Case type 08
Mergers, acquisitions, and due diligence
Should a company or a private-equity fund buy this target: valuing it with multiples, treating synergies with doubt, and checking fund returns.
24 min1 lessonFacts checked against sources on
How do you approach a mergers and acquisitions case?
- Check the market, the target on its own, what the target is worth to the buyer (including synergies, compared with the price), and the risks, including integration.
- The most common mistake: treating synergies as certain instead of testing whether the deal still works without them.
- Build the structure from the most the client should pay: value the target on its own first, add synergies you have phased in and reduced for doubt, and compare the total with the price.
By the end you will be able to
- Structure a buy-or-not decision
- Value a target with an EV/EBITDA multiple and find a walk-away price
- Treat synergies with doubt: phase them in and subtract integration cost
- Check a private-equity return with MOIC and a rule of thumb for IRR
Worked cases in this module
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Common questions: Mergers, acquisitions, and due diligence
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One lesson, about 24 minutes.