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 lesson Last reviewed
Start the lesson Mergers, acquisitions, and due diligence
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.
- Use the four questions (market, target, valuation, risk) as your structure.
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
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Common questions: Mergers, acquisitions, and due diligence
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