Aerospace & Defense Seller Financing: An Independent Sponsor's Counsel
Independent sponsor counsel for aerospace and defense, focused on Seller Financing and the deal mechanics that protect sponsor economics and LP alignment.
An independent sponsor closing aerospace and defense transactions in the $15M to $200M EV range has a defined set of moves at the Seller Financing 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.
How Seller Financing actually gets structured.
Anchor seller notes at 5 to 15 percent of EV, with a 4 to 6 year term.
Subordinate explicitly to senior and mezzanine debt with a clear standstill on default.
Price interest at 6 to 8 percent, with cash pay or PIK depending on the senior package.
Build prepayment optionality so refinancing flexibility is preserved.
In aerospace and defense, layer in ITAR / EAR registration transferred or refiled before close as part of the Seller Financing workstream.
Treating the seller note as a hand-shake. Sellers sue on notes more often than on equity disputes.
"A seller note is debt. Document it like debt. Service it like debt."Jason Powell · Seller Financing
The deal is one thing. The capital that opens up after close is another.
Refinancing, recaps, growth rounds, and the right strategic conversation eighteen months early are all downstream of relationships that take years to build and minutes to use.
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An LOI on the desk, a aerospace and defense target, and a Seller Financing question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.