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M&A Deal Evaluation: Challenging Metrics Myths |
In the world of mergers and acquisitions, emphasis is
often placed on evaluation metrics that look as if they
tell the story, but they can be misleading.
A.T. Kearney joined forces with the United Kingdom's
Investor Relations Society to understand exactly which
metrics and analyses get the most emphasis in evaluating
proposed M&A transactions, and in this paper we discuss
our findings. The research introduced a surprising
insight: The impact on earnings per share (EPS) is by
far the most emphasized metric used to evaluate proposed
M&A transactions between public companies.
With this in mind, we look at two common and related
myths surrounding EPS and demonstrate why these are at
best unhelpful and at worst potentially misleading. 2013
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