Inputs
Acquirer
$
Annual, after tax.
shares
$
Used to compute new shares if stock is issued.
Target
$
$
Enterprise adjustments ignored for simplicity; use equity value for mix.
Deal structure
%
%
%
%
%
%
Adjustments
$
$
Mix percentages must sum to 100%. Click "Normalize" to scale them proportionally.
Example scenarios
| Scenario | NI A | SO A | P(A) | NI T | Price | Stock% | Cash% | Debt% | rdebt | rcash | Tax | Synergy | Amort | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash-heavy | $1,200,000,000 | 600,000,000 | $50.00 | $300,000,000 | $8,000,000,000 | 10 | 70 | 20 | 6% | 3% | 25% | $50,000,000 | -$20,000,000 | |
| Balanced | $1,200,000,000 | 600,000,000 | $55.00 | $350,000,000 | $9,000,000,000 | 40 | 20 | 40 | 6.5% | 3.5% | 24% | $80,000,000 | -$30,000,000 | |
| Stock-heavy | $900,000,000 | 400,000,000 | $40.00 | $250,000,000 | $5,000,000,000 | 80 | 10 | 10 | 7% | 2.5% | 26% | $25,000,000 | -$15,000,000 |
Click Load to prefill the inputs with that scenario.
Results
—
Standalone EPS (A)
—
Pro forma EPS
—
Accretion / Dilution
—
New shares issued
| Metric | Value |
|---|---|
| Equity purchase price | — |
| Stock consideration | — |
| Cash consideration | — |
| Debt consideration | — |
| After-tax interest expense (debt) | — |
| After-tax lost interest income (cash) | — |
| Synergies (after tax) | — |
| Amortization / other charges (after tax) | — |
| Pro forma net income | — |
| Pro forma shares | — |
Scenario graph
Chart shows pro forma EPS and accretion percentage across stock mix from selected start to 100%, scaling cash and debt proportionally to their original ratio.
Formulas used
- Standalone EPS (A): EPSA = NIA / SOA
- Consideration amounts: Stock = Price × %Stock; Cash = Price × %Cash; Debt = Price × %Debt
- New shares issued: Sharesnew = Stock / PA
- Pro forma shares: SOPF = SOA + Sharesnew
- After‑tax financing impacts:
- Debt: Interestafter tax = Debt × rdebt × (1 − t)
- Cash: Lost incomeafter tax = Cash × rcash × (1 − t)
- Pro forma net income: NIPF = NIA + NIT + Synergies + Amortization − Interestdebt − Lost incomecash
- Pro forma EPS: EPSPF = NIPF / SOPF
- Accretion / Dilution: %Δ = (EPSPF − EPSA) / EPSA × 100%
All inputs are annualized. One‑time costs are typically excluded from EPS. Adjust tax rate to match your jurisdiction.
How to use
- Enter acquirer and target net income plus acquirer share count and price.
- Provide the equity purchase price and choose the stock, cash, and debt mix.
- Set financing rates and tax rate; add after‑tax synergies and any amortization charges.
- Click Compute. Review EPS figures, accretion percentage, and financing impacts.
- Use the chart to explore sensitivity to the stock mix while holding other assumptions constant.
- Export results via CSV or PDF for sharing and audit trails.
Tip: If the mix percentages do not sum to 100%, use the normalize button.
FAQs
Accretive deals raise the buyer’s EPS versus standalone. Dilutive deals lower EPS. This tool compares pro forma EPS to the acquirer’s standalone EPS to label the outcome.
Inputs here are after tax for clarity. If you have pre‑tax synergies, multiply by (1 − tax rate) to convert to after‑tax before entering.
Only an after‑tax amortization field is provided. For full purchase accounting, add incremental amortization or step‑ups as after‑tax charges and adjust synergies if needed.
Interest expense and interest income are pre‑tax. The model multiplies each by (1 − tax rate) to compute the after‑tax impact on net income.
New shares issued are computed as stock consideration divided by the current acquirer share price. Update the price to see impact on dilution.
Those require additional schedules. Approximate by adding expected after‑tax charges to amortization and adjusting shares if conversion is anticipated.
It is common while iterating mixes. Use the normalize button to scale stock, cash, and debt to sum to 100% while preserving their relative proportions.
Educational tool only. Not investment advice.