powerpoint presentation · 09/07/16 novelis corp. materials fixed-income $1,500 08/02/16...

Industrials M&A Report

Q3 2016

HYDE PARK CAPITAL

Member FINRA/SIPC

Investment Banking | Mergers & Acquisitions | Capital Raising

Hyde Park Capital Advisors, LLC 701 N. Franklin Street

Tampa, FL 33602 Tel: 813-383-0202

www.hydeparkcapital.com

John Hill Senior Managing Director [email protected] (813) 383-0205 John McDonald Senior Managing Director [email protected] (813) 383-0206 Keith Hodgdon Managing Director [email protected] (813) 383-0208 Jami Gold Vice President [email protected] (813) 383-0203 Greg Bosl Vice President [email protected] (813) 597-2649 Kenneth Burnside Business Development Officer [email protected] (864) 905-9633 Jeffrey Hendricks Vice President [email protected] (678) 523-3073

HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising

90%

100%

110%

120%

Sep-15 Dec-15 Mar-16 Jun-16 Sep-16

S&P 500 S&P Global Industrials Sector Index Nasdaq

Capital Markets Overview

2

Public Market Performance (LTM)

Select Public Offerings – Industrials (Q3 2016)

Public Company Market Performance by Sector

Source: S&P Capital IQ

Major market indices including the S&P 500, S&P Global Industrials Sector Index, and the Nasdaq increased 12.7%, 14.4%, and 14.8% respectively over the 12-month period ended September 30, 2016.

The table on the right illustrates select public offerings completed

in Q3 2016. Valvoline, Inc. (NasdaqGS:RUN), which manufactures and markets industrial lubricants, raised $660 in the largest IPO during the quarter.

The Industrial Conglomerates and Electrical Equipment sectors were the industry’s leaders with respect to valuation during the 3nd quarter, trading at EBITDA multiples of 12.8x and 12.5x respectively.

Commentary

14.8%

($ in millions)

14.4%

12.7%

Industry Sector 3 Months 12 months Revenue EBITDA

Construction 5.6% 25.1% 1.3x 9.5x

Electrical Equipment 6.2% 21.0% 2.3x 12.5x

Machinery 10.0% 27.4% 1.6x 11.3x

Industrial Services (3.2%) 12.8% 1.8x 11.3x

Transportation 7.0% 5.6% 1.4x 8.0x

Industrial Conglomerates (3.1%) 18.2% 3.0x 12.8x

Materials 2.6% 21.8% 0.7x 5.4x

Median

Change in Stock Price Enterprise Value / LTM

Offer Date Issuer Industry Sector

Transaction

Type

Transaction

Value

09/07/16 Novelis Corp. Materials Fixed-Income $1,500

08/02/16 International Paper Co. Industrial Services Fixed-Income $1,199

07/28/16 Axalta Coating Systems Ltd. Materials Secondary $1,176

08/02/16 International Paper Co. Industrial Services Fixed-Income $1,096

09/06/16 Westlake Chemical Corp. Materials Fixed-Income $1,059

09/22/16 Valvoline, Inc. Materials IPO $660

09/19/16 Trinseo SA Materials Secondary $577

09/08/16 TransUnion Industrial Services Secondary $525

08/08/16 United States Steel Corp. Materials Secondary $435


402

473

550

501

250

412

525

457

398

435

336

247

188

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD '15 YTD '16

Middle Market M&A Transactions by Deal Size

U.S. Middle Market M&A Activity – Annual Trends: VOLUME U.S. Middle Market M&A Activity – Annual Trends: VALUE

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Annual Middle Market M&A Activity – Industrials

3

As detailed in the charts below, U.S. Middle Market M&A activity, or deal volume, in the Industrials industry decreased 24% to 188 closed transactions during the year-to-date period ended September 30, 2016, down from 247 during the prior year period.

The total value of completed Middle Market M&A transactions in the Industrials industry fell 15% during YTD ‘16 to $26.8 billion, down from $31.5 billion during YTD ’15.

Transactions valued between $500 million and $999 million experienced the largest declines during YTD ‘16, with transaction volume and value both falling 56% compared with the prior year period

Commentary

Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion)

($ in billions)

Less than $100M $100 - $499M $500 - $999M Less than $100M $100 - $499M $500 - $999M

$48.6

$52.5

$75.2

$54.4

$21.6

$43.3

$56.4

$51.7 $51.2

$57.6

$46.1

$31.5

$26.8

$0

$10

$20

$30

$40

$50

$60

$70

$80

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD '15 YTD '16

Deal Size Volume Value Volume Value Volume Value

Less than $100M 168 $5.8 114 $4.2 (32%) (27%)

$100 - $499M 63 $14.1 67 $17.6 6% 24%

$500 - $999M 16 $11.6 7 $5.0 (56%) (56%)

Total Middle Market 247 $31.5 188 $26.8 (24%) (15%)

% of Middle Market

Less than $100M 68% 17% 60% 16%

$100 - $499M 25% 44% 36% 65%

$500 - $999M 7% 39% 4% 19%

Total Middle Market 100% 100% 100% 100%

YTD '15 YTD '16 % Change


$9.3 $9.0

$14.1

$16.0

$13.5

$16.0

$12.0

$15.5

$9.0

$10.9$11.5 $11.9

$9.5$9.3

$8.1

$0.0

$3.0

$6.0

$9.0

$12.0

$15.0

$18.0

$21.0

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16

61

96104

108

92

122

94

113

81 8086 87

65 6459

0

25

50

75

100

125

150

Q1 '13 Q2'13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16

Quarterly Middle Market M&A Activity – Industrials

U.S. Middle Market M&A Activity – Quarterly Trends: VALUE U.S. Middle Market M&A Activity – Quarterly Trends: VOLUME

Middle Market M&A Transactions by Deal Size

($ in billions)

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As detailed in the table on the right, Middle Market M&A activity in the Industrials industry decreased 31% during Q3 2016 compared to Q3 2015; while the value of completed transactions fell 29% to $8.1 billion.

Middle Market M&A volume in the Industrials industry has declined

for four consecutive quarters, although we expect deal volume will increase during Q4 2016 because of low interest rates and record amounts of cash held by corporate buyers and private equity firms.

During Q3 2016, transactions valued between $500 million and $999 million saw the largest declines compared with Q3 2015 as deal volume and value within this size range fell 75% and 81%, respectively.

Commentary

Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion)

Less than $100M $100 - $499M $500 - $1,000MLess than $100M $100 - $499M $500 - $1,000M

Deal Size Volume Value Volume Value Volume Value

Less than $100M 53 $1.7 36 $1.4 (32%) (18%)

$100 - $499M 29 $6.6 22 $6.1 (24%) (7%)

$500 - $999M 4 $3.2 1 $0.6 (75%) (81%)

Total Middle Market 86 $11.5 59 $8.1 (31%) (29%)

% of Middle Market

Less than $100M 61% 15% 60% 18%

$100 - $499M 34% 57% 37% 75%

$500 - $999M 5% 28% 3% 7%

Total Middle Market 100% 100% 100% 100%

Q3 2015 Q3 2016 % Change


Recent M&A Activity – Industrials

Select Announced M&A Transactions (Q3 2016)

5

Source: S&P Capital IQ.

($ in millions)

Announced Date Target Buyer Industry

Enterprise

Value ($mm)

EV /

Revenue

EV /

EBITDA

09/25/16 Chemtura Corp. LANXESS Deutschland GmbH Materials $2,468.4 1.5x 8.3x

09/19/16 Independence Tube Corp. Nucor Corp. Materials $435.0 NA NA

09/13/16 Continental Structural Plastics, Inc. Teijin Holdings USA, Inc. Materials $825.0 1.3x NA

09/12/16Cemex ConstructionMaterials Atlantic, LLC

Eagle Materials, Inc. Materials $400.0 NA NA

09/06/16Luvata Heat TransferSolutions Business

Modine Manufacturing Co. Machinery $422.0 NA NA

09/06/16 Young & Franklin, Inc. TransDigm Group, Inc. Machinery $260.0 NA NA

09/02/16 Accuride Corp. Crestview Partners, L.P. Machinery $433.0 0.7x 6.3x

09/01/16Rigid Plastics BlowMolding Operations

Amcor Rigid Plastics USA, Inc. Materials $280.0 1.3x 8.0x

08/29/16 Aleris Corp. Zhongwang USA, LLC Materials NA NA NA

08/29/16 IronPlanet, Inc. Ritchie Bros. Auctioneers, Inc. Industrial Services $758.5 NA 13.0x

08/29/16 L&W Supply Corp.American Builders & Contractors Supply Co., Inc.

Industrial Services $670.0 NA NA

08/25/16 AEP Industries, Inc. Berry Plastics Group, Inc. Industrial Services $705.4 0.6x 6.6x

08/22/16 LanguageLine Solutions, Inc. Teleperformance SE Industrial Services $1,522.0 3.9x 10.4x

09/16/16Aircraft ServiceInternational Group, Inc.

Menzies Aviation, Inc. Transportation $200.2 0.6x 8.5x



Enterprise

Value ($mm)

EV /

Revenue

EV /

EBITDA

08/16/16 G&K Services, Inc. Cintas Corp. Industrial Services $2,134.0 2.2x 13.4x

08/12/16Honeywell TechnologySolutions, Inc.

KBR Holdings, LLC Industrial Services $300.0 NA NA

08/11/16 Tecta America Corp. ONCAP Construction $215.2 NA NA

08/02/16Emerson Electric Co.'sNetwork Power Business Segment

Platinum Equity Electrical Equipment $4,000.0 0.9x NA

07/18/16 Span-Alaska Transportation, Inc. Matson Logistics, Inc. Transportation $197.6 NA 9.4x

08/02/16 Krestmark Industries Headwaters Windows, LLC Construction $240.0 NA NA

07/21/16 Joy Global, Inc. Komatsu Ltd. Construction $3,692.3 1.3x 14.6x

07/18/16 New Birmingham, Inc. U.S. Silica Holdings, Inc. Materials $200.8 4.9x NA

07/06/16 Nortek, Inc. Melrose Industries PLC Construction $2,732.0 1.1x 9.9x

07/06/16 Tim-Bar Corp. Packaging Corp. of America Industrial Services $386.0 1.2x 4.3x

07/01/16 Intelligrated, Inc.Honeywell Sensing andProductivity Solutions

Machinery $1,500.0 NA NA

Recent M&A Activity – Industrials

Select Announced M&A Transactions (Q3 2016)

6


($ in millions)


M&A Activity by Industrial Sector

% Change

% Change

U.S. Middle Market M&A Activity by Industrial Sector: VALUE

7

U.S. Middle Market M&A Activity by Industrial Sector: VOLUME

10%

30%

32%

($ in billions)

50%

0%

65%

63%

7%

106%

52%

$2.2

$0.8

$1.7

$1.4

$0.1

$0.4

$4.5

$2.5

$2.5

$0.7

$0.2

$0.5

$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0

Materials

Transportation

Industrial Services

Machinery

Electrical Equipment

Construction

Q3 2015 Q3 2016

Q3 2015 Q3 2016

21

5

14

9

2

3

31

10

20

10

2

8

0 5 10 15 20 25 30 35

Materials

Transportation

Industrial Services

Machinery


Construction

51%

33%

Source: S&P Capital IQ (includes all closed deals with disclosed deal value between $10 million and $1 billion). Screen excludes Aerospace and Defenses and Professional Services.



Enterprise

Value

09/30/16 Destin Jet, LLC The Sterling Group, L.P. Transportation NA

09/30/16 Mission Critical Electronics, Inc.Windjammer Capital

Investors, LLCElectrical Equipment NA

09/20/16 HawkeyePedershaab, Inc. Forsyth Capital Investors, LLC Machinery NA

09/19/16 PumpMan, Inc.Soundcore Capital

Partners, LLCIndustrial Services NA

09/13/16 Silver Airways Corp. Versa Capital Management, Inc. Transportation NA

09/12/16 Tronair, Inc. Golden Gate Capital Transportation NA

09/02/16 Accuride Corp. Crestview Partners, L.P. Machinery $433

08/29/16 NACS, Inc. Blue Wolf Capital Partners, LLC Machinery $110

08/23/16 XRI BlueNorth Haven Energy Capital

Fund L.P.Industrial Services NA

08/23/16 HEPACO, LLC Gryphon Investors Industrial Services NA

08/12/16 Constellis Holdings, LLCApollo Global

Management, LLCElectrical Equipment NA

08/11/16 Tecta America Corp. ONCAP Construction $215

08/09/16 PREMIER Trailer Leasing, Inc.Redwood Capital

Investments, LLCTransportation NA

08/05/16 DBi Services, LLC Sterling Partners Construction NA

08/02/16Emerson Electric Co.'s

Network Power Business SegmentPlatinum Equity Electrical Equipment $4,000

07/19/16 Powerhouse Maintenance, Inc. Dubin Clark & Co., Inc. Construction NA

Financial sponsors were active across many sectors of the Industrials industry, announcing a number of acquisitions during the 3rd quarter of 2016, as shown in the chart below.

Several notable private equity backed transactions were

announced during the 3rd quarter including Platinum Equity’s announced acquisition of Emerson Electric Co.’s Network Power Business Segment for $4 billion; Crestview Partners’ proposed purchase of Accuride Corp. for $433 million; and ONCAP’s acquisition of Tecta America Corp. for $215 million.

During Q3 2016, financial sponsors were most active in the Industrial Services and Machinery sectors, announcing 23 and 15 transactions respectively.

Select Private Equity Transactions – Industrials (Q3 2016)

Financial Sponsors - Sector Focus

Private Equity Activity – Industrials

8

Commentary


($ in millions)

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23

15

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Construction ElectricalEquipment

IndustrialServices

Machinery Materials Transportation


90%

100%

110%

120%

130%


S&P 500 Electrical Equipment

80%

90%

100%

110%

120%

130%


S&P 500 Machinery

90%

100%

110%

120%

130%

140%


S&P 500 Construction

Industry Sector Overview – Recent Stock Price Performance


Commentary

9

Construction

Machinery


The charts included on the following pages detail the recent stock price performance by sector for the leading public companies within the Industrials industry for the trailing 12-month period ended September 30, 2016. The shaded section is the most recent 3-month period (Q3) for each sector and relative to the S&P 500.

For the 12-month period ended September 30, 2016, the

industrials industry had a very strong performance with the Machinery, Construction, and Materials sectors increasing the most at 27.4%, 25.1%, and 21.8% respectfully.

During Q3 2016, a majority of the sectors increased, led by the Machinery and Transportation sectors, which increased 10% and 7%, respectively.

25.1%

12.7%

21.0%

27.4%

12.7%

12.7%


80%

90%

100%

110%

120%

130%


S&P 500 Industrial Conglomerates

90%

100%

110%

120%

130%


S&P 500 Materials

80%

90%

100%

110%

120%


S&P 500 Transportation

90%

100%

110%

120%

130%


S&P 500 Industrial Services

Industry Sector Overview – Recent Stock Price Performance

Industrial Conglomerates

Industrial Services

10

Transportation


Materials

21.8%

12.7%

12.7%

18.2%

12.7%

12.7%

5.6% 12.8%


Construction and Engineering

Industry Sector Overview – Public Company Analysis

Building Products

($ in millions, except per share)

11

Construction


Closing Price % of 52 Equity Enterprise

Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA

Masco Corp. MAS $34.31 92% $11,477 $13,557 $7,275 $2,390 $1,182 32.9% 16.2% 1.9x 11.5xFortune Brands Home & Security, Inc. FBHS $58.10 90% $9,340 $10,666 $4,868 $1,715 $732 35.2% 15.0% 2.2x 14.6x

Owens Corning OC $53.39 91% $6,263 $8,515 $5,520 $1,342 $1,010 24.3% 18.3% 1.5x 8.4xAO Smith Corp. AOS $98.79 99% $8,778 $8,393 $2,568 $1,065 $505 41.4% 19.6% 3.3x 16.6xLennox International, Inc. LII $157.03 96% $7,066 $8,087 $3,524 $1,005 $467 28.5% 13.2% 2.3x 17.3x

USG Corp. USG $25.85 84% $3,808 $5,160 $3,869 $762 $602 19.7% 15.6% 1.3x 8.6xArmstrong World Industries, Inc. AWI $41.32 79% $2,312 $3,094 $2,424 $610 $293 25.2% 12.1% 1.3x 10.5x

Simpson Manufacturing Co., Inc. SSD $43.95 97% $2,141 $1,895 $830 $387 $157 46.6% 18.9% 2.3x 12.1x

Average 91% $5,673 $6,544 $3,372 $984 $538 31.6% 16.1% 2.0x 12.6x

Median 91% $6,263 $8,087 $3,524 $1,005 $505 28.5% 15.6% 2.2x 12.1x

LTM Margins

Enterprise Value /

LTM LTM



AECOM Technology Corp. ACM $29.73 82% $4,610 $8,484 $17,811 $666 $1,017 3.7% 5.7% 0.5x 8.3xFluor Corp. FLR $51.32 92% $7,322 $7,428 $18,035 $1,007 $1,045 5.6% 5.8% 0.4x 7.1x

Jacobs Engineering Group, Inc. JEC $51.72 93% $6,301 $6,237 $11,441 $1,809 $679 15.8% 5.9% 0.5x 9.2x

EMCOR Group, Inc. EME $59.62 99% $3,709 $3,794 $7,155 $986 $383 13.8% 5.4% 0.5x 9.9xTutor Perini Corp. TPC $21.47 83% $1,063 $1,770 $4,935 $382 $195 7.7% 3.9% 0.4x 9.1x

KBR, Inc. KBR $15.13 76% $2,164 $1,391 $4,284 $323 $222 7.5% 5.2% 0.3x 6.3x

Average 88% $4,112 $4,124 $9,170 $901 $505 10.1% 5.2% 0.4x 8.3x

Median 92% $3,709 $3,794 $7,155 $986 $383 7.7% 5.4% 0.4x 9.1x

Enterprise Value /

LTM LTM Margins LTM



12






Rockwell Automation, Inc. ROK $122.34 99% $16,189 $15,547 $5,948 $2,488 $1,185 41.8% 19.9% 2.6x 13.1x

Ametek, Inc. AME $47.78 84% $11,359 $13,121 $3,909 $1,422 $1,053 36.4% 26.9% 3.4x 12.5xAcuity Brands, Inc. AYI $264.60 94% $11,589 $11,531 $3,291 $1,436 $553 43.6% 16.8% 3.5x 20.9x

Hubbell, Inc. HUBB $107.74 97% $6,130 $6,780 $3,450 $1,126 $592 32.6% 17.2% 2.0x 11.4xWoodward, Inc. WWD $62.48 98% $3,989 $4,588 $1,995 $555 $316 27.8% 15.8% 2.3x 14.5xBelden, Inc. BDC $68.99 91% $2,938 $4,456 $2,320 $960 $385 41.4% 16.6% 1.9x 11.6x

Generac Holdings, Inc. GNRC $36.30 92% $2,446 $3,502 $1,371 $490 $261 35.7% 19.0% 2.6x 13.4xBrady Corp. BRC $34.61 96% $1,757 $1,858 $1,121 $559 $150 49.9% 13.4% 1.7x 12.4x

Average 93% $5,744 $6,548 $2,494 $935 $473 38.2% 18.0% 2.5x 13.8x

Median 94% $3,989 $4,588 $2,320 $960 $385 36.4% 16.8% 2.3x 12.5x

Enterprise Value /

LTM LTM Margins LTM



Construction and Farm Machinery


13

Industrial Machinery

Machinery




Caterpillar, Inc. CAT $88.77 100% $52,330 $85,194 $41,795 $8,932 $5,629 21.4% 13.5% 2.0x 15.1xDeere & Co. DE $85.35 96% $27,193 $61,447 $26,725 $6,113 $3,711 22.9% 13.9% 2.3x 16.6x

PACCAR, Inc. PCAR $58.78 97% $20,752 $25,987 $17,916 $2,852 $2,626 15.9% 14.7% 1.5x 9.9xCummins, Inc. CMI $128.15 100% $22,235 $23,125 $18,205 $4,673 $2,351 25.7% 12.9% 1.3x 9.8xAGCO Corp. AGCO $49.32 88% $4,155 $5,476 $7,250 $1,505 $579 20.8% 8.0% 0.8x 9.5x

The Toro Company TTC $46.84 95% $5,255 $5,339 $2,405 $871 $390 36.2% 16.2% 2.2x 13.7xOshkosh Corp. OSK $56.00 97% $4,212 $5,168 $6,102 $1,010 $478 16.5% 7.8% 0.8x 10.8x

Joy Global, Inc. JOY $27.74 97% $2,715 $3,539 $2,580 $566 $176 21.9% 6.8% 1.4x 20.1xManitowoc Co., Inc. MTW $4.79 27% $654 $916 $3,437 $833 $329 24.2% 9.6% 0.3x 2.8x

Average 88% $15,500 $24,021 $14,046 $3,039 $1,808 22.8% 11.5% 1.4x 12.0x

Median 97% $5,255 $5,476 $7,250 $1,505 $579 21.9% 12.9% 1.4x 10.8x

Enterprise Value /

LTM LTM Margins LTM



Illinois Tool Works, Inc. ITW $119.84 97% $43,598 $48,250 $13,334 $5,577 $3,427 41.8% 25.7% 3.6x 14.1x

Eaton Corp. ETN $65.71 96% $30,345 $38,573 $20,153 $6,441 $3,201 32.0% 15.9% 1.9x 12.1xStanley Black & Decker, Inc. SWK $122.98 99% $18,329 $22,190 $11,279 $4,148 $1,911 36.8% 16.9% 2.0x 11.6x

Parker Hannifin Corp. PH $125.53 99% $17,187 $18,338 $11,361 $2,614 $1,582 23.0% 13.9% 1.6x 11.6xDover Corp. DOV $73.64 98% $11,520 $14,282 $6,791 $2,528 $1,213 37.2% 17.9% 2.1x 11.8x

Flowserve Corp. FLS $48.24 92% $6,346 $7,734 $4,358 $1,472 $684 33.8% 15.7% 1.8x 11.3xDonaldson Co., Inc. DCI $37.33 97% $5,032 $5,399 $2,220 $761 $365 34.3% 16.4% 2.4x 14.8x

The Timken Co. TKR $35.14 95% $2,857 $3,416 $2,779 $756 $418 27.2% 15.0% 1.2x 8.2x

Average 97% $16,902 $19,773 $9,034 $3,037 $1,600 33.3% 17.2% 2.1x 11.9x

Median 97% $14,353 $16,310 $9,035 $2,571 $1,398 34.0% 16.2% 1.9x 11.7x

Enterprise Value /

LTM LTM Margins LTM



Trading Companies and Distributors


14

Machinery




W.W. Grainger, Inc. GWW $224.84 94% $14,118 $15,992 $10,081 $4,149 $1,473 41.2% 14.6% 1.6x 10.9xUnited Rentals, Inc. URI $78.49 93% $7,223 $14,711 $5,804 $2,462 $1,750 42.4% 30.2% 2.5x 8.4x

Fastenal Co. FAST $41.78 84% $12,103 $12,377 $3,919 $1,956 $904 49.9% 23.1% 3.2x 13.7xWatsco, Inc. WSO $140.90 94% $4,585 $5,046 $4,147 $1,012 $352 24.4% 8.5% 1.2x 14.3x

MSC Industrial Direct Co., Inc. MSM $73.41 94% $4,506 $4,736 $2,846 $1,282 $448 45.0% 15.7% 1.7x 10.6xWESCO International, Inc. WCC $61.49 96% $2,968 $4,290 $7,473 $1,479 $410 19.8% 5.5% 0.6x 10.5xEnerSys ENS $69.19 95% $3,096 $3,322 $2,355 $628 $322 26.7% 13.7% 1.4x 10.3x

Applied Industrial Technologies, Inc. AIT $46.74 96% $1,845 $2,156 $2,519 $711 $204 28.2% 8.1% 0.9x 10.6xTitan Machinery, Inc. TITN $10.40 77% $220 $766 $1,244 $217 $31 17.5% 2.5% 0.6x 24.8x*

Average 91% $5,629 $7,044 $4,488 $1,544 $655 32.8% 13.5% 1.5x 11.2x

Median 94% $4,506 $4,736 $3,919 $1,282 $410 28.2% 13.7% 1.4x 10.6x

Enterprise Value /

LTM LTM Margins LTM



Environmental and Facilities Services


15

Industrial Services

Diversified Support Services

Source: S&P Capital IQ. *Excluded from average and median calculation.



Iron Mountain, Inc. IRM $37.53 90% $8,296 $14,300 $3,133 $1,770 $943 56.5% 30.1% 4.6x 15.2xCintas Corp. CTAS $112.60 94% $12,237 $13,282 $5,001 $2,190 $975 43.8% 19.5% 2.7x 13.6xKAR Auction Services, Inc. KAR $43.16 98% $6,036 $9,355 $2,866 $1,237 $696 43.2% 24.3% 3.3x 13.4x

Avery Dennison Corp. AVY $77.79 98% $7,153 $8,081 $5,950 $1,655 $715 27.8% 12.0% 1.4x 11.3xCopart, Inc. CPRT $53.56 98% $6,542 $7,027 $1,268 $569 $446 44.9% 35.2% 5.5x 15.7x

R.R. Donnelley & Sons Co. RRD $47.16 79% $3,316 $6,659 $11,144 $2,443 $1,023 21.9% 9.2% 0.6x 6.5xPitney Bowes, Inc. PBI $18.16 83% $3,542 $6,182 $3,487 $1,967 $777 56.4% 22.3% 1.8x 8.0xCorrections Corp. of America CXW $13.87 40% $1,634 $3,019 $1,819 $551 $448 30.3% 24.6% 1.7x 6.7x

The Brink's Co. BCO $37.08 98% $1,837 $2,168 $2,986 $563 $231 18.9% 7.7% 0.7x 9.4x

Average 86% $5,287 $6,971 $4,315 $1,397 $664 35.9% 19.4% 2.2x 10.6x

Median 96% $4,789 $6,843 $3,237 $1,446 $706 36.7% 20.9% 1.7x 10.3x

Enterprise Value /

LTM LTM Margins LTM



Waste Management, Inc. WM $63.76 90% $28,682 $38,193 $13,207 $4,962 $3,587 37.6% 27.2% 2.9x 10.6xRepublic Services, Inc. RSG $50.45 95% $17,540 $25,134 $9,233 $3,568 $2,575 38.6% 27.9% 2.7x 9.8x

Waste Connections, Inc. WCN $74.70 94% $9,503 $13,249 $2,322 $1,020 $747 43.9% 32.2% 5.7x 17.7xStericycle, Inc. SRCL $80.14 53% $6,885 $9,970 $3,373 $1,509 $718 44.8% 21.3% 3.0x 13.9xRollins, Inc. ROL $29.28 99% $6,400 $6,273 $1,526 $775 $296 50.8% 19.4% 4.1x 21.2x

Covanta Holding Corp. CVA $15.39 84% $2,024 $4,604 $1,675 $522 $343 31.2% 20.5% 2.7x 13.4xClean Harbors, Inc. CLH $47.98 88% $2,774 $4,053 $2,940 $838 $431 28.5% 14.7% 1.4x 9.4xTetra Tech, Inc. TTEK $35.47 98% $2,112 $2,326 $1,825 $319 $192 17.4% 10.5% 1.3x 12.1xSims Metal Management, Ltd. ASX:SGM $7.13 90% $1,445 $1,258 $3,474 $460 $56 13.2% 1.6% 0.4x 22.5x

Casella Waste Systems, Inc. CWST $10.30 99% $422 $923 $556 $175 $100 31.4% 18.0% 1.7x 9.2xSchnitzer Steel Industries, Inc. SCHN $20.90 97% $568 $767 $1,419 $176 $73 12.4% 5.1% 0.5x 10.5x

Average 90% $7,123 $9,705 $3,777 $1,302 $829 31.8% 18.0% 2.4x 13.7x

Median 94% $2,774 $4,604 $2,322 $775 $343 31.4% 19.4% 2.7x 12.1x

Enterprise Value /

LTM LTM Margins LTM



Air Freight and Logistics


16

Transportation

Road and Rail




United Parcel Service, Inc. UPS $109.36 98% $98,041 $106,812 $59,338 $14,672 $10,082 24.7% 17.0% 1.8x 10.6xFedEx Corp. FDX $174.68 98% $47,993 $58,786 $52,749 $15,076 $7,742 28.6% 14.7% 1.1x 7.6x

CH Robinson Worldwide, Inc. CHRW $70.46 93% $10,150 $10,908 $13,004 $1,237 $939 9.5% 7.2% 0.8x 11.6x

Expeditors International of Washington, Inc. EXPD $51.52 98% $9,560 $8,584 $6,141 $916 $747 14.9% 12.2% 1.4x 11.5xAtlas Air Worldwide Holdings, Inc. AAWW $42.82 74% $1,059 $2,804 $1,784 $589 $351 33.0% 19.7% 1.6x 8.0x

Hub Group, Inc. HUBG $40.76 94% $1,435 $1,415 $3,452 $445 $173 12.9% 5.0% 0.4x 8.2xForward Air Corp. FWRD $43.26 86% $1,331 $1,366 $972 $252 $144 26.0% 14.9% 1.4x 9.5x

Average 91% $24,224 $27,239 $19,634 $4,741 $2,883 21.4% 12.9% 1.2x 9.6x

Median 94% $9,560 $8,584 $6,141 $916 $747 24.7% 14.7% 1.4x 9.5x

LTM

Enterprise Value /

LTM Margins LTM



Union Pacific Corp. UNP $97.53 99% $83,057 $96,083 $20,369 $10,436 $9,503 51.2% 46.7% 4.7x 10.1xCSX Corp. CSX $30.50 100% $29,524 $39,246 $11,042 $4,514 $4,514 40.9% 40.9% 3.6x 8.7x

Norfolk Southern Corp. NSC $97.06 98% $29,069 $38,582 $10,105 $4,028 $4,033 39.9% 39.9% 3.8x 9.6xKansas City Southern KSU $93.32 93% $10,144 $12,725 $2,361 $1,101 $1,135 46.6% 48.1% 5.4x 11.2xJB Hunt Transport Services, Inc. JBHT $81.14 91% $9,312 $10,258 $6,351 $1,275 $1,084 20.1% 17.1% 1.6x 9.5x

Ryder System, Inc. R $65.95 86% $3,518 $9,086 $6,675 $1,503 $1,808 22.5% 27.1% 1.4x 5.0xAMERCO UHAL $324.23 74% $6,353 $8,394 $3,314 $1,176 $1,247 35.5% 37.6% 2.5x 6.7xGenesee & Wyoming, Inc. GWR $68.95 94% $4,020 $6,197 $2,045 $731 $573 35.7% 28.0% 3.0x 10.8xOld Dominion Freight Line, Inc. ODFL $68.61 95% $5,784 $5,991 $2,977 $898 $661 30.2% 22.2% 2.0x 9.1x

Landstar System, Inc. LSTR $68.08 93% $2,916 $2,850 $3,179 $700 $258 22.0% 8.1% 0.9x 11.0xWerner Enterprises, Inc. WERN $23.27 81% $1,687 $1,817 $2,045 $550 $355 26.9% 17.4% 0.9x 5.1x

Average 90% $10,233 $13,515 $5,009 $1,648 $1,567 32.0% 28.6% 2.5x 8.7x

Median 93% $6,068 $8,740 $3,246 $1,138 $1,109 32.8% 27.6% 2.3x 9.3x

LTM

Enterprise Value /

LTM Margins LTM



Airlines


17

Transportation

Marine




American Airlines Group, Inc. AAL $36.61 78% $22,903 $38,631 $40,134 $14,137 $8,600 35.2% 21.4% 1.0x 4.5xDelta Air Lines, Inc. DAL $39.36 75% $30,720 $35,569 $40,307 $12,091 $8,352 30.0% 20.7% 0.9x 4.3x

United Continental Holdings, Inc. UAL $52.47 85% $18,758 $25,488 $36,933 $13,918 $7,342 37.7% 19.9% 0.7x 3.5xSouthwest Airlines Co. LUV $38.89 76% $25,356 $25,295 $20,333 $8,133 $5,670 40.0% 27.9% 1.2x 4.5xAlaska Air Group, Inc. ALK $65.86 76% $8,305 $7,324 $5,733 $2,416 $1,781 42.1% 31.1% 1.3x 4.1x

JetBlue Airways Corp. JBLU $17.24 64% $5,902 $6,138 $6,541 $2,783 $1,658 42.5% 25.3% 0.9x 3.7xSpirit Airlines, Inc. SAVE $42.53 79% $3,043 $2,944 $2,217 $906 $578 40.9% 26.1% 1.3x 5.1xAllegiant Travel Co. ALGT $132.07 58% $2,191 $2,460 $1,303 $574 $481 44.0% 36.9% 1.9x 5.1x

Westjet Airlines, Ltd. WJA $17.46 89% $2,152 $2,405 $3,070 $1,524 $585 49.6% 19.1% 0.8x 4.1x

Average 75% $12,053 $13,453 $14,555 $5,293 $3,306 40.9% 25.9% 1.1x 4.3x

Median 76% $7,103 $6,731 $6,137 $2,600 $1,720 41.5% 25.7% 1.1x 4.2x

Enterprise Value /

LTM LTM Margins LTM



Kirby Corp. KEX $62.16 85% $3,344 $4,147 $1,917 $717 $515 37.4% 26.9% 2.2x 8.0x

Matson, Inc. MATX $39.88 75% $1,751 $2,194 $1,961 $369 $305 18.8% 15.5% 1.1x 7.2xRand Logistics, Inc. RLOG $0.76 28% $14 $229 $137 $41 $27 29.6% 19.5% 1.7x 8.6x

Average 63% $1,703 $2,190 $1,338 $376 $282 28.6% 20.6% 1.6x 7.9x

Median 75% $1,751 $2,194 $1,917 $369 $305 29.6% 19.5% 1.7x 8.0x

Enterprise Value /

LTM LTM Margins LTM




18

Industrial Conglomerates

Source: S&P Capital IQ. * Note: General Electric Co. enterprise value and LTM financials excludes GE Capital



General Electric Co. GE $29.62 90% $277,036 $420,436 $123,158 $26,018 $16,845 21.1% 13.7% 3.4x 25.0x

3M Co. MMM $176.23 97% $109,531 $119,226 $30,078 $14,967 $8,667 49.8% 28.8% 4.0x 13.8xSiemens Aktiengesellschaft SIE $117.35 96% $96,311 $113,534 $87,755 $26,182 $10,451 29.8% 11.9% 1.3x 10.9x

United Technologies Corp. UTX $101.60 93% $85,024 $102,474 $56,885 $15,790 $10,155 27.8% 17.9% 1.8x 10.1x

Danaher Corp. DHR $78.39 76% $54,763 $62,177 $22,751 $12,141 $5,435 53.4% 23.9% 2.7x 11.4x

Average 90% $124,533 $163,569 $64,125 $19,020 $10,311 36.4% 19.2% 2.6x 14.2x

Median 93% $96,311 $113,534 $56,885 $15,790 $10,155 29.8% 17.9% 2.7x 11.4x

Enterprise Value /

LTM LTM Margins LTM



19

Materials


Chemicals

Metals and Mining




The Dow Chemical Co. DOW $51.83 91% $63,577 $78,199 $46,153 $11,122 $8,735 24.1% 18.9% 1.7x 9.0x

E.I. du Pont de Nemours and Co. DD $66.97 88% $59,085 $64,131 $24,638 $9,913 $4,322 40.2% 17.5% 2.6x 14.8xMonsanto Co. MON $102.20 89% $45,694 $54,488 $13,502 $7,017 $3,399 52.0% 25.2% 4.0x 16.0xPraxair, Inc. PX $120.83 97% $34,714 $44,087 $10,455 $4,692 $3,451 44.9% 33.0% 4.2x 12.8x

Air Products & Chemicals, Inc. APD $150.34 95% $32,759 $38,184 $9,511 $3,056 $3,057 32.1% 32.1% 4.0x 12.5xThe Sherwin-Williams Co. SHW $276.66 89% $25,927 $27,564 $11,550 $5,794 $1,947 50.2% 16.9% 2.4x 14.2xPotash Corporation of Saskatchewan Inc. TSX:POT $16.27 73% $13,634 $18,055 $4,658 $1,427 $1,654 30.6% 35.5% 3.9x 10.9xEastman Chemical Co. EMN $67.68 86% $10,108 $17,088 $9,205 $2,525 $2,154 27.4% 23.4% 1.9x 7.9x

Celanese Corp. CE $66.56 89% $9,925 $12,234 $5,502 $1,290 $1,085 23.4% 19.7% 2.2x 11.3xW.R. Grace & Co. GRA $73.80 72% $5,273 $6,676 $3,001 $1,179 $664 39.3% 22.1% 2.2x 10.0x

Average 87% $30,070 $36,071 $13,817 $4,801 $3,047 36.4% 24.4% 2.9x 11.9x

Median 89% $29,343 $32,874 $9,983 $3,874 $2,605 35.7% 22.8% 2.5x 11.9x

Enterprise Value /

LTM LTM Margins LTM



Freeport-McMoRan Copper & Gold, Inc. FCX $10.86 76% $12,945 $38,415 $14,744 $3,188 $2,690 21.6% 18.2% 2.6x 14.3x

Newmont Mining Corp. NEM $39.29 85% $20,843 $26,503 $7,919 $3,585 $3,057 45.3% 38.6% 3.3x 8.7xSouthern Copper Corp. SCCO $26.30 84% $20,532 $25,971 $4,968 $1,949 $1,819 39.2% 36.6% 5.2x 14.3x

Alcoa Inc. AA $10.14 88% $13,233 $22,641 $21,060 $3,931 $2,632 18.7% 12.5% 1.1x 8.6x

United States Steel Corp. X $18.86 68% $2,761 $5,063 $10,327 $211 ($128) 2.0% (1.2%) 0.5x NM

Average 80% $14,063 $23,719 $11,804 $2,573 $2,014 25.4% 20.9% 2.5x 11.5x

Median 84% $13,233 $25,971 $10,327 $3,188 $2,632 21.6% 18.2% 2.6x 11.5x

Enterprise Value /

LTM LTM Margins LTM



20

Source: Capital IQ.

Materials


Paper and Forest Products



International Paper Co. IP $47.98 96% $19,981 $34,764 $21,566 $6,187 $3,069 28.7% 14.2% 1.6x 11.3x

Domtar Corp. UFS $37.13 86% $2,335 $3,512 $5,160 $1,064 $654 20.6% 12.7% 0.7x 5.4xResolute Forest Products, Inc. RFP $4.73 45% $426 $995 $3,567 $862 $265 24.2% 7.4% 0.3x 3.8x

Average 76% $7,581 $13,091 $10,098 $2,704 $1,329 24.5% 11.4% 0.9x 6.8x

Median 86% $2,335 $3,512 $5,160 $1,064 $654 24.2% 12.7% 0.7x 5.4x

Enterprise Value /

LTM LTM Margins LTM


Member FINRA/SIPC

Recent Transactions

HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising Integrity | Expertise | Results

Hyde Park Capital Advisors, LLC 701 N. Franklin Street

Tampa, FL 33602 Tel: 813-383-0202

www.hydeparkcapital.com

John Hill Senior Managing Director [email protected] (813) 383-0205 John McDonald Senior Managing Director [email protected] (813) 383-0206 Keith Hodgdon Managing Director [email protected] (813) 383-0208 Greg Bosl Vice President [email protected] (813) 597-2649 Jami Gold Vice President [email protected] (813) 383-0203 Jeffrey Hendricks Vice President [email protected] (678) 523-3073 Kenneth Burnside Business Development Officer [email protected] (864) 905-9633

has been acquired by

a portfolio company of

has been acquired byhas been acquired byhas been acquired by


a part of

MTS Markets International Inc.


has been acquired byhas been acquired byhas been acquired by

has been acquired byhas been recapitalized by

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