Back It On Up

ProHub Comment

This case focuses on M&A valuation, specifically calculating a standalone valuation and then enhancing it with revenue and cost synergies. The math is straightforward, but correctly identifying and applying the synergy percentages to the revenue increase is crucial for the final acquisition price.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
BackupCo is a data backup and disaster recovery company. It’s primary headquarters is in Boston, its client services department is in South Carolina, and its development is split between Texas and Ukraine. To expand its product offerings, reach, and revenue, it is considering purchasing CloudCo, a cloud backup provider headquartered in Southern California. Our firm has been hired to evaluate this potential acquisition. How would you begin considering this deal?

Clarifying Information

  1. What does BackupCo Produce? / What is data backup and disaster recovery?
  2. Does it sell its products worldwide?