Disney’s Marvel Acquisition: A Strategic Financial Analysis

Strategy & Leadership, Vol. 38, No. 2, pp. 42-51, 2010

Posted: 4 Mar 2010

See all articles by Joseph Calandro, Jr.

Joseph Calandro, Jr.

Fordham University - Gabelli Center for Global Security Analysis

Date Written: March 3, 2010

Abstract

Purpose: Assess the value and risks of Disney’s 2009 $4 billion acquisition of the Marvel Entertainment Group (Marvel) in a case study utilizing the modern Graham and Dodd valuation approach.

Design/methodology/approach: Presents a detailed valuation of Marvel in 2009 drawing on previously published Graham and Dodd methodological materials and Marvel’s publicly available financial reports.

Findings: Disney’s $4 billion acquisition price for Marvel contained considerable risks based on certain valuation assumptions, which were identified in the context of our analysis.

Practical and research implications: This acquisition is a useful one for executives to study because it involves a situation many of them could face: evaluating the purchase of a great company that is seemingly a strategic fit and offered at what appears to be a reasonable price. Assessing such opportunities utilizing the modern Graham and Dodd valuation approach facilitates greater levels of insight into key assumptions, value drivers, and risks. This is a methodology that has proved useful to successful value investors over time.

Originality and value: Lessons executives in many industries can learn from a Graham and Dodd-based valuation of the 2009 Disney acquisition of Marvel include: better risk assessment, valuation of entertainment property assets and franchise assessment.

Keywords: M&A, Valuation, Investment

JEL Classification: G34, L2

Suggested Citation

Calandro, Jr., Joseph, Disney’s Marvel Acquisition: A Strategic Financial Analysis (March 3, 2010). Strategy & Leadership, Vol. 38, No. 2, pp. 42-51, 2010. Available at SSRN: https://ssrn.com/abstract=1564173

Joseph Calandro, Jr. (Contact Author)

Fordham University - Gabelli Center for Global Security Analysis ( email )

531 Hughes Hall
441 E. Fordham Rd
Bronx, NY 10458
United States

HOME PAGE: http://www.linkedin.com/in/josephcalandro/

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
2,281
PlumX Metrics