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Longbow Capital Partners Case Solution

Introduction

Executive SummaryBrazo had actually produced the business two years after the major acquisition of the Northern Video System and Tri-Ed circulation, which were the electronic security distribution business. The combination had actually been effective in between the two business, and after 24 months of success, two attractive offers were gotten by Longbow Capital Partners Case Study Solution for the combined supplier, with the management of the business estimating double digit development for the year 2012, therefore, it is clear from that the truth that now is the optimum time to exit from the 3rd fund of the firm.

Longbow Capital Partners Case Study Analysis’ investment strategy


Considerably, the investment technique of Longbow Capital Partners Case Study Analysis, a middle market leveraged buyout group (LBO) has focused on the companies' acquisition throughout the firm's buyout that have actually been valued in between $250 and $500 million in the lower part of the middle market. Over the last 30 years of time, the company has raised 3 funds. The really first fund of the business with the overall capital of $250 million was closed in year 2000, and it had effectively invested, and the returns had actually substantively surpassed the capital that was invested. The second fund with the capital of $400 million was closed in year 2005, and last fund was raised in the year 2008, with the capital dedication of $715 million.

Pest AnalysisLongbow Capital Partners Case Study Solution has the technique of investing in the companies which are close to the Longbow Capital Partners Case Study Solution home in Dallas. The application of this method has actually enabled the business to have better control on the gotten companies. The Generation transfer transaction has actually also been established by Longbow Capital Partners Case Study Solution, which is a tax efficient method for the medium sized company and household owned companies for the function of receiving liquidity by means of maintaining operating control and selling minority share.This has actually assisted in dealing with situation for the household owned businesses where the business can be offered, and reinvesting an amount has actually enabled them to retain fifty percent of the typical stock in a brand-new business which keeps the owner involved in the service.

Texas is ranked on 11thas the biggest standalone economy throughout the world, and is house to the lots of fortune 500 companies, as California and New York have an incredible amount of public and private mid-market companies.Since, Texas does not have lots of buyout groups, due to which the Longbow Capital Partners Case Study Analysis's financial investment method makes good sense. It is to inform that the competition was limited in the area for the mid-market buyout, which in turn offers a benefit for Longbow Capital Partners Case Study Help Partners and the funds have also been carrying out well over the period of time. Longbow Capital Partners Case Study Help Partners has actually constantly tended to target the companies which create good cash streams that are essential in the leveraged buyout. Also, the method has actually been effectively working due to the fact that there are lots of firms operating in the area. Not only this, the Generation transfer deal (GIT) has actually likewise supplied a benefit to Longbow Capital Partners Case Study Solution in a manner that the medium and little sized firm would get associated with business, and numerous other benefits including sellers tend to become comfortable with the buyout. Longbow Capital Partners Case Study Help Partners has actually planned each of its investment effort after a deep insight and exceptional execution, due to which it has becomeable of catching the operational techniques that could increase the earnings before interest tax devaluation and amortization.

The dual-acquisition of Tri-Ed and Northern Video fit within this strategy


The double acquisition of Northern Video and Tri Ed by Longbow Capital Partners Case Study Solution Partners fit the strategy in a method that these companies have enough prospective to produce a substantial and positive cash circulation over time, and likewise they are able tocause decrease in expenses and growth in profits of the company. The technique of the business's investmentwas not focused on acquisition of these companies, but primarily focused on the aquisition of the business lying within or in the surrounding of its geographical place.

Vrio AnalysisFor Longbow Capital Partners Case Study Analysis Partners, the acquisition was the natural fit. It is due to the fact that of the fact that

Electronic security circulation industry has been growing regularly. When the merger had taken place, there were lots of synergies that might be produced in addition to value post acquisition. : the telesales circulation and branch-based supplier would be benefited through the cross selling opportunities, which in turn would've allow a natural earnings growth.

Unfavorable and beneficial effects of market environment on Longbow Capital Partners Case Study Analysis' investment strategy for its third fund

The favorable and undesirable methods through which the marketplace environment has affected the investment method of Longbow Capital Partners Case Study Analysis Partner for its 3rd fund are discussed below:

Favorable results of market climate

Of all, it is to be noted that the investment method of Longbow Capital Partners Case Study Help Partner is well matched with the effective and brand-new methods in the market or market, which includes; the company's engagement in developing operating proficiency and proficiency, and focus on the companies with the growing cash flows as well as good management.

Porter's 5 ForcesThe company has actually focused on investing in small sized firms, diversifying in geographic terms, such as Texas and Southwest as well as develop specific niche or specialized investment focus.

Unfavorable results of market environment

Apart from the beneficial environment impacts on Longbow Capital Partners Case Study Solution Partner investment strategy, there is an unfavorable impact as well for its 3rd fund, which is that the policies was tightened and the threat aversion among the lending institutions was increased, which means that the opportunity was not higher for the financial obligation take advantage of, and the loan providers were extremely depending on the equity contributors.

The economic downturn or financial slump had likewise made the condition worstasthere were no more equity readily available to be invested in. There was a significant fall in the fund raising from the 63.5 billion dollars to 35 billion dollars in the year 2001. Not only this, due to the reality that the operating efficiency had actually been rising, which in turn challenged the buyout firms to add worth, nevertheless causing the higher preliminary costs and better revenues.

Following the acquisition, Longbow Capital Partners Case Study Solution create value at the combined distributor


The valuation of the two companies namely; the Northern Video System and Tri-Ed circulation have actually been performed in order to examine the benefits these 2 companies tend to produce over the period of time. The business worth and the net present value calculation are performed with the intent to assess the expediency of the acquisition effort.

It is imperative to note that the Longbow Capital Partners Case Study Help Partner has actually produced a value post acquisition, it can be seen in the exhibits offered that the business value or the net present value of the business i.e. Northern Video System and Tri-Ed distribution is higher than zero or positive. The net present value for Northern Video System and Tri-Ed circulation is $239002 and $178677 respectively. The favorable net present worth shows that Longbow Capital Partners Case Study Analysis Partners Holdings Inc. has actually substantially produced the value after getting Northern Video System and Tri-Ed circulation.

Swot AnalysisOn the other hand, the synergies acquired from the post-acquisition by the start of the year 2012, numerous quantifiable gains had actually been created for the company by this newly combined acquisition. Not only this, the margins have actually likewise substantially increased from 5.2 percent to 5.9 percent during the two year period of time. The increased performances and the strong money streams with the net working capital of the company had actually considerably improved utilize ratio of Tri-Northern in 2010 from 4.5 x in 2012 to 3.0 x.

The right time to sell Tri-Northern and At what price?


A leading and important Dallas based personal investment company Longbow Capital Partners Case Study Solution Partner has announced that it would be going to sell Tri-Northern Holdings Inc. which is among the independent and leading supplier of electronic security products.

Longbow Capital Partners Case Study Solution Partner and its management has actually formed the Tri-Northern Holdings Inc. through the subsequent merger and the acquisition of the Northern Video System and Tri-Ed Circulation in March 2010. The effective as well as the strong combination of the experienced technical sales operation and the comprehensive branch network have significantly located Tri-Northern Holdings Inc. as the leading hybrid distribution design in the market of electronic security product.

In addition to this, the Longbow Capital Partners Case Study Solution Partner has intended to form a collaboration with its management in an attempt to expand the business operations during its ownership both naturally in addition to through 3 include on acquisition.

RecommendationsIt is the right time to sell the Tri-Northernbecause of the reason that the Tri-Northern has been successful and the company was attracted to Tri-Northern due to the fact that of the combined market position in the fragmented and growing electronic security item market and its remarkable management team. The success of business is an outcome of the remarkable integration of two company, which in turn have led to numerous synergies, tactical acquisition, broadening through organic growth, extending product line by means of strong relationship with supplier and achieving functional excellence. Due to the tremendous development and the remarkable performance, the Longbow Capital Partners Case Study Analysis Partners must offer the Tri-Northern Holdings Inc. since Tri-Northern would have the ability to grow into the largest independent distributor of the electronic security items that would help the company in providing value for its end clients and suppliers.

In addition, the company must sell the Tri-Northern Holdings Inc. or it need to complete the investment out of its 715 million dollars Longbow Capital Partners Case Study Solution Partners Equity Fund III.