M&A Model Example
Corporate Finance Financial Model (Free Excel Download)
Assess acquisitions with purchase price, sources and uses, purchase accounting, pro forma earnings, synergies, accretion or dilution, and transaction returns.
professionals from Deloitte
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About this model
An M&A Modeling & Valuation template provides comprehensive target valuation using three methods: standalone DCF (discounted cash flow with free cash flow projections), trading comparables (public company EV/EBITDA multiples), and precedent transactions (prior M&A deal multiples). The model builds a forward 5-year P&L for the target, computes unlevered free cash flow, applies a WACC (typically 7-10% for mid-market industrial targets), and derives enterprise value. Comparable company analysis extracts median EV/EBITDA, EV/Revenue, and P/E multiples from peer groups; precedent transactions adjust for deal timing and buyer-specific synergies. The final valuation range (football field) anchors buyer offer strategy and integration planning.
Once valuation is established, the Deal_Structure sheet models pro-forma financing: all-cash, stock, or mixed consideration. The Synergies_Analysis quantifies cost synergies (headcount reduction, procurement savings, overhead elimination), revenue synergies (cross-sell, geographic expansion), and integration costs (severance, system migration). Pro-forma accretion/dilution is computed: if the buyer's existing EPS and the deal's pro-forma EPS diverge, the transaction is accretive (boosts EPS) or dilutive (reduces EPS) on a per-share basis. The Buyer_Returns sheet models levered cash returns to the buyer - equity IRR and cash-on-cash multiple - factoring in deal leverage, exit multiple (typically flat to 50-100 bps compression), and hold period. Acquisition price sensitivities are crucial: buyer's walks if cost of capital or synergies don't support deal returns.
This model is essential for M&A bankers, corporate development teams, and private equity sponsors evaluating acquisitions. Typical target valuation ranges from 6-12× EBITDA depending on industry and growth profile; buyer decision thresholds often require >15% levered IRR or >2.0× equity multiple. The three-method approach provides defensible negotiation fodder for both buyer and seller.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the M&A Model Example
- Transaction summary and purchase price build
- Purchase price allocation and synergies
- Standalone and pro forma income statements
- Accretion dilution outputs
- Credit metrics and scenario testing
- Standalone DCF valuation with revenue, EBITDA, and capex projections
- Trading comparables analysis with EV/EBITDA, P/E, and growth multiples
- Precedent transaction analysis with disclosed and implied multiples
M&A Model: How the Acquisition Analysis Template Works
Evaluating an acquisition requires connecting deal structure, purchase accounting and financing into one coherent view. This m&a model template delivers exactly that: a five-year pro-forma analysis that links acquirer and target, produces accretion/dilution per year, and surfaces leverage, coverage and buyer returns.
The public download is a values-only preview of the underlying model logic.
Operating drivers and deal structure assumptions
Every figure traces back to the Assumptions tab, which holds acquirer, target, transaction, financing, synergy, integration, purchase accounting, operating, and sensitivity-range inputs in one place.
- Because the whole model reads from these named inputs, changing the offer premium, cost synergy estimate, cash-versus-stock mix, or target net debt should flow through the transaction summary, the debt schedule and the income statement consistently.
- The transaction summary then builds Sources & Uses, which must tie, and calculates the purchase price allocation including goodwill, implied multiples and the exchange ratio for stock consideration.
How the acquisition flows through the financial statements
The pro-forma income statement combines acquirer and target results with synergies and integration costs, moving from combined EBITDA through purchase-accounting amortisation, interest, transaction and financing fees, foregone cash interest, tax and net income to EPS.
- Interest is sourced from the debt schedule opening balances rather than parallel formulas, so edits to the debt schedule propagate correctly.
- The balance sheet builds Day-1 acquisition adjustments and rolls forward five years with a balance check in each column, while the cash flow statement links opening cash from the Day-1 balance sheet and returns closing cash to it.
- A standalone income statement provides the acquirer-only counterfactual for comparison.
Accretion, dilution and credit outputs
The Accretion_Dilution tab compares pro-forma EPS with standalone EPS and decomposes the difference through a net income bridge with an explicit tie check, plus a per-share bridge that includes a share dilution drag line and its own tie check.
- The Credit_Metrics tab models acquisition and existing debt from opening balance through amortisation, balloon and closing balance, driving leverage and interest coverage ratios.
- It also tracks pro-forma equity via a market-cap proxy and a separate book equity rollforward.
- These outputs show how deal financing and purchase accounting affect reported earnings and credit quality over the projection horizon.
Buyer returns, sensitivity and validation
Buyer_Returns calculates equity invested at close, dividends over years one to five, and terminal equity value from an exit EBITDA multiple applied to pro-forma EBITDA less net debt plus cash, scaled by ownership share. It produces IRR and MOIC alongside a break-even cost-synergy sweep.
- The Sensitivity tab provides two-way grids on premium versus cost synergies and premium versus cash mix, anchored to base-case inputs with the base highlighted and tied to year-three accretion. A consolidated Checks panel tests sources and uses, the independent PPA identity, bridge ties, balance sheet balance, debt continuity, sensitivity tie-out, integration headroom and buyer return bounds, flagging PASS or FAIL.
- The download is a values-only preview.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
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Frequently asked
What is an M&A model?+
An M&A model analyses how a transaction affects a buyer through financing, synergies, purchase accounting, and pro forma earnings.
What is accretion dilution?+
It tests whether a transaction increases or decreases the buyer's earnings per share after financing and synergies are considered.
Have more financial modelling questions? Contact us
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