What type of purchase price adjustment is common (e.g., debt-free, cash-free)?
Frequency/market practice: Cash free/debt free and working capital are very common. NAV is also common.
Who usually prepares the closing balance sheet (where applicable)?
Frequency/market practice: This is usually prepared by the target company (but the buyer may be involved in process of preparing the accounts).
Is the balance sheet audited (where applicable)?
Frequency/market practice: It is fairly common to have the balance sheet reviewed by an independent auditor, especially if there is a dispute between the parties.
Is an earn-out common?
Frequency/market practice: Fairly common; earn-outs are more common in private equity transactions when the sellers continue to manage the target company after closing. They are less common where the seller exits completely . Earn-outs are commonly capped.