Indemnification for Precision Manufacturing Independent Sponsors
Securities and M&A counsel for independent sponsors drafting precision manufacturing transactions, from LOI to close to the capital markets that open up afterward.
Indemnification 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 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 precision manufacturing, layer in AS9100 succession plan as a closing condition 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.
Refinancing, recaps, growth rounds, and the right strategic conversation eighteen months early are all downstream of relationships that take years to build and minutes to use.
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Bring the precision manufacturing deal. Get Indemnification 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.