Forecasting Value and Growth with Merger and Acquisitions Modeling

June 8, 2021

A viable strategy for growing your business and reaching untapped markets is expanding through the acquisition of other brands and by participating in mergers. By definition, this can include a variety of things from corporate sales and consolidations as well as purchases. Even small and medium-sized businesses can benefit from taking part in this particular endeavor, as it is possible to combine two firms without having a great deal of capital on hand first. 

Assessing Potential

Both players will have access to a viable segment of the buying public, as they will have developed their own unique way of meeting a felt need. This will include their marketing efforts and the teams and culture they have built around communicating with the buyers in their purview. As such, it is vital to understand that a combination of these forces usually adds more value than simply adding the two together but tends to have a more expansive effect.

The reason tends to be that press is generated by these events as well as the overall excitement people get when watching something new and novel occur. The M & A process is a step that companies take before embarking on the step of joining forces, and this analysis can take anywhere from six months to a period of a few years to complete. This will be paramount to securing the approval of shareholders from the prospective partners prior to their consolidation. 


Part of your investment will result in the expenditure of less money than before, as you will be able to pool resources together. This will enable your bottom line to increase by default and is an effect belonging to the category labeled synergies. Structuring an organization from two means you can benefit from your shared information technology as well as efficiencies in the supply chain. 

You need to develop a detailed breakdown of costs attached to processes to compare where you can reduce spending by adopting one or the other’s protocol. You both likely work with different vendors and may also be able to secure better pricing by adding volume to your current shipment requirements. This also extends to your distribution of marketing materials and can significantly assist in your message being heard in greater volume for less money, all of which in turn will affect the forecasting of your financial trajectory. 

Combination Of The Two

Essentially, you’ll also be examining the role of research and development efforts and how combining these will lead to your total success. This means that you can likely cut the amount of production required when both entities are separate. A vital part of your modeling is working out the details involved in finding solutions that will contribute to the merged corporation. 

When both have come together into one, you will also find the reduction of corporate staffing. For example, you will not need to have two CEOs, CFOs, or other essential roles. These tend to be higher-end positions commanding large salaries and can free up revenue better spent elsewhere. When taken to its logical conclusion, this same principle will apply to the entirety of your merger and will result in a trimmer work force. 

Fidelman and Co. can assist you with assessing your needs and crafting a plan when you work to experience growth in this way. Though lengthy and thorough, a carefully executed merger and acquisitions model helps pave the road to a seamless convergence to the fulfillment of your professional goals and objectives.

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