Harvard American Chemical

Corporate Finance 3.2 Bonuspoint assignment American Chemical Corporation Harvard Business national Recently, Dixon Corporation, a specialty chemical company, has made an acquisition end to purchase the Collinsville plant from American Chemical Corporation for $12 million. Dixon has multiple reasons in raise to expand their activities by getting the sodium chlorate plant in Alabama which may be aligned with strategically advantages. First of all, Dixon primarily sells to the paper and glop industry in which chloride dioxide is key chemical. In order to let on this and other chemicals meant for sale, the complement sodium chlorate is required. Hence, producing one of the few basic elements may results in decreased costs (material, transport), less colony on other producers and benefits to existing product lines. Secondly, both gross revenue (and mart) concentration and the Collinsville plant are located in southeastern U.S. 68% producing capacity which is of major importance since transport is of evidentiary costs. Moreover, Dixon has profound experience in Southeastern U.S. and has a level-headed existing sales group there. Consequently, a solid topical anaesthetic position could be meeted aligned with existing strategy.

Furthermore Dixons sales show a rapid growth, consistent shekels and low unused debt capacity. Therefore it would be a discursive moment to expand activities further when having established this strong, healthy market position aligned with past rapid growth. However, Dixon should note that by current finance plans its target book debt ratio leave be exceeded with 35% due to this acquisition. In order to obtain the Asset beta (?addition) of the Collinsville plant we look at the asset beta of Dixon and of other companies with standardized sodium chlorate plants. These companies have similar assets corresponding with the same business industry, hence by combine these results in the sodium chlorate market approximation this may be corresponding with the... If you want to get a full essay, order it on our website: Ordercustompaper.com

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