Mergers and Acquisitions (M&A))

If considering a merger, companies must perform analysis to determine if the merger makes financial sense. This includes analyzing the historical financial records of the companies in the proposed merger and forecasting future performance to assess whether the deal is viable. Mergers can drastically alter the organizational structure of a company, its financial standing, and market positioning. As a result, they can also introduce significant risk and pose a challenge to integration, cultural alignment, and retention of customers.

Operational Evaluation

Business analysts conduct extensive research and evaluation of a target’s operations to provide acquirers with a full picture of the strengths, weaknesses, and opportunities. They can identify areas for improvement and recommend ways to increase productivity and increase efficiency.

Analysis of valuation

The most important part of a M&A transaction is to determine the value of the target to the acquiring company. This is typically accomplished by comparing comparable trading transactions, prior transactions, and then performing the discounted-cash flow analysis. It is important to use several valuation techniques when conducting M&A analysis, since each offers a unique perspective on the value.

Analyzing accretion/dilution

The accretion/dilution calculator is a key instrument to evaluate the effect of an M&A deal. It is a method that shows how the acquisition will impact the buyer’s https://www.mergerandacquisitiondata.com/ pro-forma earnings per share (EPS). An increase in earnings per share (EPS) is considered to be accretive and a decrease dilutive. The accretion/dilution model is employed to ensure that the amount paid for the target is a fair price relative to the value intrinsically.