Acquisition Forecast

Post-acquisition forecast: can the acquisition debt be repaid?

An acquisition forecast answers a precise question: does the acquired business generate enough cash to repay the acquisition debt while continuing to operate? Unlike a start-up forecast, you start from real accounts — the seller's — which you project after the deal, factoring in the cost of financing. This is the tool that checks your structure is sustainable. Designed for the 27 EU countries, it helps you build a cautious scenario and present a credible file to your bank or investors.

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What sets an acquisition forecast apart

The post-acquisition forecast rests on the target's real history, adjusted for the seller's particularities. It includes items specific to the deal:

Repayment of the acquisition debt (principal + interest) over the financing term.
The acquired company's ability to up-stream dividends to the acquisition holding, if that structure is used.
Seller adjustments: departing owner's remuneration, personal expenses, non-recurring items to neutralise.
Any upgrade investments (ageing equipment, compliance work).

Adjusting the seller's accounts

The accounts presented by the seller reflect their management, not yours. Before projecting, you must adjust them: neutralise an atypical owner's salary, personal expenses booked as costs, or a result inflated by a non-recurring event.

This adjustment, drawn from due diligence, makes your assumptions reliable. A forecast built on unadjusted accounts can overstate repayment capacity and weaken the whole structure.

Prudence rule

Build at least a cautious scenario alongside the central one. Financiers value a forecast that withstands a drop in activity, especially in acquisitions where the transition can cause a temporary loss of customers.

Accounting and tax rules specific to each country

The deductibility of loan interest, the treatment of depreciation and the taxation of dividends up-streamed to the holding vary by member state. A forecast valid in France may be wrong in Germany or Spain.

The tool structures the forecast without imposing a France-centred tax framework. Precise tax parameters must be validated with an accountant in the target's country.

From forecast to financing file

The post-acquisition forecast is the centrepiece of your acquisition business plan and your financing request. It demonstrates the sustainability of the debt and the deal's ability to repay itself.

Once the forecast is built, move on to the acquisition business plan and then the financing module to structure bank debt and contribution.

Frequently asked questions

How does an acquisition forecast differ from a start-up forecast?▼

It starts from the seller's real (adjusted) accounts rather than assumptions about a market to win. Above all it includes the acquisition debt repayment and the dividend up-streaming capacity.

What does 'adjusting the seller's accounts' mean?▼

It means neutralising what relates to the departing owner's personal management (atypical salary, private expenses, non-recurring items) to obtain a realistic base on which to project your operations.

Does the forecast include the acquisition debt?▼

Yes. That is its main contribution in an acquisition: checking the acquired business generates enough cash to repay principal and interest while continuing to operate.

Does the forecast account for my country's taxation?▼

The tool structures the forecast without imposing a France-centred framework. Precise tax parameters (interest deductibility, dividends) must be validated with an accountant in the target's country.

How many scenarios should I plan?▼

At least a central scenario and a cautious one. In an acquisition, the transition can cause a temporary drop in activity: a forecast that withstands it reassures financiers.

Check your structure is sustainable

Acquisition debt, cash flow, dividend up-streaming: build a cautious, credible post-acquisition forecast for your financiers, adapted to your country.

Build the acquisition forecast

Indicative information. Accounting and tax rules (deductibility, dividends, depreciation) are set by each member state. The forecast does not replace the opinion of a qualified accountant in the target's country.