Butler Essay

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[pic] Lecturer: dr. J.K. Martin Butler Capital Partners and Autodistribution Question 1 Should Walter Butler submit a proposal for Autodistribution? What is the nature of the opportunity? The question whether Walter Butler (Butler Capital) should submit a proposal for Autodistribution does not have a simple answer. Indeed it is a strategically relevant question, both for the buying company and the bought company. In the following analysis we try to present the advantages and disadvantages of eventual acquisition of Autodistribution. The core activity of Butler Capital is investing in different businesses. They have successfully completed two fundraising funds, reaching IRR of 32.8% on the first one. The opportunity of buying Autodistribution is considered as a great addition to the existing business portfolio. The business of Autodistribution consists of trading with automotive spare parts; reaching FF 7.7 billion (33% market share of the independent wholesale segment and 10% market share of the total market in France). The promising corporate figures are backed with steady macro economical (GDP of $1,392.5 bln and GDP per capita of $23,760 in France for 2007) and strong market data (total market in France of $13.3 billion; total market in Germany $15.8 billion and in UK – $6.7 billion). In addition to the attractive financial and economical figures, the time when the deal took place, was one of the best years for the investment funds in France (new funds raised in 1998 grew by 253.5% in comparison with 1997) making investing desirable business, attracting many players. Other advantages of the newly arisen opportunity were the huge retailers’ network of Autodistribution, possibilities for differentiation and cross border expansion and significant potential margin improvement. From that point of view a possible investing in a leading

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