INFINITI HR – professional employer organizations
Publication date: 4 March 2021
Issue publication date: 30 April 2021
Abstract
Theoretical basis
Students need to know basic capital budgeting techniques to value INFINITI and its competitors. Issues include how to: handle taxes in a discounted cash flow analysis when valuing an S Corp. where incentives depend on current (known) and future (unknown) tax provisions; value a firm using comparable multiples analysis and transactions data; assess the costs and benefits of acquiring a firm versus being acquired; and analyze an industry and perform a ratio and financial statement analysis.
Research methodology
The case information was obtained through interviews with co-founder Mark Schwaiger. In addition, the authors researched industry and comparable company data, along with current events relating to the professional employer organization (PEO). Financial data was obtained from the owners and competitor data was obtained from Thomson One and Bloomberg.
Case overview/synopsis
INFINITI HR was a PEO providing comprehensive human resources to their clients. Co-founders Scott Smrkovski and Mark Schwaiger were at a crossroads at the end of 2015 trying to determine the best course of action to take with their company to grow and prosper. One option was for INFINITI to be acquired by a larger company and the second option was for INFINITI acquire a smaller company. In this case, students have the opportunity to do a financial analysis and evaluation of INFINITI and its competitors to determine which option is the best.
Complexity academic level
This case is intended for an advanced undergraduate or an MBA corporate finance class.
Keywords
Acknowledgements
Disclaimer. This case is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was compiled from published sources.
Citation
White, S. and Hallows, K. (2021), "INFINITI HR – professional employer organizations", , Vol. 17 No. 1, pp. 79-116. https://doi.org/10.1108/TCJ-09-2019-0088
Publisher
:Emerald Publishing Limited
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