Mergers and Acquisition (M&A) Financial Projection Model (Excel XLSX)

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BENEFITS OF THIS EXCEL DOCUMENT

1. Excel model to project and analyse the financial outcomes and feasibility of an M&A transaction.

M&A EXCEL DESCRIPTION

Editor Summary An Mergers and Acquisition (M&A) Financial Projection Model is an XLSX financial model (with supplemental XLSX) built by former Deloitte financial modeling professionals, accountants, and CFA charterholders that produces 3-statement forecasts and DCF valuations. Read more The model provides 5-year projected Income Statement, Balance Sheet and Cash Flow for acquirer, target and merged entities, includes 3 synergy scenarios, integrated ratio analysis, a checks dashboard and 10 tabs (input, calculation, output, system). Sold as a digital download on Flevy with immediate digital download.

Use this model when evaluating a potential merger or acquisition to quantify synergies, compare intrinsic values, and forecast post-deal performance over a 5-year horizon.
  Corporate development managers building 5-year pro-forma financial statements and DCF valuations for both stand-alone and combined entities.
  M&A analysts stress-testing 3 synergy scenarios (revenue increases and cost reductions) versus consideration and transaction costs using scenario dropdowns.
  Investment bankers preparing charts of sources of funds, offer versus intrinsic value per share, and EPS accretion analyses for deal negotiations.
The model’s structured 3-statement forecasting, integrated DCF valuation, scenario analysis, and audit-style checks reflect financial modelling practices used in advisory firms such as Deloitte.

An M&A Financial Projection Model is crucial for evaluating the financial viability and potential synergies of a merger or acquisition. It helps assess the combined entity's future financial health, identify cost-saving opportunities, and estimate post-deal cash flows. This model informs strategic decision-making, supports negotiations, and guides integration planning. It also assists in securing financing and gaining approval from stakeholders. Ultimately, an M&A Financial Projection Model is an indispensable tool for mitigating risks, optimizing value creation, and ensuring the success of complex corporate transactions.

PURPOSE OF TOOL
User-friendly financial model to project and analyse the financial outcomes of an M&A transaction. The model enables the user to project the financial performance and position (3-statement financial forecast) over a 5-year period of the stand-alone acquiring business, target business and merged business with the inclusion of any revenue and cost synergy benefits to the latter. The model also enables the user to qualify the intrinsic value of the stand-alone acquirer, target and merged business using the discounted cashflow (DCF) approach.

The model compares these outputs in a dashboard to help the user determine the financial feasibility of the M&A transaction including, amongst others:
•  Synergy benefits vs consideration
•  Revenue, EBITDA and net profit performance of combined entity vs sum of stand-alone entities
•  Intrinsic enterprise and equity values before and after the transaction
•  Gearing, ROE and margin development pre and post transaction
•  Earnings per share pre and post transaction

The model includes 3 scenarios for synergy benefits and pro-forma financial statements for the merged business showing goodwill and impact of sources of funds for consideration.

The model follows good practice financial modelling principles and includes instructions, checks and input validations.

KEY OUTPUTS
The key outputs include:
•  Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) across 5 years presented on a yearly basis for stand-alone acquirer, target and merged business
•  Discounted cash flow valuation using the projected cash flow output for acquirer, target and merged business
•  Ratio Analysis based on projected financial statements for acquirer, target and merged business
•  Summarised tables and charts showing:
Key transaction outputs including, offer/market and intrinsic value per share, total synergy benefits, consideration and transaction costs
Charts showing breakdown of synergy benefits and sources of funds
Key performance metrics and ratio comparison between acquirer, target and merged entity in table and chart format including revenue growth, EBITDA, net profit, margin, ROE, EPS and debt to equity ratios)
Key valuation comparison between acquirer, target and merged entity in table and chart format

KEY INPUTS
Inputs are split into Setup inputs, Acquirer entity inputs, target entity inputs and merged entity inputs.

Setup Inputs:
•  Names of transaction, acquiring entity and target entity
•  Currency;
•  Transaction close period;
•  Latest share prices and outstand shares;
•  Offer premium and consideration type;
•  Transaction costs;
•  Naming of synergy scenarios.

Acquiring and Target Entity Projection Inputs:
•  Latest P&L and balance sheet actuals;
•  Forecast revenue;
•  Forecast cost of sales;
•  Forecast operating expenses including depreciation;
•  Fixed asset additions;
•  Borrowing additions/repayments;
•  Dividend distributions;
•  Tax rate and interest rates;
•  Debtor and creditor days;
•  Inventory percentage of cost of sales;
•  Discount rate and terminal growth rate.

Merged Entity Inputs:
•  Synergy benefits (revenue increases, cost reductions) for each scenario
•  Tax rate and interest rates;
•  Debtor and creditor days;
•  Inventory percentage of cost of sales;
•  Discount rate and terminal growth rate.
•  Borrowing additions/repayments;
•  Dividend distributions;
•  Pro-forma opening balance sheet adjustments.

MODEL STRUCTURE
The model comprises of 10 tabs split into input ('i_'), calculation ('c_'), output ('o_') and system tabs. The tabs to be populated by the user are the input tabs which include ‘i_Setup' for model and transaction general assumptions and ‘i_Acquirer', ‘i_Target' and ‘i_Merged' for specific projection assumptions relating to the stand-alone entity and combined entity. The calculation tabs uses the user-defined inputs to calculate and produce the projection outputs which are presented in the calculation tabs and ‘o_Dashboard' tab.

System tabs include:
•  A 'Front Sheet' containing a disclaimer, instructions and contents;
•  A checks dashboard containing a summary of checks by tab.

KEY FEATURES
Other key features of this model include the following:
•  The model follows good practice financial modelling guidelines and includes instructions, checks and input validations to help ensure input fields are populated accurately;
•  The model enables the user to prepare projections for the acquirer, target and merged entity across a 5-year timeline with an additional 3 years of actuals in the case of the acquirer and target stand-alone businesses.
•  The model includes the possibility to model synergy benefits across 3 scenarios with a drop down in the dashboard tab to change scenario.
•  The model is not password protected and can be modified as required following download;
•  The model is reviewed using specialised model audit software to help reduce risk of formula inconsistencies;
•  Apart from projecting revenue and costs the model includes the possibility to model receivables and payables, inventory, fixed assets, borrowings, dividends and corporate tax;
•  Business names, currency and transaction close date are fully customisable;
•  The model included an integrated discounted cash flow valuation for acquirer, target and merged business using the projected cash flow outputs;
•  The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.

TOPIC FAQ

What are the essential components of an M&A financial projection model?

An M&A financial projection model typically includes 3-statement projections (Income Statement, Balance Sheet, Cash Flow) for acquirer, target and merged entities, integrated discounted cash flow valuation, ratio analysis, scenario-based synergy modelling, pro-forma opening balance adjustments and a checks dashboard; the referenced product presents these outputs across a 5-year forecast.

How should synergy benefits be represented in an M&A model?

Synergy benefits are captured as revenue increases and cost reductions applied to the merged entity inputs, with the model allowing multiple scenarios to compare outcomes; the Mergers and Acquisition (M&A) Financial Projection Model supports 3 distinct synergy scenarios selectable from the dashboard.

Which inputs are required to prepare a 3-statement M&A projection?

Key inputs include latest P&L and balance sheet actuals, forecast revenue, cost of sales, operating expenses (including depreciation), fixed asset additions, borrowing movements, dividends, tax and interest rates, debtor and creditor days, inventory as a percent of cost of sales, and discount and terminal growth rates.

How is valuation performed within an M&A projection model?

Valuation is performed using a discounted cash flow (DCF) approach based on the projected cash flows for the acquirer, target and merged business; outputs compare intrinsic enterprise and equity values before and after the transaction and report offer/market and intrinsic value per share using the modelled cash flows.

What should I look for when selecting a downloadable M&A projection template?

Look for structured input tabs (setup, acquirer, target, merged), clear instructions and input validations, integrated DCF valuation, scenario-capable synergy modelling, ratio and dashboard outputs, and audit-style checks; the Mergers and Acquisition (M&A) Financial Projection Model explicitly includes a 10-tab structure and a checks dashboard.

How easy is it to customize a purchased M&A financial model for a specific deal?

Customization depends on the model and deal complexity,, but useful features include editable setup and entity input tabs, instructions, checks and input validations, and a non-password-protected workbook that can be modified after download; this model is supplied modifiable with guidance and checks.

Can an M&A model show whether a transaction is EPS accretive or dilutive?

Yes; models calculate earnings per share pre and post transaction and compare combined entity performance versus the sum of stand-alone entities, enabling accretion/dilution analysis alongside other metrics such as ROE, margin and debt-to-equity ratios.

How can a financial model support post-deal integration planning?

A model supports integration by producing pro-forma opening balance sheet adjustments, showing goodwill implications, projecting consolidated financial statements under different synergy scenarios, and providing ratio comparisons to prioritize integration actions based on forecasted financial impacts.

Source: Best Practices in M&A, Integrated Financial Model Excel: Mergers and Acquisition (M&A) Financial Projection Model Excel (XLSX) Spreadsheet, Projectify