Berkshire Partners, a private equity firm in Boston, was pleased with their recent investment in Holmes consumer groups comfort of home electronics company. The company's portfolio was over key financial ratios and Berkshire Partners was sure that it will be another successful investment. Managing a team of Holmes then proposed acquisition of kitchen electronics, a competitor. Management Holmes believes that the opponent will be in addition to existing product line, and it was a great time to buy because of depressed stock price due to lower revenues. Investment teams in Berkshire now had to decide if the potential return on investment in Rival enough to venture successful investments in Holmes, or if the opponent could be acquired without the risk of investment in Berkshire Holmes. "Hide
by Nabil N. El-Hage, Andre Baillargeon, Stephen Parks Source: Harvard Business School 21 pages. Publication Date: July 16, 2007. Prod. #: 208023-PDF-ENG
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