Colt Companies

Colt Companies provides engineering design, procurement and construction services to the oil and gas industry. The company president knew that, to continue to grow, the company needed to expand its service offerings or its geographic base. He was considering expansion into the United States, which had a lot of prospective benefits, but also some drawbacks; among others, the company perceived the engineering contractor market was mature and highly competitive. The company had several expansion options: build its business slowly on its own; tender an initial public offering and provide existing partners with shares in the new public company, and use the cash to acquire other firms; go forward with an acquisition based on debt rather than equity; or merge with a private competitor. The president was expected to choose a strategy and champion his case to the board of directors.