2019SD Q3: synergy and FME

The difference between the new market value of the 'enlarged' company after the acquisition and the total of the current MV's of the two companies is due to the synergy. We calculate the new MV of the 'enlarged' company in the normal way based on the future earnings of the enlarged company. Here, the synergy is due to an extra $20.5M per year and it is because the earnings increase by $20.5M per year that the MV of the enlarged company increases by $524.4M.