%. The post deal return to Black and Deckers shareholders assuming price at closing date reflects no synergies was be 0.9% while that of Stanley Works shareholders assuming price at closing date reflects no synergies was be 0.3%. Black Deckers Premium At Risk was 27.7%, while Stanley Works hypothetical shareholder value at risk (SVAR) Assuming an all cash deal was 0.5 %. Stanley Wor ks Actual Shareholder Value At Risk (SVAR) was -0.3% %.( Expectations investing, 2001). 2. The anticipated market reaction will be as shown below: The present values of capitalized annual synergies starting the following year 2011 are 853.7 million and the premium offered for Black and Decker would have been 55.9 million. The Percentage projected of post merger company owned by Black and Decker shareholders was 27.7% while that for Stanley Works shareholders would have been 72.3%. The Post deal return to Black and Deckers shareholders would have been 4.4% while that for Stanley Works shareholders would have been 5.7% (Expectations investing, 2001). 3. Post market initial reactions will be as follows; The percentage post merger company owned by Black and Decker shareholders would have been 27.7% while that of Stanley Works would have been 72.3%. Black and Deckers Post announcement premium At Risk would have been -447.6% while Stanleys Hypothetical post announcement shareholder At risk (SVAR) assuming all cash in would have been 7.2%. Stanley Works Actual Post announcement Shareholder Value At Risk would have been 5.2% (Expectations investing, 2001). Actual data after the Merger Stanley Black and Deckers market capitalization has reached 12.44 billion dollars with its shares trading at $ 74.95. After the merger the Stanley shareholders retained 50.5% of the total share of the combined company. The value of the merger was estimated at $ 4.657 billion with the Merged companies experiencing 425 million dollars in cost synergies a 75 million dollars increment from the originally projected. The number of securities issued upon stock awards stand at 15,369,387. Revenue synergies after the merger have also been put at between 300 million and 400 million dollars by 2013. since the merger the company has been able to enjoy increased goodwill and net earnings of 198.2 million dollars in the year 2010 (Stanley Black Decker Inc Form 10-K, 2011) Conclusion From the above pre merger analysis and post merger data, it can be clearly noted that the shareholders of Black and Decker Corporations got a good deal from the acquisition of the company. Where as the analysis projected that they would only own 27.7 % of the combined stock in the company, the owned 49.5 % from the deal. The deal has also been beneficial to the Stanley Works shareholders who have experienced increased market capitalization and has had increased share value and dividend earnings.

The Great Gatsby :: essays research papers

Book Review   Ã‚  Ã‚  Ã‚  Ã‚  The Great Gatsby by F. Scott Fitzgerald is set in the 1920’s during the Jazz Age. Nick Carraway is a man in his late twenties residing on West Egg island in Long Island, New York living a â€Å"normal† life. That is, until he meets his mysterious neighbor, a wealthy man named Jay Gatsby. He is a man of mystery, living in a mansion that is constantly full of people, music, and fun. Nick’s â€Å"normal† life gets thrown topsy-turvy when he gets involved in the life of this extraordinary millionaire. Marred by jealousy, cheating, and lying, Nick begins to feel the essence of living a glamorous life in the ‘20’s. He showed this when he said, â€Å"Everyone suspects himself of at least one of the cardinal virtues, and this is mine: I am one of the few honest people that I have ever known.†   Ã‚  Ã‚  Ã‚  Ã‚  All along, I felt sorry for Nick being dragged into more and more tragedy, but I especially felt bad for him during one instance. His friend Daisy was married to Tom, but Tom was having an affair with Mrs. Wilson and Daisy had a thing for Gatsby. Daisy and Gatsby were driving home from town after an argument amongst the group of friends when they passed the Wilson’s gas station. Mrs. Wilson ran out to Gatsby’s car, because they were driving Tom’s car, and was hit. Mr. Wilson went positively crazy, and Nick felt torn by his mixed feelings towards his supposed friend Gatsby. â€Å"I disliked him so much by this time that I didn’t find it necessary to tell him he was wrong.† Gatsby’s insensitivity brought on by his lifestyle made Nick despise him. This is the part where I think Nick really started opening his eyes to how Gatsby really was.   Ã‚  Ã‚  Ã‚  Ã‚  This book really displays how the life of an important person is, especially in that time period. At first, Nick is awed and drawn in by the glamour and prestige, but he eventually figures out for himself how rough it really was. Although this book was set back in the ‘20’s, the lessons you learn from it still apply to society and life in general today. Anyone could read this book and draw a few lessons about life from it. Summary   Ã‚  Ã‚  Ã‚  Ã‚  The Great Gatsby was set in the 1920’s. It’s about the lives of a group of people who all become entangled in a web of, lying, scandal, and cheating together. Nick Carraway lives a â€Å"normal† life on Long Island, until he meets his neighbor, Jay Gatsby. Parties went on every weekend, and Nick

Information and Communication Technology

Spending on information and communications technology in 2005 Information and communications technology or information and communication technology,[1] usually called ICT, is often used as an extended synonym for information technology (IT) but is usually a more general term that stresses the role of unified communications and the integration of telecommunications (telephone lines and wireless signals), intelligent building management systems and audio-visual systems in modern information technology. ICT consists of all technical means used to handle information and aid communication, including computer and network hardware, communication middleware as well as necessary software. In other words, ICT consists of IT as well as telephony, broadcast media, all types of audio and video processing and transmission and network based control and monitoring functions. The expression was first used in 1997[3] in a report by Dennis Stevenson to the UK government[4] and promoted by the new National Curriculum documents for the UK in 2000. ICT is often used in the context of â€Å"ICT roadmap† to indicate the path that an organization will take with their ICT needs. [5][6] The term ICT is now also used to refer to the merging (convergence) of audio-visual and telephone networks with computer networks through a single cabling or link system. There are large economic incentives (huge cost savings due to elimination of the telephone network) to merge the audio-visual, building management and telephone network with the computer network system using a single unified system of cabling, signal distribution and management. See VOIP and Intelligent Infrastructure Management (IIM). This in turn has spurred the growth of organizations with the term ICT in their names to indicate their specialization in the process of merging the different network systems. Information and Communication Technology Spending on information and communications technology in 2005 Information and communications technology or information and communication technology,[1] usually called ICT, is often used as an extended synonym for information technology (IT) but is usually a more general term that stresses the role of unified communications and the integration of telecommunications (telephone lines and wireless signals), intelligent building management systems and audio-visual systems in modern information technology. ICT consists of all technical means used to handle information and aid communication, including computer and network hardware, communication middleware as well as necessary software. In other words, ICT consists of IT as well as telephony, broadcast media, all types of audio and video processing and transmission and network based control and monitoring functions. The expression was first used in 1997[3] in a report by Dennis Stevenson to the UK government[4] and promoted by the new National Curriculum documents for the UK in 2000. ICT is often used in the context of â€Å"ICT roadmap† to indicate the path that an organization will take with their ICT needs. [5][6] The term ICT is now also used to refer to the merging (convergence) of audio-visual and telephone networks with computer networks through a single cabling or link system. There are large economic incentives (huge cost savings due to elimination of the telephone network) to merge the audio-visual, building management and telephone network with the computer network system using a single unified system of cabling, signal distribution and management. See VOIP and Intelligent Infrastructure Management (IIM). This in turn has spurred the growth of organizations with the term ICT in their names to indicate their specialization in the process of merging the different network systems.

Persuasive Essay On Marijuana - 918 Words

Marijuana isnt as bad as people say it is. These are reasons why marijuana isnt as harmful for your body for you as you think. There are actually many benefits from marijuana that can help you. Marijuana can help people more than harm them,everybody says that marijuana is bad for you but it is the only drug that actually has medical benefits. Such as glaucoma, marijuana can help prevent and treat glaucoma, which increases pressure of the eyeball. The pressure in the eyeball can cause of vision due to damaged nerves. These effects of the drug may slow the progression of the disease, preventing blindness. Medical marijuana is available in several different forms. It can be smoked, vaporized, ingested in a pill form or an edible version†¦show more content†¦So when people say that marijuana is harmful they dont know all the benefits that marijuana actually has for the human body. So they try to make it sound like marijuana is a bad thing, but its actually more helpful than it i s harmful. the amount of cannabis required to have any effect on tumors is large; very large. In fact some experts say it is impossible for a person to take in enough cannabis to be effective. However, those who promote the use of cannabis as a cure for cancer suggest that by using cannabis oil it is possible to get enough of the active ingredient into the body and medical science supports them. So people cant overdose on marijuana, they would have to have an amount that mo person could physically put in their body at once. That proves that nobody can ever overdose on marijuana. Other proponents of cannabis claim that it’s not as dangerous as alcohol, and that it’s a peaceful drug: It has a calming and relaxing effect that must be associated with decreased anxiety. A new study highlights the drug’s potential anxiety relief effects. Alcohol kills 26,729 each year. The total deaths from marijuana annually is 0, so marijuana is safer than alcohol. Marijuana is also used for people who have stress. The chemicals in marijuana can be used to reduce stress for the people who have a lot of stress. It can also help with anxiety, but it only helps with it, it doesnt completely cure anxiety. If somebody is having really bad anxiety marijuana can helpShow MoreRelatedPersuasive Essay On Marijuana1056 Words   |  5 PagesMarijuana is known to most people in society, and those people that are aware of marijuana do not have a depth of knowledge of the history or the effects of marijuana Generations before us would use Marijuana for ropes because of the strength is was capable of but now people that hear the word marijuana would probably go straight with the idea that marijuana is useless and would not do the society or the economy any good. 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