Industrial & Manufacturing Industry M&A Update …peakstonegroup.com/.../Peakstone-Industrial-Manufacturing-Industry... · The following materials provide a market overview of the

Industrial & Manufacturing Industry M&A Update

February 2017

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Industrial & ManufacturingM&A Update | February 2017

1

Peakstone Industrial & Manufacturing M&A Market Overview

The following materials provide a market overview of the Industrial & Manufacturing industry sectors

Stock price performance and valuation trends have been strong across most sectors. The following is an overview ofthe selected industries and their respective stock price performance over the last three years and current valuationlevels [(Relative Stock Price) (Enterprise Value to EBITDA)]

- Aerospace & Defense (5.4%) (13.0x) - Engineering Services (19.6%) (11.1x)

- Automotive (41.9%) (8.6x) - Environmental Services (42.0%) (17.2x)

- Building Materials (21.6%) (10.2x) - Industrial Filtration (13.8%) (14.2x)

- Business Services (31.1%) (13.7x) - Machinery (42.1%) (13.2x)

- Distribution (-35.0%) (11.2x) - Packaging (10.9%) (10.5x)

- Electrical Equipment (-12.7%) (13.6x) - Paper & Forest Products (0.4%) (9.7x)


2

Industrial & Manufacturing Industry Update

For year-to-date 2017, strategic buyers accounted for approximately 92% of industrial & manufacturing M&Atransactions

o During 2016, strategic buyers accounted for 91% of the transactions

For closed transactions, industrial & manufacturing transaction multiples decreased from 9.3x EBITDA and 1.0xrevenue in 2015 to 8.4x EBITDA and 1.0x revenue in 2016. 2017 year-to-date multiples are up, 11.3x EBITDA and1.6x revenue

Notable publicly announced 2016 and YTD 2017 M&A transactions:

o Rockwell Collins Inc. entered into a definitive agreement to acquire B/E Aerospace Inc. for approximately $6.3 billion

o Parker-Hannifin Corporation entered into a definitive agreement to acquire CLARCOR Inc. for approximately $4 billion

o Zoomlion Heavy Industry Science and Technology Co., Ltd. made a bid to acquire Terex Corporation for $3.2 billion

o Gartner, Inc. entered into a definitive agreement to acquire CEB Inc. for approximately $2.5 billion

o American Axle & Manufacturing Holdings Inc. entered into a definitive agreement to acquire Metaldyne Performance Group Inc. for $1.5 billion

Notable IPO’s include REV Group, Forterra, Milacron Holdings, JELD-WEN Holdings, Inc. and Atkore InternationalGroup, Inc.


3

Industrial & Manufacturing Industry - M&A Market Overview

Source: Capital IQNotes: US Industrial Manufacturing Transactions by Buyer Type only includes categorized transactions US Industrial Manufacturing Multiple excludes data outliers

U.S. Industrial & Manufacturing Transactions by Buyer Type U.S. Industrial & Manufacturing Transaction Multiples

Industrial & Manufacturing transaction activity has been strong

1,478 1,5751,726

1,5731,797 1,843 1,716

231

203261

290

210

215 220174

21

0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014 2015 2016 2017YTD

Financial Strategic

8.0x

9.2x8.8x 8.6x

8.0x

9.3x

8.4x

11.3x

1.0x 1.0x 0.9x 0.9x 0.9x 1.0x 1.0x1.6x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

2010 2011 2012 2013 2014 2015 2016 2017YTD

EV / EBITDA EV / Revenue


-70%

-50%

-30%

-10%

10%

30%

50%

70%

4

Relative Stock Performance – Group 1

Peakstone Industrial & Manufacturing Index - Trading Statistics

S&P 500: +27.5%

Distribution: -35.0%

Building Materials: +21.6%

Packaging: +10.9%

Automotive: +41.9%

Business Services: +31.1%

Engineering Services: +19.6%

Source: Capital IQNotes: Peakstone Industrial & Manufacturing Indexes represent middle market companies with revenue between $10 million and $2 billion


5

Comparable Valuation Trends – Enterprise Value/EBITDA – Group 1

Peakstone Industrial & Manufacturing Index - Trading Statistics (continued)

S&P 500: 12.0x

Distribution: 11.2x

Building Materials: 10.2x

Packaging: 10.5x

Automotive: 8.6x

Business Services: 13.7x

Engineering Services: 11.1x


0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

40.0x

45.0x


6

Relative Stock Performance – Group 2

S&P 500: +27.5%

Industrial Filtration: 13.8%

Environmental Services: +42.0%

Electrical Equipment: -12.7%

Aerospace & Defense: +5.4%

Machinery: +42.1%

Paper & Forest Products: +0.4%



-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%


7

Comparable Valuation Trends – Enterprise Value/EBITDA – Group 2

S&P 500: 12.0x

Industrial Filtration: 14.2x

Environmental Services: 17.2x

Electrical Equipment: 13.6x

Aerospace & Defense: 13.0x

Machinery: 13.2x

Paper & Forest Products: 9.7x



5.0x

7.0x

9.0x

11.0x

13.0x

15.0x

17.0x

19.0x


Forward Gross EBITDA

Revenue EBITDA EBIT P/E Ratio Margin % Margin %

1.1x 12.2x 20.6x 24.8x 28.0% 8.8%

1.0x 9.4x 12.9x 0.1x 9.6% 14.9%

1.3x 11.1x 15.8x 19.8x 25.3% 11.4%

1.0x 10.9x 16.2x 20.7x 44.0% 9.4%

0.8x 10.3x 20.6x 23.6x 14.7% 6.7%

1.0x 8.6x 12.6x 22.5x 18.8% 11.2%

0.8x 18.1x 18.5x 23.9x 22.6% 6.6%

0.9x 11.1x 15.0x 18.3x 24.1% 1.8%

1.1x 12.6x 19.7x 23.5x 28.4% 6.9%

1.9x 12.7x 17.3x 23.1x 29.7% 16.1%

1.5x 11.9x 17.5x 21.7x 25.1% 11.9%

1.0x 12.6x 35.2x 14.7x 19.9% 11.5%

1.0x 11.5x 17.4x 22.1x 25% 10%

As of February 17, 2017 Source: Capital IQ

Industrial Filtration Systems

Machinery

Paper & Forest Products

Industrial & Manufacturing Sectors Median:

Enterprise Value /

Industrial & Manufacturing Sectors

Aerospace & Defense

Automotive

Electrical Equipment

Environmental Services

Building Materials

Business Services

Engineering Services

Packaging

Distribution

8

Public Trading Comparables by Sector


9

Selected Industrial & Manufacturing Industry Transactions

Source: Capital IQ

Date Target / Issuer

Transaction

Size ($mm) Buyers / Investors EV / EBITDA Transaction Comments

02/17/2017LMI Aerospace, Inc.

(NasdaqGS:LMIA)$448 Sonaca S.A. 11.7x

Sonaca S.A. entered into a merger agreement to acquire LMI

Aerospace, Inc. (NasdaqGS : LMIA) from Adage Capita l

Management, L.P.

02/17/2017SiteOne Landscape

Supply, Inc. (NYSE:SITE)$114 - 6.7x

Deere & Company (NYSE:DE) sold 38% stake in Si teOne

Landscape Supply, Inc. (NYSE:SITE) for approximately $110

mi l l ion in December 2016.

02/16/2017 Peninsula Packaging, LLC $230Sonoco Products

Company (NYSE:SON)-

Sonoco Products Company (NYSE:SON) s igned a defini tive

agreement to acquire Peninsula Packaging, LLC from Odyssey

Investment Partners , LLC for approximately $230 mi l l ion in cash

on February 16, 2017.

02/16/2017 Innos ight LLC $135Huron Consulting Group

Inc. (NasdaqGS:HURN)-

Huron Consulting Group Inc. (NasdaqGS:HURN) s igned an

agreement to acquire Innos ight LLC for approximately $140

mi l l ion on February 16, 2017.

02/16/2017Westinghouse Electric

Company LLC$167

Toshiba Corporation

(TSE:6502)-

Toshiba Corporation (TSE:6502) agreed to acquire an additional

3% stake in Westinghouse Electric Company LLC from IHI

Corporation (TSE:7013) for approximately ¥18.9 bi l l ion on

February 17, 2017.

02/14/2017 Race Winning Brands $150

Dover Corporation

(NYSE:DOV); Kinderhook

Industries

-

Kinderhook Industries acquired Performance Motorsports , Inc.

from Dover Corporation (NYSE:DOV) for $150 mi l l ion on February

14, 2017.

02/13/2017

U.S. Manufacturing

Corporation, Michigan

Operations

$100Dana Incorporated

(NYSE:DAN)-

Dana Incorporated (NYSE:DAN) entered into a defini tive

agreement to acquire Michigan Operations from U.S.

Manufacturing Corporation for approximately $100 mi l l ion on

February 13, 2017.


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Source: Capital IQ


Transaction


02/09/2017 Letica Corporation $640 RPC Group Plc (LSE:RPC) 11.2xRPC Group Plc (LSE:RPC) entered into an agreement to acquire

Letica Corporation for $640 mi l l ion on February 9, 2017.

02/07/2017 Media Link, LLC $207 Ascentia l plc (LSE:ASCL) -Ascentia l plc (LSE:ASCL) agreed to acquire Media Link, LLC for

approximately $210 mi l l ion on February 7, 2017.

02/05/2017 Newcor, Inc. $106Cie Automotive, S.A.

(BME:CIE)-

Cie Automotive, S.A. (BME:CIE) entered into a defini tive

agreement to acquire Newcor, Inc. from EXX Inc. for

approximately for $110 mi l l ion on February 5, 2017.

01/26/2017 Power Dis tribution, Inc. $204 Dunes Point Capita l , LLC -

Dunes Point Capita l , LLC acquired Power Dis tribution,

Incorporated from Smiths Interconnect, Inc. for an enterprise

va lue of approximately £160 mi l l ion on January 26, 2017.

01/24/2017

Multi Packaging

Solutions International

Limited (NYSE:MPSX)

$2,307WestRock Company

(NYSE:WRK)11.3x

WestRock Company (NYSE:WRK) s igned a defini tive agreement

to acquire Multi Packaging Solutions International Limited

(NYSE:MPSX) from Madison Dearborn Partners , LLC and Carlyle

European Capita l Partners II I , L.P.

01/23/2017Alpha Holding Company,

LLC$1,215 Pla ins Pipel ine L.P. -

Pla ins Pipel ine L.P. entered into agreement to acquire Alpha

Holding Company, LLC from COG Operating LLC and Frontier

Midstream, LLC for $1.2 bi l l ion on January 19, 2017.

01/06/2017Firs t Manhattan

Consulting Group LLC$200

Deluxe Corporation

(NYSE:DLX)-

Deluxe Corporation (NYSE:DLX) acquired Fi rs t Manhattan

Consulting Group LLC for $200 mi l l ion on December 30, 2016. The

cons ideration is subject to customary adjustments .


11


Source: Capital IQ


Transaction


01/05/2017 CEB Inc. (NYSE:CEB) $3,448 Gartner, Inc. (NYSE:IT) 17.2x

Gartner, Inc. (NYSE:IT) entered into a defini tive agreement to

acquire CEB Inc. (NYSE:CEB) for $2.5 bi l l ion on January 5, 2017.

Gartner, Inc. wi l l acquire a l l of the outstanding shares of CEB

Inc. in a cash and s tock transaction.

12/29/2016Terex Corporation

(NYSE:TEX)$4,876

Zoomlion Heavy Industry

Science and Technology

Co., Ltd. (SZSE:000157)

12.3x

Zooml ion Heavy Industry Science and Technology Co., Ltd. made

a bid to acquire Terex Corporation (NYSE:TEX) from Marcato

Capita l Management, LLC, TIAA-CREF Investment Management,

LLC and others for $3.2 bi l l ion on December 29, 2016.

12/22/2016TriNet Group, Inc.

(NYSE:TNET)$442 Atairos Group, Inc. 14.1x

Ata iros Group, Inc. entered into an agreement to acquire an

additional 25.7% stake in TriNet Group, Inc. (NYSE:TNET) from

General Atlantic, LLC for approximately $440 mi l l ion on

December 21, 2016.

12/21/2016

H-E Parts International

LLC and HEP Austra l ia

Holdings Pty Ltd

$240

Hitachi Construction

Machinery Co., Ltd.

(TSE:6305)

-

Hitachi Construction Machinery Co., Ltd. (TSE:6305) acquired H-E

Parts International LLC and HEP Austra l ia Holdings Pty Ltd from

H-E Parts Investors LLC for an enterprise va lue of $240 mi l l ion on

December 21, 2016.

12/19/2016American Rai lcar Leas ing

LLC$2,778 SMBC Rai l Services , LLC -

SMBC Rai l Services , LLC s igned an equity and asset purchase

agreement to acquire American Rai lcar Leas ing LLC from AEP

Rai l Corp. and American Enterta inment Properties Corp. for an

enterprise va lue of $2.8 bi l l ion on December 16, 2016.

12/19/2016Pittsburgh Glass Works

LLC$310

Vitro, S.A.B. de C.V.

(BMV:VITRO A)-

Vitro, S.A.B. de C.V. (BMV:VITRO A) s igned a defini tive agreement

to acquire Pi ttsburgh Glass Works LLC from LKQ Corporation

(NasdaqGS:LKQ) for $310 mi l l ion on December 18, 2016.

12/15/2016 Republ ic Conduit, Inc. $335Nucor Corporation

(NYSE:NUE)-

Nucor Corp. (NYSE:NUE) s igned a defini tive agreement to acquire

Republ ic Conduit, Inc. from Tenaris S.A. for approximately $340

mi l l ion on December 15, 2016. The cons ideration wi l l be paid

through cash free and debt free bas is .


12


Source: Capital IQ


Transaction


12/07/2016Teletronics Technology

Corporation$233

Curtiss -Wright Controls

Defense Solutions-

Curtiss -Wright Controls Defense Solutions entered into a

defini tive s tock purchase agreement to acquire Teletronics

Technology Corporation for approximately $230 mi l l ion in cash

on December 7, 2016.

12/01/2016 CLARCOR Inc. (NYSE:CLC) $4,433Parker-Hannifin

Corporation (NYSE:PH)17.2x

Parker-Hannifin Corporation (NYSE:PH) entered into a defini tive

agreement to acquire CLARCOR Inc. (NYSE:CLC) for $4 bi l l ion in

cash on December 1, 2016.

11/15/2016

95,000 Acres of

Timberlands in Western

Oregon

$194 Campbel l Global -

Campbel l Global acquired 95,000 acres of timberlands in

Western Oregon from Rosboro LLC for $194 mi l l ion on

November 15, 2016.

11/14/2016Koroseal Interior

Products , LLC$134

Sangetsu Corporation

(TSE:8130)-

Sangetsu Corporation (TSE:8130) agreed to acquire Koroseal

Interior Products , LLC for approximately $130 mi l l ion on

November 14, 2016. The transaction wi l l have a clos ing date of

November 14 as per US loca l time. Robert W. Baird & Co.

11/08/2016 Mesker Openings Group $143dormakaba Holding AG

(SWX:DOKA)-

dormakaba Holding AG (SWX:DOKA) s igned an agreement to

acquire Mesker Openings Group for approximately $140 mi l l ion

on November 8, 2016. Mesker generated turnover of about $67

mi l l ion in 2015.

11/03/2016Metaldyne Performance

Group Inc. (NYSE:MPG)$3,418

American Axle &

Manufacturing Holdings ,

Inc. (NYSE:AXL)

6.9x

American Axle & Manufacturing Holdings Inc. (NYSE:AXL) entered

into a defini tive agreement to acquire Metaldyne Performance

Group Inc. (NYSE:MPG) from American Securi ties , Levin Capita l

Strategies , L.P. and others for $1.

11/02/2016Anchor Glass Container

Corporation$1,000

CVC Capita l Partners

Limited; BA Glass BV-

CVC Capita l Partners and BA Glass B.V. s igned a defini tive

agreement to acquire Anchor Glass Container Corporation from

KPS Capita l Partners , LP for $1 bi l l ion on November 2, 2016.


13


Source: Capital IQ


Transaction


11/02/2016 Camber Corporation $380Huntington Ingal ls

Industries , Inc. (NYSE:HII)8.6x

Huntington Ingal ls Industries , Inc. (NYSE:HII) entered into a

defini tive agreement to acquire Camber Corporation from New

Mountain Capita l , LLC and others for $380 mi l l ion on November

1, 2016.

11/01/2016

Consumer Health &

Spending Accounts And

Consol idated Omnibus

Reconci l iation Act

$235WageWorks , Inc.

(NYSE:WAGE)-

WageWorks , Inc. (NYSE:WAGE) entered into an asset purchase

agreement to acquire Consumer Health & Spending Accounts

And Consol idated Omnibus Reconci l iation Act bus inesses from

ADP, LLC and ADP Benefi t Services , KY, Inc.

10/24/2016 Contech Holdings , Inc $950 Quikrete Holdings , Inc. -

Quikrete Holdings , Inc. agreed to acquire Contech Holdings , Inc.

from Anchorage Capita l Group, L.L.C. and Li ttlejohn & Co. LLC for

$950 mi l l ion on October 24, 2016.

10/23/2016B/E Aerospace, Inc.

(NasdaqGS:BEAV)$8,354

Rockwel l Col l ins , Inc.

(NYSE:COL)13.6x

Rockwel l Col l ins Inc. (NYSE:COL) entered into a defini tive

agreement to acquire B/E Aerospace Inc. (NasdaqGS:BEAV) for

$6.3 bi l l ion in cash and s tock on October 23, 2016.

10/23/2016 Mactac Americas , LLC $375LINTEC Corporation

(TSE:7966)-

Lintec Corp. s igned defini tive agreement to acquire Mactac

Americas , LLC from Platinum Equity, LLC for approximately $380

mi l l ion on October 23, 2016. On November 28, 2016, the

transaction received early termination notice from FTC.

10/17/2016Enviva Pel lets Sampson,

LLC$174

Enviva Partners , LP

(NYSE:EVA)-

Enviva Partners , LP (NYSE:EVA) agreed to acquire Enviva Pel lets

Sampson, LLC from Enviva Wi lmington Holdings , LLC for

approximately $180 mi l l ion recently.

10/16/2016 AC Propuls ion, Inc. $100

Chongqing Sokon

Industry Group Co., Ltd.

(SHSE:601127)

-

Chongqing Sokon Industry Group Co., Ltd. (SHSE:601127) s igned

letter of intent to acquire AC Propuls ion, Inc. for $100 mi l l ion

October 16, 2016.


14


Source: Capital IQ


Transaction


10/12/2016TAP Automotive Holdings ,

LLC$665

Polaris Industries Inc.

(Delaware)9.0x

Polaris Industries Inc. entered into an agreement to acquire

Transamerican Auto Parts Company from group of shareholders

for approximately $670 mi l l ion on October 11, 2016.

Cons ideration is subject to customary clos ing adjustments .

10/11/2016 The Radiant Group, Inc. $140Digi ta lGlobe, Inc.

(NYSE:DGI)-

Digi ta lGlobe, Inc. (NYSE:DGI) entered into a defini tive

agreement to acquire The Radiant Group, Inc. from Aston

Capita l , LLC for $140 mi l l ion in cash on October 7, 2016.

10/11/2016 Columbus Container Inc. $100Packaging Corporation of

America (NYSE:PKG)3.3x

Packaging Corporation of America (NYSE:PKG) entered into a

defini tive agreement to acquire substantia l ly a l l of the assets

of Columbus Container, Inc. for $100 mi l l ion on October 11, 2016.

10/03/2016 Grand Des ign RV $503 Octavius Corporation 8.4x

Octavius entered into a defini tive agreement to acquire Grand

Des ign RV from Summit Partners for $503 mi l l ion on October 2,

2016. Under the terms of the agreement, Octavius wi l l pay $395

mi l l ion in cash and issue 4.6 mi l l ion shares of Winnebago.

10/03/2016 TIPPER TIE, Inc. $160John Bean Technologies

Corporation (NYSE:JBT)-

John Bean Technologies Corp. (NYSE:JBT) s igned a defini tive

agreement to acquire Tipper Tie from Dover Corporation

(NYSE:DOV) for $160 mi l l ion on October 3, 2016. The purchase

price i s before customary post-clos ing adjustments .

09/28/2016Irvin Automotive

Products , Inc.$175 Piston Automotive, LLC -

Pis ton Automotive, LLC acquired Irvin Automotive Products , Inc.

from Takata Corporation (TSE:7312) for approximately $180

mi l l ion on September 28, 2016. Irvin Automotive had annual

sa les of $500 mi l l ion.

09/22/2016 Kurt Sa lmon US Inc. $166 Accenture plc (NYSE:ACN) -

Accenture plc (NYSE:ACN) entered into an agreement to acquire

Kurt Sa lmon US Inc. from Management Consulting Group PLC

(LSE:MMC) for approximately £130 mi l l ion in cash on September

21, 2016.


15

Peakstone Selected Industrial & Manufacturing Transactions

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Industrial & Manufacturing Industry M&A Update …peakstonegroup.com/.../Peakstone-Industrial-Manufacturing-Industry... · The following materials provide a market overview of the