Part I. Needs Analysis
i. Company Need Analysis
Airgas strategy
Airgas have successfully integrated approximately 400 acquisitions in history and consider the acquisition and integration of business to be a core strategy to extend its business. (Airgas, 2010) Due to economic downtown in the U.S in fiscal 2009, Airgas is experiencing a challenging environment of same-store sales declines. Thus, Airgas has speed up its acquisition step to enhance its profitability from acquisition business. In fiscal 2010, the company acquired a total of six businesses with aggregate historical annual sales of more than $47 million. (Airgas, 2010) As a part of developing strategy, Airgas is seeking to expand its specialty gas segment, especially in the healthcare area.
Extend Airgas business internationally
Airgas operates 1100 locations in specific geographic regions, and most of them are located within US. The annual report shows that more than 95% of its revenue comes from U.S. Airgas is limited by the expense of transporting gas in new regions as well as the limitations of its existing infrastructure. The CEO has indicated that, "we are open to the possibility of extending our business beyond North America and are currently evaluating opportunities on a case-by-case basis. (CNN money, 2010) On the other hand, Teleflex operate 30 manufacturing sites or its Medical segment to supply products for more than 140 countries, and approximately 49 percentages of Teleflex segment revenues are derived from consumers outside the United States. (Reuters, 2010) The high speed growth of some developing countries has created numbers of opportunities not only on medical segment but on gas industry. For sustainable growth purpose, Airgas should execute the international strategy as soon as possible. To acquire Teleflex would be able to market a broader range of consumer coverage. In spite of wasting money to build a new international network, Airgas could use Teleflex’s existing network to transport gas product and consolidated medical products.
Diversifying Airgas’s product line on health care segment
Airgas presently develop single kinds of medical gas products and related equipments on its health care segment. Faces to the great expectation on the health care industry, Airgas strengthen the health care segment for achieving higher profit. On the other hand, Teleflex has integrated medical products development and distribution system, which is categorized by four independent groups: Critical Care, Surgical, Cardiac, and OEM and Development Services. All of Teleflex products are developed by each group. Thus, if the transaction is done, the Teleflex’s existing products will largely enhance Airgas’ product diversification on health care segment. In addition, the acquisition will allow Airgas to benefit from the synergy of the Research & Development investment of Teleflex. Nearly 80% of Teleflex R&D cost occurs in the Medical Business in connecting with efforts to being innovation new products to markets. However, Airgas presently have no R&D department concentrating on Health care products development. So if the transaction is done, it will initially enhance Airgas ability of medical product innovation. The combined company could even package their present products and services for higher return. For example, if the transaction is done, the combined company could package their products together in the Anesthesiology and Oxygen therapy segment that will increase revenues and provide a better service for consumer. Without the acquisition, Airgas would have been a supplier to Teleflex.
ii. Target company---Teleflex Need Analysis
The medical devices industry is highly completive. Faced with this environment, Teleflex focus their strategy on expansion of marker share, introduction of existing product into new geographical regions to achieve sustainable and profitable growth. Teleflex aims to increase business with existing consumers and add new consumer relationship.
Extend Teleflex Business in US
Airgas has the largest distribution network within US with 1100 locations. Similar to Teleflex, Airgas also supplies products to hospitals, medical dental offices and home healthcare providers. On the other hand, Teleflex has very little presence in the US; therefore, after the acquisition both companies will benefit by increasing exiting consumer as well as create new consumer relationship. It will largely contribute Teleflex native products’ market share by using Airgas’ existing native networking. The synergy of the combination will save charges on extend network of native market, as well as increase Teleflex inventory turnover.
Specializing Teleflex business into medical Segment
Teleflex has been selling many of their unprofitable businesses on aerospace and commercial segment from last three years. They are focusing their attention towards medical segment. In 2005 Teleflex medical segment only contain 33% of total operating profit, while in 2009, the number has reached 91%, and more than 80% R&D cost came from this segment. On the other hand, Airgas also have the motivation to diversifying their business on the medical segment. Leading by the same target, the combined business will be benefited by the present advantages of each side.
Recover commercial business segment
In the past few years, Teleflex commercial business unit has been suffering from huge losses, which is the reason why Teleflex had to discontinue many of their operation on commercial business unit. Without this transaction, Teleflex will probably keep losing market share on commercial segment. However, similar to Teleflex, Airgas also have integral design, manufacture and distribution of commercial products, as well as broader consumers’ relationship. If the transaction is done, the combined company could restructure both commercial line together, and prevent losing market share in the future.
Part II. Financial and Market Analysis
i. Financial Analysis of Airgas Inc. ($ in millions)
Airgas had net sales for the fiscal year ended March 31, 2010 (fiscal 2010) of $3.864 million compared to 4.349 million for the fiscal year ended March 31, 2009 (fiscal 2009). The fiscal 2010 net sales reflect a challenging sales environment due to the economic downturn in the U.S. However, compared with the S&P 500 Index ($109.97) and S&P 500 Chemicals Index ($123.90), Airgas’ stockholder return reached $280.42 that was still much better than average industry index. Therefore, this part would firstly analyze the financial performance of Airgas according to its liquidity, asset management, debt management, profitability, and market value. Then, this research report would analysis Airgas market share.
1. Liquidity: Airgas has current liabilities of $476 million that must be paid within a year. The current ratio of 1.5 times shows that Airgas has sufficient funds to meet those obligations. However, if we deduct $334 million of inventories from the current asset, Airgas quick ration comes to 0.79 which is a red flag, as some of the inventories could not generate cash with a year and Airgas might have to sale their inventories to pay off their short term obligations. Therefore, management team should concern about it.
2. Asset Management: The second group of ratios measured how effectively Airgas managed their assets. As a rough approximation, each item of Airgas’ inventory is sold out and restocked 11.59 times per year, which is much higher compared to industry average of 6.49 times. While evaluating Airgas’ receivables, the average length of time that Airgas must wait after making a sale is 17.65 days. Additionally, Airgas’ fixed assets turnover ratio of 1.57 times indicated that Airgas used its plant and equipment not so effectively. A potential problem could exit when interpreting the fixed assets turnover ratio. Since fixed asset reflected the historical cost of the assets, inflation has caused the value of many assets that were purchased in the past to be seriously understated. Furthermore, Airgas’ total assets turnover ratio (0.86 times) is somewhat higher than industry average, indicating that Airgas generated a sufficient volume of business given its total asset investment.
3. Debt Management: Airgas has debt ratio of 60.06%, which shows that Airgas has finance more than 50% of their total assets using debt. A variety of factors determine a company’s optimal debt ratio. Nevertheless, the fact that Airgas’ debt ratio exceeded 60% raise a red flag and may make them costly to borrow additional funds using debt financing. Additionally, Airgas has $314 million of earnings before interest and taxes (EBIT). While, their interest charges is $63 million. That makes Airgas’ interest coverage ratio only 4.96 times.
4. Profitability: Airgas has net profit margin of 5.08% which is in fact lower compared to past few years. Airgas low profit margin is the result of its heavy use of debt. Airgas has 4.37% of return on asset which is lower compared to industry average and last year return on assets. This low return resulted from (1) the company’s low basic earning power (6.99%) plus (2) high interest cost resulting from its above-average use of debt, both of which caused its net income to be relatively low.
5. Market Value
The current market price of Airgas’ stock is 70.89 as of October 26, 2010. Airgas Earnings per share (EPS) is $2.34 while, Airgas P/E ratio is 27.78 times that indicate strong growth prospects. Also, Airgas’ price/cash flow ratio was above to 13.0 times, once again suggesting that its growth prospects were above average, its risk was above average, or both.
ii. Financial Analysis of Teleflex Inc. (Dollars in millions)
Teleflex is a diversified company with industrial origins, but now focuses on providing health-care products. Teleflex net revenue decreased from $2,067 million in 2008 to $1,890 million in 2009. As a result of decreased in revenue, Teleflex’s net income reduced from $314 million in 2008 to $155 million in 2009.
1. Liquidity: Teleflex has a current ratio of 2.98 times, which provides the best single indicator of the extent to which the claims of short-term creditors were covered by assets that were expected to be converted to cash quickly. Furthermore, Teleflex quick ratio of 1.91 indicated that it could pay off its current liabilities without having to liquidate its inventory.
2. Asset Management: Teleflex has inventory turnover of 5.24 times which is lower compared to industry average of 4.23 times. As a rough approximation, each item of Teleflex’s inventory is sold out and restocked 5.24 times per year. Low turnover ratio suggests that Teleflex was holding to much inventory. Also, the average collection period of Teleflex is 51.23 days. 51.23 days of outstanding indicates that customers, on the average, are not paying their bills on time. This deprived Teleflex of funds that it would use to invest in productive assets. Additionally, Teleflex’s fixed assets turnover ratio of 5.95 times is higher than industry average of 1.57 times. Therefore, Teleflex seemed to have about the right amount of fixed assets in relation to other firms.
3. Debt Management
Teleflex has a debt ratio of 58.71%, which indicates that Teleflex’s more than 58% of total assets are financed by debt. Creditors may be reluctant to lend the firm more money, and management would probably be subjecting the firm to the risk of bankruptcy if it increased the debt ratio by borrowing additional funds.
Conclusion
Teleflex’s turnover of 5.23 times is much lower, which suggested that Teleflex is holding too much inventory. Excess inventory represent an investment with a low rate of return. Teleflex’s low inventory turnover ratio also made us question about their current ratio. With such a low turnover, we must wonder whether Teleflex is actually holding obsolete goods not worth their stated value.
Additionally, we noticed that Teleflex’s income from continuing operations is $143 million which was better compared to prior fiscal year. But it could not support high profit margin of 16.03%. In fiscal 2009, the major part of Teleflex’s income came from its discontinued operations. During 2009, Teleflex gained $269 million from discontinued operations, which was the result of Teleflex sales of their business units such as, joint venture ownership interest of Airfoil Technologies-Singapore Pte. Ltd., an aircraft engine repairs business. And, Teleflex also sold its power systems business, an alternative fuel systems supplier. That is the main reason why Teleflex’s profitability seems better than its prior year.
Market Share Analysis of Airgas
The industrial gas equipment wholesales industry in the U.S. are drove by four main players, Praxair, Air products, Airgas Incorporation, and Invacare Corporation. Airgas has continued to focus on manufacturing and distribution of industrial, medical and specialty gases as well as equipments needed. Approximately 80% of total sales were derived from the distribution and manufacturing of industrial, medical and specialty gases and 20% from the gas equipments. Based on market capitalization analysis, Airgas occupy third position with market capitalization of $5940 which represents 11% of market capitalization of industry. Praxair is the industry leader with $28010 million of market capitalization which is 40% of total market capitalization of industry, while Air product is in second position with $18090 million of market capitalization which is 33% of total market capitalization of industry. Invacare has $1600 million of market capitalization which represent 2.97% of industry (yahoo finance, 2010).
Based on revenue, Airgas occupy third position in the industry with $3864 million of revenue. Praxair is the leader with $8956 million of share while Air product is in second position with $8265 million of revenue.
Market Share Analysis of Teleflex
Teleflex is principally a global provider of medical technology products and most of its earning comes from making disposable medical supplies; such as catheters and oxygen masks. In fiscal 2009, its medical segment businesses grown to $1,500 million, which represented 77% of its consolidated revenues and over 90% of segment operating profits. Approximately 49% of Teleflex segment revenues are derived from customers outside the United States. Acquisition with Teleflex would facilitate the immediate entry of Airgas into new markets in key areas.
Based on market capitalization analysis, Teleflex occupy fourth position with market capitalization of $2260 million which represents 5% of market capitalization of industry. Alcon Incorporation is the industry leader with $48470 million of market capitalization which is 35% of total market capitalization of industry, while Heartware International incorporation is in second position with $35040 million of market capitalization which is 28% of total market capitalization of industry. Good rich Corporation is the third largest company with market capitalization of $10370 million of market capitalization which represent 11% of industry (yahoo finance, 2010).
Part III. Valuation and Financing Strategies
i. Assumptions
The estimated value of Teleflex’s stock is in the range of $60 to $70, hence the estimated total value of Teleflex ranges between $2395.8 million to 2795.1 million. The estimated total value represents the value for the number of share outstanding of 39.93 million. For the valuation of Teleflex three types of scenarios are consider, pessimistic, moderate and optimistic. The projections are based on the following assumptions:
Valuation of Teleflex with Sensitivity Analysis
Financials:
· The beginning stock price for this valuation model is $55.75. During the 52 week period the price of Teleflex stock range from 66.07 to 47.92.
Sensitivity Analysis: Therefore different begging stock prices from the range of 52 weeks are used to see the effect on ending stock price.
| If the beginning stock price is: | The ending stock price is: |
| $55.75 | $70.14 |
| $66.07 | $69.28 |
| $50.00 | $70.35 |
| $46.00 | $70.92 |
The above table shows that a $10 variation in prices only has a low effect on ending stock price.
· Revenues: According to the annual report 2009, the management of Teleflex expects the revenues to grow up to 10%. The estimations are based on within 10% growth rate.
Sensitivity Analysis:
| If the revenue growth estimate is: | The stock price is: |
| Pessimistic (4%) for 2011-2015 | $68.71 |
| Moderate (5-8%) for 2011-2015 | $70.43 |
| Optimistic (10%) for 2011-2015 | $72.73 |
· COGS/Revenues: – In the past cost of goods sold has fluctuated around 62% to 56%. For the valuation, the cost of goods sold will be kept 55%.
· SG&A/Revenue: In the past Sales, general, and administrative expenses were in the range of 25% to 27.5%. SG&A will remain 28% for the following years.
· Effective tax rate – Based on Teleflex’s effective tax rate in last three years, it is assumed that tax rate will fluctuate in the range of 26% to 25% going forward. For the coming five years, effective tax rate will be 25%.
Sensitivity Analysis for effective tax rate:
| If the effective tax rate is: | Stock price is: |
| 25% | $70.14 |
| 28% | $68.03 |
· Weighted average shares outstanding: For the company’s valuation 39.993 million is used as current number of share outstanding. Teleflex’s weighted shares outstanding were 39,359, 39,584, and 39,718 for years 2006, 2007, and 2008, respectively. For the valuation, increase in weighted average share outstanding until FY2014 are 230,000 per year, following historical precedent.
· Capital expenditures: Capital expenditures are $25,000 for the 5 years.
Cost of Capital and Terminal Value Assumptions:
· Risk free rate – Risk free rate is the 10 year Treasury rate. The risk free interest rate referenced in the 2009 Teleflex Annual Report was 2.6%. However, according to www.treasury.gov website, the rate on 10 year treasuries is 2.5% as of 10.26.10.
Sensitivity Analysis:
| If the risk free rate is: | The stock price is: |
| 2.5% | $70.14 |
| 2.6% | $69.91 |
· Risk Premium = expected market return-risk free rate; analysts say 5.1%, companies in the US say 5.3%, and companies in the EU say 5.7%. According to an Internet article by Aswarth Damo Daran entitled “Reversal on Market Risk Premiums: the 2010 story”
Risk premiums skyrocketed (into the 8% range) during the height of the economic downturn. This would be expected since the market risk premium has been described as “hazard pay” for holding a risky investment or any investments in risky times. However, since that time, market risk premiums have reversed the upward trend, and at the beginning of 2010, they were in the 4.37% range. Market risk premium of 4.3% is used in this valuation.
Sensitivity analysis:
| If the market risk premium rate is: | Stock price is: |
| 8.0% (at the height of the downturn) | $61.86 |
| 5.7% | $66.89 |
| 5.0% | $68.50 |
| 4.73% | $69.13 |
| 4.3% | $70.14 |
· Beta – according to www.zacks.com, Teleflex’s beta ratio is 0.84, indicating that Teleflex’ stock is 16% less volatile that other stocks in the market.
Sensitivity analysis: if the beta is similar to market in the future, it will have the following effect on the stock price:
| If the beta is: | The stock price is: |
| 0.84 | $70.14 |
| 1.00 | $68.46 |
· Inflation rate: According to the US Inflation Calculator
The inflation rate in the US as of 9.10.10 is 1.14%. According to the QE2 plan of government, inflation rate is supposed to go.
| If inflation rate is: | The stock price is: |
| 1.14% | $70.14 |
| 2% | $71.31 |
· Perpetuity Growth Rate – original calculation of WACC:
(.57*5.5+.43*5.1)=5.25%
Sensitivity Analysis: the perpetuity growth rate can change based on changes to components of its formula that include:
| K of e is: | The perpetuity growth rate is: | The stock price is: | |
| Risk free rate becomes 2.6% as it was in the beginning of 2010 | 5.2% | Stays at 5.33% | $64.59 |
| Risk premium rises to 5%, due to fears of a further economic downturn, or double dip recession | 5.5% | 5.5% | $69.74 |
| Unlevered beta goes to .71 since beta goes to 1.00 due to more volatility in the stock price | 5.61% | 5.56% | $69.45 |
In conclusion, there are numerous factors that can change in this model which the effects the perpetuity growth rate and the stock price.
· Cost synergy assumptions:
o Perpetuity Growth Rate: is the same rate of 5.2% as the valuation.
o Discount rate: 12% based on Airgas’s annual report.
o Ongoing Investment/Saving(year 3+): the range for ongoing investment / saving is from 6% - 10%
o Investment necessary to realize the savings: Airgas estimate the necessary investment will be in the range of $5 million to $8 million.
· Revenue synergy assumptions:
o Perpetuity Growth Rate: is the same rate of 5.2% as the valuation.
o Discount rate: 12% based on Airgas’s annual report.
o Ongoing Investment/saving (year 1+): the range of 6% - 10%
o Operating cost/Revenue: We assume Operating cost/Revenue account for 55% of revenues as it was the case last year.
o Investment necessary to realize the added revenue: Airgas estimate the necessary investment will be in the range of $8 million to $10 million.
ii. Financing strategies
Form of Payment: 100% stock
Form of Payment: 100% stock
As date of October 26, 2010
| Company | Shares Outstanding | Market Value | 52 weeks high-low | Last Price | EPS |
| TFX | 39.93 million | 2.23 billion | 66.07-47.92 | 55.75 | 3.98 |
| ARG | 83.67 million | 5.93 billion | 71.15-41.82 | 70.89 | 2.57 |
Source: Google Finance, 2010
Management of Airgas has identified the use of stocks as the best way to finance the acquisition of Teleflex. The stock price of Airgas has been increasing from the last 7-8 months; taking the advantage of increase in stock price, the management has decided to issue stocks. Further, by issuing stocks, Airgas will avoid worsening the leverage situation with debt or affecting the liquidity using cash for this transaction. Based on the sensitivity analysis and evaluation of Teleflex’s stock, management has determined a price range of $60 to $70. The management has also computed a probability test for stock prices in that range, and has identified $70.14 as the fair value for Teleflex’s stock. There is a big gap between the estimated stock value and the current stock price; this gives management sufficient room to negotiate a favorable deal for both sides.
Airgas will only issue the number of stocks necessary to cover the cost of this acquisition. Teleflex currently has 39.93 million shares outstanding and the first offer price for Teleflex share is $60 per share with 8% premium on current market price which gives a total market value of $2395.8 million. Airgas, on the other hand, has 83.67 million of share outstanding at the current market price of $70.89 at this time. The total market value of Airgas is $5931.37 million. The total of these two market values will represent Airgas’s new market value of $8327.17 million after the acquisition. With 83.67 million shares, Airgas will account for 71.23% of the combined market value, while Teleflex will only account for 28.77%. This means Airgas will need to issue 33.8 million shares to purchase Teleflex’s contribution of 28.77% in combined companies.
The number of 33.8 million shares represents the minimum number Airgas will be required to issue to purchase the company, where the negotiation will start. At price of $60 per share, Airgas’s stock would be diluted by $169.7 million or by $2.03 per share. Dilution based on Teleflex’s original market capitalization of $2226.1 ($55.75 X 39.93) million and Airgas’s price of $5931.37 million. In the very likely case Teleflex requests a higher offer for its shares, Airgas will increase offer to $62 per share and again $65 per share with 11% and 17% premium on current market price. At the stock price of $62, Airgas will need to issue 34.92 million shares which give a total market value of $2475.66 million, accounting for 29.44% of the combined market value of $8407.03 million. In this even, Airgas’s stock would be diluted by $249.56 million or by 2.98 per share. At the stock price of $65, Airgas will need to issue 36.61 million shares which give a total market value of $2595.45 million, accounting for 30% of the combined market value of $8526.82 million. In this even, Airgas’s stock would be diluted by $369.35 million or by 4.41 per share.
As it is mentioned earlier Airgas can afford to offer up to $70 per Teleflex stock, but Airgas will try to refrain from reaching this price. At this stock price of $70, Airgas will need to issue 39.43 million shares to purchase all Teleflex’s shares as its new market value will rise to $2795.1 million, accounting for 32% of the combined market value of $8726.47 million. In this event, Airgas’s stocks would be diluted by $569 million or 6.8 per share. Thus, the price negotiation range will be in between $2395.8 million at $60 per share and $2795.1 million at $70 per share. It was determined that each Airgas share is equivalent to 2.5 Teleflex shares. At the stock price of $65 where market capitalization will increase to 2595.45 million, only 2.28 Teleflex share will correspond to one Airgas share. At the stock price of $70, only 2 Teleflex share will correspond to one Airgas share.
In case Teleflex does not wants to negotiate for 100% stock for stock deal, Airgas will offer them 25% cash and 75% stock at the price of $67 and or maximum per share with 20% and or more premium on current market price. At the price of $67 per share, Teleflex’s total market value will be $2675.31 million. Airgas will pay $668.83 million by cash and rest by stock. Airgas will need to issue 28.30 million shares for the remaining market value of $2006.48. In order to finance $598.95, Airgas has $33 million of free cash flow and Airgas will borrow rest of the money from bank. As it is mentioned earlier, Airgas will try to refrain on stock for stock deal as Airgas stock has been increasing and Airgas credit rating is not that great.
Teleflex has several litigations mention on their annual report. Airgas will thoroughly evaluate all those litigations and if those risks are serious and Airgas might have to involve on those risk then Airgas will deduct the money based on how risky are those litigations are, from the total amounts payable to Teleflex.
Part IV. Acquisition Strategy
Choice of the acquisition of Teleflex in a vertical integration
Airgas seeks to expand its specialty gas segment, specifically in the healthcare area. Airgas originally considered two companies which would help it achieve this goal: Invacare, a direct competitor, and Teleflex, which is not a direct competitor.
The acquisition of Teleflex through vertical integration appears to offer a lower potential risk from anti-trust action than the acquisition of Invarcare through a horizontal integration. According to an analysis using the Herfindahl-Hirschman Index, the Department of Justice
( DOJ) and the Federal Trade Commission ( FTC) would likely challenge an acquisition of the competitor, Invarcare (see Appendix A). Fortunately, there are similarities between Invarcare and Teleflex business. Although Teleflex is not considered a direct competitor of Airgas, the acquisition of Teleflex would allow Airgas to benefit from the synergies of the R&D investments of Teleflex, and further concentrate in the healthcare segment. In addition, a vertical integration will most likely avoid the costly and time consuming litigation of an anti-trust suit.
The Acquisition of Teleflex
The range of the Teleflex valuation is from $60.00 to $70.00, and is a starting point to determine an offer price (see Appendix B – ZOPA). The Best Alternative to a Negotiated Agreement (BATNA) defines the reservation price that Airgas will pay for Teleflex, corresponding to the high end of the valuation range, $70.00. If the deal to acquire Teleflex requires the payment of a price in excess of the reservation price, Airgas is prepared to walk away from the deal. However since Airgas continues to revise its estimates on the deal, it may decide to revise the BATNA, based on new information that revises the valuation upward.
Opening Offer (Asking Price)
Initially, Airgas has decided on a medium range offer price (see Appendix C). Teleflex offers an attractive investment opportunity to propel Airgas to further growth in the healthcare industry (Bruner, 2004). This further justifies the medium range price offered.
Friendly Takeover Scenario – Tender Offer
Even before negotiations start, Airgas will buy a toe-hold stake (4.99%) of Teleflex stock, acquiring shareholder status and receiving notice of meetings (not more than 60, but not less than 10 days before a meeting is held), but it will not have to file a SEC form 13-d, alerting competitors and arbitrageurs (Bruner, 2004). Teleflex’s current share price is $55.75 and the market capitalization is $2,230.0M.
· In the first tender offer, Airgas will offer $62.00/share to be paid as 100% in stock, representing a total offer of $2,480.0M, providing an 11% premium to Teleflex’s shareholders.
Each tender offer must remain open for 20 days under 14e-1(a) of the Williams Act. If the management, board of directors, and shareholders of Teleflex are supportive of the deal, Airgas will encourage fast approval of this deal. Fast action will minimize the effects of other potential buyers and arbitrageurs entering who may bid up the price of the stock. In addition, Airgas will be willing to increase the tender offer price:
· Tender $65.00/share from $62.00 (representing a revised offer price of $2,600.0M and a premium of 17% to shareholders)
· But only if the deal can be approved on the 21st business day after the offer is opened, and all golden parachutes and poison pills are revoked (bear hug), and no other anti-takeover provisions are implemented
Hostile Takeover
However, based on Airgas’ extensive experience having done 400 acquisitions, the company expects that Teleflex may reject a friendly takeover believing that the shareholders may receive higher acquisition premiums in a hostile deal than under a friendly negotiation (Bruner, 2004). If Teleflex rejects an initial Airgas tender offer and subsequent tender offers, Airgas will send a letter to Teleflex explaining that it has no choice but to initiate a hostile takeover (See Appendix D). Any current or future tender offers will be submitted directly to the shareholders in a letter.
Airgas’ strategy will be to gain control of the board:
· There are currently 11 members of the board, but there can be up to 15: vote to add new members
· There may be Teleflex board members who are supportive of this acquisition: will vote for it
· According to the bylaws, board members can only serve up to 70 years of age, and there are 3 members who are of retirement age; vote to replace with new members
· Voting for Removal of Directors (for cause)
At or before the next meeting of the board (special or annual) Airgas can make its move on the board:
· Airgas buys up to 5% of shares, files SEC form 13-d, then purchases more up to 10-15%
· Issues a letter to all shareholders explaining the value they will gain by approving the acquisition
· Airgas could move for the removal of board members opposed to the takeover
o Neglect of fiduciary responsibilities
o Can be held personally liable
· Board members can be added or changed
· If Airgas gains a simple majority (1/2 of directors, plus 1) (supermajority is not necessary), then there will be enough votes to approve the acquisition
Anti-Takeover Measures
Airgas assumes that Teleflex may use a staggered board/poison pill defense. According to Teleflex’s bylaws, Teleflex has a staggered board which means only 1/3 of its directors come up for election each year. Teleflex will combine its staggered board, with the poison pill: the pill blocks any stock acquisition after the triggering event (the purchase of 10% of the company’s stock by Airgas), Airgas becomes an “interested person” and the staggered board makes it necessary to go thru 2 proxy fights in order to gain control and redeem the pill. However, according to the SEC, a company will adopt the poison pill, with the intention of not using it – like nuclear weapons (Bruner, 2004).
A greater threat is from a leveraged recapitalization combined with a poison put (see Appendix E): if Teleflex mounted a leveraged recap, it would borrow heavily, pay a large one-time dividend to its shareholders. The immediate result is a high dividend payout to shareholders, a lower stock price, and a high amount of debt that would have to be assumed by Airgas, as the acquiring company. If Teleflex implemented a poison put, that may require an immediate payment of the debt (Bruner, 2004).
The following types of litigation may also be used by Teleflex as anti-takeover defenses:
· Violation of section 13(d) of the Williams Act if Airgas did not promptly disclose an interest greater than 5% to the SEC
· Failure to comply with tender offer disclosure requirements Filing of form 14e-1e – keeping tender offer open for 20 days and what plans Airgas has for Teleflex
· Airgas does not anticipate any anti-trust litigation since this is a vertical integration with Teleflex
Airgas’ legal staff has made sure that all of these matters are in compliance and cannot be used.
Integration
Airgas will use a confederation integration strategy framework, granting Teleflex high autonomy, but subject to high controls:
· New organizational chart will reflect C-level changes and the addition of Chief R&D Officer – to be done immediately and announced to the media
· The technology platform will use enterprise-wide SAP software (already in place at Airgas): SAP Financials and HR will be implemented first – this will be over several years
· Communication with employees to allay fears - immediately
o In the past Airgas has retained a high number of employees after an acquisition
o In the case of a vertical integration, there may be even a higher % retained
o Any employee who is terminated due to redundancy will be given a generous severance package and outplacement services
· Retention of specific talent - ongoing
o Airgas expects to retain all of the R&D staff; there will be specific communication with this group; retention bonuses paid
· Work space – both companies are based in PA, there may be consolidation of the corporate offices in the next year, but initially the companies will operate as usual so as not to disrupt the work flow
· Production, logistics, supply chain: Supply chain changes to bundle Airgas specialty gas products with anesthesiology medical devices - immediately
Risks
· The initial tender offer of a medium price will not be accepted, and additional tender offers will be made with higher prices
o Loss of Airgas value
· Technology – Airgas is implementing an enterprise wide SAP IT system, and there is risk that the Teleflex IT system will not interface smoothly. Initially, only the financial and HR systems will be integrated followed by the other systems
· Product Liability Lawsuits – Teleflex Product recall – humidifier, company moved quickly, acknowledged blame, and ordered a recall, no undue harsh media attention, due to a defective ventilator tube, could cause death, there may be lawsuit fallout, but Airgas feels there is insurance coverage to cover these claims (Aboutlawsuits, 2010)
· Law360: Environmental Lawsuit.Teleflex may be held liable for a factory it sold in 1990 that had environmental concerns, courts going after deep pockets (Law360, 2010)
· Various patent lawsuits, no liability, but a dispute between US and foreign patent law. However, potential loss of revenues from the loss of patent usage and the cost of litigation (Yeh, 2007)
· Airgas fails to retain the R&D employees who are key to new product development, as well as other employees to run the core business
o Retention bonuses will be issued
Conclusions
Airgas has a strong commitment to acquiring Teleflex Inc in order to propel its expansion and presence into healthcare, and specifically medical devices. Airgas prefers to acquire Teleflex in a friendly takeover, but, it will not hesitate to engage in in a hostile takeover. However, if the price required to complete the deal exceeds its reservation price, Airgas is prepared to walk away from the deal.
REFERENCES
Aboutlawsuits (2010, May 10). Teleflex humidifier recall: Defective tube could cause
injury, death [Fact Sheet]. Retrieved from
http://www.aboutlawsuits.com/teleflex-humidifier-recall-10091/
ADVFN (2010). Teleflex [Fact Sheet]. Retrieved on November 6, 2010 from
http://www.advfn.com/p.php?pid=financials&symbol=NYSE%3ATFX
Airgas (2010). Airgas Board of Directors Rejects Air Products Hostile Take-Over [Fact
Sheet]. Retrieved from http://www.airgas.com/content/pressreleases.aspx?PressRelease_ID=1509
Airgas, Inc. (2010, May 6). Airgas reports fourth quarter and full year 2010 earnings
[Press release]. Retrieved from
http://www.airgas.com/content/pressreleases.aspx?PressRelease_ID=1539
Bruner, R. (2004). Applied Mergers & Acquisitions, John Wiley & Sons, Inc.
Cassano, Eric (2007, March). Mergers and Acquistions on the Rise. Retrieved from
http://www.sbnonline.com/National/Article.aspx?CID=11303
Faqs.org. (n.d.). Airgas Inc. - Form 10-k- May 27, 2010. Retrieved November 10, 2010,
from http://www.faqs.org/sec-filings/100527/AIRGAS-INC_10-K/
Google Finance. (2010). Airgas Corporation (ARG): Airgas, Inc. Retrieved from
http://www.google.com/finance?q=arg
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http://www.google.com/finance?q=tfx
Law360 (2010). Teleflex can’t toss all claims in Kansas clean=up fight. Retrieved from
http://www.law360.com/registrations/user_registration?article_id=201717&concurrency_check=false
Mouboussin, J. Michael & Hier, Bob(1998, April 27). Frontiers of Finance: Let’s Make a Deal.
Retrieved on November 6, 2010 from www.capatcolumbia.com/Articles/FoFinance/Fof4.pdf
Teleflex, Inc. (n.d.). Governance Guidelines [Fact Sheet]. Retrieved from
http://www.teleflex.com/investor/corporateGovernance/governanceGuidelines/
Teleflex, Inc. (2010). Annual Report 2009. Retrieved on November 6, 2010 from
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc0MTAyfENoaWxkSUQ9MzcyMTA4fFR5cGU9MQ==&t=1
Thomson Reuters. (n.d.). Airgas, Inc. (ARG.N). Retrieved November 10, 2010, from
http://www.reuters.com/finance/stocks/companyProfile?symbol=ARG.N
Thomson Reuters. (n.d.). Teleflex Incorporated (TFX). Retrieved November 10, 2010,
from http://www.reuters.com/finance/stocks/companyProfile?symbol=TFX
Wikivest. (2010). Airgas (ARG). Retrieved November 13, 2010, from
http://www.wikinvest.com/stock/Airgas_(ARG)
Wikinvest (n. d.). Wiki Analysis. Retrieved November 1, 2010, from
http://www.wikinvest.com/stock/Airgas_ (ARG)
Yahoo Finance (2010). Teleflex: Form 8K Corporate Bylaws. Retrieved from
http://yahoo.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=6587415-7303-54175&SessionID=crUVHv6dLSIjXR7
Yeh, B. (2007). CRS Report for Congress: The Obviousness Standard in Patent Law:
KSR International v. Teleflex Inc. Retrieved from
http://www.policyarchive.org/handle/10207/bitstreams/19417.pdf
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Industry outlook. Retrieved November 10, 2010, from
Appendices
Appendix A: Herfindahl-Hershman Index
| Herfindahl-Hershman Index Calculator | ||||||||||||
| Airgas - Possible Acquistionof Invarcare | ||||||||||||
| Summary | | | Revenues | | ||||||||
| Market HHI before the deal | 3150.2 | | ||||||||||
| Market HHI after the deal | 3398.0 | | ||||||||||
| Change in market HHI | | 247.8 | | |||||||||
| Based on Revenues, HHI after the deal is 3398.0 (> 1800), and change in HHI is 247.8. Challenge is likely. | ||||||||||||
| HHI Indexes before the contemplated transaction | ||||||||||||
| Based on Revenues | ||||||||||||
| Revenues | % Market Share | (Market Share)2 | ||||||||||
| Market Players | ||||||||||||
| Praxair | 1 | 8.956 | 39.0 | 1518.9 | ||||||||
| Air Products | 2 | 8.265 | 36.0 | 1293.6 | ||||||||
| Airgas | 3 | 3.864 | 16.8 | 282.7 | ||||||||
| Invarcare Corp | 4 | 1.693 | 7.4 | 54.3 | ||||||||
| Mgp Ingredients | 5 | 0.202 | 0.9 | 0.8 | ||||||||
| Total | 22.98 | 100.0 | 3150.2 | HHI | ||||||||
| | ||||||||||||
| HHI Indexes after the contemplated transaction | ||||||||||||
| Based on Revenues | ||||||||||||
| Revenues | % Market Share | (Market Share)2 | ||||||||||
| Market Players | ||||||||||||
| 1 | 8.956 | 39.0 | 1518.9 | |||||||||
| 2 | 8.265 | 36.0 | 1293.6 | |||||||||
| 5 | 0.202 | 0.9 | 0.8 | |||||||||
| Newco (=#3+#4) | 5.557 | 24.2 | 584.8 | |||||||||
| Total | 22.98 | 100.0 | 3398.0 | HHI | ||||||||
Appendix B: Zone of Potential Acceptance (ZOPA)
Airgas
________________
____ ____ ____ ____
$55.75 $60 $70
Teleflex
Low High
Conclusion: Establishing a ZOPA is a good strategy for Airgas. There is less of a chance that the buyer will give away more value than its reservation price, and less of a chance the target (Teleflex) will take more of the value.
Source: (Bruner, 2004)
Appendix C: Rationale for a Medium Price Offer
· Airgas is not impatient and will wait to make the deal happen
· There are no known competitors for Teleflex, however some may emerge
· Teleflex is not a distressed company, therefore it will not accept a “bargain basement” price
· A bid higher than a low bid may win, but a high price may not be necessary to win
· A bid lower than a high bid may save value for Airgas, as the bidder
· Directors may be inclined to accept the medium bid over a low bid
· There is less of a chance that Teleflex, the target, may restructure
Source: (Bruner, 2004)
Appendix D: Letter to CEO Announcing Hostile Takeover Intent
Mr. Jeffrey Black
Chairman, President, and CEO
Teleflex
PA
Dear Jeffrey:
As you know, we have been trying for the last several months to engage Teleflex regarding a business combination. We continue to be amazed that you and your board have rejected two written offers providing your shareholders with substantial premiums. Although we have expressed maximum flexibility regarding the value and form of consideration, you have refused to discuss our offers.
Jeffrey, let me emphasize as I have in past discussions that Airgas is fully committed to this compelling transaction. While we would prefer to proceed through friendly negotiations, we are fully prepared to take the necessary to complete this transaction. We would welcome the opportunity to meet with you or with any special committee of your independent directors to consider our offer. Finally we reiterate our willingness to reflect in our offer any incremental value you can demonstrate.
Very truly yours,
Peter Maclausand
CEO, Airgas
cc Teleflex Board of Directors
Appendix E: Teleflex Recapitalization with Poison Put
| Estimate of Gains from Restructuring Defense – Teleflex | |||||||||
| In Millions | Before Recap | Changes | After Recap | ||||||
| Book Value Balance Sheets | |||||||||
| Net Working Capital | 3150.4 | 3150.4 | |||||||
| Fixed Assets | 688.6 | 688.6 | |||||||
| Total Assets | 3839.0 | 3839.0 | |||||||
| Long-Term Debt | | | 1192.5 | | 2500 | | 3692.5 | ||
| Deferred Taxes | 398.9 | ||||||||
| Preferred Stock | |||||||||
| Common Equity | 1580.2 | 2500 | 4080.2 | ||||||
| Total Capital | 3171.6 | ||||||||
| Market Value Balance Sheets | |||||||||
| Fixed Assets | 688.6 | ||||||||
| PV debt tax = .34 times debt balance | 850 | ||||||||
| Total Assets | |||||||||
| Long-term Debt | | | 1192.5 | | 2500 | | 3692.5 | ||
| Deferred Taxes, etc | 0.0 | 0.0 | |||||||
| Preferred Stock | 0.0 | 0.0 | |||||||
| Common equity | 2224.0 | -850 | 1374.0 | ||||||
| Total Capital | |||||||||
| Number of Shares | 40.0 | 40.0 | |||||||
| Price per Share | | | 55.6 | | | | 34.4 | ||
| Value to Public Shareholders | |||||||||
| Cash Received | 0.0 | 2500.0 | |||||||
| Value of Shares | 2224.0 | 1374.0 | |||||||
| Total | 2224.0 | 3874.0 | |||||||
| Total Per Share | | | 55.6 | | | | 96.9 | ||
Appendix F: Pro forma income statement
| Pro forma Income Statement | ||||||
| Airgas | Teleflex | New Company | ||||
| 2010 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Revenues | $3,864,005.0 | $1,890,062.0 | $5,754,067.0 | $6,329,473.7 | $6,962,421.1 | $7,658,663.2 |
| COGS (excluding Depreciation) | 1,732,424.0 | 1,075,987.0 | 2,808,411.0 | 3,164,736.9 | 3,481,210.5 | 3,829,331.6 |
| Selling, General, & Administrative | 1,473,599.0 | 519,925.0 | 1,993,524.0 | 2,025,431.6 | 2,227,974.7 | 2,450,772.2 |
| EBITDA | 657,982.0 | 294,150.0 | 952,132.0 | 1,139,305.3 | 1,253,235.8 | 1,378,559.4 |
| Depreciation | 212,718.0 | 0.0 | 212,718.0 | 489,099.2 | 510,599.2 | 523,099.0 |
| Amortization of Intangibles | 22,231.0 | 21,785.0 | 44,016.0 | 31,461.5 | 30,674.9 | 29,908.1 |
| Other Expense (Income) | 23,435.0 | 2,597.0 | 26,032.0 | 26,032.0 | 26,032.0 | 26,032.0 |
| EBIT | 399,598.0 | 269,768.0 | 669,366.0 | 592,712.6 | 685,929.7 | 799,520.3 |
| Interest (Income) | 22,188.0 | (2,541.0) | 19,647.0 | 20,000.0 | 20,000.0 | 2,900.0 |
| Interest Expense - Straight Debt | 63,310.0 | 89,463.0 | 152,773.0 | 170,000.0 | 170,000.0 | 170,000.0 |
| Interest Expense - Convertible Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Pre-Tax Income | 314,100.0 | 182,846.0 | 496,946.0 | 402,712.6 | 495,929.7 | 626,620.3 |
| Income Taxes | 117,800.0 | 39,904.0 | 157,704.0 | 132,895.1 | 163,656.8 | 206,784.7 |
| Minority Interest | 0.0 | 11,017.0 | 11,017.0 | 15,000.0 | 15,000.0 | 15,000.0 |
| (Income) from Discontinue operation | 0.0 | (171,069.0) | (171,069.0) | 0.0 | 0.0 | 0.0 |
| Net Income | 196,300.0 | 302,994.0 | 499,294.0 | 254,817.4 | 317,272.9 | 404,835.6 |
| Straight Preferred Dividends | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Convertible Preferred Dividends | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Net Income to Common | 196,300.0 | 302,994.0 | 499,294.0 | 254,817.4 | 317,272.9 | 404,835.6 |
Appendix G: Pro forma Balance Sheet
| Balance Sheet | ||||||
| Airgas | Teleflex | New Company | ||||
| 2010 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Cash and Equivalents | 47,001.0 | 188,305.0 | 235,306.0 | 522,425.3 | 1,280,760.4 | 2,050,341.6 |
| Accounts Receivable | 186,804.0 | 265,305.0 | 452,109.0 | 497,319.9 | 547,051.9 | 607,227.6 |
| Inventory | 333,961.0 | 360,843.0 | 694,804.0 | 764,284.4 | 840,712.8 | 933,191.3 |
| Other Current Assets | 143,569.0 | 189,481.0 | 333,050.0 | 227,023.0 | 256,104.2 | 256,881.3 |
| Total Current Assets | 711,335.0 | 1,003,934.0 | 1,715,269.0 | 2,011,052.6 | 2,924,629.3 | 3,847,641.8 |
| Property , Plant, & Equipment | 3,774,208.0 | 688,563.0 | 4,462,771.0 | 4,742,771.0 | 5,022,771.0 | 5,302,771.0 |
| Accumulated Depreciation | 1,346,212.0 | 371,064.0 | 1,717,276.0 | 2,280,375.0 | 2,857,474.0 | 3,248,573.0 |
| Net Property, Plant, & Equipment | 2,427,996.0 | 317,499.0 | 2,745,495.0 | 2,462,396.0 | 2,165,297.0 | 2,054,198.0 |
| Intangible assets | 212,752.0 | 1,045,706.0 | 1,258,458.0 | 1,226,996.0 | 1,196,321.0 | 1,198,415.0 |
| Goodwill | 1,109,276.0 | 1,459,441.0 | 2,568,717.0 | 2,568,717.0 | 2,568,717.0 | 2,588,717.0 |
| Equity in Income of Affiliates | 0.0 | 12,089.0 | 12,089.0 | 25,000.0 | 25,000.0 | 25,000.0 |
| Other Long-Term Assets | 34,573.0 | 336.0 | 34,909.0 | 36,409.0 | 36,409.0 | 36,409.0 |
| Total Assets | 4,495,932.0 | 3,839,005.0 | 8,334,937.0 | 8,330,570.6 | 8,916,373.3 | 9,750,380.8 |
| Accounts Payable | 157,566.0 | 94,983.0 | 252,549.0 | 263,775.6 | 272,326.7 | 403,548.3 |
| Other Current Liabilities (excl. S/T Debt) | 318,077.0 | 238,127.0 | 556,204.0 | 621,203.6 | 636,051.1 | 683,357.1 |
| Total Current Liabilities | 475,643.0 | 333,110.0 | 808,753.0 | 884,979.2 | 908,377.8 | 1,086,905.4 |
| Straight Debt | 1,499,384.0 | 1,196,488.0 | 2,695,872.0 | 2,870,872.0 | 3,045,872.0 | 3,220,872.0 |
| Convertible Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Debt | 1,499,384.0 | 1,196,488.0 | 2,695,872.0 | 2,870,872.0 | 3,045,872.0 | 3,220,872.0 |
| Deferred Taxes | 652,389.0 | 398,923.0 | 1,051,312.0 | 551,312.0 | 606,443.2 | 667,087.5 |
| Minority Interest | 0.0 | 0.0 | 15,000.0 | 30,000.0 | 45,000.0 | |
| Other Long-Term Liabilities | 72,972.0 | 325,410.0 | 398,382.0 | 372,972.0 | 372,972.0 | 372,972.0 |
| Total Liabilities | 2,700,388.0 | 2,253,931.0 | 4,954,319.0 | 4,695,135.2 | 4,963,665.0 | 5,392,836.9 |
| Straight Preferred Stock | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Convertible Preferred Stock | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Common Stock (Par + APIC+ Other Equity) | 462,785.0 | 153,196.0 | 615,981.0 | 615,981.0 | 615,981.0 | 615,981.0 |
| Retained Earnings | 1,332,759.0 | 1,431,878.0 | 2,764,637.0 | 3,019,454.4 | 3,336,727.3 | 3,741,562.9 |
| Total Liabilities & Stockholders' Equity | 4,495,932.0 | 3,839,005.0 | 8,334,937.0 | 8,330,570.6 | 8,916,373.3 | 9,750,380.8 |
Appendix H: Pro forma Cash flow Statement.
| Statement of Cash Flows | ||||||
| Airgas | Teleflex | New Company | ||||
| 2010 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Net Income | 196,300.0 | 302,994.0 | 499,294.0 | 254,817.4 | 317,272.9 | 404,835.6 |
| Depreciation | 212,718.0 | 0.0 | 212,718.0 | 489,099.2 | 510,599.2 | 523,099.0 |
| Amortization of Intangible | 22,231.0 | 21,785.0 | 44,016.0 | 31,461.5 | 30,674.9 | 29,908.1 |
| Increase in Deferred Taxes | 75,674.0 | 74,245.0 | 149,919.0 | (500,000.0) | 55,131.2 | 60,644.3 |
| Minority Interest | 0.0 | 0.0 | 15,000.0 | 15,000.0 | 15,000.0 | |
| Income from Affiliates | 0.0 | 16,016.0 | (12,911.0) | 0.0 | 5,000.0 | 0.0 |
| Other Non-Cash Charges | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| (Increase) / Decrease in NWC | 60,563.0 | (153,153.0) | 233,198.0 | (158,381.5) | (175,219.7) | (175,219.7) |
| Cash Flow from Operations | 567,486.0 | 261,887.0 | 829,373.0 | 131,996.6 | 758,458.5 | 858,267.3 |
| Capital Expenditures | 236,675.0 | 30,409.0 | 267,084.0 | 230,000.0 | 230,000.0 | 230,000.0 |
| Free Cash Flow | 330,811.0 | 231,478.0 | 562,289.0 | (98,003.4) | 528,458.5 | 628,267.3 |
| Debt Issuance / (Repayments): | ||||||
| Straight Debt | 0.0 | 200,000.0 | 200,000.0 | 200,000.0 | 200,000.0 | 200,000.0 |
| Convertible Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Debt Issuance / (Repayments) | 0.0 | 0.0 | 200,000.0 | 200,000.0 | 200,000.0 | 200,000.0 |
| Straight Preferred Dividends | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Convertible Preferred Dividends | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Common Stock Dividends | (46.0) | (52.2) | (98.2) | (64.8) | (64.8) | (64.8) |
| Equity Issuance / (Repurchases) | 0.0 | 0.0 | 33,600.0 | 0.0 | 0.0 | 0.0 |
| Other | (330,952.0) | (150,394.8) | (481,346.8) | (26,574.0) | 0.0 | 1,000.0 |
| Change in Cash and Equivalents | (187.0) | 81,030.0 | 80,843.0 | 75,357.8 | 728,393.7 | 829,202.5 |
| Beginning Cash and Equivalents | 47,188.0 | 107,275.0 | 235,306.0 | 522,425.3 | 1,280,760.4 | 2,050,341.6 |
| Ending Cash and Equivalents | 47,001.0 | 188,305.0 | 522,425.3 | 1,280,760.4 | 2,050,341.6 | 2,879,544.1 |
Appendix I: Cost synergies
Appendix J: Revenue synergies
Appendix K: Valuation
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