Gordon Bell Ltd.
It was June 2024. For the last two months Bruce Scott, an experienced Scotch whisky executive, had been investigating the possibility of putting together a management buy-in of a small Scotch whisky business; however, what had seemingly started out as a straightforward process had grown increasingly difficult. The current owner was proving awkward to negotiate with and, as yet, Scott still did not have a firm offer of finance to back a deal.
An attractive job offer which had been open to Scott since the beginning of the year would not be available for much longer. Scott had to pin down the situation and make an offer for the business. But what deal would be acceptable to the seller, Scott’s financial backers and Scott himself?
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Description
It was June 2024. For the last two months Bruce Scott, an experienced Scotch whisky executive, had been investigating the possibility of putting together a management buy-in of a small Scotch whisky business; however, what had seemingly started out as a straightforward process had grown increasingly difficult. The current owner was proving awkward to negotiate with and, as yet, Scott still did not have a firm offer of finance to back a deal.
An attractive job offer which had been open to Scott since the beginning of the year would not be available for much longer. Scott had to pin down the situation and make an offer for the business. But what deal would be acceptable to the seller, Scott’s financial backers and Scott himself?
Learning Objective
- Facilitate discussion about the factors that must be considered in managing the buyouts.
- Introduce students to structuring of buyout financing.
- Determine valuation for a buyout of a company by selecting and applying an appropriate valuation approach.
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