Precision Manufacturing Deals: LOI Negotiation Done Right
Independent sponsor counsel for precision manufacturing, focused on LOI Negotiation and the deal mechanics that protect sponsor economics and LP alignment.
LOI Negotiation 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 LOI Negotiation actually gets structured.
Cap the exclusivity at 60 days, with one 30-day extension you control.
Name the earnout, the rollover percentage, and the management fee in the LOI itself, not later.
Reserve QofE and rep-and-warranty insurance as buyer expenses, paid at close.
Build a no-shop carve-out for inbound strategic bids above a threshold.
In precision manufacturing, layer in AS9100 succession plan as a closing condition as part of the LOI Negotiation workstream.
Letting the seller's counsel draft the first LOI. The frame of reference sets every fight that follows.
"An LOI is not a non-binding nicety. It is the deal, in skeleton."Jason Powell · LOI Negotiation
The deal is one thing. The capital that opens up after close is another.
Capital after close is where the IRR actually gets made. The right introductions at month nine through month thirty are where this practice works as hard as it does at the LOI.
Related deal pages.
Independent Sponsor Economics for Precision Manufacturing
The package of deal-by-deal carry, management fees, and transaction fees that compensates the independent spo…
Management Fee Structuring for Precision Manufacturing
The annual fee paid by the deal entity to the independent sponsor for ongoing oversight, board service, and p…
Equity Rollover for Precision Manufacturing
The portion of seller proceeds reinvested into the post-close entity, aligning seller with buyer.
Earnout Structures for Precision Manufacturing
Deferred purchase price contingent on post-close performance, used to bridge buyer-seller valuation gaps.
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An LOI on the desk, a precision manufacturing target, and a LOI Negotiation 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.