6.2·6 min read
Accretion Isn't Value
The model tells you the EPS optics. Whether the deal is smart depends on price, synergies, and integration - not the sign of the EPS change.
By the end you can
- ✓Separate EPS impact from value creation
- ✓State what a banker concludes from the analysis
Accretive ≠ automatically good
- ›Cheap debt can mask overpaying
- ›EPS up, but value down if never appear
- ›Short-term optics, not a return
Dilutive ≠ automatically bad
- ›A fast grower can be worth the near-term hit
- ›Strategic fit may dominate year-1 EPS
- ›Stock currency may simply be expensive
What the analysis is for
/ is a quick read on how the market will likely greet the deal's EPS - not a verdict on value. The real questions sit beside it: is the price disciplined, are the real and achievable, and can the two companies actually be integrated?
Put together, the gives you a defensible answer to 'what happens to EPS, and why' - the and , the cash/stock mix, the and , the , and the new share count. That's the foundation every M&A conversation is built on.
Check yourself
An all-stock deal is 8% dilutive but the target grows 30% a year. The best read is:
Practice in the simulator
Lock it in by building it yourself in a live, graded spreadsheet.