Real Estate Carve-Outs for IT Services & MSPs Independent Sponsors
Securities and M&A counsel for independent sponsors structuring IT services and MSPs transactions, from LOI to close to the capital markets that open up afterward.
The economics on a IT services and MSPs platform deal usually hinge on a handful of structural decisions. Real Estate Carve-Outs 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 Real Estate Carve-Outs actually gets structured.
Separate operating real estate into a single-purpose entity pre-close.
Document an arm's-length lease with renewal options and assignment rights.
Address title, survey, and environmental on each parcel.
Coordinate the real estate close with the operating company close.
In IT services and MSPs, layer in MSA assignment review with carve-outs noted as part of the Real Estate Carve-Outs workstream.
Leaving the real estate inside the operating company. The buyer pays a higher multiple than the real estate deserves.
"Real estate trades at a different multiple than the business. Separate it, lease it, manage it."Jason Powell · Real Estate Carve-Outs
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.
Related deal pages.
Independent Sponsor Economics for IT Services & MSPs
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Management Fee Structuring for IT Services & MSPs
The annual fee paid by the deal entity to the independent sponsor for ongoing oversight, board service, and p…
Transaction Fee Structuring for IT Services & MSPs
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for IT Services & MSPs
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Real Estate Carve-Outs for Healthcare Services
roll-up of physician practices and ancillary service lines
Real Estate Carve-Outs for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a IT services and MSPs target, and a Real Estate Carve-Outs 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.