The origin of the word synergy is grega (Synergos) and means “working together”.
Synergies represent potential or expectations and do not exist on balance sheets.
In M&A, synergies appear as forces of attraction for businesses and can be classified into the following three major categories: revenue synergies, cost synergies and balance sheet synergies.
Quantifying synergies depends on analyzing different scenarios, risks and levels of investor aspiration and appraisers with more experience are more precise in these estimates.
Another important aspect in this valuation is defining how synergies are divided between the seller and the buyer.
Research by the Boston Consulting Group shows that 69% of the value of synergies “belongs” to the buyer and 31% “belongs” to the seller.
Synergies also clarify a lot about the goodwill of companies.
The disclosure of synergies in M&A brings greater credibility and confidence to the market.
Good decisions require good information and Mynarski International can help to have better information.