Provident Life & Accident Insurance Co. has a first bid, made a primary competitor, Paul Revere, purchase of conglomerate Textron. The due diligence process reveals an essential building block of the problematic disability insurance policies. Provident is forced to the negative impact of this discovery on his initial evaluation and revise their offer. The different views on the development of this policy have to be translated by the bidder and seller through a discounted cash flow … Read more »

Provident Life & Accident Insurance Co. has a first bid, made a primary competitor, Paul Revere, purchase of conglomerate Textron. The due diligence process reveals an essential building block of the problematic disability insurance policies. Provident is forced to the negative impact of this discovery on his initial evaluation and revise their offer. The different views on the development of this policy by the bidder and seller are translated by discounted cash flow analysis in the respective offer prices. Finally, this analysis DCF in combination with multiple analysis is used in negotiations with Textron and public shareholders.
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from
Mihir A. Desai,
Mark F. Veblen,
Frank Williamson
Source: Harvard Business School
21 pages.
Release Date: 03 October, 2001. Prod #: 202044-PDF-ENG
Provident Life and Accident Insurance: The acquisition of Paul Revere HBR case solution