Seller Financing for Building Products Independent Sponsors
When the deal is building products and the question is Seller Financing, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
The economics on a building products platform deal usually hinge on a handful of structural decisions. Seller Financing is one of them.
The typical building products platform sits at $10M to $150M EV with EBITDA in the $2.5M to $25M range. The thesis runs on regional manufacturer or specialty distributor consolidation. Pricing power lives in dealer contracts, not in branding. Read the dealer agreements before the LOI.
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 building products, layer in raw-material pass-through clauses confirmed 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.
Capital after close is where the IRR actually gets made. The right introductions at month nine through month thirty are where this practice works as hard as it does at the LOI.
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An LOI on the desk, a building products 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.