Our investment criteria

We understand that approximately $4.8 trillion of net worth, representing the largest intergenerational shift of wealth in U.S. history, will be transferred over the next 20 years, as virtually all closely held and family-owned businesses will lose their primary owner to death or retirement.

Far too often clear succession plans are not in place, leaving the owner’s financial and entrepreneurial legacy in jeopardy. The employees, customers, suppliers, and communities the business serves are also at risk of being disrupted. Legado partners with owner/entrepreneurs to build operational succession plans, tailor the transition to their unique business and personal needs, while providing them with a meaningful financial exit.

Today Legado is exclusively focused on finding a single, high-quality company with a motivated seller and the potential to achieve meaningful growth. We are evaluating opportunities against the dimensions and criteria below:

Financial	Business
Cash flow positive for three years Annual revenues over $3.0 million Annual EBITDA over $1.0 million EBITDA margin above 20% Recurring and contractual revenue streams Strong financial accounting records Low/moderate capital expenditure needs Low revenue cyclicality	Long history of business success (5+ years) Low customer concentration and churn Long tenured employee base (5+ employees) Strong middle management Healthy company culture Competitive advantage or niche offering Ability to scale / High operating leverage Opportunity for Legado Growth Partners to add value Private and concentrated ownership

Industry	Seller
High organic growth potential / strong tailwinds Large, fragmented market Mission-critical product or services Low risk of adverse regulatory changes Low risk of technological obsolescence Non-commoditized product or service offering High barriers to entry	Looking to retire / transition from day-to-day operations Preserve their entrepreneurial legacy Take care of employees, customers, and suppliers Sell at a fair price to a long-term oriented buyer Open to partial seller financing to align interests Willing to support the buyer during the transition period

While Legado initially intends to focus on select industries, we do not plan to limit our search exclusively to these industries. We have identified the following industries of interest that will fit well with Legado Growth Partners’ investment criteria; however, in no way is this list meant to be exhaustive.

Business to Business (B2B)	Business to Consumer (B2C)
Commercial Business Services Professional Business Services Healthcare Services Environmental Services Transportation and Logistics Light Manufacturing	Home Services Home Healthcare Personal Services Education Services

We understand that in a competitive marketplace, very rarely do companies fit all the characteristics listed above and are available on terms capable of generating attractive returns for operators and investors. We believe that efficient searching is an exercise in holistically evaluating companies based on limited data and learning quickly which of the above attributes are worth compromising on. At a minimum, companies must have a history of profitable operations with annual earnings (EBITDA) above $750,000, be part of a growing industry, a healthy company culture with high-integrity seller.