M&A Foundations · glossary
In a locked box deal, leakage is value flowing from the target to the seller after the locked box date, such as dividends or fees. The seller must repay it euro for euro. Permitted leakage is the agreed list of exceptions, such as ordinary salaries or a disclosed management charge. SPA definition · Chapter 9
Explained in Chapter 9, Price Mechanisms and Adjustments, of M&A Foundations.
If the buyer owns everything in the box from 31 December 2025, then anything that flows out of the box to the seller after that date is the buyer's money leaving in the seller's pocket. The SPA calls this Leakage, and the definition is a carefully built net. Walk through its limbs — you will meet this structure on every locked box deal…Read Chapter 9, Price Mechanisms and Adjustments →
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement.
any of the following occurring in the period from (but excluding) the Locked Box Date to (and including) the Completion Date, other than Permitted Leakage: (a)any dividend or other distribution (in cash or in kind) declared, paid or made by any Group Company to or for the benefit of the Seller or any Related Person; (b)any payment by any Group Company to or for the benefit of the Seller or any Related Person, including any management, monitoring, service or directors’ fees; (c)any transfer of assets by any Group Company to, or assumption of liabilities of, the Seller or any Related Person, in each case at an undervalue; (d)any waiver or release by any Group Company of any amount owed to it…Read the definition in the document →
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