The management team at Xantrex believe there is a window of opportunity to expand the business rapidly, however additional investment capital is thought necessary to execute these plans. Additionally, Xantrex’s increasing sales have caused an existing FBDB loan to become costly due to a sales volume royalty arrangement and repayment of the loan is being considered.
Assignment:
Your team of consultants has been requested by the senior management of Xantrex to review the company’s current situation and pro forma projections and to offer advice regarding the following:
- What are (or should be) the needs and objectives of the owners of Xantrex at this juncture? What are the risks and opportunities available from additional investment in Xantrex at this time from the perspectives of Xantrex and the investors?
- How much capital should be raised? How much equity should be given up in exchange for the investment?
- Would you recommend that Management proceed with the contemplated BDC deal? Explain.
- What are the significant criteria and constraints employed by the investors?
- Structure an ‘optimal’ deal that would meet investor criteria and Xantrex’s objectives and requirements. Summarize the major terms and any key clauses Xantrex should seek to include in a Shareholder’s Agreement.
Team Blog Post Assignment:
Working as a team, prepare a blog post of your specific recommendations and advice to the Xantrex management team, include your supporting analysis. Please upload your team post at 6:00PM on Mon. Nov 30, NOT earlier.
Individual Blog Post Portion of Assignment:
Following the posting of team responses on Nov. 30, review and comment on a blog post made by a team other than your own. Complete your individual posting by 6:00 PM Mon. Dec 7.
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