Transaction Fee Structuring for Specialty Distribution Independent Sponsors
Structuring Transaction Fee Structuring on specialty distribution deals, with the structure protection and capital connectivity an independent sponsor actually needs.
Specialty Distribution deals in the lower middle market run a specific playbook. Transaction Fee Structuring is where the structure either holds or starts to leak.
The typical specialty distribution platform sits at $10M to $100M EV with EBITDA in the $2.5M to $18M range. The thesis runs on vertical buy-up of niche product distributors. Most distribution multiples are wrong by half a turn until the rebate accounting gets normalized.
How Transaction Fee Structuring actually gets structured.
Disclose the fee in the LP commitment letter and the LPA, with no surprises at close.
Set platform transaction fees at 2 to 3 percent of enterprise value, add-on fees at 1 to 2 percent.
Build an LP-approval threshold above which a one-time vote is required.
Treat the fee as a closing distribution, paid before working capital adjustments.
In specialty distribution, layer in supplier reaffirmation letters before LOI signs as part of the Transaction Fee Structuring workstream.
Hiding the transaction fee in closing costs. LPs find it, and you lose the next deal.
"Charge the fee. Disclose the fee. Defend the fee. The LP either funds the model or does not."Jason Powell · Transaction Fee Structuring
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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Transaction Fee Structuring for Specialty Distribution, 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.