Dividend Recapitalization for Industrial Services Independent Sponsors
Structuring Dividend Recapitalization on industrial services deals, with the structure protection and capital connectivity an independent sponsor actually needs.
The economics on a industrial services platform deal usually hinge on a handful of structural decisions. Dividend Recapitalization is one of them.
The typical industrial services platform sits at $10M to $130M EV with EBITDA in the $3M to $22M range. The thesis runs on regional consolidation of plant maintenance, specialty contracting, or rentals. An EMR over 1.0 will cost you a half-turn at close unless you fix the story upfront.
How Dividend Recapitalization actually gets structured.
Time the recap when leverage has come down and EBITDA has grown.
Structure the new senior debt with room for ongoing operations and add-ons.
Confirm that the LP waterfall recognizes the distribution as recap, not exit.
Coordinate tax treatment of the distribution with the LPs in advance.
In industrial services, layer in MSA renewal calendar mapped pre-LOI as part of the Dividend Recapitalization workstream.
Recapping too early. Lenders price it; LPs feel it; the next deal cost goes up.
"Recaps are a tool, not a habit. Use them when the operating story supports them."Jason Powell · Dividend Recapitalization
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.
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Bring the industrial services deal. Get Dividend Recapitalization 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.