Logistics & Distribution Management Incentive Plans (MIP): An Independent Sponsor's Counsel
Securities and M&A counsel for independent sponsors structuring logistics and distribution transactions, from LOI to close to the capital markets that open up afterward.
An independent sponsor closing logistics and distribution transactions in the $12M to $140M EV range has a defined set of moves at the Management Incentive Plans (MIP) stage. Most of them are not in a generic M&A textbook.
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 Management Incentive Plans (MIP) actually gets structured.
Size the MIP at 10 to 15 percent of post-close equity, with 60 percent time-vested and 40 percent performance-vested.
Use profits interests for tax efficiency, with a clear strike value at grant.
Build double-trigger acceleration on change of control plus termination.
Document the MIP in the LLC operating agreement, not in a separate plan only.
In logistics and distribution, layer in earnout indexed to gross margin, not revenue as part of the Management Incentive Plans (MIP) workstream.
Promising the MIP percentage in the LOI without modeling the impact on the LP waterfall. The LP finds out and the deal stalls.
"MIPs are the cheapest retention tool you have. Use them deliberately, document them precisely."Jason Powell · Management Incentive Plans (MIP)
The deal is one thing. The capital that opens up after close is another.
The capital that opens up post-close, from refinancing to growth equity to strategic exit, runs through a small set of Wall Street relationships. That network is built in.
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Bring the logistics and distribution deal. Get Management Incentive Plans (MIP) 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.