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Katie Lenzini Jeremy Epstein

CASE 1 Presentation. Katie Lenzini Jeremy Epstein. February 27, 2007. Background Info. Started in 1978 in Burlington, Vermont Founders: Ben Cohen & Jerry Greenfield Spent $5 learning how to make ice cream Bought an old gas station and opened shop

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Katie Lenzini Jeremy Epstein

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  1. CASE 1 Presentation Katie Lenzini Jeremy Epstein February 27, 2007

  2. Background Info • Started in 1978 in Burlington, Vermont • Founders: Ben Cohen & Jerry Greenfield • Spent $5 learning how to make ice cream • Bought an old gas station and opened shop • Initial Investment: $12,000 ($4,000 borrowed)

  3. Timeline • 1980 started distributing pints in grocery stores • 1984 Vermont Only stock offering • $10.50 x 75,000 shares = $787,500 • Used to build new factory • 1985 NASDAQ IPO • $13 x 450,000 shares = $5,850,000 market cap • 1992 Additional Stock Issued • $30.50 x 1,265,000 shares = $38,582,500 • August, 2000 Acquired by ___________

  4. A) DREYERSB) UNILEVERC) MEADOWBROOK LANE CAPITALD) CHARTWELL INVESTMENTS Who acquired Ben & Jerry’s?

  5. UNILEVER $43.60

  6. Mission Statement Analysis • Product • Did they fulfill their mission statement? • Economic • Did they increase value for shareholders…was there anything that prevented this? • Social • What ways did they help the community?

  7. How did they help community? • Ben and Jerry’s Foundation • Donates minimum $1.1 million per year • Green Team • Focuses on environmental concerns • CAT (community action teams) • Get employees involved in service projects

  8. Takeover Target? • Slowdown in growth • 45% share of market • Already had existing infrastructure • Strong, developed brand name • Very low debt ratios • Debt-equity ratio: 18.68% • Debt-ratio: 15.7% • Return on Equity 8.9% • Can get better return in market • Donated 7.5% to charity…inefficient use of earnings?

  9. Stakeholders • Employees (specifically management) • Suppliers • Charities • Shareholders • Social Mission

  10. Fair Market Value Average industry P/E ratio: 23.92

  11. What happened with acquisition • April 12, 2000 Unilever announced it would acquire Ben & Jerry’s Homemade at $43.60 per share for 8.4 million outstanding shares (that’s over $300 million for ice cream!!) • Maintained Independent BOD, but replaced Ben & Jerry’s CEO with Unilever employee a few months later

  12. Social Mission Under Unilever • Following acquisition, Ben and Jerry ceased involvement because they felt Unilever just used social mission as marketing ploy • In 2005, new CEO took over Ben & Jerry’s business and made effort to focus on social mission, resulting in Ben and Jerry becoming involved again • Since then, Ben & Jerry’s continues to support community and donate portion of earnings to charity

  13. What is your favorite flavor? • Cherry Garcia • Phish Food • Chunky Monkey • Chubby Hubby • Other

  14. Questions? Information came from Ben & Jerry’s website, Unilever’s website, and www.msnbc.com

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