Table of Contents

1. Overview

2. Corporate & Industry overview

     2.1 Costco: Segmentation, Targeting, Positioning, & Planning

     2.2  Sprouts Overview

3. Industry Analysis

     3.1 Performance

     3.2 Profitability Forecast

     3.3 Growth & Profitability Factors

     3.4 Market Structure

     3.5 Targeting

     3.6 Branding

     3.7 Positioning

     3.8 Distribution

     3.9 Competition

     3.10 Threat of New Entrants

     3.11 Bargaining Power of Buyers

     3.12 Bargaining Power of Suppliers

     3.13 Threat of Substitutes

     3.14 Rivalry Amongst Existing Competitors

     3.15 Other Areas of Concern

4. Integration Issues

     4.1 Leadership Selection

     4.2 Corporate Culture

     4.3 Networks and Information Flow

     4.4 Communication Plan

     4.5 Transition of Non-Management Staff

     4.6 Facilities

     4.7 Franchise Services

     4.8 International Operations

5. Risk Analysis – Sprouts (Target)

     5.1 Strategic Risk

     5.2 Reliance on Growth

     5.3 Credit & Liquidity Risk

     5.4 Capital Requirements

     5.5 Interest Rate Risk

     5.6 Compliance Risk

     5.7 Reputation

6. Risk Analysis – Costco (Acquiring)

     6.1 Strategic Risk

     6.2 Credit Risk

     6.3 Liquidity Risk

     6.4 Interest Rate Risk

     6.5 Foreign Exchange Risk

     6.6 Market Risk

     6.7 Compliance Risk

     6.8 Reputation

7. Financial Statement Review

     7.1 Side-by-Side Comparison

     7.2 Income Statement

     7.3 Key Statistics

     7.4 Cash Flow

     7.5 WACC

     7.6 Value of Firm’s Operations

     7.7 Intrinsic Values using Market Multiples

     7.8 Market & Book Value

     7.9 Key Financial Statements

8. Financing Options

     8.1 Equity Financing

     8.2 Debt Financing

     8.3 Sources of Debt Financing

     8.4 Other Sources of Debt Financing

     8.5 Evaluation & Identification of Equity Financing

     8.6 Cost of Equity Financing

     8.7 Overall Cost of Capital

9. Acquisition Proposal

     9.1 Cost of Acquisition

     9.2 Funding the Acquisition

     9.3 Strategic Growth Plan

     9.4 Justification to Acquire/not Acquire