Mr. Green is the owner of EcoDecking, a company that has bee…
Mr. Green is the owner of EcoDecking, a company that has been successful in developing a synthetic decking material manufactured from recycled products. Mr. Green has developed this product and promoted it in his area of Atlantic Canada for the past 6 years. The product has been well received by customers and has stood up well to the environmental challenges of the area. Mr. Green is 72 years old and while he enjoys his work, he does not feel that he can grow the company to its full potential. He would like to sell but is concerned that while the company is profitable, the upside to his company is huge based on the development and initial market acceptance and he is hoping that he is able to capitalize on some of this through the sale. He has heard that there are potential purchasers that may be willing to pay amounts more than the value indicated by the volume of current operations but doesn’t really understand why this would happen. Required: a) Explain the concept of special purchasers and what this premium is a function of. Give examples of possible synergies that could apply to this business. (7 marks) b) Advise Mr. Green whether a special purchaser premium may apply to his business and suggest who you would investigate as potential special interest purchasers for this business. What sources of information would help you quantify this potential benefit. (3 marks)