Accretion Dilution Template Excel Model (Stock Exchange)
Originally published: 28/02/2018 16:08
Last version published: 16/03/2018 09:22
Publication number: ELQ-66047-2
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Accretion Dilution Template Excel Model (Stock Exchange)

Simple Accretion Dilution Model for you to quickly work out if an acquisition will generate value for a public company.

For an executive of a public company, or for a banker that is trying to make money for a prospective customer, increasing shareholder value is always the goal. This is because the bonuses of the senior leadership are often associated with this.

Large companies are always asking themselves how they're going to grow. Similarly to a startup except without the tight budget or the lack of publicly traded shares. When the topic of growth is brought to the table, 'buy' often becomes a hot topic on the agenda.

Whether you opt for a range of small deals or do a big deal, the only question that should cross your mind is whether or not this adds relative value to the company. You can answer this question by completing an accretion dilution analysis.

Accretion dilution analysis
Accretion/Dilution analysis aims to answer the question: does the deal add or take away value for the shareholders of the buyer? The model shows this numerically.

This analysis is generally done by analysts working at investment banks or those that work in a corporate development team. So really, it's a kind of M&A financial modeling that is undertaken pre-deal to evaluate what effect the transaction will have on shareholder value, and to see whether Earnings per Share for buying shareholders will grow or fall post deal.

It's not difficult to work out if you have the right inputs and tools. This template should make it simple for you.

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