Accretion / Dilution Model
M&A accretion/dilution analysis with pro forma EPS, synergies phase-in, sources & uses, and sensitivity across offer price and deal structure.
Overview
What is a Accretion / Dilution?
An Accretion/Dilution analysis determines whether an acquisition will increase (accrete) or decrease (dilute) the acquirer's earnings per share. It's a critical test in any M&A deal — boards and shareholders want to know if a deal creates or destroys value on a per-share basis.
M&A advisory teams build accretion/dilution models for every potential deal. It's presented to boards of directors as part of the fairness opinion. IB interview candidates are frequently asked to walk through the mechanics.
Features
What you get with this model
Pro forma EPS with combined entity modeling
Synergies phase-in over multiple years
Sources & uses of funds analysis
Sensitivity across offer price and deal structure (cash/stock mix)
Break-even synergies calculation
Use cases
How to use this model
M&A deal evaluation: is this acquisition accretive or dilutive?
Interview prep: walk through an accretion/dilution analysis
Board presentation: analyze deal impact on shareholder value
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