Training · IB-2 · Lesson 12 of 12
Case study: a real acquisition
The rule
Take one public deal and rebuild it: price paid, implied multiple, financing, and whether the buyer's stock reacted as the model predicted.
How to study a deal
Take any large announced acquisition and work through it as a banker would: why the buyer wanted it, what was paid, how it was funded, and whether it made sense. Interviewers ask about deals to see whether you can connect strategy, valuation and financing in one story.
Step 1: strategic rationale
Read the press release and investor presentation. Identify the stated rationale — new market, new product, scale — and test it. Does the target actually fill a gap? Was there a cheaper way to get the same capability?
Step 2: price and multiples
Calculate the enterprise value, the multiple of EBITDA and revenue paid, and the premium over the undisturbed share price. Compare with peers and recent precedents.
- Offer per share
- $60
- Undisturbed price
- $45
- Premium
- 33%
- Enterprise value
- $12.0bn
- LTM EBITDA
- $900m
- EV/EBITDA paid
- 13.3x
- Sector trading median
- 10.5x
Step 3: funding and impact
Note the mix of cash, new debt and stock, and the effect on leverage. Estimate the accretion or dilution with and without synergies. Check what rating agencies said and how the buyer's share price reacted on announcement — the market's first verdict.
Step 4: your view
Finish with a clear judgement: was it a good deal for the buyer's shareholders, and what would have to be true for it to work? A two-minute version of this analysis, delivered confidently, is one of the strongest things you can bring to an interview.
- ·Thesis in one sentence.
- ·Price paid versus value of synergies.
- ·Biggest risk and how you'd monitor it.
Hold onto this
- ·Start from the buyer's disclosed pro forma, then strip back to your own assumptions.
- ·Compare the price paid to trading comps and to the buyer's own multiple.
- ·Write the one sentence that says why the deal worked or failed.
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Education, not financial advice. Figures may be simplified for illustration.