Airthread Case Essay

Words: 1232
Pages: 5
Open Document
Stewart Fish, Menting Xu, David Dowdy
Executive Summary
Over the past decade, significant changes in regulations, advances in technology, and shifts in competitive dynamics began transforming the cable industry. Companies within the industry were forced to adapt by acquiring economies of scale and scope. American Cable Communication was seeking to acquire AirThread Connections for three reasons. The two companies could help each other become more competitive in an industry that is moving toward bundled package service offerings. The acquisition would help both companies expand into the business market, and lastly American Cable was in a unique position to add value to AirThread’s operations. They could obtain a significant amount of …show more content…
Another weakness that ATC faces is the necessity to provide its customers with a bundling option. According to Stafford and Heilprin, the company lacks the ability, “to bundle its wireless service with other offerings such as landline telephony, internet access, and video services (AirThread Case).”
ACC Strategic Rationale

American Cable Communications’ acquired AirThread connections so together it can compete in the bundling services that their competitors were offering. ACC is not only a regional cellular provider, but can now supply video, internet, and landline telephony. Together ACC and ATC are able to produce an 802.16n standard for WiMAX that both companies were feeling pressure to create. The second reason ACC acquired ATC, because ACC did not have long-term service contracts. The long-term service contracts from ATC would increase stability and decreasing risk with ACC’s customer base. Another reason why ACC acquired ATC, because of ATC’s infrastructure would save ACC “more than 20% in backhaul costs”, and the savings will decrease the operating costs (AirThread Case). Lastly ATC can “obtain a significant amount of debt financing” for ACC (AirThread Case).
ATC Estimated Enterprise Value

To
Show More

Related Documents: Airthread Case Essay

Essay on Air Thread

The calculation of each cash flow required us to use the projections from AirThread Connections that are given in the Exhibit 1 of the case allowing us to know the Total Revenue, EBITDA, EBIT and the Unlevered Net Income to be able to compute the Unleveraged Cash Flow (UFCF) from 2008-2012. As well we used Depreciation & Amortization, Capital Expenditures and the assumptions established in AirThread Connections Exhibit 1 case to make the adjustments that Working Capital needed to fully calculate the…

Words 1867 - Pages 8

Valuation of Air Thread Connections Essay examples

Valuation of AirThread The valuation of Air Thread is intended to present to it's potential acquirer, American Cable Communication (ACC) for consultation on decision of acquisition purpose. According to the case study, American Cable communications is a large and healthy cable operator which provides the services and products that related to internet, video and landline telephony. The demand of the ACC is high in America as for instance, there are around 48.5 million households installed the ACC…

Words 962 - Pages 4

Essay on Valuation of Airthread Connections

4263 REV: APRIL 27, 2012 ERIK STAFFORD JOEL L. HEILPRIN Valuation of AirThread Connections In early December 2007, Robert Zimmerman, senior vice president of business development for American Cable Communications (ACC), was in his office sifting through a number of investment banking proposals related to potential acquisition targets when he paused to consider the recent presentation made by Rubinstein & Ross (R&R). Rubinstein & Ross was a boutique investment bank with a strong reputation…

Words 5615 - Pages 23