IT Services & MSPs Employment & Non-Compete Agreements: An Independent Sponsor's Counsel
When the deal is IT services and MSPs and the question is Employment & Non-Compete Agreements, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
The economics on a IT services and MSPs platform deal usually hinge on a handful of structural decisions. Employment & Non-Compete Agreements is one of them.
The typical IT services and MSPs platform sits at $8M to $100M EV with EBITDA in the $2M to $18M range. The thesis runs on MSP platform with regional or vertical-specific bolt-ons. An MSP at 70% recurring revenue trades at one multiple, at 90% trades at a different one. The mix is the deal.
How Employment & Non-Compete Agreements actually gets structured.
Negotiate seller non-competes to the maximum enforceable scope, by state law.
Refresh key employee restrictive covenants pre-close, where possible.
Address the FTC non-compete rule and its state-by-state aftermath.
Tie executive non-competes to retention bonus economics that survive a quick exit.
In IT services and MSPs, layer in MSA assignment review with carve-outs noted as part of the Employment & Non-Compete Agreements workstream.
Drafting a national-scope non-compete in California. Enforceability is a binary, not a spectrum.
"A non-compete is only as strong as the state it sits in. Draft for the state, not the deal."Jason Powell · Employment & Non-Compete Agreements
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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An LOI on the desk, a IT services and MSPs target, and a Employment & Non-Compete Agreements 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.