Infrastructure upgrade plus pet popularity drove Lincolnshire’s interest in wire mesh maker

'It’s very realistic to expect a return of about two and a half to three times invested capital,' says Lincolnshire's Pieter Kodde about Banker Wire.

The meshed wire industry will benefit from the revamp of infrastructure in the US, as local suppliers position themselves for pent-up demand of their industrial products, Pieter Kodde, a managing director in Lincolnshire Management‘s origination team, told PE Hub in an interview.

Earlier this week, the New York-based PE firm completed the acquisition of Banker Wire, a company focused on the manufacturing of high-quality woven and welded wire mesh products.

Banker Wire provides a large mix of custom and stock products for both functional and decorative applications, selling through both distributors and original equipment manufacturers within the architectural and transportation sectors, pet/animal caging producers, data center racking makers, among others.

Pieter Kodde, Lincolnshire Management

“We have seen very nice growth within some of Banker Wire’s existing sectors, and management has identified new growth opportunities in those areas which we can even pursue through our existing customers,” Kodde told PE Hub.

With this investment, the Lincolnshire managing director said, “It’s very realistic to expect a return of about two and a half to three times invested capital.”

Pandemic-fueled trends that fueled Banker Wire’s growth are here to stay, Kodde added. For example, demand for dog crates and other animal cages blossomed as people brought home pets during lockdowns, and that demand is expected to remain strong.

The pandemic also boosted demand for locally manufactured meshed wire as delivery times to receive exports during the pandemic got extended due to the snarled global supply chain.

“What we also saw as a result of covid is that people continue to have issues with importing, either because of higher freight cost, or availability of containers in general or just-in-time delivery issues, and they want a supplier closer to home,” said Kodde. “Especially because of lower freight cost, lower labor costs as a result of automation and better local quality, on-shoring is a trend we don’t believe is going away.”

As compared with other developed countries in Europe, Kodde said the US is lagging with its infrastructure. The government is injecting billions of dollars through the Infrastructure Investment and Jobs Act that was signed in 2021 to support the drive to improve the infrastructure. With more money flowing into this space, Kodde said Banker Wire will also benefit.

Growth opportunities lie within the architectural sector, either decorative or functional, which is expected to increasingly remain strong. The functional sector involves products such as stairwells. The transportation sector, especially rail, is expected to play a part in the growth of Banker Wire too.

Then there are niche sectors, for example, the machine covering business is yet another opportunity that Lincolnshire is looking forward to tapping. This could involve sectors such as data centers where machine caging is used as security to protect sensitive equipment from intruders, including people and objects.

In terms of gaining market share and increasing product offerings, Banker Wire will be working in conjunction with distributors to develop products that their clients want, instead of going through third parties, Kodde explained.

This could be done through organic or inorganic means, explained Kodde. “We hope to expand the existing product offering we have today. If we cannot do it ourselves because we don’t have the expertise, don’t have the footprint to do it internally, we will pursue add-on opportunities, which could be especially interesting if they cover other customers and/or regions to expand the existing business.”

Among its strengths, Lincolnshire has gained experience working with founder-owned or family businesses over the years, and that experiences will provide necessary tools to scale Banker Wire, Kodde said.

Through its relationship with investment bankers and brokers, the firm is looking for potential leads for more add-ons for Banker Wire.

When asked about the portfolio company’s opportunities given the challenging US economy, Kodde said: “We see huge investments going into infrastructure, and so hopefully it levels each other off a little bit.”