The Timken Case

| | ECONM2021Cases in Financial Management| THE TIMKEN COMPANY| (Word Count: 4000)| prospect Nos.380843767942568| | Executive Summary The Timken companionship a leader in the air industry, is considering acquiring the Torrington Company from Ingersoll-Rand. Torrington an engineering solutions segment of the Ingersoll-Rand. The main author of acquisition is to enhance Timkens market share and crop base. Ope valuation synergies are highly judge from this merger with 80 one million million cost savings by the end of 2007. The presented analysis, recommends in our opinion, the best course of action in the proposed acquisition of the Torrington Company: * Both companies operate and compete in same commercial enterprise and therefore, Timken is seeking substantial operating synergies from this largest acquisition of its history (80 million cost savings by the end of 2007). Timken expects to expand its ecumenic business base with new products and services as both(prenominal) companies have only 5 percent overlap in their product offerings. * Stand alone value of Torrington found on DCF = 533 m.; based on industry multiples = 1150 m. * With synergy value of Torrington based on DCF = 1113 m.; based on industry multiples = 1261 m.

* Timken, which has a BBB rating and a leverage of 43%, should be worried just about losing its investment grate rating for further debt financing. * Ingersoll-Rand is valued and is suggested to exact at least minimum damage of 533 million dollars and as high above this as could be negotiated. However, a price between a range of 880 and 950 million dollars is considered feasible for Timken to pay, after accounting for the expected synergies and the expected premiums above market price, as expected by shareholders of the target company. * This deal is beneficial because of the expected synergies of approximately 500million and therefore Timken should go forward with this acquisition. * The spare debt might is not sufficient to... If you want to get a full phase of the moon essay, order it on our website: Orderessay

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