Eureka Case 30 min Undergrad

The Acquisition Bet

You are Andoni, 49, CEO of Vortzia, a Basque industrial-automation firm. €280M revenue, 11% EBITDA margin, profitable for 14 years. On Tuesday your banker put a deal in front of you that would double the firm overnight — and use up every reserve of capital, attention, and credibility you have.

The situation

The target is Faroguard AG, a Swiss-based industrial-safety-systems firm — €340M revenue, 13% EBITDA margin, complementary product line (your robotics + their safety = the missing piece of every customer pitch you've lost). Faroguard's founder is 68 and wants to retire. He has approached you because he wants the firm to stay European.

The asking price is €420M (1.2× revenue, 9× EBITDA — fair, neither cheap nor dear). Vortzia's market cap is €310M. The deal would require ~€80M new equity issuance (~20% dilution) + €340M debt — taking leverage from 1.1× to 4.3× EBITDA. You have a 6-week window before he opens it to Schneider and KION.

Your job in this case: review the industry positioning before/after, model the integration trade-offs, and commit to one of three responses. The board meets in 8 days; you need to brief them with a clear recommendation.

The decision

What do you tell the founder this Friday?

  • A · Full acquisition at €420M
  • B · Walk away
  • C · Counter-offer: 30% stake + commercial partnership

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