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
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
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
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
$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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4
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 - $999M 5% 28% 3% 7%
Total Middle Market 100% 100% 100% 100%
Q3 2015 Q3 2016 % Change
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Recent M&A Activity – Industrials
Select Announced M&A Transactions (Q3 2016)
5
Source: S&P Capital IQ.
($ 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 $200.2 0.6x 8.5x
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Announced Date Target Buyer Industry
Enterprise
Value ($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 $1,500.0 NA NA
Recent M&A Activity – Industrials
Select Announced M&A Transactions (Q3 2016)
6
Source: S&P Capital IQ.
($ in millions)
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
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
Electrical Equipment
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.
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Announced Date Target Buyer Industry
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 $215 million.
During Q3 2016, financial sponsors were most active in the Industrial Services and Machinery sectors, announcing 23 and 15 transactions respectively.
Select Private Equity Transactions – Industrials (Q3 2016)
Financial Sponsors - Sector Focus
Private Equity Activity – Industrials
8
Commentary
Source: S&P Capital IQ.
($ in millions)
Nu
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3
23
15
13
6
0
5
10
15
20
25
30
Construction ElectricalEquipment
IndustrialServices
Machinery Materials Transportation
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
90%
100%
110%
120%
130%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Electrical Equipment
80%
90%
100%
110%
120%
130%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Machinery
90%
100%
110%
120%
130%
140%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Construction
Industry Sector Overview – Recent Stock Price Performance
Electrical Equipment
Commentary
9
Construction
Machinery
Source: S&P Capital IQ
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%
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
80%
90%
100%
110%
120%
130%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Industrial Conglomerates
90%
100%
110%
120%
130%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Materials
80%
90%
100%
110%
120%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Transportation
90%
100%
110%
120%
130%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
S&P 500 Industrial Services
Industry Sector Overview – Recent Stock Price Performance
Industrial Conglomerates
Industrial Services
10
Transportation
Source: S&P Capital IQ
Materials
21.8%
12.7%
12.7%
18.2%
12.7%
12.7%
5.6% 12.8%
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Construction and Engineering
Industry Sector Overview – Public Company Analysis
Building Products
($ in millions, except per share)
11
Construction
Source: S&P Capital IQ.
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
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $383 7.7% 5.4% 0.4x 9.1x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
12
Source: S&P Capital IQ.
Electrical Equipment
($ in millions, except per share)
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $385 36.4% 16.8% 2.3x 12.5x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
Construction and Farm Machinery
($ in millions, except per share)
13
Industrial Machinery
Machinery
Source: S&P Capital IQ.
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $1,398 34.0% 16.2% 1.9x 11.7x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
Trading Companies and Distributors
($ in millions, except per share)
14
Machinery
Source: S&P Capital IQ.
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $410 28.2% 13.7% 1.4x 10.6x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
Environmental and Facilities Services
($ in millions, except per share)
15
Industrial Services
Diversified Support Services
Source: S&P Capital IQ. *Excluded from average and median calculation.
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $343 31.4% 19.4% 2.7x 12.1x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
Air Freight and Logistics
($ in millions, except per share)
16
Transportation
Road and Rail
Source: S&P Capital IQ.
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $1,109 32.8% 27.6% 2.3x 9.3x
LTM
Enterprise Value /
LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
Airlines
($ in millions, except per share)
17
Transportation
Marine
Source: S&P Capital IQ.
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $305 29.6% 19.5% 1.7x 8.0x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
($ in millions, except per share)
18
Industrial Conglomerates
Source: S&P Capital IQ. * Note: General Electric Co. enterprise value and LTM financials excludes GE Capital
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $10,155 29.8% 17.9% 2.7x 11.4x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
19
Materials
($ in millions, except per share)
Chemicals
Metals and Mining
Source: S&P Capital IQ.
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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 $2,632 21.6% 18.2% 2.6x 11.5x
Enterprise Value /
LTM LTM Margins LTM
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
Industry Sector Overview – Public Company Analysis
20
Source: Capital IQ.
Materials
($ in millions, except per share)
Paper and Forest Products
Closing Price % of 52 Equity Enterprise
Company Ticker 9/30/16 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA
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
HYDE PARK CAPITAL Investment Banking | Mergers & Acquisitions | Capital Raising
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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
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