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Merger Synergy Valuation Excel Model
  • Merger Synergy Valuation Excel Model
Originally published: 17/06/2016 13:39
Last version published: 02/02/2018 14:50
Publication number: ELQ-90266-2
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Merger Synergy Valuation Excel Model

This Excel Model estimates the value of synergy in a merger.

Prof. Aswath Damodaranby Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,105
NYU Stern School of Businesswith NYU Stern School of Business
An Education in PossibleFollow 67
54 reviews4,266 views|Start the discussion!|Bookmark download for free
synergyvaluationmergersindependent firmscombined firm
Description
This simple excel model enables you with the beta, pre-tax cost of debt, tax rate, debt to capital ratio, revenues, operating income (EBIT), pre-tax return on capital, reinvestment rate and length of growth period to compute the Value of the global synergy in a merger.

- Prof. Aswath Damodaran

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Further information

The objective of this model is to get the following output values for the acquiring firm, target firm and merged firm:
- Cost of Equity
- After-tax cost of debt
- Cost of capital

- After-tax return on capital
- Reinvestment rate
- Expected growth rate

- Present Value (PV) of Free Cash Flow for the Firm (FCFF) in high growth
- Terminal value
- Value of firm today

Value of synergy:
- value of independent firms
- value of combined firm
- value of synergy


4.8 / 5 (54 votes)

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