Paragon Tool

Executive Summary Considering the situation that idol Tool is before long in, with uncertainty regarding troupes future, direction in disagreement and the neglect of tangible information regarding MonitoRobotics acquirement it is recommended that nonsuch Tool, take a week, gather all of senior management and develop a concrete and agreed upon strategy regarding nonsuch Tools future grant strategy.Once such a strategy is formulated, if the attend to traffic and MonitoRobotics fit with these plans, then Nickolas should take the next step in conducting the needful due diligence to determine that the MonitoRobotic achievement scathe and its finish volition fit with Paragon Tools. Current Situation age Paragon Tool Company seems to be a healthy railway car shot manufacturing go with surviving in a tough industry, a radical concern for Nickolas Anaptyxi, chief operating officer, is act growth for the company.Paragons current spear manufacturing gunstock is surviving in a fairly saturated market, exclusively if not exactly thriving. Mr. Anaptyxis primary goal since his start at Paragon is to grow the then small company by dint of acquisitions. The company continues to fund much and more acquisitions composition continuing to evince senseless profits. While the chief financial officer continues to debate with the CEO, Nick Anaptyxi, Mr. Anaptyxis strategy continues to be growth for Paragon through frequent acquisitions while continuing to show poor margins to investors. His belief is that the cost now will pay take in the future.The current situation that Paragon faces is that the recently added line of subscriber line of services (repairs, service calls, etc. ) has been experiencing losses which has been pulling d deliver its antecedently well performing animal manufacturing line. Mr. Anaptyxi believed that a key way for this indisposed growing and cyclical company to grow and thrive in the punishing market is to expand its market base by offering a service line to complement its tooling business. The CEO has to explain to the companys investors that it will take era for the company to see a return on its investment in the service sector.Potential New accomplishment In the interim, Paragon has been recently courting a technology company, MonitoRobotics, that focuses on the ability to identify manufacturing malfunctions much more quickly than before through the services of software and technology. While contemplating this relationship, it is made known to the CEO that a major competitor of Paragon is going in on a incompatible bid for MonitoRobotics Company. The acquisition of MonitoRobotics would essentially double Paragons gross sales revenue collaborating on remote servicing technology for machine tools.A big plus is that this acquisition would use Paragon a presence in this type of robotic diagnostic business while at the same time, blocking a major competitor from doing the same. The CEO believes this co llaboration would greatly benefit the growth of Paragon by offering this additional service to its customers. Mr. Anaptyxi now needs to step up his decisiveness and accomplish his next move. The company first needs to understand that this possible acquisition is more than just a move to attempt to grow sales revenue.It is more a strategy to reposition the company into a more profitable and growing line of business that compliments its existing tool manufacturing line. The company has to even up sure it is making a well researched ending with sufficient due diligence versus making a knee hitchhike decision based upon the threat of the competitors impending hostile bid. They need to consider if the company has enough management support and lag to succeed at the overhaul of the company from manufacturing to technology.Executives need to not only be concerned about the investors position on the acquisition and continued diminished returns, but on the opinion and attitude existing stave has and their related motivation, whether the cultures of the two companies can mingle into one. The realize management is divided on their stance regarding the acquisition. An effort mustiness be made to get the entire team on the same knave or else, half of the team will retreat their motivation unheeding of the decision made. The acquisition has to be at a fair price and make business sense.Analysis must be done to make sure that Paragons existing service line will become profitable in the future, if not, the acquisition of an additional service line that whitethorn be unprofitable may mean death for Paragon. expatiate such as the acquisition costs and performance figures would have been accept information in determining if MonitoRobotics acquisition makes business sense. However tending(p) the lack there of, it is difficult to determine what kind of hardship the acquisition would be on Paragon.The description from the CFO makes it sound like it may be tough on the companys capital if the spread over where to go through. Although the CEO states that the CFOs style compliments his own style, their differences in strategies and overall mindsets may prove disastrous for the company. The fact that the CFO thinks the company should consider selling of their existing services line while the CEO is talking about acquiring an entire company for their service lines makes not synergy between the two.They may spend more time spinning their wheels arguing over viewpoints than making progress in the companys growth. Additionally, the CEOs concern that he may lose the CFO if the deal is finalized should not be a showstopper for the CEO if the deal is in the best inte domiciles of the company. Recommendation Before a decision with such magnitude can be made, Paragon Tool must understand its current capabilities. After understanding what its management, financial and return capabilities are, then after determining the companys growth strategy, Mr.Anaptyxi a nd the rest of Paragon Tool will know if MonitoRobotics is the right fit for Paragon Tool. There exists too much confusion and disagreement between management to make a decision, and even if Mr. Anaptyxi, were to force the acquisition upon his management, as it stands now, Paragon Tools lacks the management team to follow through on the merger process. While MonitoRobotics feels like a cant miss opportunity, with the services business becoming a booming industry, there will be new(prenominal) opportunity to either acquire smaller service businesses or give time to grow the service business within.