Investment Criteria

We take the time to review each investment opportunity carefully to determine if there may be a good match between the company and our ability to add value for investors and management.

Over time we have determined that we can be most successful with companies that match several of the following criteria:

Company Profile

Located in the Southeastern US
Defensible position in a clear market sector
Large business (Fortune 1000) or government (federal, state or local) customers or specialized distribution to consumers

Sectors of Interest

Niche Manufacturing
Infrastructure Services
Value-Added Business Services or Distribution

Revenues of $10 million - $50 million

We believe that by focusing on the lower end of the middle market there can be outsized opportunities for exploiting niche market segments.

Cash flows of $1,500,000 to $7,000,000

Past is prologue. We prefer to build on a foundation of success.

Management capable of facilitating the companies continued growth

It is important that senior management be willing to remain involved in the business during a transition period, and that middle management be engaged and interested in leading the company towards new opportunities for growth. In many cases key members of the management team understand what it takes to ensure that the business continues to operate smoothly even as change and growth takes place. Partnering with management to develop and execute a growth plan is integral to our approach.

Assets that support prudent use of transaction leverage

We prefer to make appropriate use of debt capital to fund acquisitions. Proper employment of debt and equity capital to structure a company’s balance sheet can be a precursor to success when implementing a growth or build-up strategy.

There are two market niches where Red Clay has particular expertise and interest. For opportunities in these sectors, Red Clay will evaluate transactions outside of our primary geographic markets: