Approximating Cost Synergies and Target Cost Base from the I/S?
Hi all,
The title says it all. Was wondering if anyone could provide some wisdom as to whether there is a way to calculate cost synergies from a deal by looking at the consolidated income statement. The trick I know is to look at some notes where brokers incorporated deal synergies in revised estimates and see if there's an increase in OpEx and COGS. If brokers revise estimates down for OpEx's, can we usually take the difference as the run-rate cost synergies? Also, can we assume that an increase in COGS is just the target's cost base being incorporated into the acquirer's accounts? This is what I was taught, but is there another way to really do this properly? What if there are no broker notes showing revisions?
Thanks : )
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