Precision Manufacturing Deals: Representation & Warranty Insurance Done Right
Securities and M&A counsel for independent sponsors structuring precision manufacturing transactions, from LOI to close to the capital markets that open up afterward.
Representation & Warranty Insurance 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 Representation & Warranty Insurance actually gets structured.
Get to non-binding indication within two weeks of LOI sign, with carrier diligence to follow.
Negotiate retention to 0.5 percent of EV, dropping to 0.25 percent after 12 months.
Confirm policy follows form on the purchase agreement, not the other way around.
Carve out tax indemnities and known liabilities, priced separately if needed.
In precision manufacturing, layer in AS9100 succession plan as a closing condition as part of the Representation & Warranty Insurance workstream.
Treating R&W as a commodity. Carrier appetite varies sharply by industry and deal size.
"R&W is no longer optional on most independent sponsor deals over $20M. Price it into the LOI."Jason Powell · Representation & Warranty Insurance
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.
Related deal pages.
Transaction Fee Structuring for Precision Manufacturing
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for Precision Manufacturing
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Indemnification for Precision Manufacturing
The seller's contractual promise to compensate the buyer for breaches of representations, covenants, and spec…
Quality of Earnings for Precision Manufacturing
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
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An LOI on the desk, a precision manufacturing target, and a Representation & Warranty Insurance 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.