The company was able to gener ate additional revenue by licensing the rights to these characters. ![]() AG owned the rights to a variety of popular characters, including Strawberry Shortcake, the Care Bears, Holly Hobbie the Get Along Gang, and the Nickelodeon characters. To order copies, send an email to No part of this publication may be reproduced, stored in a retrieval system, sed in a spreadsheet, or transmitted in any form or by any means electronic, mechanical photocopying, recording, or otherwis-without the permissie ofthe Darden School Foundation 571ĥ72 Part Fight Valuing the Enterprise: Acquisitions and Buyouts maintained the following major brands: American Greetings, Carlton Cards, Gibson Recycled Paper Greetings, Papyrus, and Design Ware. Copyright 2013 by the University of Virginia Darden School Foundation, Charlottesville, VA. Schill, Associate Professor of Business Administration. To strengthen its business, the company owned and This case was prepared by Michael J. In addition to gift cards, AG marketed gift wrap, candies, party goods, candles, and other giftware. ucts through traditional retail channels and electronic products through a number of company websites. To meet the changing times, AG sold greeting cards as both paper prod. If, on the other hand, AG stock was simply temporarily out of favor, the buyback plan presented a prudent defensive strategy American Greetings With $1.7 billion in revenue, AG was the second-largest greeting card publisher in the United States. If the share price reasonably reflected bleak prospects for AG, management should preserve cash for future needs. The decision hinged on how the future of the enterprise was expected to play out. The repurchase was to be funded from AG's operating profit and cash reserves. With current valuation levels, management was considering going into the mar- ket with a $75 million repurchase program. At times of low equity valuation, AG management historically had turned to share buybacks. But while temperatures were up, the same could not be said of AG's share price, which had been cut in half over the previous several months to a year-end closing price of $12.51 (Exhibit 45.1). ![]() ![]() Incremental expenses this year to roll our new doors in the dollar store channel -Jeff Stein, Managing Director, Northcoast Research It was New Year's Day 2012, and the weather was unseasonably warm in Cleveland, Ohio, headquarters for American Greetings Corporation (AG). The company also accelerated investment spending in the digital space to support the growth of recently louched. In marketing, sending increased by a surprising $10 million. However, the growth has come at a cost that is also far greater than we had anticipated. The company has accelerated top-line growth through a combination of organic growth and acquisitions, and year-to-date revenues are trending well ahead of our forecast. CASE 45 American Greetings This year American Greetings is demonstrating to naysayers that the greeting card space is not dead.
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