Center for Entrepreneurial Studies,
Babson College © 1995

ISBN 0-324-00176-2

Case Teaching Package
A case teaching package, written by Joel Shulman and Dan D'Heilly, is available for these cases. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the cases, and suggestions for the most effective ways to work these cases into your course.

Length
This case is 10 pages in length and the case teaching package is 14 pages.

Abstract

This case focuses on the buy-out of a private printed circuit manufacturer. Friends from childhood, David Gray and Peter Mullin want to go into business together. They decide to buy a manufacturing company. The case examines their due-diligence, deal negotiations, and valuation. It asks students to value the company using several different methods and to formulate a maximum offer price. Also considered is whether Gray and Mullin should purchase the company and how the deal should be structured.

The B case reveals that David and Peter purchased Shaker Circuits just prior to a major industry consolidation. They had several difficult years but reached break-even, only to find themselves faced with a strategic dilemma: to keep making integrated circuits, the company needed an additional $250,000 investment. Students are asked if they should invest in this increasingly competitive industry or close the business with a $1 million loss.

• Location of the company: Cleveland, Ohio
• Years spanned by the case: 1989 through 1990
• Industry segment: Integrated circuit board manufacturing
• Stage of the company: Maturity and renewal
• Age of the entrepreneurs: 30s