Monstra Mihi Pecuniam: A Report on Projecting and Quantifying Operational Synergies in a Group Merger

Abstract: Synergy projection and quantification is a key issue in every strategic M&A transaction. In 2006, acquirers are estimated to have paid over US$ 1 trillion in synergy deal premiums. However, synergy projection and quantification is an underdeveloped academic field. This case report has developed three models in order to project and quantify operational synergies in an anonymous entity, referred to as The Group. This has been done in order to identify the capital requirements for The Group in regard to a set of acquisitions The Group aims to execute. This report estimates that approximately SEK 12.6M in cash flow will be derived from synergy effects by 2010. In regard to The Group’s planned acquisitions, there is no need for additional equity. On the contrary, The Group can support further acquisitions to a maximum value of SEK 230.1M by 2010.