To value synergies using multiples we need to firstly find a multiple. But let's try and understand what's happening here.

We could imagine that on the top half of our multiple, you've got the value of synergies, maybe the present value of synges or the value for multiples. Whatever it may be it's a value today.

And then in our denominator, we've got the synergies per annum. Here It suggests the forecast energy per annum from precedence. Fantastic.

So value on the top and some kind of annual figure on the bottom.

So that gives us a multiple.

So how does that help us work out the value of our synergies? Well, the value of our synergies could be found by taking a very similar multiple.

Such as an EBIT multiple EV over EBIT.

Our synergies are pre-tax operating savings most closely related to EBIT and the present value of your EBIT is really your Enterprise Value. So our EBIT multiple EV over EBIT is very similar to the idea of our value of synergies multiple over a value driver.

So let's take our EV EBIT multiple and multiply it by the four car synergies per annum.

If I take that calculation, then I can find the value of synergies using multiples.