Exclusive: Elite Performer Strikes First Deal In A Year

The New York-based firm—considered one of the best performing buyout shops in the business—bought True Temper Sports Inc., a designer and manufacturer of golf club shafts, hockey sticks, lacrosse handles and other sports equipment.

A small merchant bank called Innovative Sports & Entertainment brought the deal to Lincolnshire. The firm’s executives were immediately interested, given their experience in the sports and recreation area with past investments in name-brand companies such as tennis racquet maker Prince Sports Inc., Kate Lehman, a managing director with the firm, told Buyouts. Lincolnshire believes it can improve the company by helping it expand its product offering into other sports while strengthening its core golf business.

“It’s clearly a market leader, and we like its strengths on the R&D side,” Lehman said.

Lehman declined to discuss terms of the deal, though she said the capital markets group of Regions Financial Corp., of Birmingham, Ala., is providing senior credit and PNC Mezzanine Capital is providing mezzanine financing for the deal.

Founded in 1986, Lincolnshire invests in companies in a variety of sectors with revenues of around $50 million to $500 million and operating cash flow of $5 million to $50 million.

Lincolnshire has been relatively quiet on the deal market. Its previous platform acquisition was on Aug. 4, 2011, when it bought Amelia, La.-based marine services provider Allison Marine Contractors. Senior Managing Director Michael Lyons said the firm simply hasn’t seen many quality opportunities.

“We have tremendous deal flow,” Lyons said. But, he added, “We’ve been very disciplined in our approach, as we always have been. I do think the markets have been aggressive; I do think there’s an awful lot of money out there chasing deals … which makes deals very expensive.”

Lincolnshire is investing out of its fourth fund, which closed in late 2008 with $835 million in commitments and was activated in 2009. That fund represented an almost 50 percent increase from the $433 million the firm raised for its 2005 fund.

The firm has indeed been taking its time in putting the fund to work. As of March 31, only 22 percent of the fund has been drawn down, according to data provider Preqin. Lyons said the fund has a six-year investment period, which means the firm is at about the halfway mark.

Lincolnshire boasts returns that would make many a buyout professional jealous. Each of the firm’s first four funds (when including its pledge fund and its first three institutional funds) achieved investment multiples of at least 2x and internal rates of return of least 19 percent and as high as 62.7 percent, in the case of its 1986-vintage pledge fund. Its more recent 2005 fund posted a 2.01x investment multiple and an IRR of 38 percent. Last year, a study by HEC Paris and Dow Jones ranked Lincolnshire as the fifth best-performing private equity firm of the last 10 years.