Acquisition valuations are complex, because the valuation often involved issues like synergy and control, which go beyond just valuing a target firm.


Following are the steps in Acquisition valuation process: 


Step 1: Establish a motive for the acquisition

Step 2: Choose a target

Step 3: Value the target with the acquisition motive built in.

Step 4: Decide on the mode of payment – cash or stock, and if cash, arrange for financing – debt or equity.
Step 5: Choose the accounting method for the merger/acquisition-purchase or pooling.

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