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Acquisitions & Mergers Escrow

Company acquisitions, mergers and investments can present some unique challenges for buyers   and sellers who need to protect their investments and assure fair value.  This is especially true during the due diligence phase when the seller needs to demonstrate the value of his company and the buyer needs to demonstrate his ability to invest.  In most instances a buyer will also require additional safeguards to protect his investment after the acquisition or merger has taken place.  For example, such safeguards may be linked to the retention of some payment until the business has demonstrated satisfactory performance over a period of time following the acquisition.

In such circumstances Financechain provides a secure Escrow Agreement which reflects specific criteria or milestones during and subsequent to the acquisition or merger and that:

  • Protects the seller ensuring that ‘pre-deposited funds’ are available for payment as and when agreed criteria or milestones are met – the seller is thereby assured that funds are available for payment
  • Protects the buyer or investor by ensuring that his ‘pre-deposited’ funds are only transferred to the seller once the agreed criteria or milestones have been met – the buyer is thereby assured that his funds are retained until satisfactory performance by the business he is buying or investing in.

As the Escrow Agent, Financechain will provide an Escrow Agreement which will include criteria and milestones which when satisfied or met will result in the transfer of funds. The agreement can remain in place for whatever duration the parties agree and can include multiple payments or part payments, so assuring both buyer and supplier of performance and payment throughout.

For more information about Financechain’s Escrow for Acquisitions and Mergers contact us on 0161 440 2700 or email enquiries@finance-chain.com