LOI · Logistics & Distribution

Independent Sponsor Earnout Structures in Logistics & Distribution

Structuring Earnout Structures on logistics and distribution deals, with the structure protection and capital connectivity an independent sponsor actually needs.

EV range $12M to $140M EV EBITDA $3M to $22M Audience Buy & Sell-side
The deal context

Every logistics and distribution acquisition has its own gravity. Earnout Structures is the workstream where independent sponsor counsel earns the seat.

The typical logistics and distribution platform sits at $12M to $140M EV with EBITDA in the $3M to $22M range. The thesis runs on regional acquisitions of brokerages, 3PLs, and last-mile operators. Fuel-volatile years make for clean entry multiples. Read the math, not the narrative.

The moves

How Earnout Structures actually gets structured.

  1. Tie the earnout to gross profit or contribution margin, not revenue, to avoid sandbagging.

  2. Cap the earnout window at 24 months. Anything longer is a litigation risk.

  3. Build acceleration on a change of control or buyer-driven operational change.

  4. Name an arbitrator and the accounting standard in the agreement.

  5. In logistics and distribution, layer in earnout indexed to gross margin, not revenue as part of the Earnout Structures workstream.

The common mistake

Drafting the earnout in three paragraphs. Earnouts are the second-most-litigated provision in M&A.

Jason's take
"If the earnout could be measured by a teenager with a spreadsheet, you wrote it well."
Jason Powell · Earnout Structures
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
WORK WITH JASON

Bring the logistics and distribution deal. Get Earnout Structures 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.