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Locking in Value

A quick guide to Locked Box closing mechanics

You’ve agreed the headline valuation for the business and due diligence is progressing quickly. Before you know it, you’re racing towards the deal completion, so what next?

Chosing an appropriate closing mechanism is key

The Locked Box is a popular closing mechanism for M&A transactions across Europe, however, many sellers and buyers are still unfamiliar with the Locked box concept.

Put simply, the Locked Box approach removes price uncertainty for all parties as the Seller and Buyer negotiate a fixed price at signing the SPA based on the agreed Locked Box balance sheet.

Hugh Lyons, Associate Director in our Corporate Finance, M&A team discusses the concept, its benefits, challenges and the key steps to implementing the Locked Box mechanism. 

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