The "Blue Sage" is an indigenous Texas wildflower that is a hardy and upright plant able to survive in drought conditions. Like our namesake, we are set up to thrive in all varieties of investing environments. We are by nature generalists and seek to invest across a diverse range of industries.
Our Investment Criteria
At Blue Sage, we seek to invest in growing, profitable middle-market companies with $4 million to $15 million in EBITDA and $20 million to $125 million in revenue.
We invest in companies that are, or have the potential to become, market leaders. These companies generally have long-term defensible competitive advantages and enjoy high barriers to entry, weak competition, few close substitutes, limited supplier power and higher margins than their peers.
Proven and Growing Companies
We look for companies that have proven business models, generate strong recurring cash flow, and have demonstrated growth potential.
Typically, the companies we target have:
- EBITDAs of $4 million to $15 million
- Revenues of $20 million to $125 million
- Enterprise Values of $20 million to $150 million
We favor situations in which we are able to partner with founders and management teams, usually as the first round of institutional capital. We provide intellectual and financial capital to enable companies to achieve their full potential.
Three Industry Verticals
We target investment opportunities in three primary industry verticals:
- Environmental Solutions
- Niche Manufacturing
- Specialty Services
At Blue Sage, we offer patient capital and flexible investment structures. While we focus on control buyouts and recapitalizations, we have the flexibility to offer solutions across the capital stack. We aim to invest $20 million to $40 million over the life of an investment. We have the ability, through limited partners and other co-investment partners, to assemble substantially more capital, should the circumstances warrant.
We believe it takes time to add value. Our average hold period is between five and eight years.
Most important to us is the way we interact with our partners.
We quickly seek to establish rapport with our management partners. Developing trust is critical to effective collaboration in driving growth and impact for our partner companies.
We often say that if we have to make day-to-day operating decisions, we’ve backed the wrong management team. That being said, we are heavily involved with our partner companies at the board level. Beyond formal meetings, we interact with our partner management teams frequently and provide strategic support, supplementary analyses and a network of operating partners and consultants to bolster our partner companies’ capabilities.
We believe we have a differentiated toolkit to help founders and families take their businesses to the next level. Whether it be a leadership transition, investment in growth, or strategic acquisition, we have a track record of growing small businesses and enabling a larger “second bite at the apple” for our partners.
Liquidity & Diversification
We provide capital to companies whose owners desire liquidity or asset diversification.
Family Business Owners
These owners have reached a stage in their lives when they are ready to retire or play a less active role in their company's day-to-day operations.
Private Company Owners
These ambitious private company owners are ready to take their businesses to the next level and seek to benefit from the value-added resources that a strong equity sponsor can provide.
Oftentimes these large corporations seek to divest a subsidiary in order to focus on their core business or to improve their corporate balance sheet.
Small public company shareholders, for a variety of reasons, may conclude that their business interests are better served as a private company.
These private investors, including other private equity firms, are ready to exit a portfolio company investment.
While it is our mission to achieve superior returns for our investors, we would consider it a failure if we were to do so without upholding our core values, which include:
A reputation for doing what we say we will do, both during and after the transaction.
- A uniquely fun and rewarding place to work. A place that emphasizes collegiality, good humor, and hard work with a balanced lifestyle.
- A place of analytical rigor, intellectual honesty, and data-driven decision making.
- An ability to attract, retain and develop talented investment professionals that will continue to push Blue Sage forward.
We are proud of the team we have developed and believe our diverse backgrounds offer a complementary skill set to the management teams with whom we partner.