M&A Accretion / Dilution Modeler
The first screen of any merger model: does this deal grow or shrink the acquirer's EPS? Set the consideration mix (cash / stock / debt), the cost of the new debt, the opportunity cost of the cash, and your synergy assumption — and read the pro-forma EPS, the accretion / dilution %, the breakeven synergies that flip the deal to neutral, and the pro-forma ownership split. Pure client-side math.
Inputs
Acquirer
Target
Consideration & financing
Pro-Forma EPS Impact
Pro-Forma Net Income Bridge
Accretion / Dilution vs Stock Mix — holding total consideration constant
Methodology — the accretion / dilution math
Purchase price — offer price = target current price × (1 + premium%); equity purchase price = offer price × target shares. Implied P/E paid = price ÷ target net income.
Consideration mix splits the purchase price into cash, stock, and debt. New shares issued = stock consideration ÷ acquirer share price. (Mix percentages are normalized to 100% if they don't sum.)
Pro-forma net income = acquirer NI + target NI + after-tax synergies − after-tax interest on new debt − after-tax foregone interest on cash used. Each financing cost is tax-affected: × (1 − tax). Foregone interest captures the opportunity cost of spending balance-sheet cash.
Pro-forma EPS = pro-forma NI ÷ (acquirer shares + new shares issued). Accretion / dilution % = pro-forma EPS ÷ acquirer standalone EPS − 1. Positive = accretive (EPS grows), negative = dilutive.
Breakeven synergies — the pre-tax annual synergies required to make pro-forma EPS exactly equal the acquirer's standalone EPS. The rule of thumb still holds: paying with stock is dilutive when the acquirer's P/E is below the P/E it pays for the target, and accretive when it's above.
What's intentionally omitted — transaction fees, financing fees and OID, incremental D&A from a purchase-price-allocation step-up, target debt refinancing, NOLs, and full balance-sheet integration. This is the EPS-impact screen, not a full three-statement merger model.
Educational financial-modeling tool — not investment advice. A real merger model layers in PPA step-up D&A, fees, and balance-sheet integration that move the answer. Confirm against a full model before any deal decision. All math runs in your browser; no inputs are sent to a server.