• 4. The Roadmap to an Offer Price

    Now that we understand the basics of the M&A process, the logical next step is to think about the actual transaction price of a deal and what valuation steps are necessary to come up with a reasonable and sustainable offer price. The logical sequence is fairly simple:

    • Determine the current value of the involved firms (Stand-alone value)
    • Think about how the management of the target company could be improved (Control premium)
    • Try to quantify the benefits and costs that are associated with the transaction in question (Net synergy)
3. The Takeover Process5. The Initial Offer Price