Mergers & Acquisitions (M&A) Model

The Mergers & Acquisition (M&A) Model provides a projection for a company looking to potential merger or acquire another company. This model runs through different scenarios and synergies to forecast future value after the transaction.

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The Mergers & Acquisition (M&A) Model provides a projection for a company looking to potentially merge or acquire another company. This model runs through different scenarios and synergies to forecast future value after the transaction. Included in the template you will find:

• A Deal Assumptions Section with key drivers for the Acquirer and Target company and a 5-scenario analysis
• Accretion/Dilution with a Sensitivity Analysis
• Proforma Model merging the two companies with alternative synergy assumptions
• Debt & Interest section highlighting the different debt schedules and repayment
• Assumption section for each company with a 3 Scenario analysis
• The Income Statement, Balance Sheet and Cash Flow Statement for the Acquirer and Target companies
• Supporting Schedules Section for PPE and Working Capital
• Discounted Cash Flows Valuation for each company

On the first tab is the Deal Assumptions section where the details of the deal structure are input. There is another section for a 5-scenario analysis for the assumptions of the synergy and financing of the merger/acquisition. Below is the calculation of Goodwill for the Closing Balance sheet at the time of the deal. This is followed by the Dilution/Accretion analysis regarding stock prices and a sensitivity analysis using Takeover Premium, Revenue Enhancement, and Target Share Price to impact the change in Share Price and Earnings per Share.

The Proforma for the Merger/Acquisition is on the next tab. This consists of an Assumptions section that will tie to the debt schedule below along with a few assumptions for the Income Statement and Balance Sheet. After the 3 Statement section, there is the debt schedule that outlines each form of debt and their interest/repayment schedule. At the bottom, there is a DCF Valuation after the deal and a Merger Integration section, which is highlighted in green to show that every cell is linked to another tab in the model.

The next two tabs are for the Acquirer and Target companies and their financial projections. All assumptions can be modified to fit specific key drivers of the business to see their impact on the Mergers & Acquisition Model. Up to years of historical data can be entered into the income statement, balance sheet, and cash flow statement; the following projected years are driven by formulas from the Assumptions section according to the selected scenario in cell I9. The projection period in the Supporting Schedules section consists of all formulas that are tied to the Assumptions and 3 Statement sections so no editing is necessary. The DCF Valuation section displays the Terminal Value for each company using the Discounted Cash Flows Method. This section offers an Intrinsic and Market value and the respective share price.

All cells in blue font are input cells where custom information can be entered. All cells in black font are formulas set to streamline the model. All cells in green font represent a link to another tab in the model. Sections are grouped to condense the model to view sections individually.

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