Energy Services Deals: Indemnification Done Right
Securities and M&A counsel for independent sponsors drafting energy services transactions, from LOI to close to the capital markets that open up afterward.
An independent sponsor closing energy services transactions in the $10M to $140M EV range has a defined set of moves at the Indemnification stage. Most of them are not in a generic M&A textbook.
The typical energy services platform sits at $10M to $140M EV with EBITDA in the $2.5M to $24M range. The thesis runs on regional oilfield service or renewable services consolidation. Underwrite the trough, not the peak. Capital partners will.
How Indemnification actually gets structured.
Set general indemnity survival at 18 months, fundamental reps for the full statute of limitations.
Build a basket at 0.5 percent of EV, with a deductible structure, not a tipping basket.
Cap general indemnity at 10 percent of EV, with R&W insurance carrying the layer above.
Carve out fraud, tax, and intentional breach from any cap.
In energy services, layer in earnout indexed to gross margin instead of revenue as part of the Indemnification workstream.
Negotiating caps and baskets without first reading the disclosure schedules. The schedules dictate the real exposure.
"Indemnification only matters when the deal goes wrong. Draft it as if it will."Jason Powell · Indemnification
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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Bring the energy services deal. Get Indemnification done right.
Direct counsel from a securities and M&A attorney with billions in structured transactions, the independent-sponsor-native playbook, and the capital markets network that opens up post-close.