David M Dodson Case Solution

Bartlett, who was senior to Hammer, and he was not in favor of this deal and imposed many hurdles in the way of the acquisition. But Dodson was not much dependent on DLJ evaluations; as he made due diligence himself by analyzing the financial reports of 100 stores of ADAP. He evaluated the performance of ADAP and concluded that the ADAP was not performing the same way as was before, since the last spring. ADAP was working without the president and senior vice president and did not even have its management information system (MIS) which made the ADAP more fluctuating in the future. Dodson was putting the best of his efforts to make the deal possible but Bartlett wanted the other potential bidder, to take the deal. The other potential bidder in the race was TVC which bided $71 Million for ADAP; TVC was the one who purchased Smith Alarms Systems and hence had an understanding with the Rite Aid board of directors. Dodson wanted to get exclusivity for Falcon in making the deal so that Falcon may appear the only bidder of ADAP and the investors would also be encouraged to collect the money. But Bartlett refused to make it for Falcon due to limited information.

On February 5, 1996, Dodson was going to meet Rite Aid along with Hammer and Floor, so that the deal may come to end. Dodson also evaluated ADAP to be $60-$70 Million worth as the company was having the average total asset over the last three years (1992-1994) after satisfying the current liabilities was 69 Million. The company was also facing the fluctuations in its performance, and it also has to make its own Management Information System, which makes the company to worth less than the current average net assets.