M&A Foundations · glossary
A pricing mechanism where the price is fixed in advance by reference to a historic balance sheet (the locked box date) and the seller promises that no value has leaked out since. No post-completion adjustment: price certainty for both sides, and the seller's favourite. Project Sunrise is a locked box deal. Chapter 9
Explained in Chapter 9, Price Mechanisms and Adjustments, of M&A Foundations.
Two items deserve special mention. The first is the price mechanism. It is not enough to record “€42,000,000”: a headline number means nothing until you know how it will be adjusted for what happens to the business between the accounts date and completion. There are two standard approaches. One is the locked box: a fixed price built on a historical balance sheet, protected by anti-leakage covenants. The other is completion accounts: a price trued-up against a balance sheet…Read Chapter 6, Term Sheets and Heads of Terms →
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Where this term lives
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement. It is part of one complete fictional deal, with every document attached and a test after every chapter. Open M&A Foundations → · All terms A–Z →