Merger Consequences Model (Simplified)
Transaction Inputs
Pro-Forma Calculations & Accretion/Dilution
Input data and click "Calculate" to see pro-forma results.
Transaction Details
Transaction Value (M):N/A
Cash Used in Deal (M):N/A
Stock Used in Deal (M):N/A
Acquirer Shares Issued (M):
Pro-Forma Income Adjustments (After-Tax, M)
Acquirer Pre-Deal Net Income:N/A
Target Pre-Deal Net Income:N/A
After-Tax Synergies:N/A
After-Tax Foregone Interest Income:N/A
After-Tax Interest on New Debt:N/A
After-Tax Additional Amortization:N/A
Pro-Forma EPS
Pro-Forma Net Income (M):N/A
Pro-Forma Shares Outstanding (M):
Acquirer Standalone EPS:N/A
Pro-Forma EPS:N/A
EPS Accretion / Dilution
N/A
Model Summary & Export
This simplified merger consequences model estimates the potential impact of an acquisition on the acquirer's Earnings Per Share (EPS).
- Accretion: Occurs when the pro-forma EPS (combined company EPS) is higher than the acquirer's standalone EPS. This is generally viewed positively.
- Dilution: Occurs when the pro-forma EPS is lower than the acquirer's standalone EPS. This can be a concern for investors.
Key drivers of accretion/dilution include:
- The target's profitability (P/E multiple paid vs. acquirer's P/E).
- The form of consideration (cash vs. stock). Cash deals are often more accretive in low-interest environments if the acquirer has a high P/E. Stock deals can be dilutive if the acquirer issues many shares (e.g., if its P/E is low or it pays a high premium).
- The cost of financing (interest on new debt, foregone interest on cash).
- The magnitude of synergies achieved.
Disclaimer: This is a highly simplified model. Real-world M&A analysis involves detailed due diligence, complex purchase accounting, transaction costs, and sophisticated financial projections. Always consult with financial professionals.