Decades of Success by Lincolnshire Management

Since its founding in 1986, Lincolnshire Management has garnered a 38-year track record of successfully investing in companies across the lower middle market. The firm has over $1.9 billion of private equity funds under management and has invested in over 100 companies across a wide variety of industries, with a focus on the consumer and industrial sectors, including specialty and niche manufacturing industries. Lincolnshire leverages its broad sector experience and operational expertise to drive value, with demonstrated success in acquiring businesses and aligning with the founders, families, and management teams to accelerate growth.

Lincolnshire Management: Then and Now

Lincolnshire’s success during the firm’s nearly four-decade history is attributable to its consistent ability to identify and create value by aligning with portfolio companies. Lincolnshire is hands-on in its engagement and implements growth strategies tailored to the unique challenges and opportunities faced by each individual business. Since its inception, Lincolnshire has successfully navigated various market environments, including severe economic downturns as well as a global pandemic. Despite these headwinds, Lincolnshire has remained disciplined, consistently applying its proven investment approach and helping transform its portfolio companies in the process.

Lincolnshire’s investment approach, carefully refined over multiple decades, has helped the firm withstand extraordinarily challenging economic and operating environments, including the global financial crisis and, more recently, the COVID pandemic. Lincolnshire’s chairman and CEO, T.J. Maloney, who has been with the firm since 1993, attributed Lincolnshire’s successful navigation of the 2008-2009 financial crisis to the firm’s value-oriented approach. The firm had sold a number of portfolio companies before the crisis and as such was well positioned to deploy capital at attractive valuations during the downturn. In 2008, Lincolnshire completed fundraising for its fourth fund with $835 million of commitments, in excess of the firm’s original target and nearly twice the size of its $433 million third fund in 2005. Lincolnshire’s ability to raise capital in such a challenging environment is a testament to the trust the team has built with its limited partners, developed over time through the firm’s consistent application of a robust, repeatable, and transparent approach to investing, which has resulted in consistent, attractive returns for LPs.

As value investors, Lincolnshire’s disciplined focus on not overpaying for businesses — and investing in companies with healthy balance sheets — provided the foundation for the firm’s ability to weather the pandemic. Lincolnshire was one of the private equity firms in the U.S. to have members of its team dedicated exclusively to sourcing. George Henry, managing director at Lincolnshire, said that the number of deals Lincolnshire reviewed increased by 160% between 2018 and 2020, and limited the time available to review more complex opportunities. “We’ve remained disciplined and have even had to be ruthless in some ways,” Henry said. “We may have had to pass on deals where we ultimately know it is not a fit for us. In a less busy environment, we might take a little more time on those kinds of deals. Now, those are pushed to the side quickly.”

Lincolnshire remained selective during this period, focusing on investing in companies that could survive under draconian circumstances and emerge from the pandemic on even stronger footing, positioning Lincolnshire and its LPs for attractive go-forward returns.

By helping their companies establish healthy balance sheets heading into the pandemic, Lincolnshire Management was able to take advantage of the attractive low-cost financing on offer. Since the start of the pandemic, interest rates declined to nearly zero percent before rapidly rising above 5%. The Lincolnshire team capitalized on the favorable interest rate environment in 2021, completing a dividend recapitalization of Schumacher Electric Corp., a Fort Worth, Texas-based designer, manufacturer, and supplier of power supply products in the U.S. The deal refinanced the company’s debt at a lower interest rate while enabling the firm to take out all the capital it had invested in its acquisition of Schumacher and return it to investors. Schumacher’s strong financial footing provided the financial flexibility for Lincolnshire to execute a dividend recapitalization, which proved timely as interest rates have increased significantly since the deal was completed. Lincolnshire sold the business the following year, earning nearly five times on its investment on an after-fee basis.

Lincolnshire’s operational focus and ability to react quickly, as well as its disciplined strategy of buying companies at attractive multiples and maintaining reasonable debt levels, has been instrumental to the firm’s success and its ability to traverse historically challenging investment environments.

In addition to the firm’s successful navigation of multiple market cycles which included historically challenging investment environments, the benefits of Lincolnshire’s long-term-oriented and consistent approach are apparent in the firm’s investments like True Sports, the market-leading designer, manufacturer and supplier of golf club shafts, hockey sticks, lacrosse stick handles, and other sporting equipment, which it acquired in 2012.

During its decade-plus ownership of the business, Lincolnshire has transformed True Sports from a manufacturer of a component for an individual sport, to a diversified branded consumer products business. For example, Lincolnshire helped True Sports leverage its research and development capabilities in graphite golf shafts to develop hockey shafts for ice hockey. Under Lincolnshire’s stewardship, True Sports has completed a number of highly accretive add-on acquisitions, including the premier manufacturer of high-end ice skates, Scott Van Horne, and the premier manufacturer of equipment for ice hockey goalies, Lefevre Inc., which helped expand the company’s product offering within hockey. Playing to the company’s strength within golf, Lincolnshire supported True Sports’ 2019 acquisition of Aerotech, a designer and distributor of high-end composite golf shafts, which reinforced the company’s leadership in multimaterial golf shaft design and manufacturing.

The transformation of True Sports since 2012, guided by Lincolnshire’s strategic vision and deep industry expertise, not only exemplifies the firm’s ability to navigate complex market conditions, but also its capacity to drive significant growth by combining companies with complementary product portfolios and end-market exposure, setting a solid foundation for continued future long-term success.

Looking Ahead

Following a period of relatively muted private equity deal activity — driven by higher interest rates, inflation, and fears of a recession — the Lincolnshire team remains optimistic. “We’re not in the business of sitting on the sidelines. We’ve remained extremely active over the past two years, having closed on three platforms and multiple add-ons. We’re in the business of buying and selling companies and doing deals, and I expect 2024 will be a good year,” said Tad Nedeau, co-managing partner at Lincolnshire and head of the firm’s origination team. With decades of experience in identifying, investing in, and growing lower middle market businesses throughout multiple market cycles, including during historically challenging investment environments, Lincolnshire has honed a deep understanding of the challenges and opportunities facing business owners and management teams. The firm’s extensive experience and operational expertise uniquely positions Lincolnshire for continued success.