M&A Framework for Case Interviews

M&A cases ask whether a company should acquire another one, and often what it should be willing to pay. The framework splits the question into three parts that together determine the answer.

The base structure

• Standalone value
  • What is the target company worth on its own — its own revenue, costs, and growth trajectory?
• Synergies
  • Revenue synergies — cross-selling, new markets unlocked, combined offering
  • Cost synergies — shared overhead, purchasing power, eliminated redundancy
• Integration risk
  • Cultural fit
  • Operational complexity of combining systems and teams
  • Regulatory or antitrust risk

These three are MECE: standalone value is what the target is worth alone, synergies are the additional value created only by combining, and integration risk is what could erode that value — three distinct angles on the same deal.

Why all three matter

A target can have real standalone value and real synergy potential, but if integration risk is high enough, the deal destroys value anyway — a common failure mode in real acquisitions. Evaluating only standalone value and synergies, and skipping integration risk, is a frequent gap in case answers.

A worked example

Case: A mid-sized software company is considering acquiring a smaller competitor with a complementary product line. Should it?

• Standalone value: Target has $20M revenue, growing 15% annually, healthy but thin margins.
• Synergies: Strong revenue synergy potential — combined product line lets the acquirer cross-sell to its existing customer base. Cost synergies are modest; the two companies run on different tech stacks with little overlap to cut.
• Integration risk: Different engineering cultures and no experience integrating an acquisition before — a real risk that could delay realizing the revenue synergy.

Conclusion: The deal's value case rests almost entirely on revenue synergies, which are the most uncertain and slowest to realize — worth flagging as the key risk to the recommendation, rather than a simple "yes, acquire."

Practice structuring deal questions

M&A cases reward connecting the three branches into one coherent recommendation, not just listing them — the kind of structure worth practicing directly. Practice case structuring on Meceify →

Related: Profitability Framework, Market Entry Framework