Capital raise · Food & Beverage

Independent Sponsor Independent Sponsor Economics in Food & Beverage

When the deal is food and beverage and the question is Independent Sponsor Economics, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.

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

The economics on a food and beverage platform deal usually hinge on a handful of structural decisions. Independent Sponsor Economics is one of them.

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 Independent Sponsor Economics actually gets structured.

  1. Anchor on 20 to 25 percent carry above an 8 percent preferred return, with a 50/50 catch-up.

  2. Set the management fee at 2 percent of invested capital, capped at three years.

  3. Charge a transaction fee of 2 to 3 percent at close, with a clear LP-approval ceiling.

  4. Document the waterfall in the LPA, not in a side letter.

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

The common mistake

Negotiating economics with the LP only after the LOI is signed. By then, the leverage is gone.

Jason's take
"If you are an independent sponsor, your economics are your firm. Defend them in the LPA, not in conversation."
Jason Powell · Independent Sponsor Economics
Capital after close

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.

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 Independent Sponsor Economics 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.