one of the largest cable operators in the U.S., prepared to acquire the AirThread. Connections (ATC), a large regional cellular provider. Although this acquisition. By early , Zimmerman was considering the possibility of acquiring AirThread Connections, one of the largest wireless companies in the United States. This case can be used as a capstone valuation exercise for first-year MBA students in an introductory finance course. A senior associate in the business.

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Hi, I am Sara from Studymoose Hi there, would you like to get such a paper? Leave your email and we will send you an example after 24 hours The estimated revenue and gross profit for new wireless subscribers is shown in Table 5. What methodology should be used to value AirThread, given the characteristics of the expected cash flows after the merger?

Help Center Find new research papers in: Wider debate The case includes two interesting characters — Zimmerman and Zhang, but contention among the characters is not the primary aim of the case. Log In Sign Up.

And we use the equity in earnings of affiliates of AirThread to multiple Valuation of AirThread Connections Share this page: By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.

In terms of the long- term growth rate, Jennifer understood that it could not exceed that of the macro economy as a whole. He was well aware of several high profile takeovers that had ended in bankruptcy or considerable loss of shareholder value, and overpaying for a target company was one of the quickest ways routes to disaster. In order to effectively attract and retain customers, the firm had to offer superior customer yo service and aggressive pricing packages in terms of monthly service fees and equipment subsidies.


A senior associate in the business development group at Airthreaad Cable Communications, airrthread of the largest cable companies in the Connectkons. Equity in Earnings of Affiliates Business and Environment Business History Entrepreneurship.

The Case Centre is a not-for-profit company limited by guarantee, registered in England No and entered in the Register of Charities No This airthrewd two problems.

Valuation of AirThread Connections Essay Example for Free

Your Answer is very helpful for Us Thank you a lot! However, she also estimated that the revenue per minute for business customers would be less than that charged to retail subscribers. The very strong investment performance of passive maturity transformation strategies over this period may mask the underperformance of the specialized connectuons activities.

Heilprin Teaching note for case Copying or posting is an infringement of copyright.

Valuation of AirThread Connections

Finally, she decided tC that the nonoperating assets and liabilities should be valued separately so that the attention remained squarely on the ongoing operations. Heilprin, Illinois Institute of Technology Finance Professor and Managing Director of 59th Street Partners prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management.

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AirThread Connections Case

connevtions System Operating Expenses Valuation of AirThread Connections. In turn, these forces had been driving large investments in network infrastructure that require commensurate increases in the customer base to effectively utilize the new capacity. The decline in the service revenue growth rate reflected continued deterioration in the revenue per minute of airtime as well as the continued maturation of cellular telephony.

Publicly traded equities with these characteristics have high risk-adjusted returns after controlling for common factors typically associated with value stocks. The authors Erik Stafford and Joel L. In contemplating this issue Jennifer believed that it may be necessary to follow the customary practice of employing a private company discount.

AirThread Connections Case

A passive portfolio of small, low EBITDA multiple stocks with modest amounts of leverage and hold-to-maturity accounting of net asset value produces an unconditional return distribution that is highly consistent with that of the pre-fee aggregate private equity index.

Furthermore, the company believed that its core competency as an acquirer would continue to play a fundamental role in its future success. Do 4 A bullet payment refers to a single payment to pay off the remaining loan balance at the time of maturity. Pedagogical contribution We are very pleased to receive this award as it means that we are being acknowledged as having made a pedagogical contribution in the area of financial case method.