industry update summer 2016 - harris williams...global smart parking market to grow at 32% cagr to...
TRANSCRIPT
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Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorized andregulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
PAGE |
www.harriswilliams.com
SUMMARY
1
Thermo Fisher Scientific Inc. (NYSE:TMO) announced the pending acquisition of FEICompany (NASDAQ:FEIC) for $107.50 per share or approximately $4.2 billion. FEIdesigns, manufactures and supports high-performance electron microscopyworkflows that provide images and information at micro-, nano- and picometerscales. Through its offering, FEI enables customers across life sciences andmaterials science markets to make breakthrough discoveries and increaseproductivity.Source
KION Group AG (DE:KGX) has agreed to acquire Dematic Corp from AEA Investorsand Teachers' Private Capital in a deal valuing the company at $3.25 billion.Dematic is a supplier of integrated automated technology, software and servicesto optimize the warehouse supply chain operations.Source
Rexnord (NYSE:RXN) acquired Cambridge International from Industrial GrowthPartners for approximately $210 million. Cambridge is one of the world’s largestsuppliers of metal conveying and engineered woven metal solutions, primarilyused in food processing end markets, as well as in architectural, packaging andfiltration applications.Source
Blue Sea Capital acquired NSi Industries from Summit Park. NSi is a leading supplierof a wide variety of electrical connectors for construction, maintenance andrepair applications. NSi’s well-known brands include Polaris insulated connectors,Tork time and lighting controls, and Easy-Twist wire connectors.Source
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
PUBLIC MARKETS | KEY TRADING STATISTICS
CONTENTS
RECENT M&A ACTIVITY
WHAT WE’RE READING
PUBLIC MARKETS
M&A MARKET TRENDS
ECONOMIC UPDATE
PUBLIC COMPARABLES
CONTACTS
John ArendaleManaging [email protected]+1 (804) 648-0072
Jeffery PerkinsManaging [email protected]+49 (69) 3650638 13
Jay [email protected]+1 (617) 654-2114
Lars [email protected]+49 (69) 3650638 12
Mike WilliamsVice [email protected]+1 (804) 932-1366
M&A | SELECT RECENT ACTIVITY
DEAL SPOTLIGHT | AWEBA
a subsidiary of
has been acquired by
Harris Williams & Co. Ltd announces that Schuler AG, a subsidiary of Andritz Group (VIA:ANDR), has acquired AWEBA Werkzeugbau GmbH (“AWEBA”). Harris Williams & Co. acted as the exclusive financial advisor to AWEBA. AWEBA is one of the world’s leading full-service providers of dies and fixtures.Read More
Stock Price % Change TEV / EBITDA TEV / LTM EBITDA LTM Margins
Sub-Sector Median 1 Month 12 Month LTM 2016E Jun-15 Dec-15 Gross EBITDA
Test and Measurement
Instrumentation (0.5%) (0.6%) 12.5x 11.0x 13.5x 13.8x 38.1% 16.3%
Sensors (4.8%) (19.0%) 11.9x 10.5x 11.5x 11.4x 35.9% 22.0%
Technology and Software (4.1%) 12.4% 12.8x 9.9x 13.2x 10.9x 40.9% 15.6%
Life Sciences and Laboratory (2.7%) 11.8% 16.9x 15.6x 15.9x 18.2x 48.2% 22.8%
Flow Control
Pumps and Filtration (2.8%) (6.6%) 12.5x 11.1x #VALUE! 11.8x 33.1% 16.0%
Valves and Fittings 1.2% 1.5% 11.7x 10.8x 11.1x 10.2x 31.9% 13.9%
Process / Motion Control
Motion and Drives (3.3%) (6.5%) 11.1x 9.8x 11.7x 10.8x 31.6% 16.3%
Intelligent Automation (2.7%) (12.0%) 10.7x 9.7x 11.0x 10.2x 30.0% 12.9%
Actuators and Positioners (1.7%) (9.7%) 11.3x 9.4x 10.1x 9.0x 31.2% 13.7%
Condition Monitoring (1.6%) (8.3%) 11.2x 10.5x 11.9x 10.5x 44.5% 19.3%
Test Services
Testing, Inspection, and Certification 4.5% 3.8% 11.1x 10.7x 10.5x 9.7x 25.8% 19.1%
Engineering and Consulting 0.1% (14.1%) 10.8x 9.2x 10.7x 8.4x 15.9% 7.2%
As of June 30, 2016
PAGE |
WHAT WE’RE READING
2
INVESTMENT OPPORTUNITIES IN THE AUTONOMOUS VEHICLE SPACE
AEROSPACE MANUFACTURING ON BOARD WITH ROBOTS
GLOBAL SMART PARKING MARKET TO GROW AT 32% CAGR TO 2019
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
INDUSTRIAL SENSORS MARKET TO GROW AT 10% CAGR TO 2020
RnR Market Research
According to recent reports, the global industrial sensors market is expected to grow by a 10% CAGR through 2020.Growth will be largely driven by increased usage of industrial wireless sensing networks, robotics, and automationsystems, all which are expected to see tremendous growth in the next five years as the internet of things continues toexpand its reach. Industrial wireless sensing networks are gaining significant demand as they allow remote monitoringand control of physical conditions of equipment and organizes the collected data at a central location. Further,sensors are widely used in industrial robots and automation systems for sensing, recognition, and interpretation ofprocess functions and applications, thereby further enabling autonomous execution.
Robotics Industries Association
As with many other industries, aerospace OEMs and suppliers are seeking to increase efficiency, decrease productionflaws, and decrease production costs. This matrix of required targets is further leading aerospace companies toautomate their production lines. Historically, the aerospace industry had favored machine tools, or manual labor, dueto the required level of precision and accuracy. However, this mindset is changing as advancements in robotics haveprogressed to a point that allow for the required precision and accuracy of machine tools, coupled with the flexibilityand functionality of robotics. Robotics and process automation have been increasingly utilized for labor intensive taskssuch as drilling, fastening, sealing, painting, and composite part production.
Read the full article here.
TechCrunch
As the pending mass adoption of autonomous vehicles becomes ever closer, many investors are searching for waysto capture significant value from the autonomous vehicle ecosystem. The following article provides some narrativesaround the variety of angles to play the broader autonomous vehicle megatrend via both hardware and softwareapplications.
Read the full article here.
TechNavio Insights
The global smart parking market is estimated to grow at a 31.7% CAGR to $10.5 billion by 2019. The global smartparking meter market is expected to witness rapid growth due to the increasing adoption of effective parkingsolutions by both private and government enterprises. The use of smart parking is expanding due to their increasedreliability and the ability to accept multiple forms of payments such as cash, credit cards, and coins. Further theability of smart meters to provide valuable data allows for the use of advanced analytics to optimize parking for bothmunicipalities and drivers. Parking behavior is changing Parking behavior is changing from search-to-park to pay-to-park driven by innovative technology, user-friendly apps, and easy payment options.
HIGH DEMAND IN THE GLOBAL INTELLIGENT FLOW METER MARKET
Research and Markets
The global intelligent flow meter market is projected to grow by a 5.4% CAGR to reach $7.8 billion by 2022. Theanticipated growth is largely spurred by the expanding proven benefits of accuracy, stability, and reliability offered byintelligent flow meters. The highest demand for these meters is expected to be from the oil & gas, chemicals, andwater & wastewater industries. Multiphase flow meters are expected to grow at particularly high rates due to theirability to measure oil, gas, and water simultaneously – a function extremely valued by end users in those markets.Wastewater applications are also expected to account for significant growth as public awareness and regulatorrequirements increase regarding the hygiene and conservation water – particularly in Asia-Pacific regions. While initialcost outlays for this advancing technology represents a headwind for broad adoption, particularly in a low oil & gasprice environment, the exponentially increasing benefits are expected to ultimately prove more valuable.
PAGE |
M&A TRANSACTIONS
3
RECENT M&A TRANSACTIONS
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
Date Target Vertical Business Description Acquirer
Pending Dematic Process / Motion Control Prov ides integrated automated technology, software and serv ices to
optimize the warehouse supply chain operations.
KION Group AG
Pending FEI Co. Test & Measurement Supplies scientific instruments for nanoscale applications and solutions
for industry and science
Thermo Fisher Scientific,
Inc.
Pending TestAmerica Test Serv ices Prov ides outsourced laboratory testing serv ices JSTI Group
6/30/2016 AWEBA GmbH Process / Motion Control Manufactures and distributes forming tools and die casting molds Schuler AG
6/20/2016 Capstone Technology
Corp
Process / Motion Control Prov ides software solutions for process control optimization and
decision support.
Spectris plc
6/16/2016 Cambridge CMOS Sensors
Ltd.
Test & Measurement Prov ides sensors, non-dispersive infrared (NDIR) gas sensing,
thermometry, spectroscopy, and presence detection solutions for
consumer applications
ams AG
6/12/2016 Gimatic SRL Process / Motion Control Manufactures and distributes pneumatic electric grippers for industrial
automation applications
AGIC Partners GmbH
6/10/2016 Integrated Paper Serv ices,
Inc.
Test Serv ices Prov ides physical and analytical testing solutions for paper and pulp
products
SGS SA
6/9/2016 Chemko Technical
Serv ices, Inc.
Test & Measurement /
Process / Motion Control
Manufactures process control instruments for the aerospace industry Astro Pak Corp.
6/8/2016 Smits Machine Fabriek BV Process / Motion Control Prov ides machining operations product engineering, heat treatment,
surface treatment, assembling, 3D measurement, and testing
Roosen Nederland BV
6/7/2016 AMK Holding GmbH & Co.
KG
Process / Motion Control Prov ides electric drive and control technology, industrial automation
engineering, and automotive serv ices
Anhui Zhongding Sealing
Parts Co. Ltd.
6/3/2016 Cambridge International,
Inc.
Process / Motion Control Manufactures conveyor belts for manufacturing and commerical
settings
Rexnord Corp.
6/2/2016 ALS Ltd. Test Serv ices Prov ides testing serv ices focused on manufacturing and marketing
commercial chemicals and industrial cleaning agents
Advent International / Bain
Capital
6/2/2016 FTE Automotive GmbH Process / Motion Control Manufactures brake and clutch actuation systems, components for
gearbox and powertrain, clutch hydraulic, brake hydraulic and sensors
Valeo SA
6/2/2016 Orchid Mt. Juliet LLC Process / Motion Control Supplies automation equipment to the metal stamping industry Teknia Manufacturing
Group, SL
6/2/2016 Rowecon Systems Ltd. Process / Motion Control Designs and manufactures continuous belt weighing systems and
industrial process control equipment
Précia SA
6/1/2016 Howaldt & Söhne
Antriebstechnik GmbH
Process / Motion Control Prov ides precision machine components, including bearing, drive belts,
and drive technology
Industrial Parts Holding SAS
6/1/2016 Summit Inspection
Serv ices, Inc.
Test Serv ices Prov ides fugitive emissions inspection serv ices for the OPEX
petrochemical industry
Bureau Veritas SA
5/31/2016 Drash Consultants LLC Test Serv ices Offers geotechnical engineering, environmental consulting and
construction materials testing
TTL, Inc.
5/31/2016 Electro Rent Corp. Test & Measurement Engages in the rental, lease and sale of new and used electronic test
and measurement equipment
Platinum Equity LLC
5/31/2016 Infinite RF Holdings, Inc. Test & Measurement Supplies engineering grade radio frequency (RF) technology
components
Genstar Capital LLC
PAGE |
M&A TRANSACTIONS
4
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
RECENT M&A TRANSACTIONS (CONTINUED)
Date Target Vertical Business Description Acquirer
5/31/2016 Smartbin Test & Measurement Develops, manufactures and markets telemetry and monitoring
products
One Plus Corp
5/26/2016 Meci SAS Test & Measurement Manufactures industrial metering systems Eiffage SA
5/24/2016 Atlantic Supply &
Equipment Co., Inc.
Flow Control Manufactures and supplies pipe, valves, fittings, tools and equipment
for underground water, sewer and storm water systems
Fortiline LLC,CHS Capital
LLC
5/17/2016 Cattin Filtration SAS Flow Control Offers air cleaning and dust extraction products, including filter units,
fans, ducting systems, and waste management and control systems
Cattin Filtration SAS
5/17/2016 NSi Industries LLC Test & Measurement Supplies a wide variety of electrical connectors for construction,
maintenance and repair applications
Blue Sea Capital
Management LLC
5/16/2016 AWG Fittings GmbH Flow Control Manufactures mobile and stationary fire protection systems, fittings, and
hydraulic rescue equipment
IDEX Corp.
5/12/2016 FIGARO Engineering, Inc. Test & Measurement Manufactures gas sensors and gas detection equipment New Cosmos Electric Co.,
Ltd.
5/12/2016 I ris GmbH Infrared &
Intelligent Sensors
Test & Measurement Develops and manufactures sensor components for automatic
passenger counting in various mass transit applications
Innovation in Traffic
Systems AG
5/12/2016 Schatz AG Test & Measurement Manufactures hardware, software, and related serv ice for torque
measuring applications
Kistler Holding AG
5/11/2016 Vanguard Space
Technologies, Inc.
Test Serv ices Specializes in the engineering, tooling, manufacturing, assembly and
testing of high-performance, lightweight and precision aerospace
structures
SolAero Technologies Corp.
5/2/2016 EAC Corp. (Japan) Test Serv ices Prov ides environmental consulting and related research and testing
serv ices
Eurofins Scientific
5/2/2016 WEDGE Energy Serv ices
LLC
Flow Control Prov ides control valve skids and regulator packages, gas and liquid
chromatograph systems and buildings and header systems for oil and
gas measurement applications
Legacy Measurement
Solutions, Inc.,White Deer
Management LLC
4/29/2016 Mastergear Worldwide Flow Control Manufactures valve actuators and mastergear Rotork Plc
4/22/2016 U-Serv GmbH Test & Measurement Offers serv ices such as meter readings, periodic meter replacements,
processing of collection orders, adjustment of gas appliances for the
electric utility market
Eltel AB
4/20/2016 Jaquet Technology Group
AG
Test & Measurement Prov ides speed sensors and sensor technology for ambient conditions,
over-speed protection, and condition monitoring solutions
TE Connectiv ity Ltd.
4/18/2016 Energy Assets Group Plc Test Serv ices Prov ides industrial and commercial gas metering serv ices Alinda Capital Partners Ltd.
4/15/2016 Wita Wilhelm Taake GmbH Test & Measurement Manufactures industrial instruments and related products for measuring,
displaying, and transmitting public serv ice utilities
Shimge Pump Industry
Group Co., Ltd.
4/12/2016 SINC do Brasil
Instrumentação Científica
Ltda.
Test & Measurement Supplies laboratory equipment products Shimadzu Corp.
4/8/2016 F-Suotimet Oy Flow Control Manufactures and sells ventilation filters and filter components Camfil AB
4/6/2016 Douglas Scientific LLC Test & Measurement Designs and manufactures laboratory instrumentation systems LGC Group Holdings Ltd.
4/6/2016 Fluid Controls Ltd. Flow Control Prov ides pressure control equipment to the oil and gas industries Indutrade AB
PAGE |
M&A TRANSACTIONS
5
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
RECENT M&A TRANSACTIONS (CONTINUED)
Date Target Vertical Business Description Acquirer
4/6/2016 PCB Group, Inc. (New
York)
Test & Measurement Manufactures piezoelectric quartz sensors, accelerometers, and
associated electronics
MTS Systems Corp.
4/4/2016 Lift Truck Specialists, Inc. Process / Motion Control Prov ides material handling equipment for the warehouse environment Fairchild Equipment, Inc.
4/4/2016 Power Automation
Systems, Inc.
Process / Motion Control Manufactures warehouse automation solutions KUKA AG
4/4/2016 Quantitech Ltd. Test & Measurement Prov ides environmental testing and monitoring instrumentation serv ices Gasmet Technologies
Oy,Alder AB
4/1/2016 Dia-Stron Ltd. Test & Measurement Manufactures automated modular testing systems for single fibre and
filaments
Judges Scientific Plc
3/31/2016 Hydro-Technologies, Ltd. Test Serv ices Prov ides hydrology, environmental monitoring, water quality laboratory
testing, and food product quality testing serv ices
Riversun Nursery Ltd.
3/29/2016 HAUFE GmbH & Co. KG Test & Measurement Manufactures industrial instruments STEMAS AG
3/25/2016 Trialon Corp. Test Serv ices Prov ides engineering and reliability testing serv ices Resilience Capital Partners
LLC
3/21/2016 Boston Dynamics, Inc. Process / Motion Control Prov ides engineering and robotics solutions Demiurge Technologies AG
3/21/2016 CH4 Gas Utility &
Maintenance Serv ices Ltd.
Test & Measurement Prov ides traditional and smart gas and electricity metering installations
to the domestic and industrial and commercial sectors
Smart Metering Systems Plc
3/21/2016 Heusser Neweigh LLC Test Serv ices Prov ides weighing and metrology serv ices Rice Lake Weighing
Systems, Inc.
3/18/2016 Hioki India Pvt Ltd. Test & Measurement Develops, manufactures and markets electrical measuring equipment T.R. Khandelwal Enterprises
Pvt Ltd.
3/18/2016 Senmatic A/S Test & Measurement Produces electronic products and sensors for measurement of
temperature, humidity, and gases
Indutrade AB
3/17/2016 SNAP Sensor SA Test & Measurement Manufactures v ision sensing technologies Analog Devices, Inc.
3/17/2016 Steptech Instrument
Serv ices Ltd.
Flow Control Prov ides testing solutions for filters Hamilton Associates, Inc.
3/15/2016 Neptune-Benson, Inc. Flow Control Prov ides water filtration systems, recirculation components, and filter
accessories to the big-water recreational aquatics industry
Evoqua Water
Technologies
PAGE |
PUBLIC MARKETS OVERVIEW
6
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
TEV / LTM EBITDA TEV / 2016E EBITDA
Test and Measurement Flow Control Process / Motion Control Test Serv ices
NET DEBT / LTM EBITDA AVERAGE EBITDA MARGIN (2014 – 2016P)
AVERAGE CAPEX / REVENUE (2014 – 2016P) RESEARCH & DEVELOPMENT / LTM REVENUE
10.8x
11.1x
11.2x
11.3x
10.7x
11.1x
11.7x
12.5x
16.9x
12.8x
11.9x
12.5x
Engineering and Consulting
Testing, Inspection, and Certification
Condition Monitoring
Actuators and Positioners
Intelligent Automation
Motion and Drives
Valves and Fittings
Pumps and Filtration
Life Sciences and Laboratory
Technology and Software
Sensors
Instrumentation
9.2x
10.7x
10.5x
9.4x
9.7x
9.8x
10.8x
11.1x
15.6x
9.9x
10.5x
11.0x
Engineering and Consulting
Testing, Inspection, and Certification
Condition Monitoring
Actuators and Positioners
Intelligent Automation
Motion and Drives
Valves and Fittings
Pumps and Filtration
Life Sciences and Laboratory
Technology and Software
Sensors
Instrumentation
1.8x
1.7x
1.2x
2.1x
0.3x
1.7x
2.0x
1.4x
1.6x
1.5x
3.0x
1.7x
Engineering and Consulting
Testing, Inspection, and Certification
Condition Monitoring
Actuators and Positioners
Intelligent Automation
Motion and Drives
Valves and Fittings
Pumps and Filtration
Life Sciences and Laboratory
Technology and Software
Sensors
Instrumentation
9.3%
19.1%
21.6%
15.0%
15.9%
17.3%
14.8%
16.9%
22.9%
19.1%
19.2%
16.5%
Engineering and Consulting
Testing, Inspection, and Certification
Condition Monitoring
Actuators and Positioners
Intelligent Automation
Motion and Drives
Valves and Fittings
Pumps and Filtration
Life Sciences and Laboratory
Technology and Software
Sensors
Instrumentation
0.6%
1.8%
2.1%
0.9%
1.1%
1.1%
0.8%
1.3%
1.6%
5.3%
2.3%
1.2%
Engineering and Consulting
Testing, Inspection, and Certification
Condition Monitoring
Actuators and Positioners
Intelligent Automation
Motion and Drives
Valves and Fittings
Pumps and Filtration
Life Sciences and Laboratory
Technology and Software
Sensors
Instrumentation
0.2%
0.4%
7.5%
3.9%
4.2%
4.0%
1.4%
2.3%
5.3%
5.6%
4.4%
5.9%
Engineering and Consulting
Testing, Inspection, and Certification
Condition Monitoring
Actuators and Positioners
Intelligent Automation
Motion and Drives
Valves and Fittings
Pumps and Filtration
Life Sciences and Laboratory
Technology and Software
Sensors
Instrumentation
PAGE |
0
50
100
150
200
250
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Nu
mb
er
ofA
nn
ou
nc
ed
M&
A D
ea
ls
GLOBAL M&A TRENDS
7
GENERAL MARKET OBSERVATIONS
INDUSTRIAL TECHNOLOGY QUARTERLY M&A ACTIVITY
The global M&A industry saw $4.7 trillion in deals announced during 2015, a 42.2% increase compared to the $3.3trillion completed during 2014.
The U.S. M&A environment remains strong with aggregate deal value increasing by 64.3% in 2015 relative to2014 despite deal volume decreasing by 1.6% over the same time period.
European M&A activity increased by 2.9% from 2014 to 2015, with aggregate deal value increasing by 7.7%.
The global Industrial Technology sector saw 225 deals close during Q2 2016, representing a 10.8% increase over Q12016.
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
2010 2011 2012 2013 2014 2015 2016
PAGE |
(1.0%)
(0.5%)
0.0%
0.5%
1.0%
1.5%
2.0%
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
U.S. EU-28
98
100
102
104
106
108
U.S. EU-28
90
100
110
120
130
U.S. EU-28
90
100
110
120
130
U.S. EU-28
ECONOMIC UPDATE
8
INDUSTRIAL PRODUCTION
NEW ORDERS
ECONOMIC SENTIMENT
U.S. Real U.S. GDP increased by 0.2% in Q1 2016, growing at an annual rate of
0.8%. The deceleration in growth during in the first quarter primarily reflected a
larger decrease in nonresidential fixed investment, a deceleration in personalconsumption expenditures, and a downturn in federal government spendingthat were partly offset by an upturn in state and local government spending,and an acceleration in residential fixed investment.
EU-28 EU-28 GDP rose by 0.5% in Q1 2016, increasing 2.0% annually. Growth in the eurozone was driven by better-than-expected recovery in
France and Spain.
U.S. Industrial production decreased 0.4% in May after increasing 0.6% in April. The output of manufacturing decreased by 0.4%, primarily led by a large step-
down in the production of motor vehicles and parts; factory output, excludingmotor vehicles and parts, edged down 0.1%.
EU-28 Industrial production in the eurozone grew 2% year-on-year in April, following a
meager 0.2% rise in March and beating market expectations of a 1.4% gain. Industrial output rebounded after two straight falls, boosted by a surge in the
output of durable consumer goods.
U.S. U.S. new orders increased by 3.4% in April, representing the third consecutive
month of rising new orders. Through the first four months of 2016, new orders have grown by 5.7%.
EU-28 The EU-28 saw new orders increase by 0.8% from February to March. Since December 2015, new orders have grown 1.7% to reach levels that have
not been seen since July 2015.
U.S. U.S. economic sentiment increased 0.6% in April to 123.9, following no change
in March, and a 0.1% increase in February. All components contributed to the rebound from an essentially flat Q1;
however consumer expectations continue to lag behind. Despite a slow start in 2016, labor market and financial indicators, and housing
permits all point to a moderate growth trend throughout the remainder of2016.
EU-28 Economic sentiment in the EU-28 increased by 0.5% to 105.7 in May. The increase in eurozone sentiment was stemmed largely from improvements
in confidence in the retail and construction markets, while confidenceremained stable in industry and decreased slightly in the services sector.
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
GROSS DOMESTIC PRODUCT
Apr-16:
105.6
May-16:
103.6
Apr-16:
107.8
Apr-16:
123.9
May-16:
105.7
Mar-16:
118.3
Q1:
0.2%
Q1:
0.5%
PAGE |
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INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
8
PAGE |
PUBLIC COMPARABLES
10
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
TEST AND MEASUREMENT
As of June 30, 2016 ($ in Millions, except per share amounts)
Test and Measurement Public Comparables
LTM Margins Current 1-Month 1-Year % of R&D / Sales TEV / EBITDA
EBITDA Gross TEV Price Change Change LTM High LTM LTM 2016E
Instrumentation
AMETEK, Inc. 27.5% 38.0% $12,752 $46.23 (3.3%) (16.7%) 80.2% 3.0% 11.7x 12.2x
Danaher Corporation 22.8% 52.5% $82,207 $101.00 2.7% 17.0% 100.0% 0.6% 17.5x 15.4x
Spectris plc 17.2% 54.2% $3,056 $24.40 (0.1%) (26.7%) 72.9% 7.8% 9.8x 10.7x
Badger Meter, Inc. 16.7% 35.9% $1,110 $73.03 (2.6%) 14.5% 92.8% 2.5% 17.6x 16.0x
Teledyne Technologies Incorporated 16.6% 38.3% $4,093 $99.05 0.9% (7.0%) 88.6% 18.7% 10.7x 11.3x
National Instruments Corporation 16.1% 73.6% $3,206 $27.40 (4.1%) (7.3%) 86.4% 13.6% 16.6x 13.5x
ESCO Technologies Inc. 15.3% 36.0% $1,096 $39.94 (0.8%) 5.9% 95.8% 5.3% 13.4x 10.0x
JENOPTIK AG 11.8% 32.7% $978 $16.44 3.1% 30.4% 96.9% 6.2% 11.1x 9.3x
Oxford Instruments plc 13.2% 43.2% $726 $9.50 1.5% (36.3%) 61.9% 5.5% 10.1x 9.5x
I tron, Inc. 7.5% 28.1% $1,918 $43.10 (2.2%) 27.1% 94.3% 8.6% 13.7x 9.7x
Median 16.3% 38.1% (0.5%) (0.6%) 90.7% 5.9% 12.5x 11.0x
Mean 16.5% 43.3% (0.5%) 0.1% 87.0% 7.2% 13.2x 11.8x
Sensors
Sensata Technologies Holding NV 24.7% 26.2% $9,180 $34.89 (5.7%) (33.9%) 65.2% 4.2% 12.7x 11.5x
FLIR Systems, Inc. 22.9% 48.4% $4,139 $30.95 (0.6%) (0.4%) 90.8% 8.5% 11.6x 11.0x
Meggitt PLC 25.1% 35.3% $5,861 $5.43 (3.9%) (26.4%) 67.9% 4.5% 9.3x 10.0x
Honeywell International Inc. 21.1% 36.5% $100,031 $116.32 2.2% 13.1% 98.1% 4.9% 12.3x 11.9x
MTS Systems Corporation 10.6% 38.5% $609 $43.84 (8.3%) (36.0%) 62.9% 4.2% 10.2x 7.6x
First Sensor AG 6.5% 12.0% $139 $10.22 (10.8%) (11.6%) 70.3% 0.2% 14.0x 7.7x
Median 22.0% 35.9% (4.8%) (19.0%) 69.1% 4.4% 11.9x 10.5x
Mean 18.5% 32.8% (4.5%) (15.9%) 75.9% 4.4% 11.7x 10.0x
Technology and Software
Hexagon AB 29.4% 54.3% $14,882 $36.10 (6.9%) (1.8%) 86.6% 5.6% 15.0x 13.8x
Muehlbauer Holding AG 20.5% 32.6% $552 $42.24 13.1% 82.8% 95.1% NM 8.9x NA
FARO Technologies, Inc. 7.8% 49.3% $400 $33.83 (4.4%) (27.8%) 71.6% 8.4% 16.2x 9.9x
Mistras Group, Inc. 10.7% 26.0% $801 $23.87 (3.8%) 26.6% 90.2% 0.4% 10.5x 9.1x
Median 15.6% 40.9% (4.1%) 12.4% 88.4% 5.6% 12.8x 9.9x
Mean 17.1% 40.5% (0.5%) 19.9% 85.9% 4.8% 12.6x 11.0x
Life Sciences and Laboratory
Waters Corporation 32.7% 58.7% $10,743 $140.65 2.3% 9.0% 99.9% 5.8% 16.1x 15.1x
Mesa Laboratories, Inc. 29.8% 53.9% $502 $123.00 24.7% 37.4% 93.3% 4.7% 19.9x 18.0x
Thermo Fisher Scientific Inc. 24.7% 45.7% $73,121 $147.76 (2.6%) 12.9% 95.4% 4.1% 17.5x 16.1x
Mettler-Toledo International Inc. 23.1% 47.4% $10,595 $364.92 (2.8%) 5.8% 94.4% 5.0% 19.2x 17.7x
Sartorius AG 22.2% 48.9% $5,600 $77.77 12.8% 63.1% 82.1% 4.1% 20.4x 16.2x
Agilent Technologies, Inc. 22.6% 51.4% $14,303 $44.36 (3.3%) 13.0% 95.0% 7.7% 15.5x 15.0x
PerkinElmer, Inc. 18.3% 43.7% $6,739 $52.42 (4.3%) (0.1%) 93.4% 5.5% 16.3x 14.4x
Bruker Corporation 15.1% 44.9% $3,625 $22.74 (13.9%) 10.6% 76.2% 9.0% 14.8x 13.1x
Median 22.8% 48.2% (2.7%) 11.8% 93.9% 5.3% 16.9x 15.6x
Mean 23.5% 49.3% 1.6% 19.0% 91.2% 5.7% 17.4x 15.7x
Overall Median 19.4% 43.5% (2.6%) 5.8% 90.5% 5.3% 13.8x 11.9x
Overall Mean 19.0% 42.4% (0.8%) 4.9% 85.7% 5.9% 14.0x 12.4x
Stock Performance
PAGE |
PUBLIC COMPARABLES
11
FLOW CONTROL
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
As of June 30, 2016 ($ in Millions, except per share amounts)
Flow Control Public Comparables
LTM Margins Current 1-Month 1-Year % of R&D / Sales TEV / EBITDA
EBITDA Gross TEV Price Change Change LTM High LTM LTM 2016E
Pumps and Filtration
Graco Inc. 27.0% 53.2% $4,906 $78.99 (1.6%) 10.7% 91.2% 4.6% 14.1x 13.7x
IDEX Corporation 25.2% 46.6% $7,034 $82.10 (1.5%) 3.9% 94.2% 1.8% 13.8x 13.5x
IMI plc 17.8% 42.3% $3,891 $12.93 (11.6%) (28.1%) 70.9% 3.1% 9.2x 11.8x
Essentra plc 18.3% 27.3% $2,364 $6.86 (43.2%) (56.5%) 42.6% 0.7% 7.7x 9.0x
Flowserve Corporation 16.5% 34.2% $7,253 $45.17 (6.2%) (13.3%) 85.2% 0.9% 9.6x 11.1x
Pentair plc 17.2% 33.9% $15,312 $58.29 (3.2%) (15.2%) 83.7% 1.9% 13.8x 12.5x
ITT, Inc. 16.0% 32.6% $2,674 $31.98 (9.9%) (23.4%) 75.4% 3.2% 6.7x 6.8x
Xylem Inc. 16.6% 37.6% $8,686 $44.65 (0.0%) 21.3% 95.7% 2.6% 14.3x 13.3x
Trelleborg AB 15.7% 32.6% $5,618 $17.55 (5.9%) (6.6%) 86.7% 1.5% 12.2x 10.6x
ESCO Technologies Inc. 15.3% 36.0% $1,096 $39.94 (0.8%) 5.9% 95.8% 5.3% 13.4x 10.0x
Donaldson Company, Inc. 16.1% 33.6% $4,991 $34.36 2.5% (3.9%) 92.7% 2.8% 13.9x 13.5x
Gorman-Rupp Company 12.7% 23.2% $675 $27.41 (11.4%) (2.8%) 84.1% NM 13.1x NA
Franklin Electric Co., Inc. 14.4% 32.2% $1,701 $33.05 (1.0%) 2.4% 92.9% 2.1% 12.8x 11.5x
Colfax Corporation 12.7% 30.6% $4,705 $26.46 (2.3%) (41.6%) 56.8% 1.0% 9.3x 10.0x
SPX Flow, Inc. 11.0% 32.2% $1,907 $26.07 (13.0%) NA 62.0% NM 7.5x 7.8x
Sulzer AG 10.4% 30.6% $2,276 $86.64 (1.8%) (14.0%) 74.1% 2.5% 7.1x 9.3x
Median 16.0% 33.1% (2.8%) (6.6%) 84.6% 2.3% 12.5x 11.1x
Mean 16.4% 34.9% (6.9%) (10.7%) 80.2% 2.4% 11.2x 11.0x
Valves and Fittings
Curtiss-Wright Corporation 18.8% 35.5% $4,442 $84.25 1.2% 14.5% 96.0% 2.8% 10.7x 10.8x
Weir Group PLC 15.9% 32.0% $5,321 $19.26 10.4% (28.3%) 70.6% 1.3% 11.4x 15.2x
Mueller Water Products, Inc. 16.2% 29.8% $2,257 $11.42 3.7% 24.0% 97.2% 1.3% 11.9x 10.8x
Parker-Hannifin Corporation 13.8% 23.0% $15,905 $108.05 (5.9%) (7.8%) 91.6% 4.8% 13.7x 9.6x
Crane Co. 16.7% 34.8% $3,821 $56.72 (1.2%) (2.8%) 94.2% 2.5% 8.3x 8.5x
Aalberts Industries N.V. 14.1% 17.7% $4,126 $30.05 (14.9%) (5.4%) 82.4% NM 10.7x 9.4x
Watts Water Technologies, Inc. 8.1% 37.7% $2,331 $58.26 1.2% 13.1% 96.2% 1.6% 19.6x 11.0x
Indutrade AB 13.4% 33.1% $2,746 $19.60 (2.1%) 26.4% 92.5% 1.1% 14.6x 13.5x
CIRCOR International, Inc. 11.6% 31.8% $970 $56.99 1.7% 5.7% 92.5% 0.9% 12.7x 13.2x
Mueller Industries, Inc. 7.7% 12.2% $1,785 $31.88 2.5% (8.7%) 90.3% NM 11.1x NA
Median 13.9% 31.9% 1.2% 1.5% 92.5% 1.4% 11.7x 10.8x
Mean 13.6% 28.8% (0.3%) 3.1% 90.3% 2.0% 12.5x 11.3x
Overall Median 15.8% 32.6% (1.7%) (3.9%) 90.7% 2.0% 12.1x 10.9x
Overall Mean 15.3% 32.6% (4.4%) (5.2%) 84.1% 2.3% 11.7x 11.1x
Stock Performance
PAGE |
PUBLIC COMPARABLES
12
PROCESS / MOTION CONTROL
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
As of June 30, 2016 ($ in Millions, except per share amounts)
Process / Motion Control Public Comparables
LTM Margins Current 1-Month 1-Year % of R&D / Sales TEV / EBITDA
EBITDA Gross TEV Price Change Change LTM High LTM LTM 2016E
Motion and Drives
AMETEK Inc. 27.5% 38.0% $12,752 $46.23 (3.3%) (16.7%) 80.2% 3.0% 11.7x 12.2x
Danaher Corporation 22.8% 52.5% $82,207 $101.00 2.7% 17.0% 100.0% 6.0% 17.5x 15.4x
Rockwell Automation, Inc. 20.7% 46.9% $14,557 $114.82 (1.1%) (9.1%) 90.6% 4.6% 11.1x 11.5x
Nidec Corporation 16.2% 23.0% $22,433 $75.27 (2.4%) (1.4%) 81.7% 4.4% 14.1x 11.5x
Rexnord Corporation 16.9% 31.6% $3,463 $19.63 (5.4%) (18.4%) 80.7% 2.0% 10.7x 9.2x
Schneider Electric SE 16.3% 36.4% $39,096 $58.95 (8.9%) (15.5%) 82.3% 3.6% 8.1x 9.0x
ABB Ltd. 14.0% 29.8% $45,024 $19.63 (5.6%) (6.5%) 90.2% 3.9% 9.0x 9.7x
Yaskawa Electric Corporation 12.4% 30.9% $3,601 $12.90 1.9% 1.5% 90.0% 4.0% 8.5x 8.3x
Siemens AG 10.7% 28.9% $112,142 $102.00 (5.3%) 0.3% 91.3% 5.9% 12.1x 9.8x
Median 16.3% 31.6% (3.3%) (6.5%) 90.0% 4.0% 11.1x 9.8x
Mean 18.4% 36.1% (2.8%) (6.1%) 87.0% 3.9% 11.3x 10.9x
Intelligent Automation
Fanuc Corporation 38.0% 47.6% $24,171 $161.18 5.3% (21.5%) 77.8% 5.2% 12.3x 13.3x
Rockwell Automation, Inc. 20.7% 46.9% $14,557 $114.82 (1.1%) (9.1%) 90.6% 4.6% 11.1x 11.5x
Metso Oyj 13.3% 30.3% $3,632 $5.84 (0.6%) (14.9%) 81.9% 1.9% 8.3x 9.5x
ABB Ltd. 14.0% 29.8% $45,024 $19.63 (5.6%) (6.5%) 90.2% 3.9% 9.0x 9.7x
FARO Technologies, Inc. 7.8% 49.3% $400 $33.83 (4.4%) (27.8%) 71.6% 8.4% 16.2x 9.9x
Automation Tooling Systems Inc. 12.4% 22.5% $808 $7.48 (8.6%) (38.6%) 59.0% NM 8.2x 8.2x
Krones AG 8.5% 24.4% $3,042 $105.32 (11.7%) (1.0%) 82.9% 4.2% 10.2x 8.4x
KUKA Aktiengesellschaft 8.0% 22.1% $4,417 $119.26 1.9% 40.7% 96.8% 3.1% 16.8x NA
Median 12.9% 30.0% (2.7%) (12.0%) 82.4% 4.2% 10.7x 9.7x
Mean 15.3% 34.1% (3.1%) (9.9%) 81.3% 4.5% 11.5x 10.1x
Actuators and Positioners
Pentair plc 17.2% 33.9% $15,312 $58.29 (3.2%) (15.2%) 83.7% 1.9% 13.8x 12.5x
CTS Corporation 13.0% 33.4% $602 $17.92 0.2% (6.7%) 88.5% 5.9% 12.1x 8.7x
Eaton Corp. Plc 16.4% 31.9% $35,580 $59.73 (3.1%) (11.7%) 87.5% 3.0% 10.4x 10.8x
Parker-Hannifin Corporation 13.8% 23.0% $15,905 $108.05 (5.9%) (7.8%) 91.6% 4.8% 13.7x 9.6x
Moog Inc. 13.5% 29.3% $2,744 $53.92 (0.0%) (24.2%) 75.1% 5.2% 8.1x 8.8x
Altra Industrial Motion Corp. 13.6% 30.6% $885 $26.98 (0.2%) (0.2%) 89.9% 2.4% 8.7x 9.1x
Median 13.7% 31.2% (1.7%) (9.7%) 88.0% 3.9% 11.3x 9.4x
Mean 14.6% 30.3% (2.0%) (11.0%) 86.0% 3.9% 11.1x 9.9x
Condition Monitoring
Cognex Corporation 30.4% 77.3% $3,330 $43.10 0.1% (9.3%) 88.4% 15.5% 24.3x 23.2x
AMETEK Inc. 27.5% 38.0% $12,752 $46.23 (3.3%) (16.7%) 80.2% 3.0% 11.7x 12.2x
MKS Instruments, Inc. 22.0% 43.3% $1,640 $43.06 5.1% 13.6% 100.0% 8.4% 9.2x 7.8x
ISRA VISION AG 27.9% 47.6% $387 $81.15 10.5% 26.7% 93.4% 6.2% 10.8x 9.2x
Teledyne Technologies Incorporated 16.6% 38.3% $4,093 $99.05 0.9% (7.0%) 88.6% 18.7% 10.7x 11.3x
National Instruments Corporation 16.1% 73.6% $3,206 $27.40 (4.1%) (7.3%) 86.4% 18.6% 16.6x 13.5x
Basler AG 15.2% 45.6% $188 $54.66 (7.4%) (9.5%) 86.4% 6.7% 13.1x 9.7x
SKF AB 14.9% 27.1% $10,265 $15.83 (9.9%) (31.5%) 68.2% 3.3% 7.7x 8.5x
Median 19.3% 44.5% (1.6%) (8.3%) 87.4% 7.5% 11.2x 10.5x
Mean 21.3% 48.8% (1.0%) (5.1%) 86.5% 10.0% 13.0x 11.9x
Overall Median 16.1% 33.4% (3.1%) (9.1%) 87.5% 4.5% 11.1x 9.7x
Overall Mean 17.4% 37.5% (2.3%) (7.6%) 85.3% 5.7% 11.8x 10.7x
Stock Performance
PAGE |
PUBLIC COMPARABLES
13
TEST SERVICES
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
As of June 30, 2016 ($ in Millions, except per share amounts)
Test Services
LTM Margins Current 1-Month 1-Year % of TEV / EBITDA
EBITDA Gross TEV Price Change Change LTM High LTM 2016E
Testing, Inspection, and Certification
ALS Ltd. 19.4% 29.9% $2,023 $3.64 24.1% (14.5%) 81.8% 10.4x 10.3x
SGS SA 26.0% 38.9% $17,992 $2,284.95 7.1% 25.9% 99.8% 11.7x 13.8x
Bureau Veritas SA 18.8% 15.9% $11,392 $21.11 (1.8%) (9.1%) 87.2% 11.8x 11.1x
SAI Global Limited 21.3% 25.7% $740 $2.73 8.1% (13.3%) 79.6% 7.9x 7.5x
Intertek Group plc 19.8% 14.9% $8,727 $46.51 1.9% 20.8% 95.0% 13.3x 13.4x
Eurofins Scientific 18.4% 11.6% $7,745 $370.61 (4.5%) 16.7% 93.0% 19.4x 15.4x
APPLUS S.A. 11.6% 29.1% $2,029 $9.73 13.8% (15.3%) 82.3% 9.3x 9.6x
Mistras Group, Inc. 10.7% 26.0% $801 $23.87 (3.8%) 26.6% 90.2% 10.5x 9.1x
Median 19.1% 25.8% 4.5% 3.8% 88.7% 11.1x 10.7x
Mean 18.3% 24.0% 5.6% 4.7% 88.6% 11.8x 11.3x
Engineering and Consulting
Abengoa S.A. Class A 6.5% 7.9% $11,788 $0.63 14.0% (82.0%) 17.6% 28.3x NA
FCC, S.A. 9.3% 25.9% $9,149 $8.43 0.1% (14.1%) 79.3% 13.7x 9.7x
Tetra Tech, Inc. 10.9% 18.1% $2,065 $30.75 0.5% 20.6% 96.9% 11.0x 9.5x
Arcadis NV 8.4% 15.9% $1,839 $15.08 (9.6%) (46.3%) 53.2% 5.8x 6.8x
Jacobs Engineering Group Inc. 6.2% 16.2% $6,070 $49.81 (1.7%) 22.6% 93.4% 8.1x 9.0x
Amec Foster Wheeler plc 6.6% 9.9% $3,913 $6.55 3.0% (48.2%) 48.7% 7.1x 8.1x
WSP Global Inc. 7.2% 15.3% $3,658 $30.43 (6.7%) (2.9%) 80.1% 10.8x 9.5x
Median 7.2% 15.9% 0.1% (14.1%) 79.3% 10.8x 9.2x
Mean 7.9% 15.6% (0.1%) (21.5%) 67.0% 12.1x 8.8x
Overall Median 10.9% 16.2% 0.5% (9.1%) 82.3% 10.8x 9.5x
Overall Mean 13.4% 20.1% 3.0% (7.5%) 78.5% 11.9x 10.2x
Stock Performance
PAGE |
HARRIS WILLIAMS & CO.
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SOURCES
INDUSTRIAL TECHNOLOGY
INDUSTRY UPDATE │ SUMMER 2016
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