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Acquisition Synergy Calculator: Run-Rate, Phasing, Cost to Achieve and NPV
A synergy case has three parts that deal models often blur together: how large the benefit is once everything is done, how quickly it arrives, and what it costs to get there. Run-rate synergy is the headline, but the in-year number, the one-time costs and the timing decide whether the deal pays back.
Enter the annual cost base for each category and the synergy you expect as a percentage of it. Then set what share of run-rate you deliver in each quarter of year one and each later year, plus one-time costs by period. You get run-rate, in-year and cumulative synergy, the net after costs, NPV and payback. The example values are illustrative; replace them with your own.
Cost base and synergy target
Phasing and one-time cost to achieve
“% of run-rate” is the share of the full annual synergy being delivered during that period (100 = full run-rate).
Your results
Run-rate synergy (annual)
$4,800,000
Full annual benefit once phasing reaches 100%.
In-year synergy (year 1)
$1,440,000
Cumulative synergy (5 years)
$20,160,000
Cumulative net of one-time costs
$16,660,000
After $3,500,000 of one-time cost to achieve.
NPV of net synergy
$11,448,174
Payback on one-time costs
17.3 months
Months from close until cumulative net synergy turns positive (linear within a period).
| Period | Synergy | Cost | Cumulative net |
|---|---|---|---|
| Year 1, Q1 | $0 | $1,500,000 | -$1,500,000 |
| Year 1, Q2 | $240,000 | $1,000,000 | -$2,260,000 |
| Year 1, Q3 | $480,000 | $500,000 | -$2,280,000 |
| Year 1, Q4 | $720,000 | $250,000 | -$1,810,000 |
| Year 2 | $4,320,000 | $250,000 | $2,260,000 |
| Year 3 | $4,800,000 | $0 | $7,060,000 |
| Year 4 | $4,800,000 | $0 | $11,860,000 |
| Year 5 | $4,800,000 | $0 | $16,660,000 |
Free template · Excel workbook
PMI Synergy Tracker
Track synergies from model to realized EBITDA, with one-time costs, IMO governance and a weekly status view.
Illustrative example values are prefilled; replace them with your own. Everything is calculated in your browser, and Performis does not store what you enter. Our analytics record which calculator was used and a few summary figures, such as a rounded result.
The formulas
- Run-rate synergy
- Σ (category cost base × synergy %)
- Synergy in a period
- Run-rate × % of run-rate delivered × period length in years (0.25 for a quarter)
- In-year synergy
- Sum of synergy in the periods that fall within the first 12 months
- Net synergy
- Synergy in the period − one-time cost in the period
- Cumulative net of costs
- Σ synergy − Σ one-time costs
- NPV
- Σ net synergy ÷ (1 + discount rate)^t, with t in years to the end of each period
- Payback
- Time at which cumulative net synergy first reaches zero, interpolated linearly within the period
How to interpret your result
Anchor the percentage to named actions
A synergy percentage should trace to specific supplier moves, roles or sites. If you cannot name the action, treat the number as an aspiration rather than a plan.
Compare in-year to run-rate
A large gap means the case depends on late delivery. Check whether the plan can absorb a slower ramp, and rerun with each period shifted later.
Read NPV and payback together
NPV shows total value after timing and cost; payback shows how long capital is exposed. A positive NPV with a long payback is a bet on execution over several years.
Keep category cost bases clean
Use the combined cost base that the action actually touches, not total spend. Overlapping categories double-count the same dollars.
Know what is left out
Dis-synergies such as lost customers, revenue synergies, taxes and terminal value are excluded. Add them in your full model.
Frequently asked questions
What is the difference between run-rate and in-year synergy?
Run-rate synergy is the annual benefit once every action is fully in place. In-year synergy is what actually lands in the first twelve months after close, which is lower because actions take time. Plans that quote only run-rate overstate the first-year benefit.
How do I choose a synergy percentage for each category?
Build it from named actions, not a top-down guess: for example, a specific supplier consolidation or a specific set of roles. This tool does not supply benchmark percentages. Use your diligence findings, and test the percentage with a more cautious case.
What counts as a one-time cost to achieve?
Severance, retention, systems integration, facility exits, advisers and contract termination fees: anything you spend once to unlock the recurring benefit. Enter each in the period you expect to pay it.
How are NPV and payback calculated?
Net synergy for each period (synergy minus one-time cost) is discounted from the end of that period at your rate and summed. Payback is the point at which cumulative net synergy turns positive, interpolated in a straight line within that period.
Does this include revenue synergies or tax?
No. It models cost synergies only, before tax, over five years with no terminal value. Revenue synergies carry more uncertainty and need margin and timing assumptions of their own.
Is my data stored or sent anywhere?
No. All calculations run in your browser and nothing you enter is collected or saved.
Take it further with a template
Free template · Excel workbook
PMI Synergy Tracker
Track synergies from model to realized EBITDA, with one-time costs, IMO governance and a weekly status view.
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