Precision Manufacturing Working Capital Adjustments: An Independent Sponsor's Counsel
When the deal is precision manufacturing and the question is Working Capital Adjustments, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Precision Manufacturing deals in the lower middle market run a specific playbook. Working Capital Adjustments 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 Working Capital Adjustments actually gets structured.
Set the peg based on a trailing 12-month average, normalized for seasonality.
Define each line item in the schedule, especially deferred revenue and accrued vacation.
Cap the dispute resolution timeline at 30 days post-close.
Build a true-up payment mechanism funded out of escrow.
In precision manufacturing, layer in AS9100 succession plan as a closing condition as part of the Working Capital Adjustments workstream.
Using an unadjusted average that ignores seasonality. You pay twice for the same cash.
"Working capital is where deals are won or re-traded after LOI. Read every line of the schedule."Jason Powell · Working Capital Adjustments
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 Working Capital Adjustments 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.