What kind of financial analysis consultants do during M&A projects

so let's have a look at what kind of financial analysis you might be asked to do during consulting projects so the first one which you usually do before the m a happens is to estimate the potential synergies and we're gonna show you a case study that will teach you how to do that here you would like to make sure that the m a actually makes sense so you want to estimate how much you can save for how much you can end by acquiring certain company remember that the synergies may happen on both sides so on the side of the company who is buying and on the side of the company that is being bought similar to that you would do actually before mna evaluation of potential targets so here you try to estimate how much you have to pay for specific target you can obviously consider more than one so you can for example consider taking over five or six different competitors and you'd evaluate how much you would have to pay for each and one of them or you might be looking at different countries and taking over different leaders in those countries once you acquire the company you have to create something which is called the value creation plan so in other words to see how you can get your money back from the purchase so how you can actually create value and this is done both by companies taking over other companies but also by private equity that are buying companies to sell them in three or five years so here your task is to estimate how you can actually create value this should link to some extent the potential synergy however it goes beyond that because you might actually create value by expanding taking over other people introducing new products etc so it's not just synergies but it's actually a bit wider subject some companies when they are considering m a they will ask you to compare this option against organic growth so for example you can enter new country by taking over the leader in the country or simply by placing some factory or some stores in this country and your role as a management consultant in this case could be to estimate which routes to expand is more efficient should they organically grow or rather acquire an existing company on the market companies that are quoted on the stock exchange may also ask you to estimate how the group will behave after they did the acquisition so here you use the estimation of potential synergies and also it summits in the value creation plan and you try to see how this will impact the company that have acquired the firm linked that is the valuation so after you have done the forecast you might be also asked to value how much the company after acquisition is worth and this sort of material is then used to educate the market and show them the increased value of the new company after it has acquired some targets and finally you might be asked to analyze divestment analysis so in other words how much you can gain if you had the opportunity to get rid of some part of your company so this is in a sense opposite to mergers and acquisition here you simply get rid of some business units or some markets and in this way you want to decrease the value of the company so that's in short let's move to the examples where i will show you how actually to do this sort of analysis in practice

test attribution text

Add Comment