338(h)(10) Elections Counsel for B2B Services Acquisitions
Independent sponsor counsel for B2B services, focused on 338(h)(10) Elections and the deal mechanics that protect sponsor economics and LP alignment.
An independent sponsor closing B2B services transactions in the $8M to $90M EV range has a defined set of moves at the 338(h)(10) Elections stage. Most of them are not in a generic M&A textbook.
The typical B2B services platform sits at $8M to $90M EV with EBITDA in the $2M to $18M range. The thesis runs on recurring revenue service platform with bolt-on operators. Most B2B services deals look better in the CIM than in the data room. Skip the CIM, ask for the contracts.
How 338(h)(10) Elections actually gets structured.
Run a side-by-side tax model showing the seller's grossed-up purchase price requirement.
Document the election in the purchase agreement, with required IRS forms attached.
Confirm the seller's eligibility, including the consolidated group structure.
Plan the tax gross-up payment, often funded out of the buyer's price.
In B2B services, layer in MSA assignability mapped customer-by-customer as part of the 338(h)(10) Elections workstream.
Demanding a 338(h)(10) without offering the seller a tax gross-up. The election only works if the math works for the seller too.
"338(h)(10) is a buyer benefit you have to pay for. Price it into the LOI, not the surprise column."Jason Powell · 338(h)(10) Elections
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.
Related deal pages.
Transaction Fee Structuring for B2B Services
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for B2B Services
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Representation & Warranty Insurance for B2B Services
A buyer-side insurance product covering breach of seller representations, reducing seller escrow and indemnit…
Indemnification for B2B Services
The seller's contractual promise to compensate the buyer for breaches of representations, covenants, and spec…
338(h)(10) Elections for Healthcare Services
roll-up of physician practices and ancillary service lines
338(h)(10) Elections for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a B2B services target, and a 338(h)(10) Elections 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.