Milagrol Ltda.

Abstract

A privately held U.S. plumbing parts manufacturer is negotiating the purchase of a Brazilian plumbing manufacturer specializing in water conservation. The case provides sufficient information to value this cross-border acquisition and includes a brief summary of valuation techniques in this context. A particularly rich discussion arises from two points: A forecast of exchange rates from a forecasting company differs from forecasts based on inflation, and two methods are suggested for dealing with country risk (sovereign spread and scenario analysis). A teaching note and instructor and student spreadsheets are available to accompany this case.

Citation

Lipson, M.L. (2017), "Milagrol Ltda.", . https://doi.org/10.1108/case.darden.2016.000203