Frequency/market practice: Purchase price adjustments are fairly common.
Frequency/market practice: Choice of adjustment method generally depends on the calculation methods of the purchase price and the type of business operated by the target. Net debt (or net cash) and working capital adjustments are common. Net assets value adjustments are less common.
Frequency/market practice: Rarely. Collars are not common.
Frequency/market practice: The responsibility is usually on the buyer to ensure the target company prepares this. However, the seller may also take responsibility, especially where the seller is continuing e.g., in owner-managed companies with earn-out arrangements.
Frequency/market practice: The closing balance sheet is rarely audited. Third-party experts are generally used, as designated by the parties, to review the closing balance sheet post-closing if there is a dispute between the parties regarding calculation of the purchase price adjustment.
Frequency/market practice: Rarely to fairly common in circumstances where the sellers continue managing the target company after closing or, in case of a disagreement or the valuation of the target between the parties (in particular for start-up or tech companies for which the buyer may have difficulties to assess the "real" value for the target). Otherwise, fairly uncommon.
Frequency/market practice: Fairly common in circumstances where it is for the purpose of securing both the purchase price adjustment and the indemnification obligations of the seller under the representations and warranties, specific indemnification cases and breach of covenants. In addition, an escrow mechanism is often used under asset deals qualifying as transfer of going concerns (cessions de fonds de commerce) to secure the payment of the purchase price during the post-closing opposition period of the creditors.