Learn more about Red Clay Capital Holdings including our areas of focus and investment strategy.

1. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement.
Red Clay Capital Holdings, LLC
2013
RED CLAY CAPITALRED CLAY CAPITAL
OVERVIEWOVERVIEW

2. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement.
 Red Clay Capital
 Focus
 Investment Strategy
 Team
Table of Contents

3. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement.
Red Clay focuses on an underserved market that exceeds $700 billion,
driven by the 2.3 million baby-boomer business owners expected to exit over
the next decade.
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Emerging Middle Market: $2.8 trillion
S.E. Market: $674 billion
Family-Owned
Exits:
$270 billion
Sources: U.S. Department of Commerce, Capital IQ
Red Clay Capital

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Red Clay has an attractive focus on a transitioning sector with limited
competition.
Market Focus: Emerging middle market (“EMM”) companies
 Profile: Established, often family-owned businesses
 Financials: Revenues < $100 million and cash flows > $2 million
 Enterprise Values: $10 to $40 million
Transitioning Sector: Family owned businesses
 > 24 million family businesses in the U. S.
 40% of family business leaders expected to retire in next 10 years
 25% of family businesses will change hands in next 5 years
 30% of family businesses transition to a 2nd
generation, < 12% to a 3rd
Limited Competition: Most buyout investors prefer larger transactions
 Average buyout fund > $1.25 billion in size (2007)
 Average US buyout transaction $240 million (8/2007, lowest level since 2/2005)
Sources: Private Equity Analyst, The Wall Street Journal, Harris Williams & Co.
Focus: Emerging Middle Market

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The southeastern U.S. is the fastest growing part of the country, yet very
little private equity is focused in the region.
Sources: National Association of Investment Companies, Census.gov, Geomidpoint.com, Expansion Management Magazine
Focus: Southeastern Focus
 Population growth in the Southeast
exceeded 9% annually (vs. 7% for the
country, 2000-2007)
 > 20% of privately held U.S.
companies are located in the
Southeast
 64% of population growth in the
South will come from non-white
ethnic groups (1995 – 2025)
 32% Hispanic, 26% African American,
6% Asian
 There are 40 emerging domestic
market (“EDM”) private equity firms in
the U.S. Red Clay will be one of a
few with a focus in the Southeast.

6. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement.
Red Clay will invest in sectors that are easily understood and where the
principals can add value.
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Investment Strategy: Overview
Industry Focus
 Contract Manufacturing
 Transportation & Logistics
 Infrastructure Services
 Value-Added Business Services and Distribution
 Other basic industries opportunistically
Investment Approach
 Change of control and growth investments
 Family run businesses
 Defensible position in clear market sectors
 Creative capital structures and prudent use of leverage
Professionalization
 Value derived by improving operating fundamentals
 Financial controls and metrics
 Enhance sales and distribution strategies
 Human resource management
 Technology evaluation and investment
 Operational efficiency and quality control

7. –PRIVATE and PROPRIETARY–
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Red Clay will employ conservative capital structures to invest in Emerging
Middle Market businesses.
Investment Criteria
 Revenues < $100 million
 EBITDA > $2 million
 Enterprise values of $10 to $40 million
 History of profitable operations; steady predictable cash flow
 Financeable fixed assets
 Sustainable business models and discernable competitive
advantages
 High barrier to entry
 Value creation by professionalization of the company
 Niche and fragmented market segments
 Prudent use of leverage
 Seller financing/participation
 Hands-on support of investments, adding management as needed
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Investment Strategy: Investment Criteria

8. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement.
The Principals at Red Clay have significant experience required to execute
and manage successful transactions.
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Experienced Leadership
 VP w/ 4 venture backed companies
 Board of Directors, United
Therapeutics
Mark Arnold
Investment
Banking
 $9 billion in transactions
 Bank of America and BellSouth
Private Equity
Operations
 Consulting w/ McKinsey & GE
 BellSouth: Business restructuring
 Nuestro Banco operations/board
Entrepreneurship  Founded Nuestro Banco
 Founded Reconquista Capital
 $1 billion in transactions
 Coopers & Lybrand and Bank
of America
 Bank of America Capital Partners
 Bank of America Catalyst Fund
 Onyx Capital Ventures
 Red Clay Capital
 Co-founded Catalyst Fund
 Founded Red Clay Capital
 Red Clay Capital
Henry Hicks

9. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement. 9
For additional information please contact:
H. Beecher Hicks, III
hhicks@redclaycapital.com
C. Mark Arnold
marnold@redclaycapital.com
Red Clay Capital Holdings, LLC
1401 Peachtree St., Suite 500 3200 West End Ave., Suite 500
Atlanta, GA 30339 Nashville, TN 37203
www.redclaycapital.com

10. –PRIVATE and PROPRIETARY–
Contains private and/or proprietary information. May not be used or disclosed outside Red Clay Capital except pursuant to a written agreement. 9
For additional information please contact:
H. Beecher Hicks, III
hhicks@redclaycapital.com
C. Mark Arnold
marnold@redclaycapital.com
Red Clay Capital Holdings, LLC
1401 Peachtree St., Suite 500 3200 West End Ave., Suite 500
Atlanta, GA 30339 Nashville, TN 37203
www.redclaycapital.com