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.

RELATED TERMS
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Blanket Mortgage

    A mortgage which covers two or more pieces of real estate. The ...
  3. Merger Deficit

    An accounting term used to describe the situation when the total ...
  4. Simultaneous Closing - SIMO

    A real estate financing strategy in which two simultaneous transactions ...
  5. Cash Equity

    1. In real estate, the amount of money an owner has invested ...
  6. Private Equity Real Estate

    A Definition of "Private Equity Real Estate" and how it applies ...
Related Articles
  1. Budgeting

    Leverage: Increasing Your Real Estate Net Worth

    Few homeowners think of their mortgages as leverage, but careful use of this asset can help them maximize their net worth.
  2. Economics

    Where NOT to Buy Property Anytime Soon

    Equities are dancing on the edge of a cliff. Considering this riskiness, should investors be looking to real estate? If so, where?
  3. Home & Auto

    Flipping Houses: Is It Better Than Buy and Hold?

    Real estate investors can flip a property or use it for cash flow. Find out which will work in your neck of the woods.
  4. Investing

    How to Invest in Real Estate Without Buying Property

    Investing in real estate can require more capital than most investors have available, but there are options to invest in real estate for less.
  5. Home & Auto

    Key Reasons To Invest In Real Estate

    There has been a lot of negativity over the real estate sector since 2008. Here are the reasons why you should be investing in it.
  6. Mutual Funds & ETFs

    Add Some Real Estate To Your Portfolio

    From REITs to owning your own home, find out how diversify your portfolio with real estate assets.
  7. Options & Futures

    Rent To Own; Own To Rent

    This method can help first-time buyers afford a home using a rent-to-own strategy, and it can also be good for investors.
  8. Home & Auto

    Exploring Real Estate Investments: What Is Real Estate?

    By Ian Woychuk, CFA The most basic definition real estate is "an interest in land". Broadening that definition somewhat, the word "interest" can mean either an ownership interest (also known ...
  9. Investing

    Outstanding Shares

    Learn more about this important number found on a company's balance sheet.
  10. Home & Auto

    Exploring Real Estate Investments: Buying And Owning Real Estate

    By Ian Woychuk, CFA In Chapter 2, we presented the investment selection matrix, which outlines your alternatives when choosing the kind of real estate investment to make. You can choose to invest ...
RELATED FAQS
  1. In M&A how does an all-stock or all-cash deal affect the equity of the buying company? ...

    Mergers and acquisitions (M&A) are forms of corporate restructuring that are becoming increasingly popular in the modern ... Read Answer >>
  2. How have low interest rates affected the real estate sector?

    Learn how low interest rates stimulate the real estate sector by making it more affordable to borrow money to invest in real ... Read Answer >>
  3. Does the balance sheet always balance?

    Yes, a balance sheet should always balance. The name "balance sheet" is based on the fact that assets will equal liabilities ... Read Answer >>
  4. How can I make equity investments in real estate?

    Invest in real estate equity through buying and selling real property or through other more liquid investments like real ... Read Answer >>
  5. What financial metrics are best for evaluating companies in the real estate sector?

    Learn about some of the most important financial metrics and other analytic tools before investing in a real estate company ... Read Answer >>
  6. What are essential steps to financial due diligence?

    Explore different areas of financial due diligence. Learn the steps of due diligence that may help ensure selected investments ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center