Marketing Agencies Deals: Real Estate Carve-Outs Done Right
Securities and M&A counsel for independent sponsors structuring marketing agencies transactions, from LOI to close to the capital markets that open up afterward.
Marketing Agencies deals in the lower middle market run a specific playbook. Real Estate Carve-Outs is where the structure either holds or starts to leak.
The typical marketing agencies platform sits at $5M to $80M EV with EBITDA in the $1.5M to $14M range. The thesis runs on specialty agency or holdco platform with bolt-ons. If the founder leaves, half the agencies in the market lose 25% of revenue. Structure for that.
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 marketing agencies, layer in client roster scrubbed for top-five concentration 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.
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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Real Estate Carve-Outs for Marketing Agencies, on independent sponsor terms.
Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.