Where do we get Synergy figures from for an m&a model and the answer is careful analysis of historical transactions and management guidance.

We want to go back to previous transactions and maybe see what synergies were achieved and then turn that into a ratio maybe of revenues or STNA costs or other.

The types of synergies that we can have could be from costs synergies, but also Revenue synergies capex energies where two companies come together and don't have to spend as much capex and lastly working Capital Management here. We find two companies don't have to have so much working capital tied up. So they get a one-off release of working capital.

Any Synergy assumptions that we come up with need to include the Run rate of synergies the full amount of cost saved or Revenue earned that we could achieve.

But also an estimate of restructuring needed to arrive at those synergies.

and lastly the timing will we get those full synergies being achieved in year one? The answer is probably not.

Here, we're on the calcstab and we can see that we've total synergies coming in in column G here of 1500.

However, the Run rate of the synergies is only 25% in this first year.

That's gradually ramps up and we can see that by column J. We've got to 100% run rate.

Those synergies can then be split down. We can see of the 1500 80% of them are going to be cost synergies. So let's just calculate that out 1500 multiplied by 25% being achieves multiplied by 80% gets us a COS energy using column G of only 300.

The remainder must be the revenue Synergy. So I'll take one minus that 80% to get us to the 20% remaining and I can calculate my Revenue Center. She's been the 1500 multiplied by the 25% achieved multiplied by 20% revenues.

Getting me to 75.

As I copy them to the right we see those numbers increase dramatically until we get the full cost energies in column J of 1200 and the full revenue synergies of 300.

However, if we scroll down we can see there are some restructuring costs in those first three years. They gradually disappear towards the end.

And the last one to mention we've got capital expenditure synergies they're coming in and they gradually ramp up from zero to 150 to 300 and then continue at that level.