Middle Market Wins by Lincolnshire Management

For private equity investors, successful investing in lower middle market businesses requires strategic vision, sector and market expertise, and an unrelenting focus on value creation.

Founded in 1986, New York-based Lincolnshire Management has built a reputation for identifying and nurturing undervalued companies and propelling them toward substantial growth and operational excellence. 

Lincolnshire Management’s longevity in this space is a testament to its investment philosophy, which is supported by its team structure of operations, origination, and execution, combined with a hands-on approach to value creation. 

As explained on its website, “The firm draws on its extensive sector and investment experience to build companies in partnership with management teams and employs a collaborative, team approach.

“Lincolnshire Management makes control investments in private companies, recapitalizations, corporate divestitures, management buyouts, and growth equity for public and private companies. The firm’s past and current portfolio spans a wide range of industries and includes more than 110 acquisitions in various economic environments over the last three decades.”

A Roster of Success for Lincolnshire Management

Notable examples of LMI’s track record investing in lower middle market companies include its investment in Texas-based Schumacher Electric Corporation, a leading designer, manufacturer, and supplier of power supply products in the U.S.

“Our investment in Schumacher is a perfect example of our proven origination strategy to identify and acquire founder- and family-owned companies and position them for high growth and outsized financial success,” said Phil Kim, co-managing partner, execution at Lincolnshire Management.

Within just 18 months of LMI’s initial investment, Schumacher’s earnings before interest, taxes, depreciation, and amortization had more than doubled. This impressive result was achieved by Lincolnshire working closely with Schumacher’s leadership to execute a multipronged plan involving product extensions into aftermarket electric vehicle chargers, as well as the creation of new channel partners and original equipment manufacturer relationships aimed at expanding distribution. Upon selling the company to Ripple Industries in April 2022, Lincolnshire generated nearly five times on invested capital, net of fees.

Lincolnshire Management’s substantial value-add in such a short period of time can be attributed to a comprehensive directive that involved expanding Schumacher’s product offering and geographic reach. Lincolnshire’s strategic vision played another key role: By directing Schumacher to divert its engineering efforts toward developing EV products, the company unlocked an attractive and previously untapped avenue for meaningful growth.

Lincolnshire’s investment in Schumacher showcases the private equity manager’s aptitude for investing in lower middle market businesses, as well as its expertise within the automotive aftermarket and transportation sectors. It also highlights the benefits of a generalist but focused approach to investing in the lower middle market. In addition to Schumacher, Lincolnshire’s impressive track record in this sector includes investments in companies like Holley Performance Products and Amports. 

LMI’s investment in Holley, the largest designer, manufacturer, and marketer of branded products serving the performance automotive aftermarket, is a perfect example of how the Lincolnshire team leverages its deep sector and market expertise to add value and generate attractive returns for investors. LMI acquired Holley from Monomoy Capital Partners in 2013 and invested from the Lincolnshire Equity Fund IV,  an $835 million fund.

Under Lincolnshire's stewardship, Holley embarked on a journey of transformational growth that significantly strengthened its competitive positioning. LMI worked closely with Holley’s management team to execute an aggressive acquisition strategy while concurrently achieving significant organic growth through increased investment in new product development. This involved the add-on acquisition of MSDP Group, a prominent car parts manufacturer, which both expanded Holley’s product offering and reinforced the company’s leading position within the high-performance automotive parts sector. 

The private equity manager’s investment in Amports — a provider of logistical and portside services including rail loading, inspection, storage, and installations — is another example of Lincolnshire’s ability to identify and capitalize on significant growth opportunities by adhering to a disciplined and hands-on ethos. During a four-year ownership period, Lincolnshire Management worked closely with the Amports team to increase the size of the company’s operations and diversify its customer mix. 

“Together with Jim Davis, Steve Taylor, and the outstanding management team, Lincolnshire helped Amports grow processing volumes by 20%, increase controlled acreage by nearly 40%, and more than doubled earnings. We enhanced the company’s presence in an important segment of North American infrastructure and built a formidable force in the industry going forward,” said the co-heads of the Amports deal team.

Lincolnshire’s focus on creating sustainable, long-term value through close collaboration not only yielded an impressive return for LMI’s investors, but also enhanced the company’s presence in an important segment of North American infrastructure. 

Lincolnshire Management and ESG

Lincolnshire’s history working with lower middle market businesses extends beyond the laudable financial returns achieved on past investments. The team’s incorporation of environmental, social, and governance criteria in their investment process has also yielded noteworthy results. Lincolnshire’s approach to ESG is rooted in a deep understanding of the critical importance these factors play — not only in risk management, but also in identifying opportunities for value creation within its portfolio companies.

As explained on the company website, “The firm has made ESG a priority because when thoughtfully executed, responsible investing is a win for everyone involved.

“The United Nations Principles for Responsible Investing (UNPRI) is the springboard for Lincolnshire Management’s ESG approach, and its early entry into adopting an ESG strategy means there is added experience and perspective to each one of Lincolnshire Management’s investments. The firm’s executives also work alongside portfolio management teams to develop strategic and sustainable plans for their businesses. This means that each company’s ESG strategies are unique and tailored to their business, operations, and industry.”

The progress in furthering ESG initiatives across Lincolnshire’s portfolio highlights the tangible impact of the team’s approach. For example, Desch Plantpak, part of Lincolnshire's Fund III, exemplifies environmental stewardship by integrating raw and recycled materials in the manufacturing of its horticulture products. True Sports, a Fund IV company, showcases operational excellence and environmental responsibility by optimizing manufacturing processes to reduce waste and relocating production to North America, significantly cutting carbon emissions.

In Fund V, companies like Remedi8 and Powerhouse demonstrate social responsibility through extensive safety training programs, incident reporting protocols, and leadership structures that promote diversity and inclusion. These initiatives not only reflect Lincolnshire's commitment to ESG, but also contribute to building stronger, more resilient companies that are well positioned for sustainable growth going forward.

Lincolnshire’s acquisition and growing of lower middle market businesses is marked by a thoughtful, hands-on system, which has led to substantial growth and operational excellence. The firm's proven track record of identifying undervalued businesses and helping those companies streamline their operations and capitalize on transformational growth opportunities has resulted in a number of big wins for Lincolnshire, including Schumacher, Holley, and Amports. Each of these successes underscore the depth of Lincolnshire’s investment expertise as well as its ability to generate attractive returns for investors. Beyond investment returns, Lincolnshire’s commitment to integrating ESG principles not only enhances the operational fabric of its portfolio companies, but also contributes positively to the broader community, showcasing a holistic approach to value creation. Through strategic growth initiatives, operational improvements, collaboration with management teams, and responsible investing, the Lincolnshire team has built an impressive long-term track record of success within the lower middle market sector.