Industrial Services Deals: Indemnification Done Right
Drafting Indemnification on industrial services deals, with the structure protection and capital connectivity an independent sponsor actually needs.
Industrial Services deals in the lower middle market run a specific playbook. Indemnification is where the structure either holds or starts to leak.
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 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 industrial services, layer in MSA renewal calendar mapped pre-LOI 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.
Related deal pages.
Transaction Fee Structuring for Industrial Services
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for Industrial Services
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Representation & Warranty Insurance for Industrial Services
A buyer-side insurance product covering breach of seller representations, reducing seller escrow and indemnit…
Quality of Earnings for Industrial Services
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
Indemnification for Healthcare Services
roll-up of physician practices and ancillary service lines
Indemnification for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
Bring the industrial 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.