PwC Deals $22.4B $ Trends and highlights. Executive summary

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1 PwC Deals Global Engineering and Deals Insights Q3 218 Strong infrastructure pipeline will drive the M&A growth amid geopolitical tensions Executive summary Deal activity in the E&C is still searching for a solid foundation upon which to reverse the trends noted over the first three quarters of 218. Despite solid macro trends, including significant economic growth, a robust housing market along with an increased infrastructure investment, M&A transaction values in 218 YTD are down 19% versus 217 YTD. s also show similar patterns during the same period. One positive note, deal value increased in Q3 218 versus Q2 218 despite a decline in deal volume. Continued simmering trade conflicts and related geopolitical tensions are likely to weigh on traditionally strong fundamentals that have driven M&A in the past. There are no immediate signs that these will change anytime soon and the markets may see further turbulence due to key global events such as the US midterm elections and Brexit. E&C sector M&A activity is being weighed down by geopolitical tensions despite very solid underlying macro economic trends. Long-term positive economic fundamentals show no sign of weakening and will help fuel a rebound as tensions ease. Colin McIntyre US Engineering and Deals Leader PwC The ongoing challenges may have a silver lining and create opportunities in the US M&A market as buyers aggressively pursue inorganic growth to increase scale, market position, and profitability. Even with midterm elections, there is reasonable bipartisan support for a long talked about, and still tweeted, infrastructure spending initiative in the US, which will likely fuel further M&A. Trends and highlights Deal value in Q3 218 was $22.4 billion, increased slightly by 5% from last quarter but decreased 14% compared to Q There were 449 deals this quarter, 21% and 31% lower than Q2 218 and Q3 217, respectively. Average deal size was $14.8 million increasing 44% from Q2 218 and 29% from Q An Australian Investor Group s acquiring 51% interest in the WestConnex motorway of Sydney Motorway Corp for $6.7 billion was the only megadeal in this quarter. Asia and Oceania was the M&A target region, both in volume and value. Within-border transactions are dominating the M&A activity both by volume and value, contributing 77% and 91%, respectively. Q3 218 Total deal value $22.4B Total deal volume 449 Average deal size $ YTD versus 217 YTD Q3 218 versus Q % 5% 18% 21% 85% 44%

2 Average disclosed deal value ($mn) Deal value ($bn) Global E&C Deals Insights Q3 218 Deal activity Total deal value and volume Deal value increased slightly by 5% to $22.4 billion in the third quarter of 218 but decreased by 14% from the third quarter of 217. While average deal size increased during both periods, deal volume declined by 21% and 31%, respectively. Though deal value growth was impacted by the trade war, positive infrastructure pipeline and capital gains from tax reform accelerated deal value growth $31 63 $ $ $ $ $27 $27 $26 77 $ $21 $21 $ Largest transaction Science Applications International Corp. agreed to merge with Disclosed deal value (R-Axis) Engility Holdings Inc., a Chantilly-based provider of government consulting services for $2.4 billion. The transaction is expected to close by the end of the fiscal fourth quarter ending February 219. Deals by disclosed value Megadeals* An Australian Investor Group comprising of Australian Super Pty Ltd., Canada Pension Plan Investment Board, Sydney Transport Partners, and Tawreed Investments Ltd. agreed to acquire 51% interest in the WestConnex motorway of Sydney Motorway Corp., a Sydney-based highway and bridge constructor for $6.7 billion $116 $116 $9 $114 $89 $119 $17 $19 $147 $12 $98 $141 Undisclosed <$5 mn $5 mn to $25 mn $25 mn to $1, mn >$1, mn Average deal size (R-Axis) Sector category analysis The category contributed the highest share of deal value and volume in the third quarter of 218. Five of the top ten deals fall into this category. continues to be driven by the and Civil Engineering categories Civil Engineering Deal value ($B) Home Building *Megadeals are defined as deals with disclosed value equal to or greater than $5 billion USD. PwC Deals Global E&C Deals Insights Q

3 4% 35% 35% 34% 33% 37% 63% 55% 52% 53% 52% 21% 33% 32% 56% 33% 49% 63% Global E&C Deals Insights Q3 218 Financial vs. strategic investors Strategic investors continue to account for a majority share of deal activity in the sector. Fifty-four percent of value and 75% of volume was attributed to transactions between sector participants this quarter. Financial buyer s share of total value increased to 46% this quarter as they expect near-term profits, especially by investing in construction companies. 25 Deal value ($B) Strategic investors Financial investors 8% Financial investor share of M&A activity 2 7% 15 6% 1 5% 46% 4% % 2% 1% 25% 2 % Financial buyer share of total value Financial buyer share of total volume Regional analysis The Asia and Oceania, North America, and UK and Eurozone regions continue to have the most notable contributions to deal volume. Asia and Oceania region was the most favored destination for M&A targets, both in volume and value. Domestic transactions continue to drive both M&A volume and value in Q3 218, with 91% to the total deal value. Share of deal volume by acquirer region Share of deal value by acquirer region 1% 1% 9% 9% 8% 8% 7% 7% 6% 6% 5% 5% 4% 4% 3% 2% 1% % 3% 2% 1% % PwC Deals Global E&C Deals Insights Q

4 42% 39% 37% 34% 35% 37% 39% 63% 55% 52% 53% 43% 21% 31% 29% 49% 25% 49% 64% Global E&C Deals Insights Q3 218 Regional analysis (continued) Share of disclosed deal volume by target region Share of disclosed deal value by target region 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % E&C deals by region North America Local: 394 deals, $14.4 billion Inbound: 4 deals, $9.8 billion Outbound: 4 deals, $.4 billion South America Local: 26 deals, $.4 billion Inbound: 5 deals, $.2 billion Outbound: 3 deals, $ billion UK and Eurozone Local: 29 deals, $7.9 billion Inbound: 57 deals, $.9 billion Outbound: 7 deals, $8.8 billion Europe ex-uk and Eurozone Local: 164 deals, $.7 billion Inbound: 35 deals, $.4 billion Outbound: 23 deals, $.7 billion Africa/Undisclosed Local: 9 deals, $.2 billion Inbound: 18 deals, $.1 billion Outbound: 4 deals, $.1 billion Asia and Oceania Local: 561 deals, $29.8 billion Inbound: 51 deals, $.3 billion Outbound: 3 deals, $1.7 billion E&C deals outlook M&A activity in the E&C sector continues to underperform. With 1,65 deals in 218 YTD, the activity declined by 19% over the same period in 217 although the industry fundamentals remain strong. Key factors such as favorable tax policy leading to strong balance sheets, continued availability of low-cost debt financing and a new infrastructure bill in the US are making the construction market more attractive for investment. These, however, continue to be weighed down by ongoing trade tensions and tariff setting which are ramping up the geopolitical tensions. The current choppiness does not show any sign of abating and is likely to limit M&A activity, particularly cross-border transactions for the rest of 218. Heading into 219, the underlying fundamentals will continue to be favorable and will lead to more M&A activity as geopolitical tensions subside. PwC Deals Global E&C Deals Insights Q

5 Global E&C Deals Insights Q3 218 Top 1 E&C deals 218 Announced Target name Target nation Acquirer name Acquirer nation Status Deal value 1 Category 8/31/18 Sydney Motorway Corp.- WestConnex Motorway Australia Investor Group Australia Pending 6,755 3/26/18 USG Corp. United States Gebr Knauf KG Germany Pending 6,12 3/14/18 Hochtief AG Germany Atlantia SpA Italy Pending 3,97 4/27/18 SRS Distribution Inc. United States Leonard Green & Partners LP United States Pending 3, 9/1/18 Engility Holdings Inc. United States Science Applications International Corp. United States Pending 2,395 Civil Engineering 5/2/18 Century Textiles & Industries Ltd.- Cement Business India UltraTech Cement Ltd. India Pending 1,234 2/12/18 Binani Cement Ltd. India UltraTech Cement Ltd. India Pending 1,118 4/19/18 ESCO Corp. United States Weir Group PLC United Kingdom Completed 1,51 4/27/18 Nuova Argo Finanziaria SpA Italy Ardian Infrastructure Fund IV France Pending 985 1/24/18 Katerra Inc. United States Investor Group Japan Completed 865 Civil Engineering Top 1 E&C deals 217 Announced Target name Target nation Acquirer name Acquirer nation Status Deal value 1 Category 1/16/17 Atlas Copco AB-Mining & Civil Engineering Business Sweden Shareholders Sweden Completed 12,331 1/3/17 CalAtlantic Group Inc. United States Lennar Corp. United States Completed 5,79 Home Building 6/1/17 WIRTGEN GROUP Holding GmbH Germany Deere & Co. United States Completed 5,173 12/29/17 Zhongtian Urban Investment Group Co. Ltd. China Guiyang Jinshiqi Industrial Investment Co. Ltd. China Completed 3,766 9/2/17 Ash Grove Cement Co. United States CRH PLC Ireland-Rep Completed 3,5 8/2/17 CH2M Hill Cos Ltd. United States Jacobs Engineering Group Inc. United States Completed 3,215 Civil Engineering 3/13/17 Amec Foster Wheeler PLC United Kingdom John Wood Group PLC United Kingdom Completed 2,76 Civil Engineering 8/24/17 Allied Building Products Corp. United States Beacon Roofing Supply Inc. United States Completed 2,652 4/3/17 WS Atkins PLC United Kingdom SNC-Lavalin (GB) Holdings Ltd. United Kingdom Completed 2,613 Civil Engineering 9/25/17 Ge Industrial Solutions Inc. United States ABB Ltd. Switzerland Pending 2,6 Civil Engineering Top 1 E&C deals 216 Announced Target name Target nation Acquirer name Acquirer nation Status Deal value 1 Category 2/26/16 KUKA AG Germany MECCA International (BVI) Ltd. British Virgin Islands Completed 4,381 9/1/16 China National Petroleum Corp.- Assets China Xinjiang Dushanzi Tianli High & New Tech Co. Ltd. China Completed 4,146 Civil Engineering 7/21/16 Joy Global Inc. United States Komatsu America Corp. United States Completed 2,778 6/21/16 SolarCity Corp. United States Tesla Motors Inc. United States Completed 2,59 6/29/16 BBMG Corp.-Assets China Tangshan Jidong Cement Co. Ltd. China Pending 2,587 Jaiprakash Associates Ltd.-Cement 2/28/16 Units (6) India UltraTech Cement Ltd. India Completed 2,41 6/21/16 DH Services Luxembourg Holding SARL Luxembourg Kion Group AG Germany Completed 2,1 2/3/16 RONA Inc. Canada Lowe s Cos Inc. United States Completed 1,943 11/21/16 Headwaters Inc. United States Boral Ltd. Australia Completed 1,798 8/8/16 Linea Amarilla SAC Peru VINCI Highways SAS France Completed 1,651 ¹ In Million USD PwC Deals Global E&C Deals Insights Q

6 About PwC s Deals Practice Colin McIntyre US Engineering & Deals Leader New York, NY colin.mcintyre@pwc.com For a deeper discussion on deal considerations, please contact one of our practice leaders or your local Deals partner: Michael Sobolewski US Engineering & Leader Detroit, Michigan michael.sobolewski@pwc.com Jonathan Hook Global Engineering & Leader London, UK jonathan.hook@uk.pwc.om +44 () Smart deal makers are perceptive enough to see value others have missed, flexible enough to adjust for the unexpected, aggressive enough to win favorable terms in a competitive environment, and circumspect enough to envision the challenges they will face from the moment the contract is signed. But in a business environment where information can quickly overwhelm, the smartest deal makers look to experienced advisors to help them fashion a deal that works. PwC s Deals group can advise engineering and construction (E&C) companies and E&C-focused private equity firms on key M&A decisions, from identifying acquisition or divestiture candidates and performing detailed buy-side diligence, to developing strategies for capturing post-deal profits and exiting a deal through a sale, carve-out, or IPO. With more than 2, deals practitioners worldwide, we can deploy seasoned teams that combine deep engineering and construction industry skills with local market knowledge virtually anywhere your company operates or executes transactions. Although every deal is unique, most will benefit from the broad experience we bring to delivering strategic M&A advice, due diligence, transaction structuring, M&A tax, merger integration, valuation, and post-deal services. In short, we offer integrated solutions, tailored to your particular deal situation and designed to help you extract peak value within your risk profile. Whether your focus is deploying capital through an acquisition or joint venture, raising capital through an IPO or private placement, or harvesting an investment through the divesture process, we can help. For more information about M&A and related services in the global E&C industry, please visit or About the data The information presented in this report is an analysis of deals in the global E&C industry. Deal information was sourced from Thomson Reuters and includes deals for which targets have an SIC code that falls into one of 6 E&C industry groups. Certain adjustments have been made to the information to exclude transactions which are not specific to E&C or incorporate relevant transactions that were omitted from the SIC industry codes. This analysis includes all individual mergers, acquisitions, and divestitures for disclosed or undisclosed values, leveraged buyouts, privatizations, minority stake purchases, and acquisitions of remaining interest announced between October 1, 215 and September 3, 218, with a deal status of completed, partially completed, pending, pending regulatory and pending completion, and excludes all rumors and seeking buyers. Additionally, transactions that are spin-offs through distribution to existing shareholders are included. Percentages and values are rounded to the nearest whole number which may result in minor differences when summing totals. 218 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. Disclaimer: This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.