Deal Structuring
Locked Box Mechanism
A valuation fixed to a historical balance sheet date with no post-closing adjustment, backed by leakage covenants restricting value extraction between that date and closing.
Buyer Example
Buyer pays a fixed ₹40 Cr based on the March 31 locked-box balance sheet of a Mumbai FMCG distributor, with a strict no-leakage covenant barring dividends, related-party payments, or bonus payouts between the locked-box date and the August closing — backed by seller indemnity for any breach discovered later.