The Basics Of Closing - What happens at a deal closing?

The typical deal closing has two major elements:

• In the typical acquisition closing, the seller and the buyer effect the merger or the transfer and delivery of the stock or assets pursuant to the acquisition agreement.
• In the typical financial closing, lenders provide funding for the acquisition to the buyer, as borrower, pursuant to a specific loan agreement or other financing documentation; the buyer simultaneously remits some or all of these funds to the seller in payment of the purchase price.

The process is simpler when the acquirer provides its own funding, in which case there is no financial closing. In the acquirer-funded transaction, the acquisition closing culminates with payment to the seller in the amount named in the signed acquisition agreement. In both the acquisition closing and the financial closing (if there is one), much of the work is done electronically, with the help of a virtual data room (VDR).