LOI · Aerospace & Defense

Independent Sponsor Equity Rollover in Aerospace & Defense

Independent sponsor counsel for aerospace and defense, focused on Equity Rollover and the deal mechanics that protect sponsor economics and LP alignment.

EV range $15M to $200M EV EBITDA $3M to $30M Audience Buy & Sell-side
The deal context

An independent sponsor closing aerospace and defense transactions in the $15M to $200M EV range has a defined set of moves at the Equity Rollover stage. Most of them are not in a generic M&A textbook.

The typical aerospace and defense platform sits at $15M to $200M EV with EBITDA in the $3M to $30M range. The thesis runs on tier-two or tier-three supplier consolidation with certifications as moat. Foreign LP capital can trigger CFIUS review on the cleanest of deals. Map the cap table early.

The moves

How Equity Rollover actually gets structured.

  1. Anchor on 15 to 25 percent rollover for a clean alignment story.

  2. Treat rollover as tax-deferred under Section 351 or 721 where the structure allows.

  3. Document tag-along and drag-along rights at the rollover level, not just at the LP level.

  4. Cap exit veto rights for rolled equity to avoid future deadlock.

  5. In aerospace and defense, layer in ITAR / EAR registration transferred or refiled before close as part of the Equity Rollover workstream.

The common mistake

Rolling at the wrong entity level, triggering an immediate tax event on what was supposed to be deferred.

Jason's take
"Rollover is the cheapest alignment tool on the table. Use it; do not abuse it."
Jason Powell · Equity Rollover
Capital after close

The deal is one thing. The capital that opens up after close is another.

After close, the call list for refinancing, recapitalization, and growth equity gets short and known. Jason carries that list.

MONTH 18
Senior refi
MONTH 24
Dividend recap
MONTH 36
Growth equity
YEAR 4–5
Strategic exit
ENGAGE THE PRACTICE

Equity Rollover for Aerospace & Defense, on independent sponsor terms.

Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.