Using the exam handout, assume Conglomerate Co is purchased…
Questions
Using the exаm hаndоut, аssume Cоnglоmerate Co is purchased at a 50% premium, what is the implied 2026E EBITDA multiple for the transaction assuming the transaction is announced on 12/31/2025? Round to the nearest 0.5x.
TechVisiоn Cоrp. is а publicly trаded cоrporаtion that develops medical imaging software. The Board of Directors consists of five members: Laura (CEO and Chair), Marcus (CFO), Patricia (independent director), Robert (independent director), and Steven (independent director who is Laura's former law school roommate and current golf partner). In March 2025, Laura approached the Board with a proposal: her brother owned DataBridge LLC, a small software company that had developed a data compression algorithm that could enhance TechVision's AI software. Laura proposed that TechVision acquire DataBridge for $15 million. Laura disclosed her relationship with DataBridge's owner but told the Board that DataBridge was "worth every penny" of the asking price. The Board discussed the proposal. Marcus supported the acquisition, stating he trusted Laura's judgment. Patricia expressed concern about the price and requested an independent valuation, but Laura dismissed this as unnecessary delay. Steven remained silent. The Board voted 3-2 to approve the acquisition (Laura, Marcus, and Steven voting in favor; Patricia and Robert voting against). Two independent appraisers later valued DataBridge at $6-8 million. Laura's brother received $15 million, and Laura received a $500,000 "finder's fee" from her brother afterward, which she did not disclose to TechVision or its shareholders. In May 2025, shareholder Jennifer, who owns 2% of TechVision's outstanding shares, learned about the acquisition price discrepancy and Laura's finder's fee. Jennifer's attorney sent a written demand to TechVision's Board on May 15, 2025, requesting action against Laura, Marcus, and Steven and seeking recovery of all improper benefits. On June 20, 2025, the Board responded, stating that after "careful consideration," pursuing litigation would not be in TechVision's best interests because "the DataBridge acquisition has proven beneficial to the company's AI development." Jennifer now seeks to file a derivative action against Laura, Marcus, and Steven for breaches of fiduciary duty and to proceed without waiting the full 90-day period. What fiduciary duties, if any, have been breached by Laura, Marcus, and Steven? Can Jennifer proceed with a derivative action without waiting the full 90-day period? Discuss all relevant issues.