Although not an essential component of our M&A model, the contribution analysis provides a useful side-by-side comparison of each company’s contribution to various line items on the combined business’ income statement.
This analysis is very straightforward, and simply requires plugging in numbers previously calculated and performing basic calculations. Note that the “Combined” net income figures omit synergies and acquisition accounting and financing adjustments, while the “Pro Forma” net income figures include synergies, but omit other adjustments. Therefore, we do not expect either set of figures will tie to numbers calculated elsewhere in our model.