New York-based Lincolnshire Management unloaded its almost seven-year investment in Illinois-based flatbed manufacturer Transcraft Corp., selling the company to publicly held Wabash National for roughly $71 million (€59 million). The firm also stands to gain an additional $4.5 million in proceeds if certain performance targets are met following the sale.
Lincolnshire acquired Transcraft in July, 1999 in a deal valued at $61.2 million, according to reports. The firm initially invested $15 million of equity into the transaction.
After just two years of ownership, the company had to endure what Lincolnshire director Charles Mills described as “the longest downturn in the [trailer] industry since people started keeping track”. Throughout the downturn, the firm had to invest more capital into the business, and in 2004 orchestrated restructuring of the company’s capital structure in which it took over the company’s senior debt.
However, once Transcraft had weathered the storm, the business quickly turned around. “We recognised this was a cyclical business…and we were even able to grow marketshare during the downturn,” Mills said.
Wabash first announced that it was interested in buying the company in February of this year, and the transaction is expected to close in the first quarter, according to Wabash’s most recent annual report.
Mills declined to comment on Lincolnshire’s profit, only saying that the firm is “happy with the return.” The investment came out of the firm’s second fund, Lincolnshire Equity Fund II.
The exit follows Lincolnshire’s October 2005 sale of glass and plastic recycler Strategic Materials/NexCycle to Willis Stein & Partners for $136 million.