LSI Industries Inc., a U.S.-based manufacturer of commercial lighting and display solutions, announced it has entered into a definitive agreement to acquire privately held Royston Group for $325 million, subject to a working capital adjustment. The deal includes $320 million payable in cash at closing and $5 million in LSI common stock, valued based on the February 19, 2026, closing price.
The acquisition is positioned as a transformational step in LSI’s strategy to build a scaled, integrated retail branding solutions platform. Atlanta-based Royston is a vertically integrated provider of custom store fixtures, internal and external signage, and refrigerated and heated display cases. Operating five facilities across four U.S. states, Royston delivers build-to-order solutions spanning design, engineering, fabrication, assembly, distribution, and turnkey installation.
Royston serves key vertical markets including refueling and convenience stores, grocery, and quick-serve restaurants. It is a partner to three of the top five U.S. c-store and grocery chains and four of the top five U.S. refueling station chains by location count. Upon closing, Royston and its nearly 900 employees will be integrated into LSI’s display solutions segment.
In the trailing twelve months ended September 2025, Royston generated approximately $272 million in revenue and $38 million in adjusted EBITDA, representing a 14.0% margin. The purchase price represents 8.1x trailing adjusted EBITDA, net of tax benefits transferring to LSI. On a pro forma basis, combined LSI-Royston revenue for the same period would have totaled approximately $864 million, with adjusted EBITDA of approximately $95 million and an 11.0% margin.
Following the closing, LSI expects consolidated sales to customers in the refueling, grocery, and QSR markets to account for more than 60% of pro forma annual revenue, with minimal customer overlap between the two companies. Approximately 70% of Royston’s fiscal 2025 revenue was generated from remodel projects, creating a recurring revenue base tied to store refresh cycles. The average tenure of Royston’s top 10 customers exceeds 20 years.
The addition of Royston expands LSI’s domestic manufacturing footprint from 18 to 23 facilities, increasing manufacturing square footage capacity by nearly 40%. The company cited cross-selling opportunities, margin expansion potential, and enhanced scale across integrated lighting, fixtures, signage, and display solutions as key strategic benefits.
At closing, LSI anticipates pro forma net leverage of approximately 3.0x adjusted EBITDA and expects to reduce leverage to at or below 2.0x by fiscal year-end 2028. The acquisition will be supported by a fully committed bridge facility, with permanent financing expected to include a mix of equity and debt. The transaction is expected to be accretive to both margin rate and diluted earnings per share upon closing.
KEY QUOTES:
“We believe the acquisition of Royston will be a transformational transaction for our business, customers, and shareholders, positioning LSI as the leading scaled platform in branded retail solutions. LSI is building an integrated, new-to-market offering that provides a one-stop, solutions-based approach to support the new build and remodel programs of leading global retail companies across North America. This transaction accelerates our growth across targeted vertical markets, expands our suite of solutions within higher margin product categories, and further entrenches LSI as the partner of choice for leading retail brands.”
“Royston has established long-term customer relationships with many of the leading regional and national refueling, grocery, and QSR chains in the United States. Among its top 10 customers by revenue, the average relationship exceeds 20 years, which we believe reflects its position as a go-to partner for store remodels, which accounts for approximately 70% of Royston’s annual revenue.”
“Upon closing of the transaction, we expect our consolidated sales to customers in the refueling, grocery, and QSR markets to represent more than 60% of pro-forma annual revenue, with minimal customer overlap across the combined portfolio. Given the attractive growth profiles of these vertical markets, we believe this acquisition enhances our ability to deliver revenue growth that outpaces the broader commercial and industrial sectors in which we operate.”
“The addition of Royston will expand LSI’s capabilities within new, high-value product lines, including internal and external signage, while strengthening our existing offerings in store fixtures and display cases. We believe this transaction offers significant commercial synergy potential, positioning us to expand per-site content through cross-selling and a solutions-based value proposition.”
“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.”
“At closing, we anticipate net leverage to approximate 3.0x and remain committed to further deleveraging over the near-to-medium term, while continuing to reinvest in the organic growth of the combined business.”
“Over the last five years, with the acquisitions of JSI, EMI, Canada’s Best and now Royston, we’ve demonstrated a focused approach toward value creation through accretive, complementary acquisitions, while delivering consistent organic growth, margin discipline, and profitability within our base business. After the closing of the Royston transaction, we intend to update our long-term financial targets as we introduce the next phase of our Fast Forward plan, highlighting the value compounding power we anticipate from the combined businesses.”
“We are pleased to welcome the entire Royston team to the LSI family. Our shared cultural focus on innovation, customer service, quality, operational discipline, and a returns-focused approach to capital allocation position LSI for continued success as together, we build the leading platform for growth within the branded retail marketing solutions space.”
James A. Clark, President And Chief Executive Officer Of LSI Industries
“LSI is building the leading retail branding solutions platform in North America, with a strategic focus and proven track record of long-term value creation that aligns closely with our own. This transaction brings together highly complementary capabilities and customer relationships, expanding the breadth of integrated solutions we can deliver across retail environments. We look forward to joining the LSI team as we contribute to the profitable growth of the combined organization.”
Frank Callis, President And CEO Of Royston Group
