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💰 '''Locked-box interest (ticker)''' is a daily compensation mechanism embedded in insurance [[Definition:Mergers and acquisitions (M&A) | M&A]] transactions that compensates the seller for the economic value generated by the target business between the [[Definition:Locked-box mechanism | locked-box date]] and the actual closing of the deal. In insurance transactions — where the target company continues to collect [[Definition:Premium | premiums]], invest assets, and generate [[Definition:Investment income | investment income]] during this interim period — the ticker ensures the seller receives a pre-agreed daily rate reflecting the time value of the purchase price that the buyer has effectively been enjoying through continued ownership of the business's economics. Unlike a post-closing [[Definition:Purchase price adjustment | purchase price adjustment]], the ticker is fixed and predictable, making it a favored tool in deals involving [[Definition:Insurance carrier | carriers]], [[Definition:Managing general agent (MGA) | MGAs]], and [[Definition:Insurance brokerage | brokerages]] where both parties want certainty.

⚙️ The ticker typically accrues as a fixed daily amount — or sometimes as an annualized percentage of the [[Definition:Enterprise value | enterprise value]] or equity price — running from the locked-box date through closing. The rate is negotiated during deal structuring and documented in the [[Definition:Share purchase agreement (SPA) | share purchase agreement]]. For example, if an acquirer agrees to purchase an insurance underwriting platform and the locked-box date is set at the most recent audited year-end, the seller would receive ticker interest for every day between that date and the actual completion. The rate usually reflects a reasonable cost of capital or approximates the target's expected earnings during the gap period. In insurance deals, where [[Definition:Underwriting profit | underwriting profits]] and [[Definition:Loss reserve | reserve]] movements can cause significant value fluctuations between signing and closing, the ticker provides a clean, formulaic substitute for reopening the accounts.

📊 The practical importance of the ticker becomes especially clear in transactions subject to extended [[Definition:Regulatory approval | regulatory approval]] timelines — a common feature of insurance M&A, where bodies such as state insurance departments in the United States, the [[Definition:Prudential Regulation Authority (PRA) | PRA]] in the United Kingdom, or [[Definition:Solvency II | Solvency II]] supervisors across Europe may take months to approve a [[Definition:Change of control | change of control]]. Without the ticker, sellers would bear the full economic cost of delayed closings while the buyer benefits from the target's ongoing cash generation. The ticker aligns incentives: buyers are motivated to expedite approvals because each additional day increases the total purchase price, and sellers accept the locked-box structure knowing they will be compensated for the wait. In this way, the ticker functions as a critical bridge between deal economics and regulatory reality in insurance transactions.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Locked-box mechanism]]
* [[Definition:Locked-box permitted leakage]]
* [[Definition:Purchase price adjustment]]
* [[Definition:Share purchase agreement (SPA)]]
* [[Definition:Long-stop date]]
* [[Definition:Completion accounts]]
{{Div col end}}

Definition:Locked-box interest (ticker) - Revision history

PlumBot: Bot: Creating new article from JSON