Case: Brazos Partners And Cheddar's Inc. (Case Study Sample)
Study Questions for: “Brazos Partners and Cheddar's Inc.” 1) What is Brazos' investment strategy? Does it seem well-suited for its position as a first-time fund? How do you assess the merits of GTT transactions? 2) How has the current recessionary climate affected Brazos' investment strategy, in both favorable and unfavorable ways? 3) Is Cheddar's an attractive investment? Did Brazos underpay, overpay, or get it just right in their initial investment? 4) What are your major concerns with the proposed deal? Should Brazos allow the company to sell the managers some stock? Is the real estate subsidiary a good idea? If the managers buy more stock, what is the appropriate price?
What should one include in the “memorandum”?1) The case questions are designed to help you streamline the issues to be addressed. If you believe that these questions do not effectively address the problems in the case, feel free to go outside the parameters of the questions.2) It is not necessary to rehash the case situation in the memorandum. Do not, however, assume that I know every number and detail. Use your judgment to determine how much of the case to include in your memorandum.3) The case memorandum should be a two-page double-spaced (maximum) report. The two-page maximum does not apply to exhibits such as graphs and tables, but please keep these to a minimum.4) Most importantly, you much take a position on the problem in the case and make specific recommendations on how to solve it. Support your recommendation as succinctly and as effectively as you can.
CASE: CHEDDAR'S (MW)
Case: Cheddar's (MW)
Brazos' investment strategy is based on deliberations from an informed panel of experts with each bringing on to the table an in-depth level of understanding of the leverage buyout business. The CEO of Brazos, Fojtasek, has enough knowledge of family-run businesses having increased the family business revenues for Atrium by 54% in 1995 and negotiated three profitable buyouts until meeting his partners Fronterhouse and Mcgee. Brazos' investment strategy is built on mainly focusing on small or medium-sized enterprises valued between with $50 million to $250 with a proved potential of making superior returns. The firm further developed a unique approach to the market by putting more emphasis on Generation Transfer Transaction (GTT).
The strategy seems well suited for the firm as a first-time fund as it mainly seeks to invest in local business units located around Texas and its environs. The Dallas-based firm uses this approach as it puts the co-owners at an advantage point of gaining information on the management of their focus enterprise. The strategy is not only based on the size of equity placed for a business entity and its potential for superior returns but also on a solid management team whose passion and drive for success is evident for the LBO firm to assess. The emphasis put on GTT places the firm at an advantage over its competitors as the market in Texas is the single most known having the largest number
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