Eliot was seeking a small, well-managed manufacturer that could offer RSE strong growth opportunities and bring it more specialized, higher-technology products that would be less susceptible to succumbing to the competition. Although RSE had done well, Eliot felt the company lacked the ability to be innovative. No new products had been developed over the past two years, and Eliot personally felt that the research and development (R&D) group at RSE International had fallen behind its competitors. FVC, with its proven management and engineering skills, seemed to offer the R&D capabilities and growth prospects that Eliot sought. Eliot realized that time was of the essence, especially since other competitors were also interested in Flinder Valves. Nonetheless, he wanted to be certain that acquiring it would truly place RSE in a better competitive position. One concern was how well FVC’s employees would handle the transition from working in a small, entrepreneurial company to a much bigger place like RSE. The two companies possessed quite different cultures. Another concern was about the earnings dilution that RSE might incur from the acquisition. In fact, two directors had cautioned Eliot against impairing the firm’s forecasted growth in earnings per
Eliot was seeking a small, well-managed manufacturer that could offer RSE strong growth opportunities and bring it more specialized, higher-technology products that would be less susceptible to succumbing to the competition. Although RSE had done well, Eliot felt the company lacked the ability to be innovative. No new products had been developed over the past two years, and Eliot personally felt that the research and development (R&D) group at RSE International had fallen behind its competitors. FVC, with its proven management and engineering skills, seemed to offer the R&D capabilities and growth prospects that Eliot sought. Eliot realized that time was of the essence, especially since other competitors were also interested in Flinder Valves. Nonetheless, he wanted to be certain that acquiring it would truly place RSE in a better competitive position. One concern was how well FVC’s employees would handle the transition from working in a small, entrepreneurial company to a much bigger place like RSE. The two companies possessed quite different cultures. Another concern was about the earnings dilution that RSE might incur from the acquisition. In fact, two directors had cautioned Eliot against impairing the firm’s forecasted growth in earnings per