Leakage refers to any value extracted from a target company for the benefit of the seller or related parties between the locked-box date and closing — dividends, shareholder loan repayments, management fees to affiliates, non-arm's length transactions. In a locked-box structure, the price is fixed at the locked-box date: any post-lock-box leakage must be reimbursed to the buyer as it violates the integrity of the agreed price. The SPA exhaustively lists permitted leakage (pre-agreed authorised distributions) and prohibited leakage (which triggers a price deduction or indemnity claim at closing).

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Example: in a CHF 22.0 million locked-box acquisition with a 31 December lock date, the seller pays CHF 150,000 of dividends and CHF 80,000 of management fees to an affiliate between January and the March closing. These CHF 230,000 constitute prohibited leakage — deducted from the closing price euro for euro or claimed immediately after closing as a contractual indemnity under the SPA.

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Hectelion identifies and documents all leakage flows in locked-box transactions, advising sellers on permitted leakage structuring and buyers on leakage claim mechanisms.