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Analysis of Spring Toys

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Based upon a thorough analysis of Sprig Toys, I believe that their best option would be to seek additional funding from more socially driven investors. This is because I feel that their recent financial struggles were simply a result of the overall financial crisis of 2008 (that affected everyone) and not a reflection of any firm specific problems/issues that needed to be addressed.

When running a make-buy analysis on the situation, it becomes clear why Sprig would like to sell and Wham-O would like to buy. Sprig is need of an outside source of cash to distribute to their shareholders (both preferred stockholders and common stockholders) and the offer from Wham-O would provide them with these funds. While bootstrapping and venture capitalists allowed them to avoid traditional forms of funding, this was not a sustainable method of funding their rapidly growing company. The milestones set forth to them by Brand Journey were un-attainable given the poor economic environment that they were operating in. Without funding from this venture capital firm, Sprig was forced to look elsewhere for a potential buyer. On the other side of the deal, Wham-O wanted to buy due to the fact that they lacked the in-house expertise that Sprig had, the small volume requirements, the desire for multiple sourcing and the cost to buy being significantly cheaper than the cost to make.

An analysis of Sprig’s financials reveals a strong company that is poised for sustainable growth in the future. An

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