338(h)(10) Elections for Precision Manufacturing Independent Sponsors
Independent sponsor counsel for precision manufacturing, focused on 338(h)(10) Elections and the deal mechanics that protect sponsor economics and LP alignment.
338(h)(10) Elections on precision manufacturing deals is one of those workstreams that looks routine on a checklist and decides outcomes in practice.
The typical precision manufacturing platform sits at $10M to $150M EV with EBITDA in the $2.5M to $25M range. The thesis runs on platform plus tuck-in machine shops or aerospace-qualified shops. Most precision manufacturing sellers will not sign an LOI without a known capital partner already named.
How 338(h)(10) Elections actually gets structured.
Run a side-by-side tax model showing the seller's grossed-up purchase price requirement.
Document the election in the purchase agreement, with required IRS forms attached.
Confirm the seller's eligibility, including the consolidated group structure.
Plan the tax gross-up payment, often funded out of the buyer's price.
In precision manufacturing, layer in AS9100 succession plan as a closing condition as part of the 338(h)(10) Elections workstream.
Demanding a 338(h)(10) without offering the seller a tax gross-up. The election only works if the math works for the seller too.
"338(h)(10) is a buyer benefit you have to pay for. Price it into the LOI, not the surprise column."Jason Powell · 338(h)(10) Elections
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.
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Indemnification for Precision Manufacturing
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338(h)(10) Elections for Precision Manufacturing, 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.