LSI Industries announced on February 25 2026 that it has entered into a definitive agreement to acquire Royston Group, a privately held provider of identity and equipment solutions for retail environments, for an aggregate purchase price of $325 million. The transaction will be financed with $320 million in cash at closing and $5 million in LSI common stock, valued at the closing price on February 19 2026.
Royston Group employs approximately 900 people and operates four U.S. manufacturing facilities, positioning it as a key supplier of custom store fixtures, signage, and refrigerated/heated case displays to major retail chains in the refueling, grocery, and quick‑serve restaurant verticals.
The deal is expected to close in the third quarter of LSI’s 2026 fiscal year and will add Royston's employees and facilities to LSI’s Display Solutions segment, expanding the company’s manufacturing footprint and product mix.
Strategically, the acquisition creates a leading integrated retail‑branding platform and accelerates LSI’s Fast Forward plan. Pro‑forma revenue for the combined entity is projected at $864 million with adjusted EBITDA of $95 million, raising the combined margin to about 11.0% from LSI’s standalone 9.7% and making the transaction accretive to adjusted earnings per share.
Financing for the deal includes $320 million in cash, $5 million in stock, a $425 million senior secured credit facility from PNC, and a $90 million public stock offering. At closing, LSI anticipates a pro‑forma net debt to adjusted EBITDA ratio of roughly 3.0x and a commitment to deleveraging over the near‑to‑medium term.
Market reaction to the announcement was positive: LSI’s stock closed up 2.76% on February 25 and 24, and 0.45% on February 20. The company’s Q2 2026 earnings beat expectations with an EPS of $0.20 versus $0.17 expected and revenue of $147 million versus $145.96 million expected, reinforcing investor confidence in the company’s performance and outlook.
Management emphasized the deal’s significance: "We believe the acquisition of Royston will be a transformational transaction for our business, customers, and shareholders," said CEO James Clark. He added, "As previously outlined within our Fast Forward value creation strategy, we believe the acquisition of Royston positions LSI to deliver on its financial targets two years ahead of plan, with pro‑forma TTM September 2025 combined revenue for LSI‑Royston of approximately $864 million and adjusted EBITDA of approximately $95 million."
Segment performance context: In Q2 2026, LSI’s Lighting segment grew 15% in sales, while the Display Solutions segment declined 10%. The acquisition is intended to bolster the Display Solutions business and shift the company’s revenue mix toward higher‑margin retail‑branding solutions.
Conclusion: The Royston acquisition positions LSI as a leading integrated platform in the retail‑branding market, accelerates its Fast Forward plan, improves margin prospects, and expands its manufacturing and product capabilities, marking a significant transformation of the company’s business model.
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