Lincolnshire on positioning Whitewater as a leader in auto repair

M&A has played a role in growing Whitewater, and will continue to do so, say Tad Nedeau and Phil Kim, co-managing partners at the New York-based firm.

Lincolnshire Management announced on December 5 the purchase of Whitewater Brands, a Caldwell, Idaho-based provider of products for car repair shops. PE Hub spoke with Tad Nedeau and Phil Kim, co-managing partners at New York-based firm, about the opportunities they see in the auto repair industry.

“This is a very large and highly fragmented marketplace across the collision, mechanical repair and the dealership space,” Nedeau said. “There’s only a handful of large, regional, or national players, and so there is always a need for a business like Whitewater to be a leader in servicing that kind of highly fragmented broad marketplace.”

Founded in 1946, Whitewater markets and sells its products across various channels, including an in-house call center, e-commerce sites and online marketplaces. The company also has facilities in Elgin, Illinois and Hudson, Indiana, where it performs sales and distribution and light manufacturing for its ProLific and CHAMP brands.

Since 2012, the company has been increasing in size through add-on acquisitions, such as I/D/E/A, Collision Services and Sid Savage in 2015 and Auto Body Toolmart in 2018.

Phil Kim and Tad Nedeau, co-managing partners at Lincolnshire Management

A long-time investor in the auto space, Lincolnshire earlier this year exited Schumacher Electric, a Dallas- headquartered company focused on battery charging equipment, jump starters and other accessories.

Nedeau said Lincolnshire will help Whitewater through “a combination of partnering with management to grow the business organically, through operational initiatives, as well as through M&A.”

The firm’s M&A strategy is based on targeting companies that can help expand Whitewater’s list of services.

“There is a lot of potential just within the collision and mechanical repair space in terms of additional services and products,” Kim said. He said in the broader transportation services arena, there could be other adjacent areas to grow into “that are dependent on a similar model of serving the daily needs of customers that require someone to carry a wealth of necessary products.”

As the country faces an uncertain economic outlook, Lincolnshire maintains that Whitewater’s line of business is stable and resilient through economic cycles. “We look at this industry and believe that it has anti-recessionary characteristics,” Nedeau said.

When asked about negotiating a deal at a time when many sources say there’s a gap between the expectations of sellers and buyers, Kim responded: “We prevailed because of our sector experience,” Kim said. “I also think that both the seller and the management team saw us as the best possible partner to grow this business to the next chapter.”

Kim takes the long view. “We are also patient capital investors should the path of growth and what would be required to execute on that growth require additional time,” he said.

Kim explained the firm’s approach: “For us it’s about being more hands-on operationally to add direct value,” he said. “Our team will make sure we are not just sitting in a room, twiddling our thumbs and hoping for the best but literally driving those initiatives on the ground alongside management.”

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