Independent Sponsor Working Capital Adjustments in Energy Services
When the deal is energy services and the question is Working Capital Adjustments, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Every energy services acquisition has its own gravity. Working Capital Adjustments is the workstream where independent sponsor counsel earns the seat.
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 Working Capital Adjustments actually gets structured.
Set the peg based on a trailing 12-month average, normalized for seasonality.
Define each line item in the schedule, especially deferred revenue and accrued vacation.
Cap the dispute resolution timeline at 30 days post-close.
Build a true-up payment mechanism funded out of escrow.
In energy services, layer in earnout indexed to gross margin instead of revenue as part of the Working Capital Adjustments workstream.
Using an unadjusted average that ignores seasonality. You pay twice for the same cash.
"Working capital is where deals are won or re-traded after LOI. Read every line of the schedule."Jason Powell · Working Capital Adjustments
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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Bring the energy services deal. Get Working Capital Adjustments 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.