In an LBO or M&A transaction, the Uses of Funds refers to the total amount of capital required to complete the deal and where that capital is applied. It outlines all the financial outflows needed to acquire the target company and execute the transaction.Typical components include:Purchase of equity – the cost to buy out shareholders of the target company.Repayment of existing debt – retiring any outstanding debt on the target’s balance sheet as part of the acquisition.Transaction fees – legal, advisory, financing, and due diligence costs.Cash to balance sheet (if applicable) – additional funding injected into the company post-transaction for liquidity or growth.
Learn Uses of Funds with interactive examples and practice exercises in our Mergers and Acquisitions module.
This interactive learning module helps you understand Uses of Funds through hands-on practice and real-world examples.