Industrials M&A Report Q1 2017

Transcription

1 John Hill Senior Managing Director (813) John McDonald Senior Managing Director (813) Keith Hodgdon Managing Director (813) Industrials M&A Report Q Greg Bosl Vice President (813) Jami Gold Vice President (813) Charlie Hendrick Vice President (813) Jeffrey Hendricks Vice President (678) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC

2 Capital Markets Overview Commentary Major market indices including the Nasdaq, S&P 500, and the S&P Global Industrials Sector Index increased 20.3%, 14.0%, and 12.3%, respectively, over the 12-month period ended March 31, The table on the right illustrates select public offerings completed in Q JELD-WEN Holding, Inc. (NYSE:JELD), which manufacturers doors and windows, raised $575 million in the largest IPO during the quarter. The Electrical Equipment, Machinery and Industrial Conglomerates sectors were the industry s leaders with respect to valuation during the 1st quarter, trading at EBITDA multiples of 14.2x, 13.2x and 13.2x respectively. Public Market Performance (LTM) Select Public Offerings Industrials (Q1 2017) ($ in millions) Transaction Transaction Offer Date Issuer Industry Sector Type Value 02/15/17 TransUnion Industrial Services Secondary $726 02/23/17 Watsco, Inc. Industrial Services Secondary $610 02/28/17 Icahn Enterprises Industrial Services Secondary $600 02/09/17 Cliffs Natural Resources, Inc. Materials Secondary $591 01/26/17 JELD-WEN Holding, Inc. Materials IPO $575 01/31/17 Univar, Inc. Industrial Services Secondary $435 01/26/17 REV Group, Inc. Machinery IPO $275 01/05/17 Summit Materials, Inc. Materials Secondary $241 02/16/17 Atkore International Group, Inc. Electrical Equipment Secondary $225 02/09/17 Foundation Building Materials, Inc. Materials IPO $179 Public Company Market Performance by Sector 130% 120% 110% 100% 20.3% 14.0% 12.3% Median Change in Stock Price LTM Industry Sector 3 Months 12 months Revenue EBITDA Construction 4.2% 16.1% 1.7x 10.1x Electrical Equipment 5.1% 14.8% 2.4x 14.2x Machinery 5.7% 27.5% 2.0x 13.2x Industrial Services 6.4% 13.4% 2.7x 11.4x Transportation 1.9% 18.5% 1.7x 8.6x Industrial Conglomerates 1.3% 4.7% 3.3x 13.2x 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Materials 5.2% 18.9% 2.8x 11.3x S&P 500 S&P Global Industrials Sector Index Nasdaq Source: S&P Capital IQ 2

3 Annual Middle Market M&A Activity Industrials Commentary Middle Market M&A Transactions by Deal Size As detailed in the charts below, U.S. Middle Market M&A activity, or deal volume, in the Industrials industry decreased 17% to 290 closed transactions throughout 2016, down from 348 during the prior year. The total value of completed Middle Market M&A transactions in the Industrials industry fell 10% during 2016 to $38.2 billion, down from $42.7 billion in Transactions valued between $500 million and $999 million experienced the largest declines in 2016, with transaction volume and value falling 35% and 34%, respectively, compared to the prior year. ($ in billions) % Change Deal Size Volume Value Volume Value Volume Value Less than $100M 238 $ $7.2 (21%) (13%) $100 - $499M 90 $ $21.8 (2%) 6% $500 - $999M 20 $ $9.2 (35%) (34%) Total Middle Market 348 $ $38.2 (17%) (10%) % of Middle Market Less than $100M 68% 19% 65% 19% $100 - $499M 26% 48% 30% 57% $500 - $999M 6% 33% 5% 24% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Annual Trends: VOLUME U.S. Middle Market M&A Activity Annual Trends: VALUE Total Transaction Volume Total Transaction Value ($ in billions) Less than $100M $100 - $499M $500 - $999M Less than $100M $100 - $499M $500 - $999M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion) Screen excludes Aerospace and Defense. 3

4 Quarterly Middle Market M&A Activity Industrials Commentary Middle Market M&A Transactions by Deal Size As detailed in the table on the right, Middle Market M&A activity in the Industrials industry decreased 15% during Q compared to Q1 2016; while the value of completed transactions rose 2% to $9.3 billion. Middle Market M&A volume in the Industrials industry has remained relatively flat for five consecutive quarters, although we expect deal volume will increase throughout 2017 because of the new administration s focus on domestic infrastructure. During Q1 2017, deals valued between $500 - $999 million buoyed the industrials middle market with 5 closed deals valued at a combined $3.4 billion, a 25% increase in volume and a 36% increase in value, compared to Q U.S. Middle Market M&A Activity Quarterly Trends: VOLUME ($ in billions) Q Q % Change Deal Size Volume Value Volume Value Volume Value Less than $100M 46 $ $1.4 (22%) (28%) $100 - $499M 18 $ $4.5 (6%) (4%) $500 - $999M 4 $2.5 5 $3.4 25% 36% Total Middle Market 68 $ $9.3 (15%) 2% % of Middle Market Less than $100M 68% 21% 62% 14% $100 - $499M 26% 52% 29% 49% $500 - $999M 6% % 27% 9% 37% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Quarterly Trends: VALUE Total Transaction Volume Total Transaction Value ($ in billions) Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion) Screen excludes Aerospace and Defense. 4

5 Recent M&A Activity Industrials Select Announced M&A Transactions (Q1 2017) ($ in millions) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 03/31/17 TRC Companies, Inc. New Mountain Capital Industrial Services $ x 14.6x 03/29/17 Hoover Treated Wood Products, Inc. Graham Holdings Co. Materials NA NA NA 03/28/17 Sirrus, Inc. Nippon Shokubai Co., Ltd. Materials NA NA NA 03/28/17 Florida East Coast Holdings Corp. Grupo México Transportes S.A. de C.V. Transportation $2,100.0 NA NA 03/16/17 DuBois Chemicals, Inc. The Jordan Company / The Riverside Company Materials NA NA NA 03/15/17 Dorner Mfg. Corp. EQT Partners Machinery NA NA NA 03/13/17 United States Marble, Inc. Clio Holdings, LLC Materials NA NA NA 03/13/17 Angelo's Supplies, Inc. SiteOne Landscape Supply, Inc. Industrial Services NA NA NA 03/13/17 Loveman Steel Corp. Plastics Machinery Group, LLC Materials NA NA NA 03/08/17 GE Osmonics, Inc. Caisse de dépôt et placement du Québec; SUEZ SA Machinery $3, x 10.0x 03/07/17 Tanker Services, Inc. Lakeshore Railcar Services, LLC Industrial Services NA NA NA 03/02/17 Grace Darex Packaging Technologies Henkel AG & Co. KGaA Materials $1, x NA 03/01/17 Acme Building Materials, Inc. Beacon Roofing Supply, Inc. Industrial Services NA NA NA 02/28/17 Paramount Precision Products, Inc. Global Manufacturing Industries, LLC Materials NA NA NA 02/28/17 Chicago Bridge & Iron Company N.V., (Capital Services Business) Veritas Capital Industrial Services $ x NA 02/23/17 Permian Basin Sand Co. LLC Hi-Crush Partners Materials $275.5 NA NA Source: S&P Capital IQ Screen excludes Aerospace and Defense. 5

6 Recent M&A Activity Industrials Select Announced M&A Transactions (Q1 2017) ($ in millions) Enterprise EV / EV / Announced Date Target Buyer Industry Value ($mm) Revenue EBITDA 02/22/17 Fire & Life Safety America, Inc. Blue Point Capital Partners Industrial Services NA NA NA 02/02/17 Bastian Solutions, LLC Toyota Industries Corp. Machinery NA NA NA 01/31/17 Crane Service & Inspections, Inc. Crane 1 Services, Inc. Industrial Services NA NA NA 01/26/17 Power Distribution, Inc. Dunes Point Capital, LLC Electrical Equipment $ x NA 01/26/17 Arrow Tru-Line, Inc. Sun Capital Partners, Inc. Materials NA NA NA 01/25/17 North American Recycling, Inc. Metro Group, Inc. Materials NA NA NA 01/25/17 NES Rentals Holdings, Inc. United Rentals (North America), Inc. Industrial Services $ x 6.2x 01/23/17 Carolina Seal, Inc. Trelleborg Sealing Solutions US, Inc. Machinery NA NA NA 01/23/17 Alpha Holding Co., LLC Plains Pipeline Construction $1,215.0 NA NA 01/11/17 Paragon Molds Corp. Brueckner Group USA, Inc. Machinery NA NA NA 01/11/17 CFC Logistics, Inc. United States Cold Storage, Inc. Industrial Services NA NA NA 01/10/17 Liquid Light Corp. Avantium Technologies Machinery NA NA NA 01/06/17 Ellis Paint Co. Axalta Coating Systems Ltd. Materials NA NA NA 01/06/17 American Fire Protection Group, Inc. CHA Consulting, Inc. Industrial Services NA NA NA 01/05/17 Valet Parking Services, Inc. Towne Park, LLC Industrial Services NA NA NA 01/04/17 Seal Industries, Inc. PSC Industrial Outsourcing, Inc. Industrial Services NA NA NA Source: S&P Capital IQ. Screen excludes Aerospace and Defense. 6

7 M&A Activity by Industrial Sector U.S. Middle Market M&A Activity by Industrial Sector: VALUE % Change ($ in billions) Construction $0.2 $1.1 85% Electrical Equipment $0.4 $0.6 81% Machinery $0.2 $1.4 88% Industrial Services $1.0 $3.1 67% Transportation $0.6 $1.1 83% Materials $2.5 $ % $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 Q Q U.S. Middle Market M&A Activity by Industrial Sector: VOLUME % Change Construction % Electrical Equipment % Machinery % Industrial Services % Transportation % Materials % Q Q Source: S&P Capital IQ (includes all closed deals with disclosed deal value between $10 million and $1 billion). Screen excludes Aerospace and Defense. 7

8 Private Equity Activity Industrials Commentary Financial sponsors were active across many sectors of the Industrials industry, announcing a number of acquisitions during the 1st quarter of 2017, as shown in the chart below. Several notable private equity backed transactions were announced during the 1st quarter including Veritas Partners purchase of Chicago Bridge & Iron Co. for $755 million; New Mountain Capital s announced acquisition of TRC Companies, Inc. for $658; and Morgan Stanley Private Equity s acquisition of Fisher Container Corp. ($ in millions) Select Private Equity Transactions Industrials (Q1 2017) Announced Date Target Buyer Industry Enterprise Value 03/31/17 TRC Companies, Inc. New Mountain Capital Industrial Services $658 03/28/17 Fastener Distribution Holdings, LLC Audax Group Industrial Services NA 03/22/17 Cole-Parmer Instrument Co., LLC Golden Gate Capital Industrial Services NA 03/18/17 Industrial Lighting Products, Inc. Harbour Group Electrical Equipment NA 03/16/17 DuBois Chemicals, Inc. The Jordan Co. / The Riverside Co. Materials 03/15/17 Dorner Mfg. Corp. EQT Partners AB Machinery NA NA During Q1 2017, financial sponsors were most active in the Industrial Services and Materials sectors, announcing 23 and 19 transactions respectively. Financial Sponsors Sector Focus 03/10/17 Total Safety U.S., Inc. Littlejohn & Co. Industrial Services NA 03/10/17 Material Handling Services, LLC Harvest Partners Industrial Services NA 03/08/17 GE Osmonics, Inc. Caisse de dépôt et placement du Québec; SUEZ SA Machinery $3,375 03/01/17 U.S. Industrial Holdings, LLC Rock Hill Capital Construction NA 30 02/28/17 Chicago Bridge & Iron Co. Veritas Capital Industrial Services $755 Number of Transactions /22/17 Fire & Life Safety America, Inc. Blue Point Capital Partners Industrial Services NA 02/07/17 PharmaLogics Recruiting, LLC Webster Capital Industrial Services NA 02/06/17 TIME Manufacturing Co., Inc. The Sterling Group Machinery NA 02/03/17 Fisher Container Corp. Morgan Stanley Private Equity Materials NA 02/03/17 Steele Solutions, Inc. Merit Capital Partners Machinery $55 01/26/17 Power Distribution, Inc. Dunes Point Capital Electrical Equipment $204 0 Construction Electrical Equipment Industrial Services Machinery Materials Transportation 01/09/17 Xcentric Mold & Engineering, Inc. The Riverside Co. Materials NA 01/03/17 Tradesmen Int., LLC The Blackstone Group Industrial Services NA Source: S&P Capital IQ. 8

9 Industry Sector Overview Recent Stock Price Performance Commentary Construction 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 March 31, The shaded section is the most recent 3- month period (Q1) for each sector and relative to the S&P % 110% 16.1% 14.0% For the 12-month period ended March 31, 2017, the industrials industry had a strong performance with the Machinery, Materials, and Transportation sectors increasing the most at 27.5%, 18.9%, and 18.5%, respectively. 100% During Q1 2017, all of the sectors increased, led by the Industrial Services and Machinery sectors, which increased 6.4% and 5.7%, respectively. 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 S&P 500 Construction Electrical Equipment Machinery 120% 140% 14.8% 14.0% 130% 27.5% 110% 120% 14.0% 100% 110% 100% 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 S&P 500 Electrical Equipment 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 S&P 500 Machinery Source: S&P Capital IQ 9

10 Industry Sector Overview Recent Stock Price Performance Industrial Services Transportation 120% 130% 14.0% 110% 13.4% 120% 18.5% 14.0% 110% 100% 100% 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 S&P 500 Industrial Services S&P 500 Transportation Industrial Conglomerates Materials 120% 130% 14.0% 120% 18.9% 110% 4.7% 110% 14.0% 100% 100% 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 90% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 S&P 500 Industrial Conglomerates S&P 500 Materials Source: S&P Capital IQ 10

11 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Building Products Construction LTM LTM Margins LTM Masco Corp. MAS $ % $11,217 $13,218 $7,357 $2,456 $1, % 16.1% 1.8x 11.1x Fortune Brands Home & Security, Inc. FBHS $ % $9,602 $10,783 $4,985 $1,809 $ % 15.5% 2.2x 13.9x Owens Corning OC $ % $7,082 $9,112 $5,677 $1,416 $1, % 18.9% 1.6x 8.5x A. O. Smith Corp. AOS $ % $9,046 $8,615 $2,686 $1,119 $ % 19.6% 3.2x 16.4x Lennox Int., Inc. LII $ % $7,311 $8,129 $3,720 $1,104 $ % 14.3% 2.2x 15.3x USG Corp. USG $ % $4,696 $5,290 $3,017 $707 $ % 17.9% 1.8x 9.8x Armstrong World Industries, Inc. AWI $ % $2,565 $3,297 $1,235 $376 $ % 18.6% 2.7x 14.4x Simpson Manufacturing Co., Inc. SSD $ % $2,081 $1,854 $861 $412 $ % 19.6% 2.2x 11.0x Average 94% $6,700 $7,537 $3,692 $1,175 $ % 17.6% 2.2x 12.5x Median 95% $7,197 $8,372 $3,368 $1,112 $ % 18.2% 2.2x 12.5x Construction and Engineering AECOM Technology Corp. ACM $ % $5,594 $9,187 $17,472 $672 $ % 5.2% 0.5x 10.1x Fluor Corp. FLR $ % $7,415 $7,171 $19,037 $790 $ % 4.7% 0.4x 8.1x Jacobs Engineering Group, Inc. JEC $ % $6,714 $6,433 $10,668 $1,747 $ % 6.0% 0.6x 10.0x EMCOR Group, Inc. EME $ % $3,853 $3,813 $7,552 $1,038 $ % 5.2% 0.5x 9.6x KBR, Inc. KBR $ % $2,134 $2,279 $4,268 $112 $25 2.6% 0.6% 0.5x 91.2x* Tutor Perini Corp. TPC $ % $1,586 $2,199 $4,973 $457 $ % 5.4% 0.4x 8.2x Average 89% $4,549 $5,180 $10,661 $803 $ % 4.5% 0.5x 9.2x Median 87% $4,723 $5,123 $9,110 $731 $ % 5.2% 0.5x 9.6x Source: S&P Capital IQ. *Excluded from average and median calculation. 11

12 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Electrical Equipment Rockwell Automation, Inc. ROK $ % $20,301 $19,718 $5,943 $2,505 $1, % 20.1% 3.3x 16.5x Ametek, Inc. AME $ % $12,640 $14,264 $3,840 $1,303 $1, % 26.2% 3.7x 14.2x Acuity Brands, Inc. AYI $ % $8,966 $8,859 $3,433 $1,478 $ % 17.0% 2.6x 15.2x Hubbell, Inc. HUBB $ % $6,687 $7,242 $3,505 $1,131 $ % 17.1% 2.1x 12.1x Woodward, Inc. WWD $ % $4,311 $4,952 $2,042 $553 $ % 16.1% 2.4x 15.1x Belden, Inc. BDC $ % $2,945 $3,718 $2,357 $995 $ % 18.2% 1.6x 8.6x* Generac Holdings, Inc. GNRC $ % $2,437 $3,458 $1,444 $521 $ % 18.4% 2.4x 13.0x Brady Corp. BRC $ % $1,979 $2,016 $1,117 $561 $ % 14.0% 1.8x 12.9x Average 90% $7,533 $8,028 $2,960 $1,131 $ % 18.4% 2.5x 14.1x Median 95% $5,499 $6,097 $2,895 $1,063 $ % 17.7% 2.4x 14.2x Source: S&P Capital IQ. *Excluded from average and median calculation. 12

13 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Machinery Construction and Farm Machinery Caterpillar, Inc. CAT $ % $54,309 $84,440 $38,898 $8,295 $5, % 13.9% 2.2x 15.6x Deere & Co. DE $ % $34,525 $66,365 $26,545 $6,053 $3, % 14.6% 2.5x 17.1x PACCAR, Inc. PCAR $ % $23,664 $30,457 $16,971 $2,569 $2, % 14.0% 1.8x 12.8x Cummins, Inc. CMI $ % $25,604 $26,379 $17,509 $4,452 $2, % 13.2% 1.5x 11.4x The Toro Company TTC $ % $6,970 $7,150 $2,422 $885 $ % 16.8% 3.0x 17.6x AGCO Corp. AGCO $ % $4,863 $6,527 $7,479 $1,531 $ % 7.7% 0.9x 11.3x Oshkosh Corp. OSK $ % $5,147 $5,562 $6,333 $1,093 $ % 8.4% 0.9x 10.5x Journey Energy, Inc. JOY $ % $100 $159 $58 $29 $ % 122.5% 2.8x 2.2x Manitowoc Co., Inc. MTW $ % $785 $997 $1,613 $253 $ % 1.0% 0.6x 66.4x* Average 93% $17,330 $25,337 $13,092 $2,796 $1, % 23.6% 1.8x 12.3x Median 93% $6,970 $7,150 $7,479 $1,531 $ % 13.9% 1.8x 12.1x Industrial Machinery Illinois Tool Works, Inc. ITW $ % $47,305 $51,840 $13,599 $5,703 $3, % 26.0% 3.8x 14.7x Eaton Corp. ETN $ % $33,849 $41,800 $19,747 $6,351 $3, % 16.1% 2.1x 13.1x Stanley Black & Decker, Inc. SWK $ % $19,692 $22,990 $11,407 $4,267 $1, % 16.4% 2.0x 12.3x Parker Hannifin Corp. PH $ % $21,774 $22,824 $11,200 $2,625 $1, % 14.3% 2.0x 14.2x Dover Corp. DOV $ % $12,586 $15,253 $6,794 $2,487 $1, % 16.4% 2.2x 13.7x Flowserve Corp. FLS $ % $6,342 $7,629 $3,991 $1,296 $ % 12.0% 1.9x 16.0x Donaldson Co., Inc. DCI $ % $6,132 $6,446 $2,269 $790 $ % 17.2% 2.8x 16.5x The Timken Co. TKR $ % $3,581 $4,135 $2,670 $706 $ % 14.5% 1.5x 10.7x Average 97% $18,908 $21,615 $8,960 $3,028 $1, % 16.6% 2.3x 13.9x Median 97% $16,139 $19,039 $8,997 $2,556 $1, % 16.3% 2.1x 14.0x Source: S&P Capital IQ. *Excluded from average and median calculation. 13

14 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Machinery Trading Companies and Distributors United Rentals, Inc. URI $ % $10,802 $18,255 $5,808 $2,451 $1, % 29.5% 3.1x 10.6x W.W. Grainger, Inc. GWW $ % $13,993 $16,109 $10,172 $4,089 $1, % 14.2% 1.6x 11.2x Fastenal Co. FAST $ % $14,896 $15,152 $4,023 $1,991 $ % 22.8% 3.8x 16.5x MSC Industrial Direct Co., Inc. MSM $ % $6,047 $6,556 $2,863 $1,284 $ % 15.7% 2.3x 14.6x Watsco, Inc. WSO $ % $4,670 $5,096 $4,221 $1,035 $ % 8.7% 1.2x 13.9x WESCO International, Inc. WCC $ % $3,362 $4,663 $7,336 $1,448 $ % 5.3% 0.6x 12.0x EnerSys ENS $ % $3,473 $3,647 $2,352 $646 $ % 14.1% 1.6x 11.0x Applied Industrial Technologies, Inc. AIT $ % $2,431 $2,696 $2,500 $708 $ % 8.2% 1.1x 13.2x Titan Machinery, Inc. TITN $ % $327 $635 $1,213 $214 $ % 2.2% 0.5x 21.7x* Average 93% $6,667 $8,090 $4,499 $1,541 $ % 13.4% 1.8x 12.9x Median 93% $4,670 $5,096 $4,023 $1,284 $ % 14.1% 1.6x 12.6x Source: S&P Capital IQ. *Excluded from average and median calculation. 14

15 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Industrial Services Environmental and Facilities Services Waste Management, Inc. WM $ % $32,559 $41,860 $13,609 $5,123 $3, % 27.3% 3.1x 11.3x Republic Services, Inc. RSG $ % $21,631 $29,225 $9,388 $3,624 $2, % 28.3% 3.1x 11.0x Waste Connections, Inc. WCN $ % $13,591 $17,079 $3,376 $1,418 $1, % 31.4% 5.1x 16.1x Stericycle, Inc. SRCL $ % $7,096 $10,013 $3,562 $1,591 $ % 22.8% 2.8x 12.3x Rollins, Inc. ROL $ % $8,103 $7,961 $1,573 $801 $ % 19.7% 5.1x 25.6x* Covanta Holding Corp. CVA $ % $2,025 $4,576 $1,699 $541 $ % 19.3% 2.7x 14.0x Clean Harbors, Inc. CLH $ % $3,200 $4,526 $2,755 $822 $ % 14.2% 1.6x 11.6x Tetra Tech, Inc. TTEK $ % $2,392 $2,654 $1,998 $338 $ % 10.5% 1.3x 12.6x Sims Metal Management, Ltd. ASX:SGM $ % $1,886 $1,652 $3,351 $476 $ % 4.0% 0.5x 12.3x Casella Waste Systems, Inc. CWST $ % $582 $1,088 $565 $183 $ % 19.1% 1.9x 10.1x Schnitzer Steel Industries, Inc. SCHN $ % $564 $747 $1,366 $176 $ % 5.5% 0.5x 10.0x Average 90% $8,512 $11,034 $3,931 $1,372 $ % 18.4% 2.5x 12.1x Median 94% $3,200 $4,576 $2,755 $801 $ % 19.3% 2.7x 11.9x Diversified Support Services Iron Mountain, Inc. IRM $ % $8,820 $14,890 $3,511 $1,956 $1, % 31.5% 4.2x 13.5x Cintas Corp. CTAS $ % $13,619 $14,617 $5,144 $2,275 $ % 19.4% 2.8x 14.7x KAR Auction Services, Inc. KAR $ % $6,074 $9,623 $3,150 $1,323 $ % 23.5% 3.1x 13.0x Avery Dennison Corp. AVY $ % $7,310 $8,390 $6,087 $1,700 $ % 12.2% 1.4x 11.3x Copart, Inc. CPRT $ % $7,331 $7,868 $1,375 $616 $ % 35.5% 5.7x 16.1x* Corrections Corp. of America CXW $ % $3,701 $5,139 $1,850 $574 $ % 25.5% 2.8x 10.9x Pitney Bowes, Inc. PBI $ % $2,477 $5,040 $3,407 $1,892 $ % 22.0% 1.5x 6.7x The Brink's Co. BCO $ % $2,705 $2,995 $3,021 $596 $ % 9.3% 1.0x 10.7x R.R. Donnelley & Sons Co. RRD $ % $848 $2,602 $6,896 $1,377 $ % 6.8% 0.4x 5.5x Average 82% $5,876 $7,907 $3,827 $1,368 $671 38% 21% 2.5x 10.8x Median 93% $6,074 $7,868 $3,407 $1,377 $740 42% 22% 2.8x 11.1x Source: S&P Capital IQ. *Excluded from average and median calculation. 15

16 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Transportation Air Freight and Logistics LTM LTM Margins LTM United Parcel Service, Inc. UPS $ % $95,175 $106,736 $60,906 $12,314 $7, % 12.6% 1.8x 13.9x FedEx Corp. FDX $ % $52,837 $64,422 $57,570 $16,078 $7, % 13.6% 1.1x 8.3x CH Robinson Worldwide, Inc. CHRW $ % $11,052 $12,044 $13,144 $1,213 $ % 6.9% 0.9x 13.4x Expeditors International of Washington, Inc. EXPD $ % $10,321 $9,349 $6,098 $898 $ % 11.8% 1.5x 13.0x Atlas Air Worldwide Holdings, Inc. AAWW $ % $1,393 $3,116 $1,840 $620 $ % 20.1% 1.7x 8.4x Hub Group, Inc. HUBG $ % $1,575 $1,622 $3,573 $455 $ % 4.7% 0.5x 9.6x Forward Air Corp. FWRD $ % $1,448 $1,468 $983 $253 $ % 14.2% 1.5x 10.5x Average 93% $24,829 $28,394 $20,588 $4,547 $2, % 12.0% 1.3x 11.0x Median 93% $10,321 $9,349 $6,098 $898 $ % 12.6% 1.5x 10.5x Road and Rail LTM LTM Margins LTM Union Pacific Corp. UNP $ % $88,486 $102,156 $19,941 $10,307 $9, % 46.7% 5.1x 11.0x CSX Corp. CSX $ % $43,734 $53,825 $11,320 $4,878 $4, % 43.1% 4.8x 11.0x Norfolk Southern Corp. NSC $ % $33,143 $42,679 $9,888 $4,100 $4, % 41.5% 4.3x 10.4x Kansas City Southern KSU $ % $9,200 $11,876 $2,381 $1,074 $1, % 48.2% 5.0x 10.3x JB Hunt Transport Services, Inc. JBHT $ % $10,354 $11,328 $6,656 $1,286 $1, % 16.0% 1.7x 10.6x AMERCO UHAL $ % $7,467 $9,536 $3,396 $1,199 $1, % 36.6% 2.8x 7.7x Ryder System, Inc. R $ % $4,026 $9,358 $6,787 $1,501 $1, % 26.7% 1.4x 5.2x Old Dominion Freight Line, Inc. ODFL $ % $7,115 $7,210 $2,992 $907 $ % 22.5% 2.4x 10.7x Genesee & Wyoming, Inc. GWR $ % $3,953 $6,588 $2,002 $720 $ % 28.3% 3.3x 11.6x Landstar System, Inc. LSTR $ % $3,618 $3,547 $3,169 $696 $ % 8.1% 1.1x 13.9x Werner Enterprises, Inc. WERN $ % $1,897 $2,047 $2,027 $520 $ % 15.6% 1.0x 6.5x Average 90% $19,363 $23,650 $6,414 $2,472 $2, % 30.3% 3.0x 9.9x Median 90% $7,467 $9,536 $3,396 $1,199 $1, % 28.3% 2.8x 10.6x Source: S&P Capital IQ. 16

17 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Airlines Transportation American Airlines Group, Inc. AAL $ % $23,523 $41,508 $40,180 $13,380 $7, % 19.5% 1.0x 5.3x Delta Air Lines, Inc. DAL $ % $34,700 $39,213 $39,639 $12,100 $8, % 20.8% 1.0x 4.8x Southwest Airlines Co. LUV $ % $34,030 $34,147 $20,425 $7,851 $5, % 25.8% 1.7x 6.5x United Continental Holdings, Inc. UAL $ % $23,332 $30,609 $36,556 $13,677 $6, % 18.7% 0.8x 4.5x Alaska Air Group, Inc. ALK $ % $11,471 $12,860 $5,931 $2,117 $1, % 30.6% 2.2x 7.1x JetBlue Airways Corp. JBLU $ % $7,053 $7,466 $6,632 $2,830 $1, % 25.2% 1.1x 4.5x Spirit Airlines, Inc. SAVE $ % $3,742 $3,922 $2,322 $915 $ % 23.6% 1.7x 7.2x Allegiant Travel Co. ALGT $ % $2,642 $3,117 $1,362 $576 $ % 34.5% 2.3x 6.6x Westjet Airlines, Ltd. WJA $ % $2,064 $2,434 $3,070 $1,531 $ % 18.8% 0.8x 4.2x Average 89% $15,840 $19,475 $17,346 $6,109 $3, % 24.2% 1.4x 5.6x Median 89% $11,471 $12,860 $6,632 $2,830 $1, % 23.6% 1.1x 5.3x Marine Kirby Corp. KEX $ % $3,775 $4,496 $1,771 $644 $ % 25.5% 2.5x 10.0x Matson, Inc. MATX $ % $1,382 $2,107 $1,942 $323 $ % 12.3% 1.1x 8.8x Rand Logistics, Inc. RLOG $ % $12 $217 $117 $42 $ % 23.0% 1.9x 8.1x Average 64% $1,723 $2,273 $1,276 $336 $ % 20.3% 1.8x 9.0x Median 74% $1,382 $2,107 $1,771 $323 $ % 23.0% 1.9x 8.8x Source: S&P Capital IQ. 17

18 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Industrial Conglomerates General Electric Co. GE $ % $267,813 $400,618 $119,929 $26,240 $17, % 14.7% 3.3x 23.5x* 3M Co. MMM $ % $118,376 $127,438 $30,109 $15,069 $8, % 28.9% 4.2x 14.7x Siemens Aktiengesellschaft SIE $ % $112,464 $126,321 $84,315 $25,399 $10, % 12.7% 1.5x 11.8x United Technologies Corp. UTX $ % $92,697 $111,327 $57,244 $15,971 $10, % 17.5% 1.9x 11.1x Danaher Corp. DHR $ % $60,038 $71,577 $17,164 $9,550 $4, % 24.3% 4.2x 17.2x Average 94% $130,277 $167,456 $61,752 $18,446 $10, % 19.6% 3.0x 13.7x Median 98% $112,464 $126,321 $57,244 $15,971 $10, % 17.5% 3.3x 13.2x Source: S&P Capital IQ. *Excluded from average and median calculation. 18

19 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Materials Chemicals The Dow Chemical Co. DOW $ % $71,368 $87,446 $48,158 $10,958 $8, % 18.1% 1.8x 10.1x E.I. du Pont de Nemours and Co. DD $ % $70,452 $73,456 $24,594 $10,125 $5, % 20.6% 3.0x 14.5x Monsanto Co. MON $ % $50,119 $57,031 $14,475 $7,751 $4, % 29.4% 3.9x 13.4x Praxair, Inc. PX $ % $34,128 $43,550 $10,534 $4,674 $3, % 32.7% 4.1x 12.6x Air Products & Chemicals, Inc. APD $ % $29,605 $33,350 $9,541 $3,116 $3, % 32.8% 3.5x 10.7x The Sherwin-Williams Co. SHW $ % $29,342 $30,277 $12,043 $6,004 $2, % 16.9% 2.5x 14.9x Potash Corporation of Saskatchewan, Inc. TSX:POT $ % $14,312 $18,871 $3,921 $909 $1, % 31.8% 4.8x 15.1x Eastman Chemical Co. EMN $ % $11,991 $18,479 $9,008 $2,428 $2, % 23.5% 2.1x 8.7x Celanese Corp. CE $ % $12,928 $15,850 $5,456 $1,367 $1, % 21.2% 2.9x 13.7x W. R. Grace & Co. GRA $ % $4,915 $6,415 $1,599 $664 $ % 23.6% 4.0x 17.0x Valvoline, Inc. VVV $ % $5,033 $5,537 $1,962 $770 $ % 25.1% 2.8x 11.3x Average 94% $30,381 $35,478 $12,845 $4,433 $2, % 25.1% 3.2x 12.9x Median 97% $29,342 $30,277 $9,541 $3,116 $2, % 23.6% 3.0x 13.4x Metals and Mining Southern Copper Corp. SCCO $ % $27,765 $33,160 $5,380 $2,346 $2, % 41.2% 6.2x 14.9x Freeport-McMoRan Copper & Gold, Inc. FCX $ % $17,608 $32,596 $14,830 $4,156 $3, % 25.9% 2.2x 8.5x Newmont Mining Corp. NEM $ % $17,513 $20,469 $6,711 $3,043 $2, % 38.6% 3.1x 7.9x Alcoa Corp. AA $ % $6,295 $8,930 $9,318 $1,425 $1, % 11.7% 1.0x 8.2x United States Steel Corp. X $ % $5,297 $6,814 $10,261 $638 $ % 3.8% 0.7x 17.7x Average 82% $14,896 $20,394 $9,300 $2,322 $2, % 24.2% 2.6x 11.4x Median 81% $17,513 $20,469 $9,318 $2,346 $2, % 25.9% 2.2x 8.5x Source: S&P Capital IQ. 19

20 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Materials Paper and Forest Products International Paper Co. IP $ % $21,104 $31,403 $21,079 $5,946 $2, % 13.6% 1.5x 10.9x Domtar Corp. UFS $ % $2,290 $3,458 $5,098 $1,063 $ % 12.5% 0.7x 5.4x Resolute Forest Products, Inc. RFP $ % $490 $1,248 $3,545 $853 $ % 7.9% 0.4x 4.5x Average 82% $7,961 $12,036 $9,907 $2,621 $1, % 11.3% 0.8x 6.9x Median 82% $2,290 $3,458 $5,098 $1,063 $ % 12.5% 0.7x 5.4x Source: Capital IQ. 20

21 Integrity Expertise Results John Hill Senior Managing Director (813) Recent Transactions John McDonald Senior Managing Director (813) Keith Hodgdon Managing Director (813) Greg Bosl Vice President (813) Jami Gold Vice President (813) Charlie Hendrick Vice President (813) Jeffrey Hendricks Vice President (678) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC