Integrative Case, HannaH page 1

Integrative Case, HannaH

By; Kimberly King-Mahaffey

Professor Toiya Evans

Finance 100

May 30, 2010

Integrative Case, HannaH page 2

Hannah Eisenstat had a business plan to own and operate a small business to sell coffee to patrons. The business started out with one owner Hannah being sole proprietorship venture. The business started out a bit weak while Hannah found once it was up and operating that the coffee did not produce the flavor she had anticipated and envisioned. A regular customer made an offer to become an investor offering an idea that would eliminate the small business into a larger company that would offer a better quality of coffee, but by doing this the owner would have …show more content…
(www.businessweek.com, 2010)
Hannah did make progress with the decision of working with investors as the board of director’s decision to use the proceeds of the IPO for expansion. A year later in August 2009 the company did a cash offer to SEO selling additional shares from each owner Hannah and Natasha then selling the shares from Dixie. $4,000,000 each from first two owners then the rest of $2,000,000 from Dixie. Using some proceeds to pay off the term loan and the remaining to use of expansion. After this liquidation that concluded Dixie from any ownership of the company. As part of compensation to the employees they all received $50,000 in shares. Compensating the employees turned out to be a perfect business move; sense in the year 2010 stock per share went from $20 per share to $5 per share with putting a mix match CEO in place. Hannah wanted to make a come back with the company so she under took leveraged buyout of HannaH, along with 6 other employees. They all started buying shares so when the LBO was announced Hannah owned 5,000,000 and the employees owned an additional 1,000,000. The group then repurchased the remaining $7, 4000,000 shares above the $5 per share @ $7.50 per share.

Integrative Case, HannaH page 6
By combing the equity investment of $7,000,000, bank debt and a private placement of a $30 million semi annual, ten year coupon bond needed to finance the repurchase. That would move again to register