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Lineage Capital reaches minority deal with traffic control company City Rise

Despite the ongoing pandemic, the Boston-based mid-market firm is optimistic about the company’s resilience to the current economic slowdown, McKinley said.

Lineage Capital has taken a minority stake in City Rise Safety, a traffic control company operating primarily in Northern California, Bill McKinley, a partner at the firm, told PE Hub.

City Rise Safety, based in Lodi, California, provides traffic control services for civil infrastructure work. The company offers design, auditing and implementation of traffic control plans at worksites and civil infrastructure projects.

Lineage Capital’s investment in City Rise closed on March 31, McKinley said. Despite the ongoing pandemic, the Boston-based mid-market firm is optimistic about the company’s resilience to the current economic slowdown, the investor said.

“Infrastructure is an essential service, because people always need gas, water, [etc],” McKinley said. “Our view is that the business is not going to be severely impacted.”

City Rise has been growing more than 10 percent annually, according to McKinley. Based on the firm’s research, the traffic control services industry is expected to grow 7 percent in northern California over the next five years, McKinley said.

The company serves 95 percent of northern California almost exclusively for utilities, and also covers some of the Southern California, according to the investor.

Lineage Capital’s investment will help City Rise expand further into southern California and adapt to the growing needs of northern California residents as infrastructure in the region ages, McKinley said.

The company’s founders and family owners, Nicole and Robert Beadles, will maintain control of the company with a majority ownership in the business.

City Rise marks the firm’s 10th investment out of Lineage Capital Fund II, which closed on $248 million in 2015.

Lineage Capital invests in profitable companies with $5 million to $15 million of EBITDA and $20 million to $150 million in annual revenue. The firm takes 40 percent to 70 percent stakes in owner-managed companies.

Deloitte Corporate Finance served as a financial adviser to City Rise on the deal. Comerica Bank provided debt financing for the investment.

Action Item: For more information, contact Bill McKinley at bill@lineagecap.com.