FP&A in M&A: FAQs on the Role of FP&A in Mergers and Acquisitions

Written by CFI Team

Reviewed by Jeff Schmidt

Read Time 5 minutes

Mergers and acquisitions (M&A) are complex transactions requiring deep financial analysis and strategic planning. While corporate development teams and investment banking advisors drive deal execution, FP&A teams often provide critical financial analysis and insights. The level of FP&A involvement, however, varies widely by company and deal structure.

This FAQ answers key questions about FP&A’s role in M&A, the tasks they may perform, and the essential skills to develop—whether or not you work on M&A transactions.

FP&A in M&A - What are Mergers and Acquisitions? — Source: CFI’s **M&A Accounting & Purchase Price Allocation** course

Key Highlights

FP&A’s role in M&A varies widely. Some teams play a supporting role by supporting deal teams with financial data and integration planning, while others may have no involvement at all.

When FP&A is involved in M&A, their contributions typically include supporting the feasibility analysis and due diligence, budgeting for integration costs, and monitoring post-merger performance.

Regardless of M&A involvement, FP&A professionals benefit from mastering core financial analysis and modeling skills to enhance decision-making and drive career growth.

1. Do FP&A professionals ever work on corporate M&A deals?

FP&A’s role in M&A depends on company size, deal frequency, and internal team structure. Some FP&A teams have little to no involvement in M&A, while others support the process by providing financial data, identifying risks, and planning for post-merger integration.

Several factors determine FP&A’s role in M&A, including:

Company size and structure – Large corporations often have dedicated corporate development and M&A teams, while mid-sized firms may rely more on corporate finance functions like FP&A.
Deal frequency – Companies with frequent M&A activity may have a dedicated team and less need for FP&A to provide support.
FP&A’s scope within the company – Some FP&A teams focus solely on core functions like budgeting, forecasting, and variance analysis, while others may support broader strategic initiatives like M&A.

2. When FP&A is involved in M&A, what do they typically do?

If FP&A plays a role in an acquisition, their responsibilities typically center on supporting the feasibility analysis and due diligence, budgeting for integration costs, and monitoring post-merger performance.

Common FP&A Contributions in M&A:

Supporting deal teams – Providing historical financials, current forecasts, and cost structure data to corporate development and investment banking teams.
Assisting with due diligence – Helping internal teams or external due diligence specialists to identify potential risks in the target’s financials, operational performance, and budget.
Planning for integration – Estimating costs, updating budgets, and building forecasts related to operational consolidation, staffing changes, and system migrations.

3. Does FP&A handle valuation in M&A transactions?

No, not typically. Corporate development, investment banking partners, or other M&A advisors perform valuation analysis to determine the worth of an acquisition target.

FP&A may support the process by providing historical financials, cost structures, and forecasting assumptions, but they do not usually build detailed valuation models like discounted cash flow (DCF), precedent transactions, or comparable company analysis (comps).

4. What is FP&A’s role after an acquisition has been completed?

Successful acquisitions depend on achieving expected cost savings, revenue growth, and operational efficiencies. FP&A professionals keep management updated on post-merger performance to help them course-correct if needed.

How FP&A Contributes:

Monitors expected cost savings and synergies.
Compares projected vs. actual financial performance and identifies gaps.
Provides ongoing variance analysis for insights into underperformance and potential solutions.

Example: After an acquisition, FP&A discovers shortfalls in forecasted synergies and recommends additional cost-cutting measures.

FP&A in M&A - Introduction to Variance Analysis — Source: CFI’s **FP&A for New Analysts** course

5. What skills do FP&A professionals need if they want to work in M&A??

FP&A professionals don’t need direct M&A expertise, but strong financial analysis and modeling skills are critical to supporting M&A when applicable. With these skills, FP&A teams help their company evaluate an acquisition’s financial impact, identify risks, and monitor post-merger performance.

Even if M&A support isn’t a part of your role as an FP&A professional, these skills remain valuable for assessing capital investments, business expansions, and long-term financial planning.

Core FP&A Skills Useful in M&A:

Financial Modeling – Building integrated 3-statement models to forecast how an acquisition affects revenue, expenses, and cash flow, helping leadership evaluate potential risks and rewards.
Budgeting & forecasting – Estimating integration costs and forecasting the post-merger financial impact, ensuring that leadership has realistic expectations for the deal’s financial performance.
Variance analysis – Comparing forecasted vs. actual results after an acquisition to help identify where the company is meeting, exceeding, or falling short of expectations.
Sensitivity analysis – Testing different deal structures, financing options, or synergy assumptions to prepare for uncertainties and inform decision-making.

FP&A in M&A - Financial Forecasting Approach — Source: CFI’s **Introduction to 3-Statement Modeling** course

6. How can FP&A professionals strengthen their financial modeling and forecasting skills?

The best way to strengthen financial modeling, forecasting, and budgeting skills is through structured learning, hands-on practice, and exposure to real-world case studies. While on-the-job experience is valuable, building expertise in these areas requires deliberate skill development through training and application.

Structured courses – Learning from finance experts through a well-designed curriculum ensures a strong foundation in FP&A principles.
Hands-on modeling practice – Developing skills by building models, forecasting scenarios, and analyzing variances help reinforce concepts.
Case studies & real-world applications – Studying real business challenges improves decision-making and problem-solving abilities.
Guided exercises & feedback – Practicing with expert-led exercises ensures that models are accurate and applicable in real FP&A scenarios.

Ready to strengthen your FP&A skills for greater career impact? CFI’s FP&A Specialization program equips you with the financial modeling, forecasting, and budgeting—core skills for FP&A professionals in any industry. Whether or not you work on M&A, mastering these skills helps you support business decision-making and strategic financial planning

Earn Your Specialization!