Do you believe that Heinz is a good candidate for a leveraged buyout? Explain your answer.

Question

Quizplus · Accepted Answer

The Answer is Yes. In the food manufacturing business for 120 years with a widely recognizable brand, the firm has a substantial and defensible market share in the United States. Moreover, given the nature of its basic food product, its sales tend not to be cyclical. Moreover, industry growth tends to be modest in the mature segments in which the firm competes. The need for substantial future capital expenditures is likely to be limited or at least discretionary if the firm chooses to expand internationally. Overall, the firm's operating cash flow can be expected to remain relatively predictable, increasing its ability to pay off its outstanding debt.

Do You Believe That Heinz Is a Good Candidate for a Leveraged