tic quarterly in this issue - raymond james financial

INVESTMENT BANKING 1Q21

TIC QUARTERLYMERGERS & ACQUISITIONS, PUBLIC & PRIVATE FINANCINGS AND FINANCIAL ADVISORY SERVICES

IN THIS ISSUE

For Institutional Use Only

Sector Primer: TIC Services 3-5

Sector & Economic Indicators 6-7

Public Company Financial Ratios 8

Precedent M&A Transactions 9-10

Transaction Experience 11

RAYMOND JAMES INVESTMENT BANKING 2

TIC QUARTERLY

Companies testing, inspecting and certifying the world’s critical infrastructure and industrialsolutions can turn to the Raymond James TIC team for results. The team’s expansive industryrelationships and deep market insight allow us to provide comprehensive service to our clients,particularly those addressing the industry’s biggest secular trends: increasing industrial production,trade/globalization, regulation, technological advancement, outsourcing/privatization, andconsolidation.

As one of the largest middle market investment banking teams with a dedicated focus on the industry,you can expect informed advice and quality results and the “client first” approach for which RaymondJames is known.

Learn how our deep industry expertise and commitment to each transaction can help you achieve your business objectives.

BRENDAN TIERNEYNew York Office+1.212.856.4387 / Email

CLANCEY CROWLEYNew York Office+1.212.885.1821 / Email

FLORIAN STOEGERFrankfurt Office+49.69.219.337.22 / Email

IAN MACKAYVancouver Office+1.604.659.8310 / Email

JAY HERNANDEZBoston Office+1.617.624.7032 / Email

PACOME DE LA GRANDIERELondon Office+44.20.3798.5743 / Email

TOBIAS RAMMINGERFrankfurt Office+49.69.219.337.10 / Email

Testing, Inspection & Certification Sector Expertise

✓One of the largest teams of bankers focused on the TIC sector

Integrated teams across the U.S., Canada, U.K. and Germany✓

Differentiated focus on the Industrial & Infrastructure sub-sector within TIC✓

Distinct combination of M&A, lending and capital markets advisory services

Strong relationships with public, privately-held and investor-backed companies✓✓

Your Success is Our Business

Has acquired

A portfolio company of

Sale toSale to Sale toSale to

Selected Transaction Experience(1)(2)

(1) Included transactions were completed between July 2015 and November 2017.(2) Representative credentials include transactions completed by a Raymond James banker while at a former firm.

mailto:[email protected]







TIC QUARTERLY


1Q21

Sector Primer: TIC Services TRUST, BUT VERIFY

Out of the need for verification, a $250 billion industrywas born. Approximately half of the purchasingdecisions for Testing, Inspection & Certification (TIC)services are made in order to confirm compliance withapplicable regulations or industry standards; the otherhalf of all purchasing decisions are related to qualityand brand control. As a result, there are companiesproviding TIC solutions wherever there is a regulationor standard in place, or where the value chain involvesmultiple parties – that is to say, opportunities for theseservices are ubiquitous.

In order to deliver these verification solutions, TICproviders rely on a myriad of sensors, analysisequipment, software applications, etc. This primer willfocus solely on the service providers – the firms thatleverage the best available technology to ensure thatmaterials, goods, services, processes, systems,facilities, claims, environments, information, etc.conform to the expectation.

INDUSTRY OVERVIEW

The TIC industry is large and fragmented, with strongsecular tailwinds supporting GDP+ growth.

Within the total addressable market of $250 billion,approximately $100 billion of the market isoutsourced; $150 billion of the market is currently notoutsourced and is performed in-house by companies(e.g., quality assurance functions) and similar servicesprovided by governments (see chart). North Americacurrently lags Europe in terms of the penetration ofoutsourcing with outsourcing penetration rates ofapproximately 25% and 40% in North America andEurope, respectively. There is a massive opportunity inboth geographies driven by the expectation that theproportion of the market that is outsourced willcontinue to expand (more on growth drivers below).

While all TIC providers experience some down-sideprotection given the regulatory drivers associated withtheir services, the demand for TIC services is still afunction of the volume of commercial activity, whichvaries significantly by end market. Five sectorsaccount for 90% of the demand for outsourced TICservices: Industrial & Infrastructure (30%), Automotive(20%), Life Sciences (20%), Consumer (15%) and Oil &Gas (5%)(1). The rest of the outsourced market providesservices associated with trade assurance, shipping andbusiness systems.

There are 20 TIC firms that account for nearly half ofthe market (see chart); the rest of the market (~$50billion) is largely fragmented. Among the top firms, thelargest (SGS) has only ~6% market share, with the fivelargest companies comprising only ~25% of themarket (see chart, next page). While a handful of thelargest firms have some specialization (e.g. DEKRA’sAuto focus and Eurofins’ Life Sciences focus), the top20 firms in the space have fairly diversified offerings.For the smaller firms in the space, it is much morecommon for them to serve a single end market, thoughthey may offer a wide array of TIC services within theirtarget markets.

“If you cannot measure it, you cannot improve it.”

Quote attributed to Lord Kelvin, former president of the Royal Society of London

Global TIC Market: TAM, SAM & SOM(1)

$250 billion – Total Available Market (TAM) – including government and insourced TIC

$100 billion –Serviceable Available Market (SAM) – portion of TAM that is currently outsourced

$30 billion –Serviceable Obtainable Market (SOM) – portion of SAM related to Industrial & Infrastructure TIC

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

SGS BV Eurofins DEKRA Intertek TÜV S DNV TÜV R Applus TÜV N ALS Lloyd's R TEAM UL Socotec Cotecna NV5 Mistras AtlasTechnical

Consultants

SAI

(1) Sources: Bureau Veritas website and equity analyst initiating reports.(2) Sources: S&P Capital IQ, company websites and equity analysts initiating reports.

Revenue of Top 20 TIC Companies(2)$ in Millions

TIC QUARTERLY


1Q21

Sector Primer: TIC Services (Cont’d)

INDUSTRY OVERVIEW (CONTINUED)

Growth in the outsourced TIC industry is supported byoverall economic activity (i.e., GDP), plus: increasingtrade/globalization, product/technology proliferation,increasing regulations, and the trend to outsourcing/privatization. As supply chains expand and tradevolumes increase, new products are introduced, newregulations/standards are enacted and as marketparticipants choose to take advantage of economies ofscale and scope, TIC companies will be thebeneficiaries. These factors should enable the TICmarket to grow faster than GDP (see chart). Whilecertain end markets served by TIC companies aremore cyclical (e.g., Commodities and Energy), othersshould grow more consistently (e.g., Industrial &Infrastructure and Life Sciences), leading to long-termgrowth rates in excess of the overall market.

MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM&A ACTIVITY

The Raymond James TIC team has tracked nearly 400deals in the space since 2016. In approximately two-thirds of these deals, the buyer has been a publicly-traded strategic. This proportion has remainedrelatively consistent over the period. The mix withinthe remaining third has changed significantly: privateequity buyers accounted for ~5% of the transactions inthe space several years ago and account for ~15-20%today.

Half of the ~400 transactions were completed by fivepublicly-traded strategics: Eurofins (68), SGS (47), NV5(28), Bureau Veritas (26), and Applus (14). Transactionsizes are typically in the $50-$100 million range, withover half of transactions with a disclosed value under$50 million and only one transaction above a billiondollars during the period. The average of the publicly-disclosed multiples was around 15x EBITDA.

LOOKING AHEAD

Share prices for the public TIC companies haverecovered significantly since the market sell-off in thefirst quarter of 2020. However, an index of TICcompanies still lags the S&P 500 (see chart, page 8).The primary driver for this has been exposure withinthese larger companies to end markets that were hithardest over the past year (i.e., consumer, airlines, oil& gas, automotive, commodities and construction inselected geographies). Over the longer term, TICcompanies will not only benefit from the changesexpected as a result of new customer priorities, they

will in almost all cases be a part of the bleeding edge,supporting the transition to tomorrow’s economy.

Unsurprisingly, interest in the solutions delivered bycompanies in the life sciences space is expected to beeven higher than it was prior to the pandemic (whichwas already-elevated). Somewhat more surprisingly,companies in the food & agriculture sector havegarnered more attention as a result of heightenedfocus on supply chains, hygiene, organic/non-GMOsourcing and quality. Even in the “core” TIC activitiesof consumer product and automotive testing (thelatter now “mobility”), consumers are demandingmore transparency not only into the supply chains, butalso into the behaviors and commitments of thecorporations from which they’re purchasing.

Within the third of the TIC industry on which RaymondJames focuses – Industrial & Infrastructure – there isan even more pronounced shift “from old to new”.From the 5G and energy transitions to the focus onproactive lifecycle asset management, sustainabilityand quality of life, consumers, corporates,governments and TIC companies are surprisinglyaligned in terms of what changes need to be made andwhat investments will be required.

Corporates and investors in the space that recognizethese trends and commit early will almost certainlyexperience growth in excess of the market. As oneexample, TÜV SÜD has done a nice job herearticulating how their offering and strategies map tothe UN’s Sustainable Development Goals (frequentlycited by ESG-focused investors). While theperformance of larger companies will depend mostlyon their end market exposure (see next page) and M&Astrategies, the Raymond James team would welcomethe opportunity to help implement an effectivestrategy in the space. You could “trust” that youhave the right strategy, but we recommend that youverify.

(1) Sources: S&P Capital IQ, company websites and equity analysts initiating reports.(2) Note: Based on SAM of $100 billion.(3) Sources: IMF World Economic Outlook and market research.

3.5%4.0%

5.5%

GDP TIC TIC I&I

Annual Estimated Growth: Next 5 Years(3)TIC Market Share Breakdown(1)(2)

55%, Rest of

the market 12%, Firms 6-10

6%, Firms 11-15

3%, Firms 16-20

6%5% 5%

4% 4%

SGS BV Eurofins DEKRA Intertek

25%, Top 5 Firms (see breakdown below)

25%, Top 5 Firms

~1.5x

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

https://www.tuvsud.com/en-us/services/sustainability/sustainability-services-un-sdg-goals

TIC QUARTERLY


1Q21

Sector Primer: TIC Services (Cont’d)Company Employees Headquarters Summary Description Industry Breakdown Geography Breakdown(1)

M&A Deals CompletedSince 2016

15,638 Brisbane, Australia ALS engages in technical testing and inspection services 11

23,051 Madrid, Spain Applus offers testing, inspection, certification, engineering and consulting services 14

3,082 Austin, Texas Atlas Technical Consultants provides testing, inspection, engineering and consulting services 8

78,395 Ile-de-France, France

Bureau Veritas provides conformity assessment, compliance evaluation and certification services 26

47,427 Luxembourg City, Luxembourg

Eurofins offers bio-analytical testing services and laboratory services 68

45,653 London, United Kingdom

Intertek is engaged in testing, inspection, certification and quality of assurance of

products, commodities and services8

5,500Princeton

Junction, New Jersey

Mistras provides proprietary non-destructive testing (NDT) solutions to evaluate the structural

integrity of industrial and public infrastructure5

1,700 Irvine, CaliforniaMontrose provides environmental, engineering

and health and safety services to public and private entities

17(2)

3,214 Hollywood, Florida NV5 is engaged in providing professional and technical engineering and consulting services 28

92,661 Geneva, Switzerland

SGS offers testing, certification, quality assurance, technical consultancy and training

services47

6,800 Sugar Land, TexasTEAM provides maintenance and construction

services to high temperature and high pressure piping systems and vessels

1

Americas35%

EMEA26%

39%

30% 59% 11%

38% 27% 36%

100%

19% 58% 23%

81% 17%

24% 44% 32%

37% 56%

83% 11%

Industrial & Infrastructure (I&I)

Automotive

Life SciencesFood / Consumer

Oil & Gas Other

Europe, Middle East and Africa (EMEA)

Americas

Other / Unallocated

Note: Based on public filings and Raymond James investment banking analysis. All figures and percentages are for the most recent period available. (1) Montrose geography breakdown is based on cash balance figures. (2) Since 2018.

49% 51%

30% 35% 35%

95%

53% 22% 18%

23% 42% 35%

30% 10% 40% 10% 32% 61%

39% 58%

85% 15% 99%

34% 32% 16% 15%

28% 72%

45% 13% 13% 29% 85% 15%


1Q21TIC QUARTERLY

Sector & Economic Indicators

United States

Gross Domestic Product (GDP)

Canada

United Kingdom

European Union

Gold (Global)

Commodities

Copper (Global)

Top 25 Mining Companies’ Capex(1)

United States

Trade Volumes – Exports

Canada

United Kingdom

Germany

2.3% 3.0% 2.2%

(3.5%)

3.9%

(6.0%)

(3.0%)

0.0%

3.0%

6.0%

2017 2018 2019 2020F 2021F

3.0% 2.4% 1.9%

(5.7%)

4.4%

(8.0%)

(4.0%)

0.0%

4.0%

8.0%

2017 2018 2019 2020F 2021F

1.8% 1.2% 1.5%

(11.3%)

5.4%

(14.0%)

(8.0%)

(2.0%)

4.0%

10.0%

2017 2018 2019 2020F 2021F

2.7% 2.0% 1.6%

(7.6%)

4.7%

(10.0%)

(6.0%)

(2.0%)

2.0%

6.0%

2017 2018 2019 2020F 2021F

$ / Ounce

$ / Ounce

Sources: Bloomberg, S&P Capital IQ. Market data as of 12/31/2020.Note: Light blue represents historical figures and dark blue represents forecasted figures.(1) Top 25 mining companies determined based on market capitalization.

$ in Billions

Crude Oil (Global)$ / Barrel

3.9% 3.0%

(0.1%)

(13.4%)

5.3%

(16.0%)

(8.0%)

0.0%

8.0%

2017 2018 2019 2020F 2021F

1.4% 3.7%1.3%

(9.7%)

6.1%

(12.0%)

(6.0%)

0.0%

6.0%

12.0%

2017 2018 2019 2020F 2021F

5.4%3.0% 2.7%

(12.6%)

3.0%

(16.0%)

(8.0%)

0.0%

8.0%

2017 2018 2019 2020F 2021F

4.7% 2.3% 1.0%

(11.0%)

8.8%

(16.0%)

(8.0%)

0.0%

8.0%

16.0%

2017 2018 2019 2020F 2021F

$1,000$1,300$1,600$1,900$2,200

12/31/16 12/31/17 12/31/18 12/31/19 12/31/20

+60%

$2.00$2.50$3.00$3.50$4.00

12/31/16 12/31/17 12/31/18 12/31/19 12/31/20

+40%

$0$20$40$60$80

12/31/16 12/31/17 12/31/18 12/31/19 12/31/20

-10%

$40 $46 $51 $54 $63

$0

$25

$50

$75

2017 2018 2019 2020F 2021F


1Q21TIC QUARTERLY

Sector & Economic Indicators (Cont’d)

United States(2)

Building Permits(1)

Germany

Patent Applications(3)

Infrastructure

(1.0%)

1.1%2.4%

(0.5%)

(3.0%)(5.0%)

(2.5%)

0.0%

2.5%

5.0%

2014 2015 2016 2017 2018(8.1%)

1.9%

(4.7%)(0.6%)

7.3%

(10.0%)

(5.0%)

0.0%

5.0%

10.0%

2014 2015 2016 2017 2018

1.5%

(2.2%)

(6.7%)(4.1%) (3.3%)

(9.0%)

(6.0%)

(3.0%)

0.0%

3.0%

2014 2015 2016 2017 2018

(0.3%)

(9.3%)

11.1%

(2.1%) (2.2%)(12.0%)

(6.0%)

0.0%

6.0%

12.0%

2014 2015 2016 2017 2018

United Kingdom European Union

United States Canada

Sources: Bloomberg, S&P Capital IQ. Market data as of 12/31/2020.1) Building permits include both residential and commercial. Charts display data through 10/31/2020 because November and December 2020 figures have not been released as of the publishing date of the

newsletter. 2) The United States building permits chart includes the Architectural Billings Index (ABI) in dark blue. ABI values above 50 indicate an expansion, while values below 50 indicate a decline.3) Note: The average time between patent application and approval ranges between 23 months and 60 months in the four geographies listed. For this reason, patent applications are viewed as a leading

indicator for new product development.

$650

$750

$850

$950

$1,050

12/31/16 6/30/17 12/31/17 6/30/18 12/31/18 6/30/19 12/31/19 6/30/20 12/31/20

MSCI World Infrastructure Index

+11%

25

37.5

50

62.5

75

80,000

95,000

110,000

125,000

140,000

12/31/16 12/31/17 12/31/18 12/31/19

12,000

15,000

18,000

21,000

24,000

12/31/16 12/31/17 12/31/18 12/31/19


1Q21TIC QUARTERLY

Local Currency in MillionsALS Applus Atlas Technical

Consultants Bureau Veritas Eurofins Intertek Mistras Montrose NV5 SGS TEAM Median

Enterprise Value A$5,520 €1,929 $555 €11,817 €15,723 £10,023 $503 $1,063 $1,356 CHf 22,139 $726 NM

Market Capitalization A$4,635 €1,289 $245 €9,769 €13,091 £9,090 $227 $773 $1,044 CHf 20,165 $334 NM

YTD Share Price Change 4.7% (20.9%) (32.9%) (6.4%) 38.9% (3.5%) (45.6%) 87.6% 56.2% 0.7% (31.7%) (3.5%)

Net Debt A$875 €590 $260 €1,997 €2,584 £896 $276 $137 $312 CHf 1,889 $392 NM

Revenue A$1,752 €1,643 $456 €4,824 €4,719 £2,875 $611 $287 $631 CHf 5,909 $933 NM

Forward Revenue Growth 7.0% 6.4% 10.4% 4.8% 3.7% 4.4% 18.9% 18.6% 4.9% 6.0% 11.3% 6.4%

Gross Margins 28.3% 34.4% 46.6% 20.4% 21.4% 55.4% 33.0% 33.9% 50.7% 43.1% 28.2% 33.9%

EBITDA Margins 20.2% 10.5% 4.6% 15.4% 18.6% 18.8% 5.7% 7.6% 13.1% 17.4% 3.4% 13.1%

Net Leverage Ratio 2.5x 3.4x 12.4x 2.7x 2.9x 1.7x 7.9x 6.3x 3.8x 1.8x 12.3x 3.4x

Cash Conversion Ratio 4.1x (1.7x) (1.3x) 5.9x 3.9x 2.2x (0.6x) (0.0x) 4.5x 2.7x (0.2x) 2.2x

Capex as a % of Sales 6.0% 3.5% 1.1% 2.4% 6.2% 3.6% 2.5% 2.5% 1.5% 4.5% 2.4% 2.5%

M&A as a % of Cash from Operations 24.1% 9.6% 55.3% 3.3% 15.5% 2.9% (1.0%) NM 352.5% 3.8% 2.2% 6.7%

(35.0%)

(25.0%)

(15.0%)

(5.0%)

5.0%

15.0%

25.0%

Public Company Financial RatiosStock Index

Sources: S&P Capital IQ, public filings and Raymond James internal resources.Note: All information is LTM as of 12/31/2020. (1) Figure includes class A shares and class B shares.(2) YTD calculation for Atlas Technical Consultants is based on a start date of 2/18/2020 to account for when the Company began publicly trading.(3) YTD calculation for Montrose is based on a start date of 7/23/2020 to account for when the Company began publicly trading.(4) Cash conversion ratio is cash acquisitions divided by cash from operations.

Enterprise Value / Next Twelve Months EBITDA

(1)

(2)

(4)

S&P 500

I&I TIC Index

TIC Index

Financial Information

(3)

12.4x

7.4x 7.3x

12.9x 12.4x

16.5x

9.4x

17.0x

12.7x

16.4x

11.5x

ALS Applus AtlasTechnical

Consultants

BureauVeritas

Eurofins Intertek Mistras Montrose NV5 SGS TEAM


1Q21TIC QUARTERLY

M&A Transaction Breakdown by Buyer Type

Sources: S&P LCD, S&P Capital IQ, MergerMarket, press releases and Raymond James internal resources.

Select Testing, Inspection & Certification (TIC) Transactions

2016

76Total Annual

Deals:

2017

93

2018

95

2019

87

2020

45

Precedent M&A Transactions

Date Transaction EV / LTM

Announced Buyers/Investors Target Target Description Value ($mm) Revenue EBITDA12/9/20 Berkshire Partners LLC FoodChain ID, Inc. Testing, certification and consulting services for food products - - -

12/1/20 Applus Services, S.A. QPS Evaluation Services Inc. Product certification services $50.2 2.6x -

11/30/20 Alliance Holdings, LLC Almega Environmental & Technical Services, Inc. Source emissions testing services - - -

11/25/20 Montrose Environmental Group, Inc. Certain Testing assets and Operations of Leed Environmental Inc. Environmental project management, coordination and consulting - - -

11/12/20 Montrose Environmental Group, Inc. Certain Assets and Operations of American Environmental Testing Laboratory, LLC Environmental testing and laboratory services - - -

11/10/20 SGS SA Analytics & Services Business Of Synlab Environmental, food testing and tribology services $649.7 2.7x 16.2x

10/20/20 Applus Services, S.A. Besikta Bilprovning i Sverige AB Statutory vehicle inspection services $119.9 1.6x -

9/30/20 Applus Services, S.A. Reliable Analysis, Inc. Lab-based materials, component and electrical testing $78.7 2.8x -

9/1/20 Alliance Holdings, LLC Emissions Monitoring Business of Bureau Veritas Leak detection & repair and emissions data management - - -

7/27/20 Element Materials Technology Group Limited Analytical Lab Group, LLC Healthcare and biotech testing solutions - - -

7/14/20 New MainStream Capital Exo Group, LLC Inspection and remediation services of steel infrastructure - - -

7/2/20 Round Table Capital Management, LLP Hull & Associates, LLC Environmental and engineering consulting - - -

20

1418

24

14

31

21

27

37

20

25

13

23 2225

17

7 8

1317

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Public Strategic Buyer Private Strategic Buyer PE Buyer


1Q21TIC QUARTERLY

Sources: S&P LCD, S&P Capital IQ, MergerMarket, press releases and Raymond James internal resources.

Precedent M&A Transactions (Cont’d) Date Transaction EV / LTM

Announced Buyers/Investors Target Target Description Value ($mm) Revenue EBITDA6/29/20 Kohlberg & Company, L.L.C. Ground Penetrating Radar Systems, LLC Advanced scanning services for subsurface infrastructure - - -

6/24/20 Astorg Partners Normec Group Testing, inspection, certification and compliance services - - -

2/25/20 Tetra Tech, Inc. Segue Technologies Inc. IT management consulting $50.5 - -

1/23/20 3 Rivers Capital Aptus Group USA, LLC Utility infrastructure inspection and maintenance services - - -

1/8/20 Element Materials Technology Group Limited PCTEST Engineering Laboratory, Inc. R&D, certification, and testing services - - -

1/7/20 ACON Investments, L.L.C. Pine Environmental Services LLC Environmental test and measurement equipment - - -

1/3/20 ALS Limited Aquimisa S.L. Independent food testing services $56.1 2.3x -

12/12/19 Drive Capital Gecko Robotics, Inc. Automatic infrastructure inspection robotics developer - - -

11/20/19 Atlas Technical Consultants, Inc. Long Engineering, Inc. Civil, utility, and construction engineering and inspection $22.5 - -

11/7/19 NV5 Global, Inc. Quantum Spatial, Inc. Geospatial analytics services $311.3 - -

11/4/19 Vishay Precision Group, Inc. Dynamic Systems Inc. Thermal-mechanical testing and physical simulation systems $44.0 - -

10/8/19 Victor Capital Partners LLC Rizzo Group Building code and zoning compliance and related services - - -

9/25/19 Hamilton Robinson Capital Partners LLC Tanknology Inc. Underground storage tank test and inspection services - - -

9/6/19 Saw Mill Capital DPIS Engineering, LLC Engineering and inspection services for homebuilders - - -

9/5/19 Montrose Environmental Group, Inc. Emerging Compounds Treatment Technologies, Inc. Water treatment systems - - -

9/3/19 SOCOTEC ArchEng Holding Company Assurance services, building design, and dispute resolution - - -

8/13/19 Boxwood Merger Corp. Atlas Technical Consultants, Inc. Testing, engineering, and consulting services - - -

8/8/19 ALS Limited Laboratorios de Control ARJ S.A de C.V Quality control services for healthcare industry $57.9 2.8x -

8/7/19 Montrose Environmental Group, Inc. LEHDER Environmental Services Limited Air quality management $4.9 - -

7/24/19 Osmose Utilities Services, Inc. Power Survey Company Mobile contact voltage detection services - - -

7/18/19 Kohlberg & Company, L.L.C. EN Engineering, LLC Design, engineering and consulting services - - -

6/25/19 Safran Corporate Ventures Electric Power Systems Inc. Lightweight energy storage products - - -

5/10/19 Montrose Environmental Group, Inc. Target Emission Services Inc. / Target Emission Services USA LP Fugitive emission management services $30.8 - -

5/1/19 Palm Beach Capital GFA International, Inc. Testing, inspection and geotechnical and environmental engineering - - -

4/29/19 Gallant Capital Partners, LLC Quality Built, LLC Quality assurance construction services - - -

4/3/19 Tetra Tech, Inc. Global Tech Inc. High-end IT solutions, cloud migration, and cybersecurity $49.7 - -

2/21/19 CIT GAP Funds NOVI LLC Hardware and data analytics platforms for spacecraft - - -

2/2/19 ALS Limited BioScreen Testing Services, Inc. Pharma, cosmetic, and medical device analytical testing $31.9 - -

1/28/19 Levine Leichtman Capital Partners, LLC SK AeroSafety Group Aircraft passenger safety equipment testing and maintenance - - -

1/25/19 Sentry Energy Solutions Himarc Environmental Solutions Emissions testing and leak detection - - -

1/24/19 EQT Partners AB Osmose Utilities Services, Inc. Inspection, maintenance and repair services for infrastructure - - -

1/16/19 Bureau Veritas SA Capital Energy SAS White certificate project consulting and support services - - -

Median $50.3 2.7x 16.2x

Mean $111.3 2.5x 16.2x


1Q21TIC QUARTERLY

Transaction Experience

Note: Representative credentials include transactions completed by a Raymond James banker while at a former firm.Note: Included transactions were completed between July 2011 and November 2020. Note: Bold border indicates testing, inspection and certification (TIC) transaction.

Sale to Sale to Sale to Sale toAcquisition of

Simultaneous carve-out divestitures of

By way of an MBO backed by

Acquisition of

Sale to Sale to

Has acquired

A portfolio company of

Acquisition ofSale toSale to Sale to

Raymond James has participated in many industry-shaping transactions, including mergers and acquisitions, strategic advisory, fairness opinions and equityand debt capital raises, within the testing, inspection and certification space.

Sale to

Acquisition of Sale to Sale toSale toSale to

Sale to Sale to Sale to Sale to Sale toSale toSale to

Sale to

Sale to Sale to

Sale toSale to

TIC QUARTERLY 1Q21

Notes & Disclosures

Sources of data include Capital IQ, FactSet and other news organizations.Information obtained from third-party sources is considered reliable, butwe do not guarantee that the information herein is accurate or complete.This report was prepared within Raymond James & Associates’ InvestmentBanking Department and is for information purposes only. This report isnot a product of Raymond James & Associates’ Research Department;recipients of this report should not interpret the information herein assufficient grounds for an investment decision or any other decision. Thereport shall not constitute an offer to sell or the solicitation of an offer tobuy any of the securities mentioned herein; past performance does notguarantee future results. Any performance mentioned does not includetransaction fees and costs which would reduce an investor’s return. Aninvestment cannot be made directly in a market index.

This presentation includes logos or other words or devices that may beregistered trademarks of their respective owners. Such use is solely forpurposes of convenience in referring to the trademark owners and theirproducts/services. This presentation and its contents are not endorsed,sponsored or affiliated with any trademark owner. Raymond James &Associates, Inc. and its affiliates are not affiliated with any trademarkowner but may provide certain financial services to one or moretrademark owners or their affiliates.

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© 2020 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. Raymond James® is a registered trademark of Raymond James Financial, Inc.Raymond James Financial International Limited is authorized and regulated by the Financial Conduct Authority (FRN 188244).

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