Skills › Financial Services › merger-model
merger-model
The facts
Its description
Build accretion/dilution analysis for M&A transactions. Models pro forma EPS impact, synergy sensitivities, and purchase price allocation. Use when evaluating a potential acquisition, preparing merger consequences analysis for a pitch, or advising on deal terms. Triggers on "merger model", "accretion dilution", "M&A model", "pro forma EPS", "merger consequences", or "deal impact analysis".
The description the agent reads to decide when to use it.
From its settingsline 3
When it starts
The agent would pick this skill when someone is weighing a specific acquisition and wants to know the earnings impact — whether the deal is accretive or dilutive to EPS, what synergies or premium would make it EPS-neutral, or how cash/stock mix changes the outcome. It is triggered by talk of a merger model, accretion/dilution, pro forma EPS, or merger consequences for a pitch.
Things a person might say (the model's guesses)
- “We're thinking about buying this competitor — will the deal be accretive or dilutive to our EPS?”
- “Can you build a merger consequences analysis for the board deck?”
- “How much in synergies do we need for this deal to be EPS-neutral in year one?”
A model's summary of when it is used.
A model's reading
Licence
Apache-2.0, from LICENSE
The terms its author shares it under, which let it be shown here.
From the repositorylicence text
The text
1---
2name: merger-model
3description: Build accretion/dilution analysis for M&A transactions. Models pro forma EPS impact, synergy sensitivities, and purchase price allocation. Use when evaluating a potential acquisition, preparing merger consequences analysis for a pitch, or advising on deal terms. Triggers on "merger model", "accretion dilution", "M&A model", "pro forma EPS", "merger consequences", or "deal impact analysis".
4---
6# Merger Model
Merger Model
Raw lines 1 to 7Workflow
Raw lines 8 to 910### Step 1: Gather Inputs
12**Acquirer:**
13- Company name, current share price, shares outstanding
14- LTM and NTM EPS (GAAP and adjusted)
15- P/E multiple
16- Pre-tax cost of debt, tax rate
17- Cash on balance sheet, existing debt
19**Target:**
20- Company name, current share price, shares outstanding (if public)
21- LTM and NTM EPS or net income
22- Enterprise value or equity value
24**Deal Terms:**
25- Offer price per share (or premium to current)
26- Consideration mix: % cash vs. % stock
27- New debt raised to fund cash portion
28- Expected synergies (revenue and cost) and phase-in timeline
29- Transaction fees and financing costs
30- Expected close date
Step 1: Gather Inputs
Acquirer:
- Company name, current share price, shares outstanding
- LTM and NTM EPS (GAAP and adjusted)
- P/E multiple
- Pre-tax cost of debt, tax rate
- Cash on balance sheet, existing debt
Target:
- Company name, current share price, shares outstanding (if public)
- LTM and NTM EPS or net income
- Enterprise value or equity value
Deal Terms:
- Offer price per share (or premium to current)
- Consideration mix: % cash vs. % stock
- New debt raised to fund cash portion
- Expected synergies (revenue and cost) and phase-in timeline
- Transaction fees and financing costs
- Expected close date
32### Step 2: Purchase Price Analysis
34| Item | Value |
35|------|-------|
36| Offer price per share | |
37| Premium to current | |
38| Equity value | |
39| Plus: net debt assumed | |
40| Enterprise value | |
41| EV / EBITDA implied | |
42| P/E implied | |
Step 2: Purchase Price Analysis
| Item | Value |
|---|---|
| Offer price per share | |
| Premium to current | |
| Equity value | |
| Plus: net debt assumed | |
| Enterprise value | |
| EV / EBITDA implied | |
| P/E implied |
44### Step 3: Sources & Uses
46| Sources | $ | Uses | $ |
47|---------|---|------|---|
48| New debt | | Equity purchase price | |
49| Cash on hand | | Refinance target debt | |
50| New equity issued | | Transaction fees | |
51| | | Financing fees | |
52| **Total** | | **Total** | |
Step 3: Sources & Uses
| Sources | $ | Uses | $ |
|---|---|---|---|
| New debt | Equity purchase price | ||
| Cash on hand | Refinance target debt | ||
| New equity issued | Transaction fees | ||
| Financing fees | |||
| Total | Total |
54### Step 4: Pro Forma EPS (Accretion / Dilution)
56Calculate year-by-year (Year 1-3):
58| | Standalone | Pro Forma | Accretion/(Dilution) |
59|---|-----------|-----------|---------------------|
60| Acquirer net income | | | |
61| Target net income | | | |
62| Synergies (after tax) | | | |
63| Foregone interest on cash (after tax) | | | |
64| New debt interest (after tax) | | | |
65| Intangible amortization (after tax) | | | |
66| Pro forma net income | | | |
67| Pro forma shares | | | |
68| **Pro forma EPS** | | | |
69| **Accretion / (Dilution) %** | | | |
Step 4: Pro Forma EPS (Accretion / Dilution)
Calculate year-by-year (Year 1-3):
| Standalone | Pro Forma | Accretion/(Dilution) | |
|---|---|---|---|
| Acquirer net income | |||
| Target net income | |||
| Synergies (after tax) | |||
| Foregone interest on cash (after tax) | |||
| New debt interest (after tax) | |||
| Intangible amortization (after tax) | |||
| Pro forma net income | |||
| Pro forma shares | |||
| Pro forma EPS | |||
| Accretion / (Dilution) % |
71### Step 5: Sensitivity Analysis
73**Accretion/Dilution vs. Synergies and Offer Premium:**
75| | $0M syn | $25M syn | $50M syn | $75M syn | $100M syn |
76|---|---------|----------|----------|----------|-----------|
77| 15% premium | | | | | |
78| 20% premium | | | | | |
79| 25% premium | | | | | |
80| 30% premium | | | | | |
82**Accretion/Dilution vs. Cash/Stock Mix:**
84| | 100% cash | 75/25 | 50/50 | 25/75 | 100% stock |
85|---|-----------|-------|-------|-------|------------|
86| Year 1 | | | | | |
87| Year 2 | | | | | |
Step 5: Sensitivity Analysis
Accretion/Dilution vs. Synergies and Offer Premium:
| $0M syn | $25M syn | $50M syn | $75M syn | $100M syn | |
|---|---|---|---|---|---|
| 15% premium | |||||
| 20% premium | |||||
| 25% premium | |||||
| 30% premium |
Accretion/Dilution vs. Cash/Stock Mix:
| 100% cash | 75/25 | 50/50 | 25/75 | 100% stock | |
|---|---|---|---|---|---|
| Year 1 | |||||
| Year 2 |
89### Step 6: Breakeven Synergies
91Calculate the minimum synergies needed for the deal to be EPS-neutral in Year 1.
Step 6: Breakeven Synergies
Calculate the minimum synergies needed for the deal to be EPS-neutral in Year 1.
Raw lines 89 to 9293### Step 7: Output
95- Excel workbook with:
96 - Assumptions tab
97 - Sources & uses
98 - Pro forma income statement
99 - Accretion/dilution summary
100 - Sensitivity tables
101 - Breakeven analysis
102- One-page merger consequences summary for pitch book
Step 7: Output
- Excel workbook with:
- Assumptions tab
- Sources & uses
- Pro forma income statement
- Accretion/dilution summary
- Sensitivity tables
- Breakeven analysis
- One-page merger consequences summary for pitch book
104## Important Notes
106- Always show both GAAP and adjusted (cash) EPS where relevant
107- Stock deals: use acquirer's current price for exchange ratio, note dilution from new shares
108- Include purchase price allocation — goodwill and intangible amortization matter for GAAP EPS
109- Synergy phase-in is critical — Year 1 is often only 25-50% of run-rate synergies
110- Don't forget foregone interest income on cash used and new interest expense on debt raised
111- Tax rate on synergies and interest adjustments should match the acquirer's marginal rate
Important Notes
- Always show both GAAP and adjusted (cash) EPS where relevant
- Stock deals: use acquirer's current price for exchange ratio, note dilution from new shares
- Include purchase price allocation — goodwill and intangible amortization matter for GAAP EPS
- Synergy phase-in is critical — Year 1 is often only 25-50% of run-rate synergies
- Don't forget foregone interest income on cash used and new interest expense on debt raised
- Tax rate on synergies and interest adjustments should match the acquirer's marginal rate
From anthropics/financial-services at 6056506, 2026-10-28. Skills read by DeepSeek V4.1 Flash on 2026-11-04. Summary and techniques by Claude Opus 5.5 on 2026-11-06.