industrial automation - 7 mile advisors

March 2021

Sectorwatch:Industrial Automation

7 Mile Advisors

Industrial Automation

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only inconjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document.All data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor7M Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treatedas confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error.

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Sector Dashboard

Public Basket Overview

Public Basket Performance

Operational Metrics

Valuation Comparison

Recent Deals

Appendix

2

Overview

7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally.

DASHBOARD

PUBLIC BASKET PERFORMANCE

VALUATION COMPARISON

RECENT DEALS

• Summary metrics on the sector• Commentary on market momentum by comparing the

most recent 12-month performance against the last 3-year averages.

• Summary valuation and operating metrics for a basket of comparable public companies.

• Graphical, detailed comparison of valuation multiples for the public basket.

• The most recently announced deals in the sector

We advise on M&A and private capital transactions and provide market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets.

We publish our sectorwatch, a review of M&A and operational trends in the industries we focus.

1 - year revenue growth compared to revenue growth average for last 3 years - Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining

-3.1%

3.4x

19.1x

26.0x

32.4x

0x 10x 20x 30x 40x 50x

Median TEV / LTM Revenue

Median TEV / LTM EBITDA

Median TEV / LTM EBIT

Median Price / LTM Earnings

18.6%

37.7%

0% 10% 20% 30% 40% 50% 60% 70%

Median LTM Rev. Growth %

Median LTM EBITDA Margin %

Median LTM GP Margin %

Dashboard

4

Operating Metrics

Valuation

REVENUE GROWTH MOMENTUM

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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

M&A Activity

Deal Count

Industrial Automation

Public Basket Overview

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Europe

United States

Siemens 158,232 10,076 65,585 10.6% 35.7% 15.4% 2.4x 15.7x 294,000 223

Honeywell 156,319 7,737 32,637 -11.1% 32.1% 23.7% 4.8x 20.2x 113,000 289

Schneider Electric 90,206 5,292 28,235 -4.0% 39.8% 18.7% 3.2x 17.0x 146,406 193

ABB Group 63,675 1,945 26,134 -6.6% 30.1% 7.4% 2.4x 32.7x 110,000 238

Emerson 61,041 3,098 16,795 -8.6% 41.5% 18.4% 3.6x 19.7x 83,500 201

Rockwell Automation 32,704 1,771 6,211 -7.8% 40.9% 28.5% 5.3x 18.5x 23,500 264

PTC 16,097 565 1,531 19.9% 78.2% 36.9% 10.5x 28.5x 6,243 245

Cognex 13,425 292 811 11.8% 74.5% 36.0% 16.6x 46.0x 2,267 358

Company TEV $mLTM

EBITDA $mLTM Rev

$m

Rev Growth

YoYGP % EBITDA % TEV / Rev X

TEV / EBITDA X

# FTEsRev / FTE

$k

Public Basket

6

Average 73,962 3,847 22,242 0.5% 46.6% 23.1% 6.1x 24.8x 97,365 251

Median 62,358 2,522 21,465 -5.3% 40.3% 21.2% 4.2x 20.0x 96,750 241

Public BasketPublic EBITDA Multiples over Time

Public Revenue Multiples over Time

7

18.6x

3.1x

0x

5x

10x

15x

20x

25x

Jan-

16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-16

Jan-

17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-17

Jan-

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Mar

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-18

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18

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-18

No

v-18

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May

-19

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Sep

-19

No

v-19

Jan-

20

Mar

-20

May

-20

Jul-

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No

v-20

Jan-

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TEV/EBITDA - Median TEV/Revenue - Median

TEV/EBITDA - Average TEV/Revenue - Average

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25x

Jan-

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Ap

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Jul-

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-20

Jan-

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TEV/EBITDA - Median TEV/EBITDA - Average

0x

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Jan-

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Ap

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TEV/Revenue - Median TEV/Revenue - Average

- 10% 20% 30% 40%

Median

ABB Group

Siemens

Schneider Electric

Emerson

Rockwell Automation

Honeywell

Cognex

PTC

- 20% 40% 60% 80% 100%

Median

ABB Group

Honeywell

Siemens

Schneider Electric

Rockwell Automation

Emerson

Cognex

PTC

Operational Metrics

LTM Gross Profit Margin % LTM EBITDA %

8

Operational Metrics

LTM Revenue Growth %LTM Revenue per

Full Time Employee x 000’s

9

$- $100 $200 $300 $400

Median

Schneider Electric

Emerson

Siemens

PTC

ABB Group

Rockwell Automation

Honeywell

Cognex

(15%) (10%) (5%) - 5% 10% 15% 20%

Median

Honeywell

Emerson

ABB Group

Rockwell Automation

Schneider Electric

Cognex

PTC

Operational Metrics

Accounts Receivable TurnoverAverage Days

Sales Outstanding

10

0x 2x 4x 6x 8x

Median

Siemens

PTC

ABB Group

Honeywell

Schneider Electric

Rockwell Automation

Emerson

Cognex

0 20 40 60 80 100 120

Median

Cognex

Emerson

Rockwell Automation

Schneider Electric

Honeywell

ABB Group

PTC

Siemens

Valuation

TEV / LTM Revenue TEV / LTM EBITDA

11

0x 5x 10x 15x 20x

Median

ABB Group

Siemens

Schneider Electric

Emerson

Honeywell

Rockwell Automation

PTC

Cognex

0x 10x 20x 30x 40x 50x 60x

Median

Emerson

Schneider Electric

Siemens

Honeywell

Rockwell Automation

ABB Group

PTC

Cognex

Valuation

TEV / LTM EBIT Price / LTM Earnings

12

0x 20x 40x 60x 80x 100x

Median

Emerson

Honeywell

Schneider Electric

Rockwell Automation

Siemens

ABB Group

PTC

Cognex

0x 50x 100x 150x

Median

Emerson

Siemens

Rockwell Automation

Honeywell

Schneider Electric

Cognex

PTC

ABB Group

15x 17x 17x 20x 23x 27x 31x 58x

(8.6%)

(4.0%) (2.3%)

(10.0%)

(5.5%)

(8.1%)

16.1%

1.1%

-15%

-10%

-5%

0%

5%

10%

15%

20%

0x

10x

20x

30x

40x

50x

60x

70x

LTM

RG

R%

EBIT

DA(x

) EBITDA(x) LTM RGR%

15x 17x 17x 20x 23x 27x 31x 58x

41.8%

39.8%

35.3%

32.2%

41.0%

30.5%

77.1% 74.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0x

10x

20x

30x

40x

50x

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70x

LTM

GP%

EBIT

DA(x

)

EBITDA(x) LTM GP%

Historical Valuation Multiples versus Gross Profit

Historical Valuation Multiples versus Revenue Growth Rate

Valuation

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Recent Transactions

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Date Target BuyerTotal Transaction

Amount

Target Revenue (TTM at time of

deal) TEV /

Revenue TEV / EBITDA 02-Mar-21 Left Hand Robotics The Toro - - - -01-Mar-21 Fulfilmentcrowd BGF 10.40 - - -26-Feb-21 Savari Harman International Industries - - - -17-Feb-21 Decisive Data Calligo - - - -16-Feb-21 Ginolis Cellink (Industrial Supplies and Parts) 84.71 - 4.13 34.4011-Feb-21 Qmicro Sensirion - - - -05-Feb-21 Hyperstone Ardian 49.00 - - -02-Feb-21 MKD Electric Hastings Equity Partners - - - -28-Jan-21 Octopuz ESAB Group Canada - - - -27-Jan-21 ShipMonk Periphas Capital 65.00 - - -21-Jan-21 The Peck Company iSun (Alternative Energy Equipment) - 18.06 -0.01 0.0717-Jan-21 EMData Hua Ventures - - - -15-Jan-21 Cowain Automation Technology Addor Capital - - - -13-Jan-21 Kebai Sciences Creadev - - - -05-Jan-21 BANGAND Beidou Capital 18.57 - - -05-Jan-21 Gibson Engineering Applied Industrial Technologies - - - -29-Dec-20 Optimum (Greece) Entersoft 6.19 - - -18-Dec-20 E-Merge Systems Gray Matter Systems 15.00 - - -17-Dec-20 Applied Vision Antares Vision - - - -07-Dec-20 SQUAN Construction Services - 4.00 - - -02-Dec-20 ShipMonk Summit Partners 290.00 - - -01-Dec-20 Cimetrix PDF Solutions 35.00 - - -01-Dec-20 Shingle & Gibb Automation Graybar Electric Company - - - -24-Nov-20 OneMind Technologies Affluence - - - -13-Nov-20 CKF Systems - - - - -03-Nov-20 Inter Act Wienerberger - - - -07-Oct-20 Advanced Control Solutions Applied Industrial Technologies - - - -01-Oct-20 Progea Emerson - - - -

Industrial Automation - March 2021

AppendixPublic BasketContact Information

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Public Basket

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Siemens is an industrial conglomerate, with businesses selling components and equipment for factory automation, railway equipment, electrical distribution equipment, and medical equipment.

From its origins developing climate control technology, which still operates today, Honeywell has emerged as a sprawling conglomerate with operations that span the globe. Today, it operates through four business segments--aerospace, building technologies, performance materials and technologies, and safety and productivity solutions--increasingly transforming itself into a software-industrial company serving diverse end markets like the U.S. defense, e-commerce, and oil and gas industries.

Siemens

Siemens

Public Basket

17

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

Revenue Multiples - Siemens

TEV/Revenue Average

-2x0x2x4x6x8x

10x12x14x16x18x

EBITDA Multiples - Siemens

TEV/EBITDA (Analyst Normalized)Average

-5x

0x

5x

10x

15x

20x

25x

30x

P/E Multiples - Siemens

P/E (Analyst Normalized) Average

Siemens

Company Name Date Deal Synopsis

Fourkind 01-Feb-21The company was acquired by ThoughtWorks, via its financial sponsors Government of Singapore Investment Corporation (GIC), Mubadala Investment Company, Apax Partners, Siemens, Altamir and Fidelity Management & Research, through an LBO on February 1, 2021 for an undisclosed sum.

ThoughtWorks 14-Jan-21The company received $720 million of development capital from Siemens, Fidelity Management & Research, Government of Singapore Investment Corporation (GIC) and Mubadala Investment Company on January 14, 2021. The proceeds will be used to repurchase equity from existing investors. The transaction puts the enterprise valuation of the company at $4.6 billion.

Public Basket

18

Honeywell traces its roots to inventor Albert Butz's company, Butz-Thermo Electric Regulator, in 1885, which produced a predecessor to the modern thermostat.

From its origins developing climate control technology, which still operates today, Honeywell has emerged as a sprawling conglomerate with operations that span the globe. Today, it operates through four business segments--aerospace, building technologies, performance materials and technologies, and safety and productivity solutions--increasingly transforming itself into a software-industrial company serving diverse end markets like the U.S. defense, e-commerce, and oil and gas industries.

Honeywell

Honeywell

Public Basket

19

0.0x

1.0x

2.0x

3.0x

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Revenue Multiples - Honeywell

TEV/Revenue Average

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25x

EBITDA Multiples - Honeywell


0x

5x

10x

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35x

P/E Multiples - Honeywell


Honeywell


Librestream 09-Feb-21 The company received an undisclosed amount of development capital from Honeywell and Evergy Ventures on February 9, 2021.

Sparta Systems 22-Dec-20The company reached a definitive agreement to be acquired by Honeywell (NYS: HON) for $1.3 billion on December 22, 2020. The acquisition will enable Honeywell to further expand its position in the life sciences market and strengthen leadership in industrial automation, digital transformation solutions and enterprise performance management software.

Public Basket

20

France-based Schneider Electric is a leading global supplier to industrial, utility, data centre, and energy customers.

The company's products span from ground-level equipment to top-level analytics and execution software. Roughly 75% of its revenue comes from its low- and medium-voltage, while revenue from its automation division drives the remaining 25%. The company is the number-two and number-four supplier, respectively, in discrete (for example, manufacturing) and process (for example, fluid processing) automation. However, it holds the leading position in process safety systems.At the group level, software and services contribute about 10% of sales, integrated systems another 30%, and individual products (components and equipment) the final 60%.

Schneider Electric

Schneider Electric

Public Basket

21

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Revenue Multiples - Schneider Electric

TEV/Revenue Average

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EBITDA Multiples - Schneider Electric


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P/E Multiples - Schneider Electric


Schneider Electric


DC Systems 3/23/20The company was acquired by Schneider Electric (PAR: SU) for an undisclosed amount on January 11, 2021. With the acquisition, Schneider Electric is consolidating its portfolio, to offer customers increased simplicity and resiliency for relevant applications such as building microgrids in unreliable public grid environments or long-distance applications such as public lighting.

Planon 1/6/20The company received an undisclosed amount of financing from Schneider Electric (PAR: SU) on November 17, 2020. This investment will extend Schneider's unique digital building lifecycle software offering, increase its market penetration and enhance the value and sustainability profiles of building assets.

Public Basket

22

ABB is a global supplier of electrical equipment and automation products.

Founded in the late 19th century, the company was created out of the merger of two old industrial companies--ASEA and BBC--and is now called Asea Brown Boveri Group, or ABB. The company is the number-one or number-two supplier in all of its core markets and the number-two robotic arm supplier globally. In automation, it offers a full suite of products for both discrete and process automation as well as robotics.

ABB Group

ABB Group

Public Basket

23

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Revenue Multiples - ABB Group

TEV/Revenue Average

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40xEBITDA Multiples - ABB Group


0x

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P/E Multiples - ABB Group


ABB Group


Codian Robotics 01-Oct-20The company was acquired by ABB Group (SWX: ABBN) for an undisclosed amount on October 1, 2020. This acquisition helps ABB Group's customers to fully realize the potential of automation and increase their flexibility in a rapidly changing business landscape.

Cylon Controls 03-Mar-20 The company was acquired by ABB Group (SWX: ABBN) for an undisclosed amount on March 3, 2020.

Public Basket

24

Emerson Electric is a multi-industrial conglomerate that operates under two business platforms: Automation Solutions and Commercial and Residential Solutions.

The latter is further subdivided into two operating segments: climate technologies, which sells HVAC and refrigeration products and services, as well as tools and home products, which sells tools and compressors, among other products and services. Commercial and residential solutions boasts several household brands, including Copeland, InSinkErator, and RIDGID. Automation solutions is most known for its process manufacturing solutions, which consists of measurement instrumentation, as well as valves and actuators, among other products and services. About half of the firm's geographic sales take place in the United States.

Emerson

Emerson

Public Basket

25

0.0x

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Revenue Multiples - Emerson

TEV/Revenue Average

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EBITDA Multiples - Emerson

TEV/EBITDA Average

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P/E Multiples - Emerson


Emerson


Awair 05-Jan-21 The company received an undisclosed amount of financing from Emerson on January 5, 2021.

7AC Tech 24-Nov-20 The company was acquired by Emerson (NYS: EMR) for an undisclosed amount on November 24, 2020.

Public Basket

26

Rockwell Automation is a pure-play automation competitor that is the successor entity to Rockwell International, which spun off its former Rockwell Collins avionics segment in 2001.

As of fiscal 2021, the firm operates through three segments--intelligent devices, software and control, and lifecycle services. Intelligent devices contains its drives, sensors, and industrial components, software and control contains its information and network and security software, while lifecycle services contains its consulting and maintenance services as well as its Sensia JV with Schlumberger.

Rockwell Automation

Rockwell Automation

Public Basket

27

0.0x

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Revenue Multiples - Rockwell Automation

TEV/Revenue Average

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EBITDA Multiples - Rockwell Automation


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P/E Multiples - Rockwell Automation


Rockwell Automation


Fiix (Business/Productivity Software)

17-Dec-20 The company was acquired by Rockwell Automation (NYS: ROK) for an undisclosed amount on December 17, 2020.

Cybersec Culture & Awareness 02-Oct-20The company was acquired by Rockwell Automation (NYS: ROK) for an undisclosed amount on October 2, 2020. The addition of Oylo further accelerates our global delivery capability in this rapidly developing market and expands the offering of cybersecurity services available to the industrial market.

Public Basket

28

PTC offers high-end computer-assisted design (Creo) and product lifecycle management (Windchill) software as well as Internet of Things and AR industrial solutions.

Founded in 1985, PTC has 28,000 customers, with revenue stemming mostly from North America (45%) and Europe (40%).

PTC

PTC

Public Basket

29

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Revenue Multiples - PTC

TEV/Revenue Average

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EBITDA Multiples - PTC


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P/E Multiples - PTC


PTC


Arena Solutions 15-Jan-21The company was acquired by PTC (NAS: PTC) for $715 million on January 15, 2021. The acquisition will help PTC to expand it's SaaS business unit and it's market-leading Vuforia augmented reality technology.

ioxp 22-Sep-20

The company was acquired by PTC (NAS: PTC) for an undisclosed amount on September 22, 2020. The acquirer plans to integrate ioxp technology for the validation and verification of procedural instructions into its Enterprise AR solution suite which will support critical manufacturing, assembly, inspection and service use cases, improve the operator experience and enable companies to more effectively ensure that quality assurance standards are being met.

Public Basket

30

Cognex Corp provides machine vision products that help automate manufacturing processes.

The firm's products include vision software, vision systems, vision sensors, and ID products. Vision software combines vision tools with a customer's own cameras and peripheral equipment and can help with several vision tasks, including part location, identification, measurement, and robotic guidance. Vision systems combine a camera, processor, and vision software into a single package. Vision sensors deliver simple, low-cost solutions for common vision applications, such as checking the size of parts. ID products read codes that have been applied to items during the manufacturing process. Cognex generates the largest proportion of its sales in the United States and Europe.

Cognex

Cognex

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P/E Multiples - Cognex


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EBITDA Multiples - Cognex


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Revenue Multiples - Cognex

TEV/Revenue Average

Public Basket

31

Cognex


Sualab 16-Oct-19 The company was acquired by Cognex (NAS: CGNX) for $195 million on October 16, 2019.

ViDi Systems 04-Apr-17The company was acquired by Cognex (NASDAQ: CGNX) for $23.015 million on April 4, 2017. This acquisition helps Cognex to broaden the scope of applications that can be addressed at a world-class level with Cognex vision.

Contact Info7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions and provide market assessments and benchmarking.

As a close-knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. Securities offered through 7M Securities LLC.

Leroy Davis, Partner 704.899.5962 [email protected]

Tripp Davis, Partner 704.899.5762 [email protected]

Andy Johnston, Partner 704.899.5961 [email protected]

John Cooper, Managing Director 704.973.3996 [email protected]

Mark Landry, Managing Director 561.972.0609 [email protected]

Tim Frye, Senior Director 704.973.3994 [email protected]

Kristina Sergueeva, Director 704.899.5149 [email protected]

Ben Garber, Vice President 412.626.7898 [email protected]

Garth Martin, Vice President 704.973.3997 [email protected]

Nicholas Prendergast, Vice President 704.973.3995 [email protected]

Ariail Barker, Director, Sales & Marketing 704.981.2908 [email protected]

Ben Bruggeworth, VP, Business Development 704.365.8859 [email protected]

Steve Sypek, VP, Business Development 704.414.8736 [email protected]

Emily Halstenberg, Marketing & Sales Manager 704.409.9912 [email protected]

Alexis Papa, Marketing & Sales Coordinator 704.414.8732 [email protected]

Marty Johnson, Senior Associate 704.973.3999 [email protected]

Sydney Scadden, Senior Associate 704.973.3998 [email protected]

Steve Buffington, Associate 704.960.1828 [email protected]

Ilia Ulianchuk, Senior Analyst 704.414.8743 [email protected]

Nic Anderle, Analyst 704.826.7492 [email protected]

Luke Perda, Analyst 704.851.4013 [email protected]

Robin Siegel, Analyst 704.285.8173 [email protected]

Conor Smith, Analyst 704.855.2134 [email protected]

Sawyer Willingham, Analyst 704.285.8171 [email protected]

industrial automation - 7 mile advisors

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