Lincoln Road Global Management has formed what marks the emerging manager’s second platform investment to date, finding opportunity to support the smaller-scale parking and infrastructure needs of major big-box retailers and other commercial businesses.
Lincoln Road, in partnership with Trivest Partners, has simultaneously acquired DH Striping and Lynne Services to create Landmark Paving. The Oviedo, Florida, company will be led by CEO Joe Campolong, the former president of DH Striping.
Financial terms were not disclosed, but the investment fell within Lincoln Road’s typical criteria. The firm invests in businesses generating between $3 million and $10 million in EBITDA, with the goal of growing EBITDA to $20 million to $30 million.
Landmark provides services including pavement maintenance, thermoplastic markings, seal coating, asphalt and concrete patching, restriping, signage, hydro-blasting and related services. Its customers include big-box retail, property management, real estate development and other commercial customers.
“These services are recurring [and] there’s a lot of white space and room for consolidation,” said Lincoln Road managing partner Jeff Magny, who founded the Miami PE firm in 2015 after about nine years at Sun Capital Partners.
The industry is growing at a rate more than double that of GDP, and the businesses under Landmark had their best year in 2020, the investor said. “Good businesses within these segments have a sticky customer base. The bar to get into big-box retail is really high, so once you get in, you’re very unlikely to be displaced.”
Landmark also has a competitive advantage in the smaller parking infrastructure space.
“[Landmark] is not focused on the larger infrastructure projects – it’s the parking lots and the local municipal jobs like school zones and the like,” Magny said. “The larger players don’t dip into our sandbox, so it allows for us to maintain our competitive standing.”
The deal also comes amid the Moving Forward Act, a more than $1.5 trillion plan to rebuild American infrastructure, of which a portion has been dedicated to support parking infrastructure for commercial vehicles.
“The new infrastructure bill has segments within it that benefit our industry, and so Landmark should get the benefit of those tailwinds,” Magny said. “But, we don’t try to time [our] investments. We look for good companies and in good industries, and that’s the impetus for underwriting this business.”
The deal comes after Lincoln Road-backed Republic Fire Protection inked its fourth add-on to date. The platform in August scooped up Fire Equipment Company of Florida, a business that sells, inspects and services fire extinguishers and fire suppression systems. Lincoln Road’s investment in Republic Fire Protection, its inaugural platform, was made in July 2018.
“Similar to [Republic Fire Protection] being an early first mover, we saw a similar opportunity in the parking lot maintenance space. There really isn’t any defined platform in the Southeast and the industry is ripe for consolidation with many mom-and-pops.”
Likewise, Landmark will execute a buy-and-build strategy, concentrating on acquiring similar complementary businesses in the Southeast to build out its market share.
Lincoln Road is currently investing on a deal-by-deal basis with the expectation of raising a fund. The firm focuses in the lower-mid-market, investing in business services, specialty manufacturing and value-added distribution companies.
Other members of the Lincoln Road include John Brignon, managing director of operations at Lincoln Road, and the former CEO of Certified Power – a onetime Sun Capital portfolio business. Jagrit Rai is a senior associate at the firm.