Model how an acquisition changes the buyer’s earnings per share. Compare purchase prices, cash and stock payment mixes, and synergy assumptions, then produce an Excel workbook and a one-page summary of the deal’s financial effects.
Build accretion/dilution analysis for M&A transactions. Models pro forma EPS impact, synergy sensitivities, and purchase price allocation. Use when evaluating a potential acquisition, preparing merger consequences analysis for a pitch, or advising on deal terms. Triggers on "merger model", "accretion dilution", "M&A model", "pro forma EPS", "merger consequences", or "deal impact analysis".
Review the instructions the agent will receive before you install.
Acquirer:
Target:
Deal Terms:
| Item | Value |
|---|---|
| Offer price per share | |
| Premium to current | |
| Equity value | |
| Plus: net debt assumed | |
| Enterprise value | |
| EV / EBITDA implied | |
| P/E implied |
| Sources | $ | Uses | $ |
|---|---|---|---|
| New debt | Equity purchase price | ||
| Cash on hand | Refinance target debt | ||
| New equity issued | Transaction fees | ||
| Financing fees | |||
| Total | Total |
Calculate year-by-year (Year 1-3):
| Standalone | Pro Forma | Accretion/(Dilution) | |
|---|---|---|---|
| Acquirer net income | |||
| Target net income | |||
| Synergies (after tax) | |||
| Foregone interest on cash (after tax) | |||
| New debt interest (after tax) | |||
| Intangible amortization (after tax) | |||
| Pro forma net income | |||
| Pro forma shares | |||
| Pro forma EPS | |||
| Accretion / (Dilution) % |
Accretion/Dilution vs. Synergies and Offer Premium:
| $0M syn | $25M syn | $50M syn | $75M syn | $100M syn | |
|---|---|---|---|---|---|
| 15% premium | |||||
| 20% premium | |||||
| 25% premium | |||||
| 30% premium |
Accretion/Dilution vs. Cash/Stock Mix:
| 100% cash | 75/25 | 50/50 | 25/75 | 100% stock | |
|---|---|---|---|---|---|
| Year 1 | |||||
| Year 2 |
Calculate the minimum synergies needed for the deal to be EPS-neutral in Year 1.
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