ASSESSMENT: The Synergy Blind Spot That’s Costing You Millions
Marcus Industrial Equipment and Roberto Martinez Case Studies
Multiple Choice
1. According to the post’s opening example, a business with $3M EBITDA at a 3x multiple has an FMV of $9M. What did the strategic buyer offer? a) $12M b) $13M c) $15M d) $18M
2. In the Marcus Industrial Equipment case, what was his EBITDA and FMV? a) $3M EBITDA, $9M FMV b) $4M EBITDA, $12M FMV c) $5M EBITDA, $15M FMV d) $6M EBITDA, $18M FMV
3. What did the Financial Buyer offer Marcus, and at what multiple? a) $12.0M at 3.0x b) $14.4M at 3.6x c) $16.8M at 4.2x d) $19.0M at 4.75x
4. Strategic Buyer #2 in the Marcus case offered $24M. How many existing customers did they have, and what was their conservative cross-sell penetration assumption? a) 5,000 customers, 10% penetration b) 6,000 customers, 8% penetration c) 8,000 customers, 5% penetration d) 10,000 customers, 4% penetration
5. In the Roberto Martinez case, what was his original FMV in 2020? a) $12M b) $15M c) $18M d) $21M
6. What was the unsolicited offer Roberto almost accepted? a) $15.5M b) $16.5M c) $17.5M d) $18.5M
7. After 18 months of improvements, what was Roberto’s updated EBITDA in 2022? a) $5.0M b) $5.4M c) $5.8M d) $6.2M
8. What was Roberto’s final sale price and multiple? a) $24.0M at 4.1x b) $25.8M at 4.4x c) $26.1M at 4.5x d) $28.0M at 4.8x
9. According to the post, what percentage of total transaction value do synergies typically represent in strategic deals? a) 20-30% b) 30-40% c) 40-70% d) 70-90%
10. In Roberto’s case, what were the identified annual cost synergies? a) $1.5M b) $2.1M c) $2.8M d) $3.2M
EXPLANATORY QUESTIONS (11-15)
11. Explain the three categories of synergy value described in the post (Cost Synergies, Revenue Synergies, Integration Synergies). Provide specific examples of each from either the Marcus or Roberto case studies.
12. In the Roberto Martinez case, calculate and explain how Regional Supply Corp could realize $10.8M in synergy value despite offering only $1.5M above FMV. Why did Roberto reject this “premium” offer?
13. Compare the valuations Marcus received from three different buyer types (Financial Buyer, Strategic Buyer #1, and Strategic Buyer #2). Explain why the same business commanded such different prices based on synergy potential.
14. The post states that FMV specifically excludes “value to any particular buyer.” Explain what this means, why this exclusion exists, and how it creates opportunity for sophisticated sellers.
15. Describe the “Synergy Documentation Framework” outlined in the post. How did Roberto use this framework to help buyers quantify synergy potential, and why did this documentation lead to premium pricing?
