Lincolnshire and VSS Buy Powerhouse
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Lincolnshire and VSS Buy Powerhouse

Lincolnshire Management has acquired Powerhouse, an asset-light provider of commercial construction, remodel, and renovation services. In addition, through Powerhouse, Lincolnshire has purchased two similar companies with the buys of Security Vault Works and One Source Security & Sound. VSS partnered with Lincolnshire on this transaction and made a minority equity investment.

Powerhouse’s services include national and regional rollouts, fixture/graphic installations, remodel and refresh construction, store-in-store projects, de-brandings, and facilities maintenance. Last year, the company serviced over 80,000 project locations for customers in the foodservice, retail, hospitality, financial and healthcare sectors. Most of Powerhouse’s work is outsourced to a network of over 10,000 independent subcontractors and is provided through a tech-enabled, asset-light platform. The company, with more than 350 employees, was founded in 1996 and is based near Ft. Worth in Crowley, TX.

Security Vault Work and One Source Security & Sound (together SVW) are installers of self-service kiosks and ATMs for financial institutions. Customers of SVW include four of the top five financial institutions, original equipment manufacturers of ATMs and other point-of-sale equipment makers.

Security Vault Work is headquartered in Laurel, MD and has eleven additional offices in California (2), Texas (2), Missouri, Indiana, Florida, North Carolina, Virginia, New Jersey, and Pennsylvania. One Source Security and Sound is headquartered in Houston with six additional offices in California (2), Ohio, Florida, North Carolina, and Pennsylvania.

The buy of Powerhouse and SVW by Lincolnshire was led by managing directors Philip Kim and Pieter Kodde. “The investment in Powerhouse and SVW is a terrific addition to Lincolnshire Management’s portfolio,” said Messrs. Kim and Kodde in a released statement. “We are extremely excited to work with the management teams as the company enters its next phase of growth, and support them as they continue to offer their services to the best nationwide brands in foodservice, hospitality, financial institutions, retail, healthcare and commercial real estate segments.”

Now combined, the three companies provide refresh, remodel and facilities maintenance services to national chains of banks, health care facilities, convenience stores, restaurants, retail stores, and large residential rental apartment units, and has more than 650 employees and a nationwide network of over 10,000 subcontractors.

Lincolnshire is a middle-market private equity firm that manages $1.7 billion of capital and focuses on acquiring companies with $50 million to $500 million in revenue. The firm invests in a wide range of industries but has specific interest in niche manufacturing, distribution, and service businesses. Lincolnshire has completed more than 85 acquisitions since its founding in 1986 and is currently investing out of Lincolnshire Equity Fund IV LP with $835 million of capital. The firm registered its fifth fund, Lincolnshire Equity Fund V LP, with the SEC on July 25, 2019. Lincolnshire is headquartered in New York with an additional office in Chicago.

“Powerhouse and SVW have unique but complementary offerings, backed by strong management teams,” said T.J. Maloney, chairman and CEO of Lincolnshire Management. “We see vast potential for these companies to grow together and believe the combination will create a market-leading provider of outsourced business services. We look forward to helping these highly scalable, tech-enabled companies grow, reach more customers and develop more services.”

New York-based VSS (formerly Veronis Suhler Stevenson) partnered with Lincolnshire on this transaction and made a minority equity investment. This transaction is the firm’s ninth platform investment from its VSS Structured Capital III Fund. VSS makes control and non-control investments from $10 million to $50 million in companies with $1 million to $25 million of EBITDA that are active in the business services, healthcare IT and services, education and information sectors. Investments can take the form of mezzanine debt, subordinated debt, preferred and common equity.

“Powerhouse is a differentiated tech-enabled company with an excellent blue-chip client base, high growth potential, and a strong management team. It’s a high-quality asset-light company with a very small share of a multi-billion-dollar market,” said Patrick Turner, a managing director at VSS. “We were delighted to be able to team up with the partners at Lincolnshire, and together we look forward to supporting its future growth, both operationally and through strategic acquisitions.”

Baird Global Investment Banking was the financial advisor to Powerhouse. SunTrust Robinson Humphrey was the advisor to Lincolnshire and Kirkland & Ellis provided legal services. Financing for the transaction was provided by Cerberus Capital Management.

© 2019 Private Equity Professional | October 21, 2019

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