Close · Insurance Brokerage

Mezzanine Debt & Capital Stack Counsel for Insurance Brokerage Acquisitions

Independent sponsor counsel for insurance brokerage, focused on Mezzanine Debt & Capital Stack and the deal mechanics that protect sponsor economics and LP alignment.

EV range $10M to $150M EV EBITDA $3M to $25M Audience Independent Sponsor
The deal context

Every insurance brokerage acquisition has its own gravity. Mezzanine Debt & Capital Stack is the workstream where independent sponsor counsel earns the seat.

The typical insurance brokerage platform sits at $10M to $150M EV with EBITDA in the $3M to $25M range. The thesis runs on regional retail agency roll-ups. Producer non-competes are unenforceable in too many states to ignore. Plan retention, not litigation.

The moves

How Mezzanine Debt & Capital Stack actually gets structured.

  1. Target senior leverage at 3.0x to 3.5x EBITDA, mezzanine at 1.0x to 1.5x on top.

  2. Negotiate an intercreditor agreement that does not throttle the operator.

  3. Structure mezzanine with PIK toggle and warrants priced into the IRR model.

  4. Confirm covenant headroom of at least 20 percent at close.

  5. In insurance brokerage, layer in E&O tail insurance priced and bound as part of the Mezzanine Debt & Capital Stack workstream.

The common mistake

Letting the lender pick the intercreditor terms. Those terms decide what the operator can do on day 180.

Jason's take
"The capital stack is a contract, not a spreadsheet. Read every page of every term sheet."
Jason Powell · Mezzanine Debt & Capital Stack
Capital after close

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

Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.

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 insurance brokerage target, and a Mezzanine Debt & Capital Stack 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.