Choosing your M&A escrow partner

August 03, 2021

Finding the right escrow services team for your M&A transactions is more important than ever. Here’s what to look for as you choose an escrow partner.


For merger and acquisition attorneys, working with a top-notch escrow services partner is key. Given the extensive time and effort that goes into negotiating and closing an M&A deal, attorneys need an escrow partner that they can depend on and is deeply aligned with their needs, concerns and priorities.

Here’s how you can evaluate the most important traits of a successful escrow services provider to find the right partner for your unique needs.


Easy accessibility

It’s important to find a service provider who is easy to engage and understands the importance of this unique role. A strong escrow services team should operate smoothly and seamlessly so that you don’t have to worry about this aspect of your deal.

Teresa Caspary, senior vice president and national leader for escrow at U.S. Bank Global Corporate Trust, knows what M&A attorneys are looking for in a provider. “They want a team that is easy to work with on document language, speedy response, accuracy and availability,” Caspary says. Document negotiation difficulties may slow down the process, so it’s important to find a team that has reasonable language requirements and can finish the job quickly.



We’ve heard from attorneys across the country that flexibility is key when it comes to M&A transactions. An escrow agent must be willing to work within the deal structure that’s required for the transaction. Providers should be available to participate in pre-closing conference calls, as needed, and respond quickly to changing deal logistics. It’s also crucial that an escrow agent employs backup professionals and specialized staff necessary for complex and larger deals (i.e., cash-for-stock escrows and purchase price consideration payments). Attorneys require an escrow agent that acts as a proactive and collaborative business partner in getting transactions closed accurately and as efficiently as possible.


Extended availability

In today’s business world, we’re aware days rarely fit between 9 a.m. and 5 p.m. “M&A attorneys work long hours, therefore having a team that is available when they are working, even when it’s outside of normal business hours, is incredibly valuable to them,” says Lars Anderson, senior vice president, national sales manager at U.S. Bank Global Corporate Trust.


KYC simplicity

Knowing your customer (KYC) rules can present a laborious task in the onboarding process. Especially given the regulatory environment of the last several years, keeping in compliance with federal KYC rules can be burdensome. That’s why it’s crucial to find a partner with an efficient, online process to help keep your deals moving forward.

“With an online portal, attorneys can kick off the KYC process and let their client fill out the necessary details,” says Anderson. “It’s a streamlined onboarding experience that saves time for everyone involved.”

A resourceful partner must immediately engage both the parties and their counsel to articulate, collect and process required information, and respond to issues or questions that arise.


Shareholder portal convenience

When searching for an escrow services provider, Caspary and Anderson note the importance of considering the shareholder experience for your clients and the companies you represent. The ability of shareholders to receive payments quickly, accurately and safely is essential for all parties.

“Ultimately, M&A attorneys want to provide their clients with the best service provider and experience, and they can do that by making sure all payments are delivered properly, whether they are representing the buyer or the seller(s),” Caspary says.


Extensive transactional and document review experience

Each escrow transaction has unique requirements based on the type of deal, documentation necessities, timeline and parties involved. It is important to attorneys that an escrow agent has experience administering a variety of transactions, such as:

  • Stock and asset acquisitions
  • Varying release dates and potential interplay among multiple escrow account
  • Use of stock in an escrow or payment of consideration
  • Earn-out payments
  • Litigation or regulatory disputes and settlements
  • Matters in distress or bankruptcy

An established provider should have experience in an array of situations and know how to overcome obstacles as they arise, whether working on unconventional matters or commonplace transactions.

Escrow agreements and paying or exchange agent documents are important pieces of M&A deals. While deal lawyers have many responsibilities to manage, they need to be confident in the agent reviewing drafts. The agent should understand the deal and have extensive experience reviewing such agreements. They should also be able to spot issues or negotiate possible sticking points. Most importantly, the agent must be easily accessible and able to provide comments quickly. A service partner that uses standardized templates can often negotiate these ancillary documents more efficiently.

According to Caspary, working with a less experienced team may increase the potential for inaccurate disbursements and slow turnaround times. “Attorneys are typically responsible for selecting an escrow agent. In order to ensure that their deals close smoothly and their clients remain happy, they need to select an experienced escrow agent.”


Comprehensive solutions and specialized resources

Finally, when searching for an escrow partner, make sure they offer the entire suite of services you’ll need to execute your deals. M&A attorneys often prefer a full-service escrow agent that also provides paying and exchange agent services. The ideal escrow partner should create efficiencies through their expertise, responsive end-to-end execution and extensive resources. Dedicated escrow relationship managers and a specialized M&A paying and exchange agent team make this possible.

Working with a single touch point throughout the escrow process can save you time and effort while ensuring all details are covered. A quality escrow agent should provide:

  • Indemnity holdback and working capital adjustment escrows
  • Prompt, efficient onboarding with straightforward KYC diligence
  • Responsive document review
  • Secure web-based shareholder portal
  • Specialized in-house paying and exchange agent group providing tailored solutions
  • Tax filing and reporting

Before you choose an escrow partner, be sure to ask whether they can handle every step of the transaction for you. This makes for a smoother, faster, and efficient experience, with less chance of anything falling through the cracks.


At U.S. Bank, we offer comprehensive solutions for all your M&A escrow needs. From the unrivaled availability and experience of our specialized team to our continuous investments in technology solutions, we’re here to help your deal close smoothly, securely and on time. Learn more about our escrow services.

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