When addressing MacDonald, Deitwiler and Associates Ltd (MDA), particular emphasis must be given to the fact that it was founded in 1969; the firm came up spurred “by University of British Columbia professor John MacDonald and physics graduate Vern Dettwiler.” (Blackwell) Notably, MDA was renamed to Maxar Technologies on the 5th of October, 2017 after the merger with DigitalGlobe was completed. With respect to MDA, it represents a communication and information systems company that gravitates largely towards space exploration. MDA can be noted with sharing an ultimate commitment “to support the growth requirements of both new and existing customers.” (Johnson) It can be said with certainty that MDA makes stress upon the embodiment of modern marketing strategies, an integral part of the 21st century business process. More importantly, it would be reasonable to indicate that MDA has been found to perform well financially. MDA is headquartered in Vancouver, British Columbia in Canada.
By immersing into MDA’s business, it comes to light that much emphasis has been attached to both markets and customers possessing a strong potential for repeat business. Sinking deep into MDA’s scope of activity, no one can fail to note that there can be seen a heavy focus on promoting advanced technology development. In fact, the company is oriented towards two major markets. First and foremost, the company is intended to provide reliable, scalable and cost-efficient delivery of space-based solutions. On the other hand, MDA focuses on surveillance and intelligence; in concrete terms, the company endeavors to provide end-to-end solutions with intent to keep track of both changes and activities in the world. Broadly speaking, MDA posits as an international communications and information company seeking to maintain commercial and government organizations across the world. In reviewing Macdonald, Dettwiler, and Associates, it would be wrong to belittle a crucial role it plays in resolving some of the world’s most complex challenges. The company employs more than 4,800 workers around the globe, which in turn gives reasonable grounds for submitting that MDA stands out as a truly competitive business player. DigitalGlobe was founded in 1992. Dr. Walter Scott and Dough Gerull should be referred to as the company’s founding fathers. The firm is headquartered at Westminster, Colorado in United States of America. The company acts as an American vendor of space and geospatial contents. In October 2017, it was acquired by the Maxar Technologies with intent to act as its subsidiaries. It is not an exaggeration to say that the company is a good financial performer.
Net income and revenue for the acquiring and the acquired company.
The acquiring company in our case is MDA and the acquired one is DigitalGlobe. The revenue of the latter has grown steadily in the last three years. In 2014, 2015 and 2016, DigitalGlobe recorded revenue of 654.6, 702.4 and 725.4 million dollars respectively. The net income of the company has also grown steadily. The following are the figures for 2014, 2015 and 2016. In 2014, 2015, and 2016, the net income for DigitalGlobe was 18.5, 23.3, and 26.5 million dollars respectively. MDA’s revenue in 2014, 2015 and 2016 was 2098.8, 2117.4, and 2063.8 million dollars. MDA’s net income in 2014, 2015 and 2016 was 47.1, 142.8, and 139.6 million dollars. The merger is expected to make the companies perform better as their fields relate with one another. The merger has a competitive advantage over their rival companies and will be more profitable in the field.
Stock prices immediately before and after the merger is announced.
Stock prices skyrocketed after the merger was announced. For example, the stock price of MDA immediately before the merger was $32.94. Immediately after the merger, the stock price shifted to $62.00. This indicates that the merger was of financial benefit to the two companies.
Type of competition.
In the merger, the two companies are monopolistically competitive. This is due to the fact that the two companies deal in very similar and complementary products but they are not perfect substitutes for one another. The decisions made in the merger will also not affect the productivity and decision-making of other firms which may be the rivals to the merger in the market.
Nature of products sold and price elasticity.
The firm deals in luxury goods. This is because an increase in the potential customers’ income cause a higher demand for the goods dealt in. Price elasticity of the firm’s goods targets the change in price and the resultant change in the demand for goods. The higher the cost of goods in the firm, the lower the demand will be for the products.
The role that globalization and government regulation plays in affecting the firm’s behavior.
Globalization and government regulation has a notable role in affecting a firm’s behavior, more so the financial behavior both in the positive and in the negative. Globalization has been a result of shifts in the organizational behavior in the firm such as capitalistic ideologies and diversity; this is a positive edge of the firm’s behavior and improves market for goods. Government regulations on issues such as the market will have an influence on the profitability and how competitive the firm will be.
Best merger from an investment perspective.
The merger between MDA and DigitalGlobe is the best merger in an investment perspective. This is because of the notable growth in the two companies after the merger was completed, and the expansion of the companies while searching for the potential target markets all over the world for their products.
- Blackwell, Richard. Canadian Satellite Maker MDA Turns to U.S. Market to Drive Growth. The Globe and Mail N.p., 16 Nov. 2016. Web. 30 Nov. 2017.
- Johnson, Julia. MDA Shares Soar on Purchase of California Satellite Company. Financial Post N.p., 27 Jun. 2012. Web. 30 Nov. 2017.
