fin370 week 5 team huffman trucking

8/13/2019 FIN370 Week 5 Team Huffman Trucking

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Huffman Trucking Organization Strategy Paper

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Team Members

FIN/370

Date

Instructor Name


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Te many rea!on! firm! !eek an initia" pu#"ic offering$ ac%ui!ition or merger inc"u&e$

'#etter acce!! to capita"$ enance& "i%ui&ity of !are!$ &i(er!ification of o)ner!ip$ an&$ fina""y$

increa!e& pu#"icity* +Ho(akimian , Hutton$ 2010-. ecent ana"y!i! a! e(en !tate& tat initia"

pu#"ic offering! an& merger! an& ac%ui!ition! are inter&epen&ent. Ho(akimian , Hutton !ugge!t

tat$ 'an IPO may #e a mecani!m for o#taining currency +i.e.$ pu#"ic"y tra&e& !tock- for

!u#!e%uent merger acti(ity* +Ho(akimian , Hutton$ 2010-.

Initial Public Offering (IPO)

Participating in an initia" pu#"ic offering +IPO- i! a proce!! )ere te #u!ine!! i! offere&

to te pu#"ic #y !e""ing !tock of a company a"!o kno)n a! taking a #u!ine!! pu#"ic. Te!e !tock!

repre!ent a partia" o)ner!ip in te company to te in&i(i&ua"! or in&i(i&ua" tat purca!e! te

!tock. Ho)e(er$ tere )i"" #e &i!a&(antage! an& a&(antage! )en a #u!ine!! &eci&e! to offer

!tock to te pu#"ic$ !uc a! !tronger capita" #a!e an& !ort term gro)t pre!!ure. noter i!

increa!ing oter financia" pro!pect!$ &i!c"o!ure!$ an& confi&entia"ity. In a&&ition$ Huffman

Trucking may #ecome #etter !ituate& for making ac%ui!ition! #y enforcing o)ner &i(er!ification$

re!triction! on management$ eecuti(e compen!ation$ "o!! of per!ona" #enefit! an& increa!e&

company an& per!ona" tra&ing re!triction!.

For Huffman Trucking to epan& teir market !are of te in&u!try a&&itiona" capita" i!

re%uire&. n Initia" Pu#"ic Offering +IPO- i! one option to ac%uiring te re%uire& capita".

Huffman Trucking mu!t )eig te Strengt!$ eakne!!e!$ Opportunitie!$ an& Treat! of ti!

option to come to a proper conc"u!ion on it! (ia#i"ity.


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One a&(antage of going pu#"ic )it IPO i! te pu#"ic (i!i#i"ity te company ac%uire!

from te marketp"ace$ )ic can "ea& to ne) cu!tomer!. Ti! option a"!o )i"" make future

capita" ac%ui!ition #y !e""ing a&&itiona" !tock! an& #on&! fa!ter an& ea!ier. IPO a"!o offer! more

!ecurity to in(e!tor! )it !tronger regu"ation!.

Te !tronger regu"ation! re%uire& for pu#"ic"y tra&e& companie! put in(e!tor! more at

ea!e +.S. Security 4cange 5ommi!!ion$ 2002-. Ho)e(er$ te !tronger regu"ation! create

more co!t! for a&&itiona" management an& accounting practice!. Proper un&er!tan&ing of te

a&&itiona" re%uirement! of te Sar#ane! O"ey an& te a&&itiona" co!t! a!!ociate& )it proper"y

fo""o)ing te ne) ru"e! an& regu"ation! are a !trong factor in making te &eci!ion to procee&

)it te IPO option.

Acquisition

Te ac%ui!ition of anoter company )itin te !ame in&u!try i! an option for epan&ing

operation!. Tere are many factor! a!!ociate& )it ac%ui!ition!$ !uc a! te &e!ire& company6!

eigte& (erage 5o!t of 5apita" +55-. Te 55 of te &e!ire& company e"p!

&etermine te !tan&a"one company6! (a"ue +Titman$ 8eo)n$ , 9artin$ 2011-. Once te

(a"uation of te &e!ire& company i! kno)n te eecuti(e! can make a more e&ucate& &eci!ion on

te ac%ui!ition.

Te ac%ui!ition of anoter company in te in&u!try #ring! a&&itiona" cu!tomer !aturation

a! )e"" a! geograpic "ocation!. Te a&&itiona" emp"oyee! an& e%uipment are a"rea&y in p"ace

an& if &one proper"y on"y re%uire minima" merging )itin te ne) organization. Ti! a"" e"p!

company gro)t reacing a ne) cu!tomer #a!e an& a "arger piece of te in&u!try. Te regu"atory


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re!triction! for an ac%ui!ition are "e!! cum#er!ome tan te a&&itiona" regu"ation! of pur!uing te

IPO.

Some )eakne!!e! an& treat! to an ac%ui!ition are te ei!ting emp"oyee! an&

management. cu"ture c"a! can cau!e !e(ere in&rance! in !ucce!!. Te cu"ture of te

can&i&ate company mu!t mirror a! c"o!e"y a! po!!i#"e )it Huffman Trucking. Te a&&ition of

te a"rea&y ei!ting infra!tructure )i"" take !ome time to merge )it te company (a"ue! an&

&irection. Tere are a"!o a&&itiona" co!t! a!!ociate& )it re#ran&ing an& "a#e"ing te ne)"y

ac%uire& a!!et!. Te ac%ui!ition a"!o may &ep"ete ei!ting capita" !urp"u! for a !ort time.

Merging with another Organization

Ho(akimian , Hutton con&ucte& an ana"y!i!$ ')ic fin&! tat te ac%ui!ition acti(ity of

ne)"y pu#"ic firm! contri#ute! to firm gro)t more !o tan in(e!tment in re!earc an&

&e(e"opment +,;- an& capita" epen&iture!. t te aggregate "e(e"$ ti! re"ation!ip #et)een

IPO! an& !u#!e%uent merger! tran!"ate! into a "inkage #et)een IPO an& merger )a(e!. 200

fin370 week 5 team huffman trucking

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