Lincolnshire Merges Computer Interests –

According to Lincolnshire Management, there’s still hope for investments in the technology sector. The New York firm recently acquired Computer Technology Solutions (CTS), which specializes in repairing laptop computers and handheld devices.

Mike Lyons, senior managing director of Lincolnshire, declined to provide the transaction price, but called the Ebitda multiple “favorable.” Southwest Bank of Texas provided debt financing for the company, which is based out of Houston.

Lincolnshire is in the process of merging CTS with another portfolio company – Peripheral Computer Support– acquired in 1997. While CTS deals with laptops and hand-held devices, PCS repairs desktop computers, hard drives and other data-storage devices. Both companies thrive off of contract service work as more and more computer companies begin to outsource repair work.

Lincolnshire estimates the revenue of the two companies at about $80 million, with an Ebitda of approximately $8 million.

Despite the uncertain state of the U.S. economy, Linclonshire is betting on the combined companies’ continued success as outsourcing remains a promising sector.

“This is nice because, unlike contract manufacturers, which are having a hard time, the aftermarket sales area is surviving by working off an installed base,” Lyons said. “We’ll ride this wave of outsourcing.”

With the integration of PCS and CTS, Lincolnshire plans to add more employees as needed, as opposed to losing any, Lyons added.

He said the firm might look to exit both investments in the next 18 months to two years.

Prior to the CTS investment, Lincolshire most recently acquired the Riddell Group division of Riddell Sports. The firm is also raising its second fund, Lincolnshire Equity Fund II LP, targeting $400 million.