All-Cash Deal

What is an 'All-Cash Deal'

1. The cash purchase of a target company. When an all-cash deal occurs, the equity portion of the parent company's balance sheet remains unchanged. This is opposed to a all-stock deal, where equity on the balance sheet would be affected.


2. The transfer of a real estate property without financing or mortgages. The buyer would produce the appropriate funds at the time of closing; the seller would receive the entire selling price at closing.

BREAKING DOWN 'All-Cash Deal'

1. All-cash mergers and acquisitions occur with no exchange of stock; the parent company purchases a majority of the common shares outstanding of the target company using only cash. This mostly occurs when the purchasing company is much larger than the company it is buying.


2. An all-cash real estate transaction occurs with no buyer financing. There may be significant drawbacks to paying cash for real estate, including tax consequences resulting from no mortgage interest tax deduction or the loss of earning power on the money that is tied up in the purchase.

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