A strategic buyer is offering a multiple based on cost synergies they expect to achieve by consolidating our back office. How do we extract a portion of those synergies in the purchase price rather than letting them keep all the upside?

Question

Tyler Smith · Accepted Answer

Strategic buyers often justify their acquisition models by projecting massive cost synergies. They plan to eliminate your duplicate back-office functions, such as human resources, legal, accounting, and administrative roles, and integrate them into their existing corporate infrastructure. If they keep all these savings, they capture all the upside of the transaction. To extract your share of this value, you must precisely quantify these synergies before they do. Use your EOS® Accountability Chart to map out your current operations. Identify the exact seats and salaries that will be eliminated post-close. This allows you to calculate a synergy-adjusted EBITDA, which represents what the business is worth in the hands of that specific strategic buyer. When presenting this data, argue that you have built a highly structured, clean operation that makes consolidation effortless. Use your V/TO® and documented processes to prove that your company can be plugged into their system with zero friction. Position this operational readiness as a premium feature that deserves a higher multiple. By proving exactly how much cash they will save on day one, you can successfully negotiate a purchase price that splits those synergy savings, putting more cash in your pocket at closing.