What type of purchase price adjustment is common (e.g., debt-free, cash-free)?
Frequency/market practice: All types are seen, including working capital adjustment, cash-free debt-free, and NAV adjustments.
Is there a collar on the purchase price adjustment?
Frequency/market practice: Rarely; collars are not common. They may be required where one of the parties is a public company.
Who usually prepares the closing balance sheet (where applicable)?
Frequency/market practice: These are usually prepared by the buyer.
Is the balance sheet audited (where applicable)?
Frequency/market practice: Common for final price determination.
Is an earn-out common?
Frequency/market practice: Depending on the transaction structure; earn-outs are more common in private equity transactions when the sellers continue to manage the target enterprise after closing. They are less common where the seller is completely exiting. Earn-outs are commonly capped.