Who says deals aren’t getting done these days? Lincolnshire Management Inc. has found a sweet spot – the middle market – where attractive opportunities for private equity investment reside.
Through an affiliate, Lincolnshire has acquired the security systems business of Imperial Chemicals Industries PLC, its fourth deal since June. The company, renamed 3SI Security Systems, is said to be the world’s leading manufacturer and marketer of electronic security systems for cash protection.
3SI Security Systems’ global headquarters is in Exton, Pa., with production facilities in Byron, Ga. Its European headquarters is in Zaventem, Belgium.
Peter van Raalte, senior managing director at Lincolnshire, said 3SI’s management team has developed a business featuring high levels of recurring revenue, dominant market share, a direct sales force operating throughout North America and Europe and a list of clients including leading financial institutions.
3SI has reported record earnings growth for 13 consecutive years.
American Capital Strategies contributed to the deal with a $13 million investment that takes the form of a senior subordinated note with warrants. Lincolnshire Management, through its $315 million Lincolnshire Equity Fund II, is the lead equity provider. GE Capital is providing $20 million in senior revolving term loan facilities. ICI Security Systems’ management is investing in the common equity.
ICI, a subsidiary of Imperial Chemical, is the leading provider of security products, with tear-gas and dye-based staining to protect currency from bank robbers.
“Our ability to raise capital in a variety of ways places us in an excellent position to assist middle-market companies,” said American Capital chairman, president and CEO Malon Wilkus.
American Capital has invested more than $500 million in middle-market companies in the last 12 months.
Van Raalte said American Capital’s investment was critical in closing the transaction and establishing 3SI as an independent, stand-alone company.