What You'll Learn
- Deconstruct and quantify Hard Cost Synergies (overlapping systems, SG&A savings).
- Model Soft Revenue Synergies (cross-selling, channel sharing) with discount factors.
- Anticipate Post-Merger Integration (PMI) friction and execution delay costs.
Lesson Overview
Acquisitions fail when buyers pay high premiums based on speculative math. Learn how to separate high-conviction Cost Synergies from high-risk, speculative Revenue Synergies.
Your interviewer says: "Our client, a massive national retail pharmacy chain with $100M in EBITDA, wants to acquire a regional health clinic chain with $20M in EBITDA for a 50% premium over their $100M valuation (paying $150M). The board wants to know: Is this $50M premium justified by synergies?"
Why This Matters for Consulting Interviews
MBB firms specializing in corporate turnarounds evaluate your capacity to build a conservative, risk-adjusted strategic transaction business case.
Prerequisites
- Corporate Valuation
- M&A Transactions
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