Independent Sponsor Employment & Non-Compete Agreements in Precision Manufacturing
Negotiating Employment & Non-Compete Agreements on precision manufacturing deals, with the structure protection and capital connectivity an independent sponsor actually needs.
The economics on a precision manufacturing platform deal usually hinge on a handful of structural decisions. Employment & Non-Compete Agreements is one of them.
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 Employment & Non-Compete Agreements actually gets structured.
Negotiate seller non-competes to the maximum enforceable scope, by state law.
Refresh key employee restrictive covenants pre-close, where possible.
Address the FTC non-compete rule and its state-by-state aftermath.
Tie executive non-competes to retention bonus economics that survive a quick exit.
In precision manufacturing, layer in AS9100 succession plan as a closing condition as part of the Employment & Non-Compete Agreements workstream.
Drafting a national-scope non-compete in California. Enforceability is a binary, not a spectrum.
"A non-compete is only as strong as the state it sits in. Draft for the state, not the deal."Jason Powell · Employment & Non-Compete Agreements
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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An LOI on the desk, a precision manufacturing target, and a Employment & Non-Compete Agreements 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.