A saving that only exists inside the acquirer’s own network is not something the target ever earned on its own.
Short answer
Not to the target’s own adjusted EBITDA figure. A synergy that only exists because of the ACQUIRER’s own assets or network belongs in the buyer’s model of what the opportunity is worth to it, not in the standalone earnings the seller is presenting as already achieved. Crediting the target’s EBITDA with a saving the business has never realized, and cannot realize on its own, inflates the price by that saving multiplied by the deal multiple — for value the seller never actually created.
No statute or accounting rule governs the treatment of a buyer-specific pro forma synergy credit; it is a valuation and deal-structuring principle, not a legal test. The mechanic underneath it is a straightforward ownership question: who is entitled to the value of a change that has not yet happened, and that only the buyer — using the buyer’s own assets — can make happen? A financial buyer with no existing network gets none of that saving at all; a strategic buyer with an existing distribution footprint might realize the whole thing on day one. Either way, it is not the target’s own trailing performance.
The fix is structural, not argumentative: make the payment conditional on the projected saving actually being realized post-closing — typically a short earn-out tied to the specific synergy — rather than folding a projection into the closing purchase price at the full multiple. That shifts the delivery risk to the party that can actually deliver it.
See it decided in the buyer-synergy EBITDA credit file, the seven-years-of-non-recurring add-back file and the earned-earn-out-blocked-by-the-lender file.
A 30-minute call is enough to tell you whether your numbers hold up.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
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