Mergers, acquisitions, and due diligence: the guide
Should a company or a private-equity fund buy this target: valuing it with multiples, treating synergies with doubt, and checking fund returns.
Last reviewedWhat strong candidates can do
- 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
Common questions
What is a mergers and acquisitions case?
Should a company or a private-equity fund buy this target: valuing it with multiples, treating synergies with doubt, and checking fund returns.
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.
What is the most common mistake in a mergers and acquisitions case?
Treating synergies as certain instead of testing whether the deal still works without them.
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