2021 Year in Review

January 25, 2022

The second year of the Covid pandemic was, in many ways, more challenging for investing than year one.

Some businesses (dining, travel, entertainment and fitness) have been, perhaps irreparably, damaged. Other businesses (building products and anything related to home improvement) have experienced a renaissance. Most of the businesses we intersect with saw gradual improvement in demand and operating performance. These dynamic conditions complicate and place a premium on identifying, forecasting and underwriting a stabilized recurring free cash flow stream. Add to this the prospect of a dramatic shift in Federal Reserve monetary policy and the specter of rising long term interest rates with the corresponding impact on valuations, and we sense a need for heightened cynicism, prudence and discipline.

We believe we did just that in closing these four investments in 2021.

New Investments

Cobra Legal Solutions - After having canvassed the legal services sector for five years, we finally identified a platform in April to take advantage of the opportunities we see for this sector. Cobra Legal Solutions is an Austin, TX based provider of e-discovery, forensics, managed review and technology services for law firms and large corporations.

Digital Discovery - In August, Cobra acquired Dallas based digital forensics and data collection services company, Digital Discovery. Digital Discovery augments Cobra’s e-discovery and data breach services by providing upstream evidence collection, forensic investigation and cyber incident response.

Got You Floored - In October, portfolio company Impact Floors closed the first of what we expect to be several, geographic extensions of our multi-family relay services with the purchase of Got You Floored. Got You Floored is a North Carolina based provider of flooring services to the multi-family and single family rental market. This acquisition will serve as the base from which to expand our platform across the Carolinas and the Southeast.

Allied Plastics - In December, portfolio company All-State Industries, Inc. executed its second bolt on acquisition with the purchase of Wisconsin based Allied Plastics. Allied complements All-State's capabilities in medium to heavy gauge thermo forming and extrusion. This acquisition significantly broadens the complement of products to All-State's OEM customers in the industrial, agricultural, mining, transportation and construction industries.

Blue Sage Capital Team

Our most valuable asset is our people. We take great pride in the work we do and the people we do it with and are pleased to announce the following team additions.

Joe Haddad, Vice President, joined the Blue Sage team in September 2021 upon completion of his MBA at the Sloan School of Management at MIT. Joe has previous private equity experience having worked at Incline Equity Partners in Pittsburg, PA. He is a 2013 graduate of Williams College, where he played varsity soccer.

Preston Arnold joined the Blue Sage Associate team in July 2021. He previously worked in the Energy Investment Banking group at Raymond James & Associates. Preston graduated magna cum laude from Baylor University with a Bachelor of Business Administration in Finance and Accounting.

Michael Fletcher joined the Blue Sage Assoicate team in August 2021. He previously worked at Morgan Stanley as an Investment Banking Analyst. Michael graduated with Honors from the University of Texas at Austin with a Bachelor of Business Administration in Finance and a minor in Accounting.

Our Growing Family

Julia Montzingo and her husband, Luke, welcomed Anne ("Annie") Elliott Montzingo to their family on March 16, 2021. Big sister, Clarkin, and foster brother, J, are loving their baby sister!

Alex Bernard Weiner made his appearance on April 6, 2021. Eric Weiner and his wife Madeline are settling into parenthood nicely.

Alan Mire and his wife, Alix, welcomed their new baby girl, Avery Catherine Mire on May 13, 2021. Their older daughter, Anna, was thrilled to be promoted to "Big Sister."

Lauren Reed and her husband, Graham, welcomed their second boy, Joe Vincent Reed, on August 2, 2021. Big brother, Arthur, loves his "baby Joe".

Lily Olivia ("Lottie") Todd made her grand debut on January 7, 2022. First time parents, Hunter Todd and wife Ashton are thrilled and hoping for a little sleep.

Last but certainly not least...Jim McBride is a grandfather! Jim's first grandson, James Bohannon ("Bo") McBride, was born on April 29, 2021. Bo loves spending time with his "Poppy"!

About Blue Sage Capital

Blue Sage Capital is an Austin, Texas based private equity firm that has invested in profitable, growing, middle market companies since 2002. Blue Sage has approximately $450 million in assets under management and partners with founders, families and management teams as the first round of institutional capital for businesses that enjoy leadership positions in niche manufacturing, environmental solutions or specialty services industries. Investing now out of its $300 million Fund III, the firm typically invests $20 million to $40 million in control buyout investments and recapitalization of companies with $20 million to $125 million in revenues.

For questions or inquiries please call 512-536-1900 or email:

Peter Huff – peter.huff@bluesage.com

Jim McBride – jim.mcbride@bluesage.com

Jonathan Pearce – jonathan.pearce@bluesage.com

Eric Weiner – eric.weiner@bluesage.com

We look forward to hearing from you. Hopefully you have found these musings to be insightful. If not, let us know. Feedback is a gift, and we are constantly trying to improve!