{"id":3353,"date":"2024-09-16T09:05:27","date_gmt":"2024-09-16T05:05:27","guid":{"rendered":"https:\/\/eoninvestment.com\/?p=3353"},"modified":"2024-09-16T09:05:27","modified_gmt":"2024-09-16T05:05:27","slug":"accretive-destruction","status":"publish","type":"post","link":"https:\/\/eoninvestment.com\/ka\/2024\/09\/16\/accretive-destruction\/","title":{"rendered":"Value Destructive Accretive Acquisition"},"content":{"rendered":"\n

Managers often justify mergers and acquisitions by claiming that the operation is accretive, meaning that EPS (earnings per share) increases, and therefore shareholders should be satisfied. However, the market focuses not on transactional accounting but on whether value is actually being created.<\/p>\n\n\n\n

The table below discusses a hypothetical example that shows the deterioration of an organization’s value despite an increase in EPS.<\/p>\n\n\n\n

Two scenarios are considered: a cash deal and a stock deal. It is initially assumed that the buyer pays a 100 million premium above the target organization’s market value but fails to achieve real synergies to improve operational results. The acquisition is financed by taking on debt. Because the profitability of the target organization is higher than the interest on the debt, EPS increases\u2014but not enough to justify the risks associated with increased leverage.<\/p>\n\n\n\n

In the second scenario, where the deal is made with stock, EPS increases, but this is simply accounting and not real value creation. Value would only increase if ROIC (return on invested capital) exceeded WACC (weighted average cost of capital). An increase in EPS alone does not provide this assurance.<\/p>\n\n\n\n

There are also opposite cases in practice. A deal can be dilutive, meaning EPS decreases initially. For example, when an organization acquires a growing business that has not yet become profitable but has great potential for the future. EPS will decrease in the first few years, but this does not necessarily mean that the deal is a losing operation for the buyer.<\/p>\n\n\n\n

Source:<\/p>\n\n\n\n

Valuation, Measuring and Managing the Value of Companies – by McKinsey & Co, T. Koller, M. Goedhart, D. Wessels<\/p>\n\n\n\n

—————————————————————————————————————<\/p>\n\n\n\n

\u10db\u10d4\u10dc\u10d4\u10ef\u10d4\u10e0\u10d4\u10d1\u10d8 \u10e8\u10d4\u10e0\u10ec\u10e7\u10db\u10d0-\u10e8\u10d4\u10e1\u10e7\u10d8\u10d3\u10d5\u10d0\u10e1 \u10ee\u10e8\u10d8\u10e0\u10d0\u10d3 \u10d0\u10db\u10d0\u10e0\u10d7\u10da\u10d4\u10d1\u10d4\u10dc \u10d8\u10db\u10d8\u10d7, \u10e0\u10dd\u10db \u10dd\u10de\u10d4\u10e0\u10d0\u10ea\u10d8\u10d0 \u10d0\u10e0\u10d8\u10e1 Accretive, \u10d0\u10dc\u10e3 EPS-\u10d8 \u10d8\u10d6\u10e0\u10d3\u10d4\u10d1\u10d0, \u10d3\u10d0 \u10d0\u10db\u10d8\u10e2\u10dd\u10db \u10d0\u10e5\u10ea\u10d8\u10dd\u10dc\u10d4\u10e0\u10d4\u10d1\u10d8 \u10d9\u10db\u10d0\u10e7\u10dd\u10e4\u10d8\u10da\u10d4\u10d1\u10d8 \u10e3\u10dc\u10d3\u10d0 \u10d8\u10e7\u10d5\u10dc\u10d4\u10dc. \u10d7\u10e3\u10db\u10ea\u10d0, \u10d1\u10d0\u10d6\u10d0\u10e0\u10d8 \u10e7\u10e3\u10e0\u10d0\u10d3\u10e6\u10d4\u10d1\u10d0\u10e1 \u10d0\u10e5\u10ea\u10d4\u10d5\u10e1 \u10d0\u10e0\u10d0 \u10e2\u10e0\u10d0\u10dc\u10d6\u10d0\u10e5\u10ea\u10d8\u10e3\u10da \u10d1\u10e3\u10e6\u10d0\u10da\u10e2\u10d4\u10e0\u10d8\u10d0\u10e1, \u10d0\u10e0\u10d0\u10db\u10d4\u10d3 \u10d8\u10db\u10d0\u10e1 \u10d8\u10e5\u10db\u10dc\u10d4\u10d1\u10d0 \u10d7\u10e3 \u10d0\u10e0\u10d0 \u10e6\u10d8\u10e0\u10d4\u10d1\u10e3\u10da\u10d4\u10d1\u10d0 \u10e0\u10d4\u10d0\u10da\u10e3\u10e0\u10d0\u10d3.<\/p>\n\n\n\n

\u10e5\u10d5\u10d4\u10db\u10dd\u10d7 \u10ea\u10ee\u10e0\u10d8\u10da\u10e8\u10d8 \u10d2\u10d0\u10dc\u10ee\u10d8\u10da\u10e3\u10da\u10d8\u10d0 \u10f0\u10d8\u10de\u10dd\u10d7\u10d4\u10e2\u10e3\u10e0\u10d8 \u10db\u10d0\u10d2\u10d0\u10da\u10d8\u10d7\u10d8, \u10e0\u10dd\u10db\u10d4\u10da\u10d8\u10ea \u10d0\u10e9\u10d5\u10d4\u10dc\u10d4\u10d1\u10e1 \u10dd\u10e0\u10d2\u10d0\u10dc\u10d8\u10d6\u10d0\u10ea\u10d8\u10d8\u10e1 \u10e6\u10d8\u10e0\u10d4\u10d1\u10e3\u10da\u10d4\u10d1\u10d8\u10e1 \u10e9\u10d0\u10db\u10dd\u10e8\u10da\u10d0\u10e1, EPS-\u10d8\u10e1 \u10d6\u10e0\u10d3\u10d8\u10e1 \u10db\u10d8\u10e3\u10ee\u10d4\u10d3\u10d0\u10d5\u10d0\u10d3.<\/p>\n\n\n\n

\u10dd\u10e0\u10d8 \u10d5\u10d4\u10e0\u10e1\u10d8\u10d0\u10d0 \u10d2\u10d0\u10dc\u10ee\u10d8\u10da\u10e3\u10da\u10d8, – \u10e8\u10d4\u10d7\u10d0\u10dc\u10ee\u10db\u10d4\u10d1\u10d0 \u10e5\u10d4\u10e8\u10d8\u10d7 \u10d3\u10d0 \u10e8\u10d4\u10d7\u10d0\u10dc\u10ee\u10db\u10d4\u10d1\u10d0 \u10d0\u10e5\u10ea\u10d8\u10d4\u10d1\u10d8\u10d7. \u10d7\u10d0\u10d5\u10d8\u10d3\u10d0\u10dc\u10d5\u10d4 \u10d3\u10d0\u10e8\u10d5\u10d4\u10d1\u10d0\u10d0 \u10d2\u10d0\u10d9\u10d4\u10d7\u10d4\u10d1\u10e3\u10da\u10d8 \u10e0\u10dd\u10db \u10db\u10e7\u10d8\u10d3\u10d5\u10d4\u10da\u10d8 \u10d8\u10ee\u10d3\u10d8\u10e1 100 \u10db\u10da\u10dc. \u10de\u10e0\u10d4\u10db\u10d8\u10e3\u10db\u10e1 \u10e8\u10d4\u10e1\u10d0\u10e1\u10e7\u10d8\u10d3\u10d8 \u10dd\u10e0\u10d2\u10d0\u10dc\u10d8\u10d6\u10d0\u10ea\u10d8\u10d8\u10e1 \u10e1\u10d0\u10d1\u10d0\u10d6\u10e0\u10dd \u10e6\u10d8\u10e0\u10d4\u10d1\u10e3\u10da\u10d4\u10d1\u10d8\u10e1 \u10d6\u10d4\u10db\u10dd\u10d7, \u10d7\u10e3\u10db\u10ea\u10d0 \u10d5\u10d4\u10e0 \u10d0\u10e6\u10ec\u10d4\u10d5\u10e1 \u10e0\u10d4\u10d0\u10da\u10e3\u10e0\u10d8 \u10e1\u10d8\u10dc\u10d4\u10e0\u10d2\u10d8\u10d8\u10d7 \u10e1\u10d0\u10dd\u10de\u10d4\u10e0\u10d0\u10ea\u10d8\u10dd \u10e8\u10d4\u10d3\u10d4\u10d2\u10d4\u10d1\u10d8\u10e1 \u10d2\u10d0\u10e3\u10db\u10ef\u10dd\u10d1\u10d4\u10e1\u10d4\u10d1\u10d0\u10e1. \u10e8\u10d4\u10e1\u10e7\u10d8\u10d3\u10d5\u10d0 \u10ee\u10d3\u10d4\u10d1\u10d0 \u10e1\u10d4\u10e1\u10ee\u10d8\u10e1 \u10d0\u10e6\u10d4\u10d1\u10d8\u10e1 \u10d2\u10d6\u10d8\u10d7. \u10e0\u10d0\u10d3\u10d2\u10d0\u10dc \u10e8\u10d4\u10e1\u10d0\u10e1\u10e7\u10d8\u10d3\u10d8 \u10dd\u10e0\u10d2\u10d0\u10dc\u10d8\u10d6\u10d0\u10ea\u10d8\u10d8\u10e1 \u10db\u10dd\u10db\u10d2\u10d4\u10d1\u10d8\u10d0\u10dc\u10dd\u10d1\u10d0 \u10e1\u10d4\u10e1\u10ee\u10d8\u10e1 \u10de\u10e0\u10dd\u10ea\u10d4\u10dc\u10e2\u10d6\u10d4 \u10db\u10d0\u10e6\u10d0\u10da\u10d8\u10d0 EPS-\u10d8 \u10d8\u10d6\u10e0\u10d3\u10d4\u10d1\u10d0 – \u10d7\u10e3\u10db\u10ea\u10d0 \u10d0\u10e0\u10d0 \u10d8\u10db\u10d3\u10d4\u10dc\u10d0\u10d3, \u10e0\u10dd\u10db \u10d2\u10d0\u10d6\u10e0\u10d3\u10d8\u10da\u10d8 \u10da\u10d4\u10d5\u10d4\u10e0\u10d4\u10ef\u10d8\u10d7 \u10d2\u10d0\u10db\u10dd\u10ec\u10d5\u10d4\u10e3\u10da\u10d8 \u10e0\u10d8\u10e1\u10d9\u10d4\u10d1\u10d8 \u10d2\u10d0\u10d0\u10db\u10d0\u10e0\u10d7\u10da\u10dd\u10e1.<\/p>\n\n\n\n

\u10db\u10d4\u10dd\u10e0\u10d4 \u10e8\u10d4\u10db\u10d7\u10ee\u10d5\u10d4\u10d5\u10d0\u10e8\u10d8, \u10e0\u10dd\u10ea\u10d0 \u10d2\u10d0\u10e0\u10d8\u10d2\u10d4\u10d1\u10d0 \u10ee\u10d3\u10d4\u10d1\u10d0 \u10d0\u10e5\u10ea\u10d8\u10d4\u10d1\u10d8\u10d7 EPS-\u10d8 \u10d8\u10d6\u10e0\u10d3\u10d4\u10d1\u10d0, \u10d7\u10e3\u10db\u10ea\u10d0 \u10d4\u10e1 \u10e3\u10d1\u10e0\u10d0\u10da\u10dd \u10d1\u10e3\u10e6\u10d0\u10da\u10e2\u10d4\u10e0\u10d8\u10d0\u10d0 \u10d3\u10d0 \u10d0\u10e0\u10d0 \u10e6\u10d8\u10e0\u10d4\u10d1\u10e3\u10da\u10d4\u10d1\u10d8\u10e1 \u10e0\u10d4\u10d0\u10da\u10e3\u10e0\u10d8 \u10d6\u10e0\u10d3\u10d0… \u10e6\u10d8\u10e0\u10d4\u10d1\u10e3\u10da\u10d4\u10d1\u10d0 \u10d2\u10d0\u10d8\u10d6\u10e0\u10d3\u10d4\u10d1\u10dd\u10d3\u10d0 \u10db\u10ee\u10dd\u10da\u10dd\u10d3 \u10d8\u10db \u10e8\u10d4\u10db\u10d7\u10ee\u10d5\u10d4\u10d5\u10d0\u10e8\u10d8 \u10d7\u10e3 ROIC-\u10d8 \u10d2\u10d0\u10d3\u10d0\u10d0\u10ed\u10d0\u10e0\u10d1\u10d4\u10d1\u10d3\u10d0 WACC-\u10e1. \u10e0\u10d8\u10e1\u10d8 \u10d3\u10d0\u10e1\u10e2\u10e3\u10e0\u10e1\u10d0\u10ea \u10e3\u10d1\u10e0\u10d0\u10da\u10dd\u10d3 EPS-\u10d8\u10e1 \u10d6\u10e0\u10d3\u10d0 \u10d0\u10e0 \u10d8\u10eb\u10da\u10d4\u10d5\u10d0.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

\u10d0\u10e1\u10d4\u10d5\u10d4, \u10de\u10e0\u10d0\u10e5\u10e2\u10d8\u10d9\u10d0\u10e8\u10d8 \u10d0\u10e0\u10d8\u10e1 \u10e1\u10d0\u10de\u10d8\u10e0\u10d8\u10e1\u10de\u10d8\u10e0\u10dd \u10e8\u10d4\u10db\u10d7\u10ee\u10d5\u10d4\u10d5\u10d4\u10d1\u10d8\u10ea, \u10e8\u10d4\u10d8\u10eb\u10da\u10d4\u10d1\u10d0 \u10d2\u10d0\u10e0\u10d8\u10d2\u10d4\u10d1\u10d0 Dilutive \u10d8\u10e7\u10dd\u10e1, \u10d0\u10dc\u10e3 EPS-\u10d8 \u10e1\u10d0\u10ec\u10e7\u10d8\u10e1 \u10d4\u10e2\u10d0\u10de\u10d6\u10d4 \u10e8\u10d4\u10db\u10ea\u10d8\u10e0\u10d3\u10d4\u10e1. \u10d3\u10d0\u10d5\u10e3\u10e8\u10d0\u10d7, \u10e0\u10dd\u10ea\u10d0 \u10dd\u10e0\u10d2\u10d0\u10dc\u10d8\u10d6\u10d0\u10ea\u10d8\u10d0 \u10e7\u10d8\u10d3\u10e3\u10da\u10dd\u10d1\u10e1 \u10db\u10d6\u10d0\u10e0\u10d3 \u10d1\u10d8\u10d6\u10dc\u10d4\u10e1\u10e1, \u10e0\u10dd\u10db\u10d4\u10da\u10d8\u10ea \u10ef\u10d4\u10e0 \u10d0\u10e0 \u10d0\u10e0\u10d8\u10e1 \u10db\u10dd\u10d2\u10d4\u10d1\u10d0\u10d6\u10d4 \u10d2\u10d0\u10e1\u10e3\u10da\u10d8, \u10db\u10d0\u10d2\u10e0\u10d0\u10db \u10db\u10dd\u10db\u10d0\u10d5\u10d0\u10da\u10e8\u10d8 \u10d3\u10d8\u10d3\u10d8 \u10de\u10dd\u10e2\u10d4\u10dc\u10ea\u10d8\u10d0\u10da\u10d8\u10e1 \u10db\u10d0\u10e2\u10d0\u10e0\u10d4\u10d1\u10d4\u10da\u10d8\u10d0… EPS-\u10d8 \u10de\u10d8\u10e0\u10d5\u10d4\u10da \u10ec\u10da\u10d4\u10d1\u10e8\u10d8 \u10e8\u10d4\u10db\u10ea\u10d8\u10e0\u10d3\u10d4\u10d1\u10d0, \u10db\u10d0\u10d2\u10e0\u10d0\u10db \u10d4\u10e1 \u10e1\u10d0\u10d4\u10e0\u10d7\u10dd\u10d3 \u10d0\u10e0 \u10dc\u10d8\u10e8\u10dc\u10d0\u10d5\u10e1 \u10d8\u10db\u10d0\u10e1 \u10e0\u10dd\u10db \u10d2\u10d0\u10e0\u10d8\u10d2\u10d4\u10d1\u10d0 \u10db\u10e7\u10d8\u10d3\u10d5\u10d4\u10da\u10d8\u10e1\u10d7\u10d5\u10d8\u10e1 \u10ec\u10d0\u10db\u10d2\u10d4\u10d1\u10d8\u10d0\u10dc\u10d8 \u10dd\u10de\u10d4\u10e0\u10d0\u10ea\u10d8\u10d0\u10d0.<\/p>\n\n\n\n

\u10ec\u10e7\u10d0\u10e0\u10dd:<\/p>\n\n\n\n

Valuation, Measuring and Managing the Value of Companies – by McK.&Co, T. Koller, M. Goedhart, D. Wessels<\/p>\n","protected":false},"excerpt":{"rendered":"

Managers often justify mergers and acquisitions by claiming that the operation is accretive, meaning that EPS (earnings per share) increases, and therefore shareholders should be satisfied. However, the market focuses not on transactional accounting but on whether value is actually being created. The table below discusses a hypothetical example that shows the deterioration of an […]<\/p>\n","protected":false},"author":12998525,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[774675935,58642],"tags":[179,4269,6635,28559,13843],"class_list":["post-3353","post","type-post","status-publish","format-standard","hentry","category-valuation-measuring-and-managing-the-value-of-companies-by-mck-co-t-koller-m-goedhart-d-wessels","category-mergers-acquisitions","tag-business","tag-finance","tag-investing","tag-investment","tag-stock-market","has-post-thumbnail","fallback-thumbnail"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pQZ85-S5","_links":{"self":[{"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/posts\/3353","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/users\/12998525"}],"replies":[{"embeddable":true,"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/comments?post=3353"}],"version-history":[{"count":13,"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/posts\/3353\/revisions"}],"predecessor-version":[{"id":3514,"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/posts\/3353\/revisions\/3514"}],"wp:attachment":[{"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/media?parent=3353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/categories?post=3353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eoninvestment.com\/ka\/wp-json\/wp\/v2\/tags?post=3353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}