Accretion / Dilution Analysis tries to answer an important question when it comes to corporate acquisitions – does the deal create or destroy value for shareholders of the buyer? Answering this question requires analyzing what happens to Earnings Per Share (EPS) after the acquisition. The acquisition is accretive when the combined (Pro Forma) EPS are higher than the standalone forecast EPS of the buyer. It is dilutive when the Pro Forma EPS are lower than the standalone EPS.
Accretion/Dilution Model
Use this accretion/dilution model template to determine the effect an acquisition will have on shareholder value and EPS.
