The value of engaging a paying and exchange agent

October 11, 2022

Consider these value-added benefits when selecting an agent to keep your transaction on track.


A paying and exchange agent that specializes in private target mergers and acquisitions (M&A) can provide critical resources to support efficient transaction administration. A specialized agent can cost-effectively help the buyer fulfill its duty to pay selling shareholders while collecting relevant documents that protect the buyer’s interests. They can also help the selling shareholders by quickly facilitating payment and actively troubleshooting obstacles.


Comprehensive services strengthen your deal team

Each acquisition of a privately held company is different. The services needed to support a deal can range from a comprehensive suite to one-off requirements. Needs can change quickly as the precise details of the shareholder base are uncovered. If the demands of the transaction increase, an experienced, full-service agent can help prevent the timeline from extending.

Your deal team is strengthened when you engage a specialized paying and exchange agent. When needs arise, your agent should have the capacity and experience to:

  • Identify and resolve potential issues and discrepancies with collaboration and transparency
  • Furnish industry-proven templates, letters of transmittal (LOT), affidavits and allocation schedules
  • Respond to inquiries and review draft documents in a timely manner
  • Provide printing and mailing services
  • Receive, track (time stamp where applicable), review and reconcile documents received from shareholders, including LOTs, certificates, affidavits, and W-9 and W-8 forms
  • Promptly facilitate payment of initial consideration, working capital adjustments, escrow breakages and earn-outs
  • Exchange surrendered securities (common, preferred, vesting options, warrants and loans) for cash, stock, or cash and stock
  • Coordinate 1099-B tax reporting, often in multiple years
  • Complete funds reversion and escheatment

Specialized teams provide efficient transactions

The most efficient paying and exchange agents have a specialized team dedicated to meeting the needs of your clients, whether they’re buyers or sellers.

The most efficient paying and exchange agents have a specialized team dedicated to meeting the needs of your clients, whether they are buyers or sellers.

The administration and payment of consideration on your deal shouldn’t be handled as a one-off project; rather, it should be placed with a team whose core focus is M&A payments.

Some of the advantages of working with an experienced and committed M&A payments team include:

  • A dedicated professional providing one-on-one support to the transaction, plus customer service phone lines and a specific email and mailing address for sellers seeking assistance
  • Pre-closing preparation reinforced by insights from previous successful transactions to reveal common obstacles and efficiencies
  • Proven systems, processes and resources prepared to process heavy volumes of work on key days, such as on or near the closing date
  • The convenience of a secure, online portal for shareholder document submission – allowing payments to process easier and faster
  • Prompt review and reconcilement of shareholder submissions to ensure quick turnaround of payments and follow up when necessary
  • An understanding of the best practices and nuances of complex deals that might include payment of stock consideration or foreign currencies
  • A successful track record working with multiple stock transfer agents to foster efficient coordination with the buyer and its stock transfer agent
  • The convenience of a secure, online portal for shareholder document submission – allowing payments to process easier and faster

Utilizing a paying and exchange agent can provide valuable benefits and increase efficiencies within transactions so that you can focus on achieving your business goals. 

At U.S. Bank, our specialized M&A payments team delivers the expertise and efficiency necessary for a successful transaction. Integrated with our core escrow business, these teams provide end-to-end support of private M&A transactions. Click here  for more information on our comprehensive escrow services.

Related content

Digital processes streamline M&A transactions

Improve online presence your business

6 risks you need to manage when expanding your global footprint

Choosing your M&A escrow partner

Beyond Mars, AeroVironment’s earthly expansion fueled by U.S. Bank

The value of engaging a professional paying and exchange agent

5 tips for a successful joint venture

Know your customer: How updated rules affect M&A closings


Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.