Real Estate Carve-Outs for Precision Manufacturing Independent Sponsors
Independent sponsor counsel for precision manufacturing, focused on Real Estate Carve-Outs and the deal mechanics that protect sponsor economics and LP alignment.
Precision Manufacturing 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 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 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 precision manufacturing, layer in AS9100 succession plan as a closing condition 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.
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.
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An LOI on the desk, a precision manufacturing target, and a Real Estate Carve-Outs 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.