pwc case competition
TRANSCRIPT
![Page 1: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/1.jpg)
Greenlight SustainabilitySolution & Strategy Planning
PolarisPwC Advisory Team
A detailed look at sustainability strategy and environmental reputation reestablishment
Nov 2016
![Page 2: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/2.jpg)
Current Situation Our Process Financial
ImpactShort-Term Initiatives PWC Support
PwC @ Polaris 1
![Page 3: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/3.jpg)
Current Situation Problem: Greenlight tire waste discovered in
Louisiana wetlands1
Short-term goal: Restore public image2
Long-term goal: Embed environmental concern into everyday operations3
PwC @ Polaris 2
![Page 4: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/4.jpg)
80%
20%
80%
Complement with short-term initiatives
Pay 20% cash immediately
Purchase 80% of RubberUp's StocksPay 80% over a four
year term
Our Solution
PwC @ Polaris 3
![Page 5: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/5.jpg)
Current Situation Our Process Financial
ImpactShort-Term Initiatives PWC Support
PwC @ Polaris 4
![Page 6: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/6.jpg)
Decision Process
Cost-benefit Analysis on Different options
Financing Method Selection
PwC @ Polaris 5
![Page 7: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/7.jpg)
Cost-Benefit Comparison
Picking the best option
PwC @ Polaris 6
Acquisition
Benefits:- Quick- Established technology,
infrastructure, and market channels in place
- Enjoy sizable revenues and cash flow, used for short-term initiatives
- Vertical integration lower cost- Two companies’ value matchesCosts:- Human capital change- $2.5M overall cost
Internal
Benefits:- Flexible- Continue to perfect Greenlight
Operating System(GO) on lean six sigma principles
Costs:- Time consuming- Revenue not guaranteed- Lack of pre-existing distribution
channels- $2.5M cost
![Page 8: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/8.jpg)
Our decision involves purchasing 80% of RubberUp’s stock Financed with cash and with debts
Decision
PwC @ Polaris 7
Impacts
- Ensure minimum human capital change- Guarantee revenue- Steady cash flow can be devoted to research and
marketing campaigns- Avoid multiple taxation compared to purchase lower
than 51%- Lower cost compared to acquire 100%- Protect shareholder’s benefit compared to stock
exchange purchase, we know value will go up
![Page 9: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/9.jpg)
Current Situation Our Process Financial
ImpactShort-Term Initiatives PWC Support
PwC @ Polaris 8
![Page 10: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/10.jpg)
Balance Sheet Impact
Consolidated balance sheet
Greenlight becomes holding company
RubberUp becomes subsidiary
Taxes are consolidated Synergistic effect
PwC @ Polaris 9
![Page 11: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/11.jpg)
Tax Implications
State tax reliefs; specifically Georgia and
Mississippi
Tax credits available from the federal government
for sustainable enterprises
Immediate claim to depreciation on
RubberUp’s assets
PwC @ Polaris 10
![Page 12: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/12.jpg)
Market PowerRubberUpGreenlight
After the acquisition of RubberUp, we expect the market power of the consolidated company to be greater than before the acquisition.
Consolidated Company
PwC @ Polaris 11
![Page 13: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/13.jpg)
Current Situation Our Process Financial
ImpactShort-Term Initiatives PWC Support
PwC @ Polaris 12
![Page 14: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/14.jpg)
Complementary MethodsTest Tube Shapes
Join Rubber Manufacturer’s Association
Launch a marketing campaign
Support eco-friendly tire projects
01
02
03
PwC @ Polaris 13
![Page 15: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/15.jpg)
Rubber Manufacturer’s Association
Designed to ensure environmental diligence with
their products
RMA Mission
- Tire-Derived Fuel- Ground Rubber - Applications- Civil Engineering
Scrap Tire Market
PwC @ Polaris 14
![Page 16: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/16.jpg)
MARKETING CAMPAIGN“TIRE CRAFTSMAN”
• Tire Art• Recording• The Campaign Promo:
• Social networks• Media• Newspaper/magazines
PwC @ Polaris 15
![Page 17: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/17.jpg)
Microscope Shape for PowerPoint
We recommend an increase in funding from 3
to 5 percent for degradable tire projects
Increase Research Funding
PwC @ Polaris 16
![Page 18: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/18.jpg)
Current Situation Our Process Financial
ImpactShort-Term Initiatives PWC Support
PwC @ Polaris 17
![Page 19: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/19.jpg)
Ladder Infographics for PowerPoint05
04
03
02
01
Tax-free acquisition
Financing ratio analysis
Negotiation
Complete valuation of RubberUp
Due diligence
PwC @ Polaris 18
![Page 20: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/20.jpg)
Greenlight SustainabilitySolution & Strategy Planning
PolarisSolution Specialist Team
A detailed look at sustainability strategy and environmental reputation reestablishment
Nov 2016
![Page 21: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/21.jpg)
Appendix Forecasting
![Page 22: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/22.jpg)
Appendix Numbers in thousands
RubberUp Valuation: 2,800Greenlight Valuation: 30,000
Projected Pro forma ImpactNet Sales 37,000
Net Income 6,200Total Assets 20,000Total Liabilities13,000Total Equity 7,200
All numbers are in thousand
![Page 23: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/23.jpg)
Appendix We arrived at the valuation of RubberUp by benchmarking its revenues and headcounts with similar firms. To get the exact valuation, we found a firm, West Coast Rubber Recylcing, Inc., with revenues of approximately $7 million and headcounts of more than 40 employees. The valuation was at $2.8 million, which we then used for our valuation of RubberUp.
![Page 24: PWC Case Competition](https://reader033.vdocuments.net/reader033/viewer/2022050900/589d39ab1a28abd17d8b609d/html5/thumbnails/24.jpg)
Appendix Federal depreciation allowance: 50% depreciation credit may be taken for equipment and the machinery used for recycling within the first year the property is in service.
Manufacturing tax credits: An income tax credit worth 5% of eligible businesses in Mississippi on investments totaling over $1 million