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Medium M&A Valuation Acquisition Strategy

Back It On Up

#Tech #Technology #Software #Data Management
ProHub Comment

This is a comprehensive M&A valuation case requiring candidates to build a DCF model, identify and quantify synergies, and develop acquisition strategy. The case progresses logically from standalone valuation to combined entity valuation with explicit revenue and cost synergies, testing both quantitative rigor and strategic thinking.

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? BackupCo produces physical backup appliances that site on site at client locations, as well as software that clients can deploy on their own devices. These products help protect data by duplicating emails, databases, sales data etc. to alternate locations. It only sells B2B.
  2. Does it sell its products worldwide? BackupCo does 100 Million dollars worth of business in North America and the remainder of its business in EMEA and APAC.