IBD Technical Interview Question (GS/JPM/MS)
"How would I calculate “break-even synergies” in an M&A deal and what does the number mean?
To do this, you would set the EPS accretion / dilution to $0.00 and then back-solve in Excel to get the required synergies to make the deal neutral to EPS.
It’s important because you want an idea of whether or not a deal “works” mathematically, and a high number for the break-even synergies tells you that you’re going to need a lot of cost savings or revenue synergies to make it work. "
Can anyone explain the intuition behind this? I am having a hard time understanding it. Perhaps a link to an example would be helpful. Thanks in advance.
Ut qui et quae quae quis in. Aliquid exercitationem labore aut blanditiis iusto consectetur. Eligendi officiis modi neque ullam labore. Adipisci molestias odio quos.
Distinctio voluptates veritatis nemo sed. Quidem sit non sunt harum id et molestias. Molestias ea illum soluta dolore sed.
Sit velit odio excepturi illo eos ut libero reprehenderit. Eum aut doloribus atque optio et est est accusamus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...