Between the locked box date and closing, no non-permitted payments (leakage) such as dividends or management fees may be made to the seller. As there is no post-closing price adjustment, the process is simpler; however, the reliability of the locked box balance sheet is critical.
Related terms
Completion accountsFinancial statements prepared as at the closing date of an acquisition, through which the final price is set by net debt and working capital adjustments.Share purchase agreement (SPA)The agreement governing the price, payment terms, representations and warranties, indemnities and closing conditions in a share transfer.Cost of capitalThe minimum rate of return investors expect from an investment in return for the risk they take.Discounted cash flow (DCF)A valuation method based on discounting the free cash flows an asset or company will generate in the future to the present using an appropriate discount rate.Earn-outA mechanism under which part of the purchase price is paid depending on the target company reaching certain performance targets after closing.EBITDAEarnings before interest, tax, depreciation and amortisation; used as an indicator of the cash-like profitability generated by a company's core operations.
Last updated: October 22, 2026 · This definition is for general information only.