WMS(A): To Acquire Unitor or Not ?

Abstract

During early 2005, the Wilh Wilhelmsen (WW) group was being restructured by integrating the two main divisions, Barwil (ship services at port) and Barber International (ship management services). They formed a new parent entity called Wilhelmsen Maritime Services (WMS) under the WW group. At this point, Unitor, one of the world’s largest ship supplies company, approached the CEO of WMS with a proposition of being acquired by WMS. A team was put in place for the analysis regarding acquisition. The assessment included (1) strategic options for WMS, (2) understanding Unitor, and (3) synergies between WMS and Unitor. The financial assessment could be done in one of the three ways: (1) net capital employed (2) valuation as per the capital markets, and (3) net present value analysis based on net profits from Unitor’s business and the synergy it would bring to WMS. This case focuses on whether WMS should acquire Unitor and at what price.