Question

What are the likely pros and cons associated with AGI’s potential acquisition of MAF (offer at least 12 total pros and cons)

Answer 1

The likely pros and cons associated with Active Gear Inc’s (AGI’s) potential acquisition of Mercury Athletic Footwear (MAF)

I have included 12 total pros and cons for the same. Please find below the same.

Pros:

1. To restore financial growth

2. Broaden customer base.

3. Potential for growth in AGI’s casual footwear sector

4. Customer demographic expansion

5. Generation of additional firm value including economies of scope, economies of scale, and market expertise.

6. Easily integration of inventory management system with Mercury products

7. High operating margins of Men athletic line for mercury

8. Increased exposure within the young and middle-aged markets for each of AGI’s footwear industries.

Cons:

1. There are few factors that has imposed limitations on the analysis of AGI’s acquisition of MAF which includes survivorship bias, synergy realization and expense classification

2. Rebranding of Active Gear is one of the cons associated with AGI’s acquisition of MAF.

3. Mercury's return on net assets, and DSI ratios are below industry average.

4. Underperforming Women’s casual line.