The Global Brands

Intentia International develops and markets enterprise resource planning (ERP) software for midsized-to-large businesses in markets that include the fashion, food and beverage, automotive, manufacturing, and retail industries. Intentia operates in 40 countries and serves more than 3,400 customer sites (Hoover's, Inc., 2005c). The strategy underlying the deal, thus, is synergistic acquisition.

The financial structure of the Lawson acquisition of Intentia involves and all-stock funding of the acquisition. Each Intentia common equity share (Series B) receives 0.4519 share of Lawson common stock. The total value of the acquisition is US$480 million (Lawson Software, Inc., 2005). The post-acquisition financial structure of the company is as follows: Assets: US$464 million - Liabilities: US$235 million = Equity: US$ $229 million.

New Century Financial Corporation provides sub-prime mortgage loans primarily for single-family residences. The wholesale division (accounting for 92 percent of revenues) originates and purchases loans through a network of 21,600 independent mortgage brokers. The retail division (accounting for eight-percent of revenues) markets loans directly to individuals through 72 branch offices. New Century sells many of its mortgages in pools of loans to institutional buyers (Hoover's. Inc., 2005e).

The value of the acquisition of RBC Mortgage Company by New Century Financial Corporation is US$109 million. The deal will be for cash between New Century financial Corporation and RBC Capital Inc.; however, New Century Financial Corporation will generate to fund the purchase through the issuance of long-term notes. The expectation is that New Century Financial Corporation earnings per share for the first full financial year subsequent to the acquisition of RBC Mortgage Company will increase from US$8.29 per share (2004) to US$9.30 (2006), as 12.2 percent increase.

RBC Mortgage Company provides prime mortgage loans through 125 offices located in 30 states in the United States (RBC Mortgage Company, 2005f). The strategy underlying the deal, thus, is designed to expand the target market for New Century Financial Corporation.

 

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