Alphexo Corperation, Confidential Negotiation Information
...enefit both companies especially ours. In the negotiations, Alpexho calculated its total value the deal under different scenarios in order to maximize and inflate its earnings. Analysis Based on our deep analysis of this potential JV we found the following: Product Name: we believe that a-b gate would give us the opportunity to deviate Betonns customers towards us and its sounds that as if we were controlling the JV. Venture Location: at our facilities will cannibalize our productive activities by $3.7 MM that we are not in favor. Venture Leadership: since we are oriented by higher profits that will boost up our earnings we would prefer to withdraw our leadership and assign Beth, Betonn Candidate, instead for the sake of higher net sales of JV. Intellectual Property Rights: we will try to fight for exclusive right of the IP otherwise we will trade off with the profit sharing percentage increase. Possible Sales Restrictions: Underneath we present total values and net benefit of the deal under all alternatives base on the following formulas: Step One: Calculate JV Profitability = JV Sales Any Facilities Charge Effect of Any Other Economic Provisions on JV Profits Step Two: Calculate Total Value of Deal to Alphexo = Alphexo Share of JV Profits + Alphexo Net Sales Due to Agreed Restrictions + Any Other Alphexo Benefits Alphexo Investment Cost (21.6) Any Other Alphexo Cost JV Sales, Total Deal Value and Net Value with Various Restrictions Note: Assumed Equal Profit Sharing (50%-50%) Length of restrictions on JV Sales to Betonn Customers None 6 Months 12 Months 18 Months 24 Months Length of Restrictions on JV Sales to Alphexo Customers None (0MM) 85 NA 85 NA 84 NA 82 NA 70 NA 6 Months (17MM) 81 30.9 6.9 81 30.9 6.9 80 30.4 6.4 78 29.4 5.4 66 NA 12 Months (20MM) 76 31.4 7.4 76 31.4 7.4 75 30.9 6.9 73 29.9 5.9 61 NA 18 Months (22MM) 70 30.4 6.4 70 30.4 6.4 69 29.9 5.9 67 28.9 4.9 55 NA 24 Months (24MM) 82 28.4 4.4 82 28.4 4.4 61 27.9 3.9 59 26.9 2.9 47 NA From the table above and the assumptions made of sharing profit equally we listed the following options: 6 months to Betonn and 12 months to Alphexo 6 months to Betonn and 6 months to Alphexo 12 months to Betonn and 12 months to Alphexo Other combinations with an increased profit sharing to Alphexo ...