Precision Manufacturing Seller Financing: An Independent Sponsor's Counsel
Securities and M&A counsel for independent sponsors structuring precision manufacturing transactions, from LOI to close to the capital markets that open up afterward.
Precision Manufacturing deals in the lower middle market run a specific playbook. Seller Financing 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 Seller Financing actually gets structured.
Anchor seller notes at 5 to 15 percent of EV, with a 4 to 6 year term.
Subordinate explicitly to senior and mezzanine debt with a clear standstill on default.
Price interest at 6 to 8 percent, with cash pay or PIK depending on the senior package.
Build prepayment optionality so refinancing flexibility is preserved.
In precision manufacturing, layer in AS9100 succession plan as a closing condition as part of the Seller Financing workstream.
Treating the seller note as a hand-shake. Sellers sue on notes more often than on equity disputes.
"A seller note is debt. Document it like debt. Service it like debt."Jason Powell · Seller Financing
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
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Seller Financing for Precision Manufacturing, on independent sponsor terms.
Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.