Case Scenario 3: Zachary, Wesley & Partners

question 35

Essay

Case Scenario 3: Zachary, Wesley & Partners.
Zachary, Wesley & Partners (ZW&P)is a leveraged buyout (LBO)firm that specializes in friendly buyouts of mid- sized U.S. retailing and manufacturing firms. ZW&P shuns turnarounds and hostile takeovers; its typical deals
retain the existing management team and provide extensive funding for what is perceived to be an already sound strategy. It focuses on this type of firm because the partners have good contacts in retailing and manufacturing and they are typically able to avoid bidding wars when the LBO is negotiated. The firm has been immensely profitable over the years, in part due to the very extensive and selective due diligence process used to winnow down the list
of prospective targets. Fewer than one out of one hundred candidates are even approached, and only a fraction of these passes further screens in the LBO negotiations. The resulting profitability has, in turn, given ZW&P a strong reputation in the financial community for successful deals, and among managers for being able to put together needed financing with good business plans.
-(Refer to Case Scenario 3). What factors may threaten the ability of ZW&P's resources and capabilities to generate continued success?

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Definitions:

Deep-water Port

A harbor able to accommodate large ships due to its great depth.

Coral Reef

Underwater ecosystems characterized by reef-building corals, providing habitat for diverse marine species.

Mountain Range

A series of connected mountains aligned together, often formed by the same geological processes such as tectonic plate movement.

Oil Deposit

A subsurface reservoir containing petroleum that is naturally accumulated and can be extracted for economic use.