Logistics & Distribution Deals: Indemnification Done Right
Drafting Indemnification on logistics and distribution deals, with the structure protection and capital connectivity an independent sponsor actually needs.
The economics on a logistics and distribution platform deal usually hinge on a handful of structural decisions. Indemnification is one of them.
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.
How Indemnification actually gets structured.
Set general indemnity survival at 18 months, fundamental reps for the full statute of limitations.
Build a basket at 0.5 percent of EV, with a deductible structure, not a tipping basket.
Cap general indemnity at 10 percent of EV, with R&W insurance carrying the layer above.
Carve out fraud, tax, and intentional breach from any cap.
In logistics and distribution, layer in earnout indexed to gross margin, not revenue as part of the Indemnification workstream.
Negotiating caps and baskets without first reading the disclosure schedules. The schedules dictate the real exposure.
"Indemnification only matters when the deal goes wrong. Draft it as if it will."Jason Powell · Indemnification
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.
Related deal pages.
Transaction Fee Structuring for Logistics & Distribution
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for Logistics & Distribution
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Representation & Warranty Insurance for Logistics & Distribution
A buyer-side insurance product covering breach of seller representations, reducing seller escrow and indemnit…
Quality of Earnings for Logistics & Distribution
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
Indemnification for Healthcare Services
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Indemnification for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a logistics and distribution target, and a Indemnification 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.