Lockboxes trade post-close true-ups for price certainty: you set a price as of a “lockbox date,” define permitted leakage, and close without a working-capital adjustment. That’s cleaner, but in a growing business, value after the lockbox date typically accrues to the buyer, so speed matters. We compare lockbox vs. cash-free/debt-free, translate excess working capital into headline price for apples-to-apples offers, and flag tax/escrow gotchas. Sellers get a simple checklist to protect upside and avoid leakage disputes.
Lockboxes promise price certainty—but the clock can quietly shift value. In this episode, Mike and Ryan break down how a lockbox differs from a classic cash-free/debt-free (CF/DF) deal: fixed price as of a “lockbox date,” no post-close true-up, and a tight definition of permitted vs. non-permitted leakage. They discuss when lockboxes shine (fast closings, cleaner accounting, fewer surprises) and where sellers need to be careful (growth between lockbox date and close often accrues to the buyer). You’ll get apples-to-apples comparison tips for evaluating offers, what to watch in tax escrows, and a practical way to translate excess working capital into headline price. If you’ve ever wrestled with working capital adjustments or wanted a cleaner close, this one’s your field guide.
Seller checklist:
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