Practical Law ANZ Glossary w-018-2944 (Approx. 2 pages)
Glossary
Locked box
A mechanism through which the parties to a transaction, such as a share or asset purchase transaction, agree on the consideration for the target company or business. The price is generally based on the target's balance sheet, which is drawn up and settled between the parties as at an agreed date before completion of the transaction and notionally retained in a locked box. This approach is advantageous for the seller as it has more certainty as to the consideration.