What are the main types of M&A synergies?

Let me break it down simply:

Think of synergies like combining households. When two people move in together, they save on rent (cost synergies) and might earn more by helping each other's careers (revenue synergies).

Cost synergies are the easiest to measure. Cutting overlapping jobs, closing redundant offices, combining IT systems - these savings are clear and quantifiable. Like roommates splitting rent and utilities.

Revenue synergies are trickier but powerful. Cross-selling products to each other's customers, combining technologies to create better offerings, accessing new markets. Think Disney buying Marvel - suddenly those characters appear in parks, movies, and merchandise.

Financial synergies matter too. A bigger company might get better loan terms or tax benefits. Like how combining incomes helps qualify for a better mortgage rate.

Remember: Cost synergies are easier to predict and achieve - that's why bankers love them. Revenue synergies are sexier but harder to quantify. Smart acquirers focus on cost synergies in their math but get excited about revenue upside.

Talk soon,

Sam