Specialty Construction Representation & Warranty Insurance: An Independent Sponsor's Counsel
Structuring Representation & Warranty Insurance on specialty construction deals, with the structure protection and capital connectivity an independent sponsor actually needs.
Specialty Construction deals in the lower middle market run a specific playbook. Representation & Warranty Insurance is where the structure either holds or starts to leak.
The typical specialty construction platform sits at $8M to $110M EV with EBITDA in the $2M to $18M range. The thesis runs on trade-specific buy-ups (roofing, mechanical, electrical, fire protection). Bonding capacity is the gate. Without it, the independent sponsor deal stalls at the first big project bid post-close.
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 specialty construction, layer in surety pre-qualification for the buyer entity 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.
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.
Transaction Fee Structuring for Specialty Construction
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Working Capital Adjustments for Specialty Construction
The closing-date true-up that protects the buyer from receiving a business stripped of normal-course working …
Indemnification for Specialty Construction
The seller's contractual promise to compensate the buyer for breaches of representations, covenants, and spec…
Quality of Earnings for Specialty Construction
The buyer's accounting diligence report normalizing earnings, working capital, and pro-forma performance.
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Representation & Warranty Insurance for Specialty Construction, 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.