The parties choose a reference date before signing, usually the last annual financial statements. On this basis, they calculate net financial debt and working capital and fix the purchase price. From the reference date, the box is considered locked: distributions, special bonuses or payments to the seller are prohibited as leakage. Permitted payments, such as the regular salary, are listed as permitted leakage.
For sellers of mid-sized companies, the locked box offers predictability. The purchase price is fixed at signing, and there is no later recalculation or dispute about it. Because profits from the reference date belong economically to the buyer, sellers often negotiate compensation, known as a ticker, in the form of interest on the purchase price until closing.
The prerequisite is a reliable, ideally audited balance sheet at the reference date. The buyer requires a warranty that no leakage has occurred since that date and reimbursement of every outflow. The longer the period until closing, the greater the buyer's risk.
Example
Hypothetical example: The reference date is 31 December 2025, equity value is €7.5 million, and closing takes place on 30 June 2026. A ticker of 5 percent per year brings the seller an additional €187,500 for six months. If the company pays the seller a non-permitted bonus of €80,000 in March, the seller must reimburse it.
Locked box vs. closing accounts
| Feature | Locked box | Closing accounts |
|---|---|---|
| Valuation date | Before signing | Closing date |
| Purchase price at signing | Final | Provisional |
| Potential for disputes | Low | Higher (recalculation) |
| Risk until closing borne by | Buyer | Seller |