Pre-LOI · Industrial Services

LOI Negotiation for Industrial Services Independent Sponsors

Securities and M&A counsel for independent sponsors negotiating industrial services transactions, from LOI to close to the capital markets that open up afterward.

EV range $10M to $130M EV EBITDA $3M to $22M Audience Buy-side / Sponsor
The deal context

Industrial Services deals in the lower middle market run a specific playbook. LOI Negotiation 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.

The moves

How LOI Negotiation actually gets structured.

  1. Cap the exclusivity at 60 days, with one 30-day extension you control.

  2. Name the earnout, the rollover percentage, and the management fee in the LOI itself, not later.

  3. Reserve QofE and rep-and-warranty insurance as buyer expenses, paid at close.

  4. Build a no-shop carve-out for inbound strategic bids above a threshold.

  5. In industrial services, layer in MSA renewal calendar mapped pre-LOI as part of the LOI Negotiation workstream.

The common mistake

Letting the seller's counsel draft the first LOI. The frame of reference sets every fight that follows.

Jason's take
"An LOI is not a non-binding nicety. It is the deal, in skeleton."
Jason Powell · LOI Negotiation
Capital after close

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.

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 industrial services target, and a LOI Negotiation 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.