Accretion/Dilution: Cash-Stock Mix

Now let’s determine the accretion/dilution for the cash/stock consideration mix we have assumed for this deal over a range of possible transaction prices. We have set up this section of the analysis to default to a 50%/50% cash/stock mix in the event that the transaction assumptions call for an all-stock or all-cash transaction.

At this point, you should check that the accretion/dilution computed on this tab for the for the selected transaction price matches the accretion/dilution computed on the pro forma P&L for 2009. When performing this check, make sure you are comparing “apples to apples” by verifying that you are using the same accounting method (i.e. cash vs. GAAP) and synergies (i.e. synergies vs. no synergies).