This is just a sample partial. With the domain knowledge in telecommunication, Apex concluded that this was an attractive investment. However, due to the malleability of the document and much debate a standard was finally created. After having experienced extraordinary growth for 5 years, a lot of the competitive advantage due to having a new innovative product will disappear and thus the company will tend to perform similar to other companies in the same industry. What is an appropriate valuation for AccessLine? Usually, Apex sought to be the leading investor whatever the stage in order to have one of its representatives join the board of the financed companies. It include using the analysis to answer the company's vision, mission and key objectives , and how your suggestions will take the company to next level in achieving those goals.
Porter Five Forces is a strategic analysis tool that will help you in understanding the relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in the light of given facts. Business case study paragraph by paragraph mapping will help you in organizing the information correctly and provide a clear guide to go back to the case study if you need further information. Depending on the order we can determine the following conversion conditions: for A 0. The present price per share at such an exit. Since we are only concerned about the successful scenario, we go along with the projection of AccessLine, which is probably overoptimistic, and use its expected revenue of 208M at the time the exit happens. Finally, they spent huge resources to analyze and calculate the value of Xerium to Apax. They believe the incentives of the managers to be too week to insure that they will pursue a mutually satisfactory outcome.
Apex Investment Partners Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies
Apex is currently seeking to make an investment in Access Line Technologies, founded in 1989 in Washington by Fuller. Risks associated with the investment The growing companies are more risky than Blue Chip as these companies have high volatility in cash flows and any single inappropriate strategy will leads to broke of strategic relationship which in turn reduces value to the firm. The calculations are given in the Excel File. The Apex team is impressed by the future prospects of Access Line as the investment fits in with their current objectives of being middle age and a high possibility of going public quickly. This will encourage management to seek a quicker exit. Indeed, in a worst case scenario, Mr.
Apex Investment Partners Case Solution and Analysis, HBS Case Study Solution & Harvard Case Analysis
Thus, in 1994, AccessLine diversified their financing to professional equity investors. Issues For Apex Investment This attraction will reduce the risk of volatility in returns for the Investor. Apax took a well-designed strategy to bid for Xerium. Thus, we will suppose that AccessLine is an all equity entrepreneurial firm and consequently will avoid interest expenses as well as tax shield. Introduction: Apex Investment Partners was founded in 1987 by James A. Although… 600 Words 3 Pages Given the limited information in this case, which product would you recommend that Apex commercialize? Their Constitution for the right to a fair trial, and an independent judiciary vigorously enforces this right. C If you are unsure of your cost of capital estimate, it is important to determine how sensitive your analysis is to errors in this estimate.
Apex Investment Partners Case Solution and Analysis, HBS Case Study Solution & Harvard Case Analysis
Time line can provide the clue for the next step in organization's journey. Rights and Preferences Apart from the valuation, other elements of the term sheet must be adjusted to allow Accessline to protect its interests and motivate or replace management in the case of performance failure. The redemption option will reduce the risk of investment for the Apex Investments. There are four phases of business cycle, such as prosperity phase, recession phase, depression phase, and recovery phase. The risk free rate was given by 7.
Because we only have two comparable companies we opt to do our calculations with the industry wide average discount rate. The positive cash flow was an important factor that makes Apex felt confident. To enhance the economic viability of its products the company makes strategic relationships with the telephone companies. And, it was at the early stage and was not invested heavily by other professional investors. This is problematic for Apex since it allows current holders to lower the proportionate weight of Series B preferred stock.
Memorandum: Net Present Value and Apex Investment Partners
Attractive Terms to Apex for the Series B financing The term sheet for Series B indicates that the new investor which is Apex which get 13% equity stake in the company as the percentage is quite reasonable the Investor can pressurize the senior management to formulate those strategies which are in line with the Apex strategic objectives. Another source of strength of the company is its strong management team and its ability to meet financial projections. What have been the implications for the firm? In my opinion, the current arrangement allows management and employees to receive unjustified returns in the case of a liquidation. I had to increase my income contributions, lower the amount I projected for living expenses, and increase the current rate of return. Nor can Accessline take the sort of steps necessary to protect its investment in the case of management failure.
Alternatively, we could use the Betas of the comparable companies. Risk and Risk Aversion 7. In order to do marriage as long and successful, it takes a lot investment, compromise, patience, shared child care, unselfish gift of love and much, much more. M private placement from five investors and welcomed to the board, as part of the transaction, a representative of the first financing round. Concept of an industrial life cycle 2. Be very slow with this process as rushing through it leads to missing key details.
