January 26, 2023

2022 was a productive year for our firm.

During the year, we exited four investments.

Exited Investments

• Americo Manufacturing, an Acworth, Georgia manufacturer of 100% end-to-end recyclable floor pads and industrial cleaning solutions, on February 2nd
• Timber Automation, a Hot Springs, Arkansas manufacturer and supplier of automation equipment and systems for the forest products and biomass industries, on June 30th
• Ligchine International, a leading designer, manufacturer, and marketer of laser-guided boom operated concrete screed machines used in the construction of industrial properties, particularly those engaged in e-commerce, on July 11th
• Frontier Waste Solutions, a Texas-based provider of municipal solid waste services for the municipal, commercial, residential, and industrial markets, on November 9th

In the aggregate, these transactions generated gross proceeds of $204m with a 2.9x return on invested capital and a 26% internal rate of return (2.6x net return on invested capital and 21.2% net internal rate of return).

Additionally, during 2022, we invested in seven new businesses, one platform and six bolt-on acquisitions for existing portfolio companies:

New Investments

Portfolio company Impact Property Solutions completed its second and third bolt-on acquisitions with the addition of Orlando-based Cutting Edge Floors, in May, and Raleigh, NC-based Multi Floors, in June. We acquired Impact, a leading provider of quick-turn flooring and countertop replacement services to multifamily owners and operators, in the midst of the early days of COVID, partnering with the firm’s founders. Since that time, through both organic and acquisitive growth, Impact has doubled its market presence, expanding beyond its major market Texas presence into Greensboro and Raleigh, North Carolina; and Orlando, Jacksonville, and Gainesville, Florida. In addition, the company has initiated a greenfield expansion into the emerging Single-Family Rental (SFR) market. These initiatives have driven a 41% increase in revenue and a doubling of profitability since the date of acquisition.

Frontier Waste Solutions made three acquisitions during the year: Salford Disposal (March) , Metro Sanitation (September) and Waste Systems (September). These acquisitions completed the final phase of Blue Sage’s strategic build out in key Texas markets and was instrumental in the successful exit noted above.

All State Industries completed its third acquisition with the purchase of dB Engineering in November. The addition of dB further bolsters All States capabilities in thermal, acoustic and vibration isolation components.

In July, Blue Sage purchased Baker Manufacturing. Baker is a leading, vertically integrated manufacturer of water well equipment and accessories for residential, industrial, municipal and environmental applications. The Company also produces specialized rotary gear pumps, which are used in food equipment and other industrial applications, as well as ductile and gray iron castings.

This year marks the 20th anniversary of the first closing of our first fund. In two decades, we have successfully invested over $400 million across twenty-six platform companies. This crossroad is worthy of marking and celebrating, and indeed we will, but our focus and excitement is on the next twenty years.

To that end we expect to launch fundraising this year for our fourth fund. Additionally, to support this continued growth we have added two new team members:

Blue Sage Capital Team

Anton Cordes, Associate, Mr. Cordes joined Blue Sage in August 2022. Previously, he worked as an Investment Banking Analyst at Barclays, where he focused on mergers and acquisitions as well as capital-raising activities in the natural resources and renewable energy sectors. Anton graduated cum laude from Texas A&M University with a Bachelor of Business Administration in Business Honors and Finance with a minor in Economics. Say Hello

Taryn Johnson, Associate, Ms. Johnson joined Blue Sage Capital in August 2022. Previously, she worked as a portfolio associate at PIMCO where she covered the firm’s Total Return Strategy (PIMCO’s largest area with nearly $200 billion AUM). Prior to PIMCO, she was a risk analyst at Doubleline where she primarily covered Agency mortgages and the firm’s Flexible Income strategy. Taryn graduated from Wesleyan University where she majored in mathematics and minored in applied data analytics. Say Hello

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 2003. 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!

This document is not an offer to sell or a solicitation of an offer to buy any securities and may not be used or relied upon in connection with any offer or sale of securities. The information, including any summaries, set forth herein does not purport to be complete and is subject to change.

This document may contain forward-looking statements and projections that are based on our current beliefs and assumptions and on information currently available that we believe to be reasonable; however, such statements necessarily involve risks, uncertainties and assumptions, and prospective investors may not put undue reliance on any of these statements.

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