Funds Flow Memorandum (M&A Transaction)

by Practical Law Corporate & Securities

A Standard Document providing a form of a funds flow memorandum for use in connection with the closing of an M&A transaction. This Standard Document sets out a framework for the persons receiving payments, the payment amounts, and the wire instructions for all disbursements on the closing date. It is a key organizational tool commonly used in private M&A transactions, even if not listed as a formal closing deliverable in the purchase agreement. This resource is drafted for an equity or asset purchase and outlines common scenarios, such as payments to the seller, deposits into escrow for purchase price adjustments, and the settlement of debt payoff amounts and transaction expenses. The optional sources and uses of funds section helps parties track fund movements in complex financing structures.