Yeats And Tse Case

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Yeats Valves / TSE Questions The following are questions which should focus the groups on important aspects of the Yeats Valves case. Note the actual case name isYeats Valves and Controls, Inc. The case number is UV0094. There is also a spreadsheet - that number is UV01 Note the corresponding case is TSE International Corp. - case # UV0114. Also note these cases are included in the course pack as well as the Note on Valuing private busineses - which should be useful in solving the Yeats / TSE cases. The questions are the same for both and they are below. 1. What is the situation that this company faces? TSE is having an aggressive growth-by-acquisition plan to create opportunities and entries into more dynamic markets than the ones TSE presently served. They find although it had done well in the past, but the company had produced few new breakthrough products in recent years. If this trend continued, TSE would be left behind its competition. Now, they are considering Yeats Valves the first among several potential targets. But right before the acquisition plan, there were cruel month for stocks in general with the bursting of the dot-com bubble. If the merge fell, it will discourage the borad. If the acquired at too high a price or failed to produce adequate returns, the TSE board would not be likely to give full support merges. 2. What are the strengths and weaknesses of Yeats and its counterparty, TSE? Yeats Strength: -Supply special application for the defense and aerospace industries: drives50% profit -Having a reputation for engineering excellence in the most complex phases of the business, often did prime contract work on highly technical devices for the government. -Marketing arrangements presents no problems: Skilled sales engunner direct sale to machinery manufacturers. Good distribution channel under a

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