Post-close · Food & Beverage

Independent Sponsor Dividend Recapitalization in Food & Beverage

Structuring Dividend Recapitalization on food and beverage deals, with the structure protection and capital connectivity an independent sponsor actually needs.

EV range $10M to $120M EV EBITDA $2M to $20M Audience Independent Sponsor
The deal context

Dividend Recapitalization on food and beverage deals is one of those workstreams that looks routine on a checklist and decides outcomes in practice.

The typical food and beverage platform sits at $10M to $120M EV with EBITDA in the $2M to $20M range. The thesis runs on CPG roll-up or co-packing platform with regional bolt-ons. Treat trade spend like a working capital item, not a marketing line. The valuation moves accordingly.

The moves

How Dividend Recapitalization actually gets structured.

  1. Time the recap when leverage has come down and EBITDA has grown.

  2. Structure the new senior debt with room for ongoing operations and add-ons.

  3. Confirm that the LP waterfall recognizes the distribution as recap, not exit.

  4. Coordinate tax treatment of the distribution with the LPs in advance.

  5. In food and beverage, layer in co-pack capacity agreement re-papered as part of the Dividend Recapitalization workstream.

The common mistake

Recapping too early. Lenders price it; LPs feel it; the next deal cost goes up.

Jason's take
"Recaps are a tool, not a habit. Use them when the operating story supports them."
Jason Powell · Dividend Recapitalization
Capital after close

The deal is one thing. The capital that opens up after close is another.

The capital that opens up post-close, from refinancing to growth equity to strategic exit, runs through a small set of Wall Street relationships. That network is built in.

MONTH 18
Senior refi
MONTH 24
Dividend recap
MONTH 36
Growth equity
YEAR 4–5
Strategic exit
TALK TO JASON

An LOI on the desk, a food and beverage target, and a Dividend Recapitalization 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.