How do you structure an 'M&A synergies discussion' for a pitch to a strategic-buyer client?

The three-bucket synergies framework:

• Cost synergies (typically quantifiable): (a) procurement (5–10% of the COGS overlap, from supplier bundling). (b) SG&A (15–25% of the duplicated functions — HR, IT, finance). (c) manufacturing footprint (plant consolidation, a 10–20% capacity reduction possible). (d) D&A (combined capex plans reduce duplicate investment). Realistically: 5–8% of the combined cost base for homogeneous businesses.
• Revenue synergies (more cautious): (a) cross-selling (typically 1–3% of combined revenue, often overestimated). (b) geographic expansion via the combined footprint. (c) pricing power from a consolidated market position. Market standard: buyers often price revenue synergies at a 50% discount (probability-weighted).
• Financial synergies: (a) a lower cost of capital from a better rating. (b) NOL utilization. (c) tax structuring. NPV calculation: synergies typically build to run-rate over 3 years, then run in perpetuity. The PV is often 30–60% of the equity premium over standalone.