Blue Canyon Capital primarily looks for investment opportunities in light manufacturing and service businesses. We generally do not invest in high technology or start-up companies or in turn-around situations. Our key investment criteria include the following:
Revenue: $5-50 Million
EBITDA: $2-7 Million
History of Profitability & Stable Cash Flows: A history of profitability and stable cash flows helps to ensure post-acquisition debt service, protection from unforeseen operational issues, and internally financed capital expenditures. Targeted companies should have adjusted EBITDA margins of at least 15%.
Exceptional Service and Culture: The quality of customer service and a culture of excellence are extremely important to the principals of Blue Canyon. We expect our companies to be known as leaders in their industry for customer service and to have an excellent reputation.
Large and Growing Market: Targeted companies should have a national market of at least $500 million with attractive prospects for growth and limited concentration of market share.
Recurring Revenue Streams: Multiple revenue streams with long term contracts or a high rate of renewal via a broad customer base mitigate the effects of losing any one customer and help to ensure stability and predictability in cash flows.
Asset Intensity: Targeted companies should have a sufficient level of assets to provide collateral for some debt financing; however, companies should not require excessive capital investment to maintain the business and should exhibit high returns on invested capital.
Low to Medium Product Technology: Targeted companies should have low to medium product technology, with an operational process that is relatively simple, easy to explain to investors and lenders, and characterized by low product obsolescence.