Industrials M&A Report Q2 2016

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) Jeffrey Hendricks Vice President (678) Kenneth Burnside Business Development Officer (864) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC

2 Capital Markets Overview Commentary The S&P Global Industrials Sector Index rose 2.2% over the last 12 month period ended June 30, 2016, while the Nasdaq declined 3.4% and the S&P 500 increased 1.0%. ($ in millions) Offer Date Issuer Industry Sector Transaction Type Transaction Value 04/04/16 FedEx Corp. Transportation Fixed-Income $3,402 04/20/16 Select Public Offerings Industrials (Q2 2016) Prime Security Services Borrower, LLC Industrial Services Fixed-Income $3,140 IPO activity in the Industrials industry improved in Q after none were completed during Q Reliance Worldwide Corp. (ASX: RWC), which provides water control and plumbing solutions, raised $700 million in the largest IPO during the quarter. The Industrial Conglomerates and Electrical Equipment sectors were the industry s leaders with respect to valuation during Q2 2016, trading at EBITDA multiples of 13.7x and 12.1x, respectively. 05/03/16 United States Steel Corp. Materials Fixed-Income $980 05/25/16 TransDigm, Inc. Industrial Services Fixed-Income $950 04/29/16 Reliance Worldwide Corp. Materials IPO $700 05/11/16 SiteOne Landscape Supply, Inc. Materials IPO $210 06/09/16 Atkore International Group, Inc. Electrical Equipment IPO $192 05/25/16 GMS, Inc. Industrial Services IPO $147 Public Market Performance (LTM) Public Company Market Performance by Sector 110% 100% 90% 2.2% 1.0% 3.4% Median Change in Stock Price LTM Industry Sector 3 Months 12 months Revenue EBITDA Construction 2.7% 11.5% 1.3x 10.1x Electrical Equipment (1.4%) (2.8%) 2.2x 12.1x Machinery (0.1%) (7.1%) 1.5x 10.6x Industrial Services 5.5% 14.6% 2.5x 11.2x Transportation (3.7%) (4.4%) 1.3x 7.6x Industrial Conglomerates 1.3% 10.6% 2.8x 13.7x 80% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Materials 3.0% (3.4%) 2.3x 9.8x S&P 500 S&P Global Industrials Sector Index Nasdaq Source: S&P Capital IQ 2

3 Total Transaction Volume Total Transaction Value ($ in billions) Annual Middle Market M&A Activity Industrials Commentary Middle Market M&A Transactions by Deal Size As illustrated in the chart to the right, U.S. Middle Market M&A activity, or deal volume, in the Industrials industry decreased 37% to 106 closed transactions during the first half of 2016, down from 167 during the first half of The total value of completed Middle Market M&A transactions in the Industrials industry fell 26% during the first half of 2016 to $17.3 billion, down from $23.2 billion during the first half of Transactions valued between $500 million and $1 billion declined the most during 1H 2016 as deal volume decreased 60% and total transaction value fell 57% compared with the prior year period. ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 116 $ $2.2 (48%) (47%) $100 - $499M 36 $ $ % 22% $500 - $999M 15 $ $4.4 (60%) (57%) Total Middle Market 167 $ $17.3 (37%) (26%) % of Middle Market 1H H 2016 % Change Less than $100M 69% 18% 56% 13% $100 - $499M 22% 37% 38% 61% $500 - $999M 9% 45% 6% 26% 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 $80 $70 $60 $50 $48.6 $52.5 $75.2 $54.4 $43.3 $56.4 $51.7 $51.2 $57.6 $ $ $30 $20 $10 $21.6 $23.2 $ H H 2016 $ H H 2016 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) 3

4 Total Transaction Volume Total Transaction Value ($ in billions) 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 30% to 55 completed transactions during Q compared to Q2 2015; while the total value of completed transactions fell 25% to $8.9 billion. During Q2 2016, transactions valued at $500 to $999 million saw the largest decline compared with the prior year period as deal volume and value within this size range fell 70% and 62%, respectively. As evidenced in the charts on this page, increased volatility in the capital markets coupled with slow global growth had a negative impact on M&A activity within the Industrial industry during Q U.S. Middle Market M&A Activity Quarterly Trends: VOLUME ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 55 $ $1.0 (44%) (45%) $100 - $499M 14 $ $5.4 50% 60% $500 - $999M 10 $6.7 3 $2.6 (70%) (62%) Total Middle Market 79 $ $8.9 (30%) (25%) % of Middle Market Q Q % Change Less than $100M 70% 15% 57% 11% $100 - $499M 18% 28% 38% 60% $500 - $999M 12% 57% 5% 29% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Quarterly Trends: VALUE 150 $ $18.0 $16.7 $ $15.0 $12.0 $9.0 $10.0 $9.7 $14.8 $13.1 $14.5 $13.2 $11.4 $11.9 $11.1 $11.8 $8.4 $8.9 $ $3.0 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 $0.0 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 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) Less than $100M $100 - $499M $500 - $1,000M 4

5 Recent M&A Activity Industrials Select Announced M&A Transactions (Q2 2016) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 06/21/16 SolarCity Corp. Tesla Motors, Inc. Electrical Equipment $6, x NA 06/21/16 American Science & Engineering, Inc. OSI Systems, Inc. Transportation $ x NA 06/16/16 Dejana Truck & Utility Equipment Co. Douglas Dynamics, Inc. Machinery $ x NA 06/14/16 DST Systems, Inc. Broadridge Investor Corp. Industrial Services $ x NA 06/13/16 BWAY Parent Co., Inc. Stone Canyon Industries, LLC Materials $2,400.0 NA NA 06/10/16 Axiall Corp. Westlake Chemical Corp. Materials $3, x NA 05/31/16 Vertellus Specialties, Inc. Black Diamond Capital Materials $453.8 NA NA 05/27/16 Blue Bird Corp. American Securities Machinery $ x NA 05/24/16 ILC Industries, LLC TransDigm, Inc. Transportation $1,000.0 NA NA 05/24/16 American Covers, Inc. Energizer Reliance, Inc. Materials $340.0 NA NA 05/23/16 Wyle, Inc. KBR Holdings, LLC Transportation $600.0 NA NA 05/19/16 Lifestorage, LP Sovran Acquisition Ltd. Industrial Services $1,300.0 NA NA 05/18/16 Monsanto Co. Bayer AG Materials $63, x NA 05/18/16 Cambridge International, Inc. Rexnord Corp. Machinery $210.0 NA NA 5

6 Recent M&A Activity Industrials Select Announced M&A Transactions (Q2 2016) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 05/17/16 Herndon Aerospace & Defense Co. KLX, Inc. Transportation $ x NA 05/16/16 Terex Corp. (material handling and port solutions business) Konecranes Plc Machinery $1, x 11.9x 05/16/16 Armed Forces Services Corp. Magellan Healthcare, Inc. Industrial Services $ x NA 05/13/16 Great Plains Manufacturing, Inc. Kubota U.S.A., Inc. Machinery $430.0 NA NA 05/12/16 The Climate Control Group, Inc. NIBE Energy Systems, Inc. Machinery $ x 14.6x 05/05/16 NRG EV Services, LLC Capricorn Investment Group Electrical Equipment NA NA NA 04/30/16 Emerald Performance Materials, LLC DyStar LP Materials $245.0 NA NA 04/29/16 Power Service, Inc. NOW, Inc. Machinery $90.0 NA NA 04/26/16 Kaydon Corp. Stabilus S.A. Machinery $ x NA 04/25/16 Ball Corp. Ardagh Group S.A. Materials NA NA NA 04/04/16 Heritage Bag Co. Novolex Materials NA NA NA 04/04/16 Virgin America, Inc. Alaska Air Group, Inc. Transportation $2, x 11.5x 04/01/16 Downhole Technology, LLC Schoeller-Bleckmann Oilfield Equipment AG Machinery $ x NA 6

7 M&A Activity by Industrial Sector U.S. Middle Market M&A Activity by Industrial Sector: VALUE % Change ($ in billions) Construction $1.6 $2.5 58% Electrical Equipment $0.0 $1.1 N/A Machinery $2.0 $3.5 73% Industrial Services $4.3 $5.3 19% Transportation $0.8 $2.7 70% $6.9 Materials $3.1 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 56% 1H H 2016 U.S. Middle Market M&A Activity by Industrial Sector: VOLUME % Change Construction % Electrical Equipment 0 5 N/A Machinery % Industrial Services % Transportation % Materials % H H 2016 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. 7

8 Total Transaction Volume Total Transaction Value ($ in billions) Private Equity Activity Industrials Commentary Select Private Equity Transactions Industrials (Q2 2016) During the first half of 2016, financial sponsors were active across many sectors within the Industrials Industry, announcing a number of significant buyouts as shown to the right. Several notable private equity backed transactions were announced including: Stone Canyon Industries' acquisition of BWAY Parent Co. for $2.4 billion; TA Associates Management s proposed purchase of Conservice; and AEA Investors acquisition of Generation Brands, LLC. Announced Date Target Buyer Industry Enterprise Value ($mm) 06/17/16 Evergreen Industrial Services, Inc. The Sterling Group Industrial Services NA 06/14/16 Electric Guard Dog, LLC Snow Phipps Group Materials NA 06/13/16 Ennis-Flint Inc. Olympus Partners Materials NA 06/13/16 BWAY Parent Co, Inc. Stone Canyon Industries Materials $2, /10/16 Forum Plastics, Inc. Squadron Capital Materials NA In total, financial sponsors accounted for approximately 14% of completed deal volume and 19% of deal value during 1H /10/16 Panolam Industries International, Inc. Insight Equity Construction NA 06/09/16 United Plastics Group, Inc. Turnspire Capital Partners Materials NA 06/09/16 American Global Logistics Constitution Capital Partners Transportation NA Financial Sponsors vs. Strategic Buyers 06/08/16 Conservice TA Associates Management, L.P. Industrial Services NA 06/01/16 Bulk Tank, Inc. Sage Capital Machinery NA % 10% 37% % 14% 1H '15 1H '16 Financial Sponsor $25.0 $22.5 $20.0 $17.5 $15.0 $12.5 $10.0 Strategic Buyer (includes all closed deals with disclosed deal value between $10 million and $1 billion). $7.5 $5.0 $2.5 $0.0 $ % 1H '15 1H '16 25% $ % 13% 19% 05/31/16 MGS Mfg. Group, Inc. Mason Wells Materials NA 05/31/16 Vertellus Specialties, Inc. Black Diamond Capital Management Materials $ /28/16 Standard Components, Inc. Summit Equity Group Machinery NA 05/27/16 Blue Bird Corp. American Securities Machinery $ /26/16 DeBusk Services Group, LLC Turnbridge Capital Industrial Services NA 05/25/16 Generation Brands, LLC AEA Investors LP Materials NA 05/25/16 Royal Pacific Ltd. Midwest Mezzanine Funds; Fulton Capital, LLC Electrical Equipment 05/17/16 NSi Industries, LLC Blue Sea Capital, LLC Electrical Equipment NA 05/13/16 Amerijet International, Inc. ZS Fund L.P. Transportation NA 8 NA

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 ending June 30, The shaded section is the most recent 3-month period (Q2) for each sector and relative to the S&P % 110% 11.5% For the 12-month period ending June 30, 2016, the Industrial Services and Construction sectors saw the largest ascent, rising 14.6% and 11.5%, respectively. Machinery saw the largest decline, falling 7.1%. During Q2 2016, the Industrials industry produced mixed results with the Industrial Services and Materials sectors increasing the most at 5.0% and 3.0% respectively. 100% 1.0% 90% 80% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 S&P 500 Construction Electrical Equipment Machinery 110% 110% 100% 1.0% 1.0% 100% 2.8% 90% 90% 7.1% 80% 80% 70% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 70% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 S&P 500 Electrical Equipment S&P 500 Machinery Source: S&P Capital IQ 9

10 Industry Sector Overview Recent Stock Price Performance Industrial Services Transportation 120% 120% 14.6% 110% 110% 100% 1.0% 100% 1.0% 4.4% 90% 90% 80% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 80% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 S&P 500 Industrial Services S&P 500 Transportation Industrial Conglomerates Materials 120% 110% 110% 10.6% 100% 1.0% 3.4% 100% 1.0% 90% 90% 80% 80% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 70% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 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) Construction Building Products LTM LTM Margins LTM Masco Corp. MAS $ % $10,442 $12,566 $7,203 $2,327 $1, % 15.6% 1.7x 11.2x Fortune Brands Home & Security, Inc. FBHS $ % $9,390 $10,760 $4,735 $1,648 $ % 14.5% 2.3x 15.7x Owens Corning OC $ % $6,064 $8,002 $5,378 $1,224 $ % 16.8% 1.5x 8.8x AO Smith Corp. AOS $ % $7,858 $7,505 $2,555 $1,043 $ % 18.9% 2.9x 15.5x Lennox International, Inc. LII $ % $6,417 $7,438 $3,524 $1,005 $ % 13.3% 2.1x 15.8x USG Corp. USG $ % $3,968 $5,529 $3,837 $733 $ % 14.9% 1.4x 9.7x Armstrong World Industries, Inc. AWI $ % $2,188 $3,019 $2,440 $614 $ % 11.8% 1.2x 10.5x Simpson Manufacturing Co., Inc. SSD $ % $1,956 $1,724 $817 $374 $ % 18.5% 2.1x 11.4x Construction and Engineering Average 92% $5,406 $6,282 $3,327 $949 $ % 15.6% 1.9x 12.5x Median 98% $6,064 $7,438 $3,524 $1,005 $ % 14.9% 2.1x 11.4x AECOM Technology Corp. ACM $ % $4,890 $8,948 $17,952 $621 $1, % 5.7% 0.5x 8.8x Fluor Corp. FLR $ % $7,119 $6,363 $17,989 $1,053 $1, % 6.0% 0.4x 5.9x Jacobs Engineering Group, Inc. JEC $ % $6,108 $6,238 $11,654 $1,843 $ % 5.9% 0.5x 9.1x EMCOR Group, Inc. EME $ % $3,091 $3,021 $6,875 $951 $ % 5.3% 0.4x 8.3x Tutor Perini Corp. TPC $ % $1,168 $1,901 $4,939 $371 $ % 3.5% 0.4x 11.1x KBR, Inc. KBR $ % $1,897 $1,121 $4,656 $323 $ % 4.5% 0.2x 5.3x Average 88% $3,876 $3,729 $9,223 $908 $ % 5.0% 0.4x 8.0x Median 93% $3,091 $3,021 $6,875 $951 $ % 5.3% 0.4x 8.3x 11

12 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Electrical Equipment Rockwell Automation, Inc. ROK $ % $15,323 $14,804 $6,050 $2,549 $1, % 20.1% 2.4x 12.2x Ametek, Inc. AME $ % $11,092 $12,924 $3,935 $1,436 $1, % 27.2% 3.3x 12.1x Acuity Brands, Inc. AYI $ % $10,817 $10,835 $3,125 $1,358 $ % 17.2% 3.5x 20.2x Hubbell, Inc. HUBB $ % $6,070 $6,735 $3,416 $1,122 $ % 17.4% 2.0x 11.3x Woodward, Inc. WWD $ % $3,725 $4,357 $1,982 $561 $ % 16.0% 2.2x 13.8x Belden, Inc. BDC $ % $2,592 $4,139 $2,304 $946 $ % 15.9% 1.8x 11.3x Generac Holdings, Inc. GNRC $ % $2,389 $3,451 $1,292 $458 $ % 19.3% 2.7x 13.9x Brady Corp. BRC $ % $1,556 $1,657 $1,127 $547 $ % 12.2% 1.5x 12.1x Average 89% $5,463 $6,300 $2,454 $918 $ % 17.9% 2.4x 13.5x Median 93% $3,725 $4,357 $2,304 $946 $ % 17.2% 2.2x 12.1x 12

13 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Machinery Construction and Farm Machinery Caterpillar, Inc. CAT $ % $44,690 $77,554 $41,795 $8,932 $5, % 13.5% 1.9x 13.8x Deere & Co. DE $ % $26,188 $60,826 $27,670 $6,264 $3, % 13.7% 2.2x 16.1x PACCAR, Inc. PCAR $ % $18,313 $23,548 $17,916 $2,852 $2, % 14.7% 1.3x 9.0x Cummins, Inc. CMI $ % $19,509 $20,399 $18,205 $4,673 $2, % 12.9% 1.1x 8.7x AGCO Corp. AGCO $ % $3,971 $5,291 $7,250 $1,505 $ % 8.0% 0.7x 9.1x The Toro Company TTC $ % $4,958 $5,145 $2,413 $871 $ % 16.1% 2.1x 13.3x Oshkosh Corp. OSK $ % $3,589 $4,545 $6,102 $1,010 $ % 7.8% 0.7x 9.5x Joy Global, Inc. JOY $ % $2,065 $2,911 $2,786 $651 $ % 9.1% 1.0x 11.5x Manitowoc Co., Inc. MTW $ % $744 $1,006 $3,437 $833 $ % 9.6% 0.3x 3.1x Average 78% $13,781 $22,358 $14,175 $3,066 $1, % 11.7% 1.3x 10.4x Median 83% $4,958 $5,291 $7,250 $1,505 $ % 12.9% 1.1x 9.5x Industrial Machinery Illinois Tool Works, Inc. ITW $ % $37,893 $42,545 $13,334 $5,577 $3, % 25.7% 3.2x 12.4x Eaton Corp. ETN $ % $27,583 $35,811 $20,153 $6,441 $3, % 15.9% 1.8x 11.2x Stanley Black & Decker, Inc. SWK $ % $16,576 $20,438 $11,279 $4,148 $1, % 16.9% 1.8x 10.7x Parker Hannifin Corp. PH $ % $14,793 $15,944 $11,361 $2,537 $1, % 13.1% 1.4x 10.7x Dover Corp. DOV $ % $10,844 $13,606 $6,791 $2,528 $1, % 17.9% 2.0x 11.2x Flowserve Corp. FLS $ % $5,942 $7,330 $4,358 $1,472 $ % 15.7% 1.7x 10.7x Donaldson Co., Inc. DCI $ % $4,653 $5,016 $2,237 $758 $ % 15.8% 2.2x 14.2x The Timken Co. TKR $ % $2,493 $3,052 $2,779 $756 $ % 15.0% 1.1x 7.3x Average 91% $15,097 $17,968 $9,037 $3,027 $1, % 17.0% 1.9x 11.1x Median 92% $12,819 $14,775 $9,035 $2,533 $1, % 15.8% 1.8x 11.0x 13

14 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Machinery Trading Companies and Distributors W.W. Grainger, Inc. GWW $ % $14,269 $16,144 $10,081 $4,149 $1, % 14.6% 1.6x 11.0x United Rentals, Inc. URI $ % $6,175 $13,663 $5,804 $2,462 $1, % 30.2% 2.4x 7.8x Fastenal Co. FAST $ % $12,859 $13,133 $3,919 $1,956 $ % 23.1% 3.4x 14.5x Watsco, Inc. WSO $ % $4,578 $5,039 $4,147 $1,012 $ % 8.5% 1.2x 14.3x MSC Industrial Direct Co., Inc. MSM $ % $4,331 $4,561 $2,846 $1,282 $ % 15.7% 1.6x 10.2x WESCO International, Inc. WCC $ % $2,485 $3,808 $7,473 $1,479 $ % 5.5% 0.5x 9.3x EnerSys ENS $ % $2,661 $2,887 $2,355 $628 $ % 13.7% 1.2x 9.0x Applied Industrial Technologies, Inc. AIT $ % $1,781 $2,093 $2,519 $707 $ % 7.7% 0.8x 10.7x Titan Machinery, Inc. TITN $ % $236 $769 $1,299 $227 $ % 2.8% 0.6x 21.0x* Average 86% $5,486 $6,900 $4,494 $1,545 $ % 13.5% 1.5x 10.8x Median 89% $4,331 $4,561 $3,919 $1,282 $ % 13.7% 1.2x 10.5x 14

15 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Industrial Services Environmental and Facilities Services Waste Management, Inc. WM $ % $30,048 $38,947 $13,097 $4,819 $3, % 26.4% 3.0x 11.2x Republic Services, Inc. RSG $ % $17,926 $25,469 $9,194 $3,549 $2, % 27.9% 2.8x 9.9x Stericycle, Inc. SRCL $ % $8,958 $12,144 $3,197 $1,424 $ % 25.5% 3.8x 14.9x Waste Connections, Inc. WCN $ % $8,875 $11,044 $2,126 $942 $ % 33.4% 5.2x 15.5x Rollins, Inc. ROL $ % $6,399 $6,268 $1,507 $761 $ % 19.3% 4.2x 21.5x Covanta Holding Corp. CVA $ % $2,176 $4,491 $1,665 $526 $ % 20.6% 2.7x 13.1x Clean Harbors, Inc. CLH $ % $3,029 $4,056 $3,179 $904 $ % 15.2% 1.3x 8.4x Tetra Tech, Inc. TTEK $ % $1,847 $1,925 $1,749 $315 $ % 10.9% 1.1x 10.1x Sims Metal Management, Ltd. ASX:SGM $ % $1,194 $913 $3,914 $440 $ % 1.8% 0.2x 12.7x Casella Waste Systems, Inc. CWST $ % $320 $842 $555 $170 $ % 17.2% 1.5x 8.8x Schnitzer Steel Industries, Inc. SCHN $ % $478 $678 $1,419 $176 $ % 5.1% 0.5x 9.3x Average 89% $7,386 $9,707 $3,782 $1,275 $ % 18.5% 2.4x 12.3x Median 96% $3,029 $4,491 $2,126 $761 $ % 19.3% 2.7x 11.2x Diversified Support Services Iron Mountain, Inc. IRM $ % $8,451 $13,379 $3,009 $1,715 $ % 30.1% 4.4x 14.8x Cintas Corp. CTAS $ % $10,975 $11,911 $4,777 $2,063 $ % 19.2% 2.5x 13.0x KAR Auction Services, Inc. KAR $ % $5,888 $8,825 $2,752 $1,188 $ % 24.4% 3.2x 13.1x Avery Dennison Corp. AVY $ % $6,920 $7,957 $5,924 $1,638 $ % 12.0% 1.3x 11.2x R.R. Donnelley & Sons Co. RRD $ % $3,536 $6,863 $11,162 $2,454 $1, % 10.2% 0.6x 6.0x Copart, Inc. CPRT $ % $6,105 $6,668 $1,218 $547 $ % 35.3% 5.5x 15.5x Pitney Bowes, Inc. PBI $ % $3,535 $6,141 $3,532 $1,999 $ % 22.2% 1.7x 7.8x Corrections Corp. of America CXW $ % $4,125 $5,476 $1,814 $545 $ % 24.6% 3.0x 12.3x The Brink's Co. BCO $ % $1,407 $1,731 $3,007 $568 $ % 7.5% 0.6x 7.7x Average 93% $5,311 $6,947 $4,273 $1,375 $ % 19.4% 2.3x 10.8x Median 97% $5,007 $6,766 $3,270 $1,413 $ % 20.7% 2.1x 11.7x 15

16 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Transportation Air Freight and Logistics United Parcel Service, Inc. UPS $ % $97,083 $106,324 $58,804 $14,574 $9, % 16.9% 1.8x 10.7x FedEx Corp. FDX $ % $42,347 $47,994 $50,365 $14,457 $7, % 15.0% 1.0x 6.4x CH Robinson Worldwide, Inc. CHRW $ % $10,742 $11,532 $13,249 $1,233 $ % 7.0% 0.9x 12.4x Expeditors International of Washington, Inc. EXPD $ % $9,210 $8,199 $6,358 $923 $ % 11.8% 1.3x 10.9x Atlas Air Worldwide Holdings, Inc. AAWW $ % $1,027 $2,575 $1,796 $591 $ % 20.2% 1.4x 7.1x Forward Air Corp. FWRD $ % $1,378 $1,411 $983 $250 $ % 14.6% 1.4x 9.8x Hub Group, Inc. HUBG $ % $1,371 $1,311 $3,496 $432 $ % 4.7% 0.4x 7.9x LTM LTM Margins LTM Average 89% $23,308 $25,621 $19,293 $4,637 $2, % 12.9% 1.2x 9.3x Median 88% $9,210 $8,199 $6,358 $923 $ % 14.6% 1.3x 9.8x Road and Rail LTM LTM Margins LTM Union Pacific Corp. UNP $ % $74,302 $87,328 $20,369 $10,436 $9, % 46.7% 4.3x 9.2x CSX Corp. CSX $ % $25,245 $34,967 $11,042 $4,514 $4, % 40.9% 3.2x 7.7x Norfolk Southern Corp. NSC $ % $25,496 $34,408 $10,105 $4,028 $4, % 39.9% 3.4x 8.5x Kansas City Southern KSU $ % $9,793 $12,374 $2,361 $1,101 $1, % 48.1% 5.2x 10.9x JB Hunt Transport Services, Inc. JBHT $ % $9,288 $10,234 $6,351 $1,275 $1, % 17.1% 1.6x 9.4x AMERCO UHAL $ % $7,339 $9,244 $3,314 $1,176 $1, % 37.6% 2.8x 7.4x Ryder System, Inc. R $ % $3,261 $8,795 $6,675 $1,503 $1, % 27.1% 1.3x 4.9x Genesee & Wyoming, Inc. GWR $ % $3,437 $5,690 $2,045 $731 $ % 28.0% 2.8x 9.9x Old Dominion Freight Line, Inc. ODFL $ % $5,084 $5,199 $2,977 $898 $ % 22.2% 1.7x 7.9x Landstar System, Inc. LSTR $ % $2,940 $2,875 $3,179 $700 $ % 8.1% 0.9x 11.1x Werner Enterprises, Inc. WERN $ % $1,665 $1,802 $2,045 $550 $ % 17.4% 0.9x 5.1x Average 82% $9,355 $12,559 $5,009 $1,648 $1, % 28.6% 2.4x 8.3x Median 83% $6,211 $9,020 $3,246 $1,138 $1, % 27.6% 2.3x 8.2x 16

17 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Airlines Transportation American Airlines Group, Inc. AAL $ % $17,711 $32,337 $40,134 $14,137 $8, % 21.4% 0.8x 3.8x Delta Air Lines, Inc. DAL $ % $28,434 $33,283 $40,307 $12,091 $8, % 20.7% 0.8x 4.0x Southwest Airlines Co. LUV $ % $25,565 $25,504 $20,333 $8,133 $5, % 27.9% 1.3x 4.5x United Continental Holdings, Inc. UAL $ % $14,672 $21,593 $36,933 $13,918 $7, % 19.9% 0.6x 2.9x Alaska Air Group, Inc. ALK $ % $7,350 $6,390 $5,733 $2,416 $1, % 31.1% 1.1x 3.6x JetBlue Airways Corp. JBLU $ % $5,669 $5,939 $6,541 $2,783 $1, % 25.3% 0.9x 3.6x Spirit Airlines, Inc. SAVE $ % $3,211 $2,905 $2,217 $906 $ % 26.1% 1.3x 5.0x Allegiant Travel Co. ALGT $ % $2,513 $2,803 $1,303 $574 $ % 36.9% 2.2x 5.8x Westjet Airlines, Ltd. WJA $ % $2,001 $1,852 $3,070 $1,524 $ % 19.1% 0.6x 3.2x Average 69% $11,177 $12,534 $14,555 $5,293 $3, % 25.9% 1.1x 4.1x Median 68% $6,510 $6,165 $6,137 $2,600 $1, % 25.7% 1.0x 3.8x Marine Kirby Corp. KEX $ % $3,386 $4,107 $2,019 $752 $ % 26.9% 2.0x 7.6x Matson, Inc. MATX $ % $1,420 $1,881 $1,941 $375 $ % 15.2% 1.0x 6.4x Rand Logistics, Inc. RLOG $ % $19 $224 $148 $42 $ % 19.5% 1.5x 7.8x International Shipholding Corp. ISHC $0.30 4% $2 $111 $245 $46 $ % 4.8% 0.5x 9.3x Average 44% $1,207 $1,581 $1,088 $304 $ % 16.6% 1.2x 7.8x Median 46% $719 $1,053 $1,093 $211 $ % 17.3% 1.2x 7.7x 17

18 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Industrial Conglomerates General Electric Co. GE $ % $302,507 $453,712 $121,921 $25,705 $17, % 14.5% 3.7x 25.6x 3M Co. MMM $ % $109,397 $118,823 $30,081 $14,940 $8, % 28.6% 4.0x 13.8x United Technologies Corp. UTX $ % $87,193 $104,733 $56,319 $15,746 $10, % 18.1% 1.9x 10.3x Siemens Aktiengesellschaft SIE $ % $84,428 $102,949 $87,755 $26,182 $10, % 11.9% 1.2x 9.9x Danaher Corp. DHR $ % $70,488 $81,473 $22,080 $11,720 $5, % 23.1% 3.7x 16.0x Tyco International, Ltd. TYC $ % $18,222 $21,003 $9,661 $3,593 $1, % 15.8% 2.2x 13.8x Average 96% $112,039 $147,116 $54,636 $16,314 $8, % 18.7% 2.8x 14.9x Median 98% $85,811 $103,841 $43,200 $15,343 $9, % 16.9% 2.9x 13.8x 18

19 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Materials Chemicals The Dow Chemical Co. DOW $ % $60,977 $75,599 $46,153 $11,122 $8, % 18.9% 1.6x 8.7x E.I. du Pont de Nemours and Co. DD $ % $57,170 $62,216 $24,638 $9,913 $4, % 17.5% 2.5x 14.4x Monsanto Co. MON $ % $46,982 $56,357 $13,295 $7,028 $3, % 27.3% 4.2x 15.5x Praxair, Inc. PX $ % $32,289 $41,662 $10,455 $4,692 $3, % 33.0% 4.0x 12.1x Air Products & Chemicals, Inc. APD $ % $30,951 $36,375 $9,511 $3,056 $3, % 32.1% 3.8x 11.9x The Sherwin-Williams Co. SHW $ % $27,521 $29,158 $11,550 $5,794 $1, % 16.9% 2.5x 15.0x Potash Corporation of Saskatchewan Inc. TSX:POT $ % $13,561 $17,982 $4,658 $1,427 $1, % 35.5% 3.9x 10.9x Eastman Chemical Co. EMN $ % $10,141 $17,121 $9,205 $2,525 $2, % 23.4% 1.9x 7.9x Celanese Corp. CE $ % $9,759 $12,068 $5,502 $1,290 $1, % 19.7% 2.2x 11.1x W.R. Grace & Co. GRA $ % $5,231 $6,634 $3,001 $1,179 $ % 22.1% 2.2x 10.0x Average 84% $29,458 $35,517 $13,797 $4,803 $3, % 24.7% 2.9x 11.7x Median 87% $29,236 $32,767 $9,983 $3,874 $2, % 22.8% 2.5x 11.5x Metals and Mining Freeport-McMoRan Copper & Gold, Inc. FCX $ % $12,641 $38,132 $15,251 $3,998 $3, % 22.7% 2.5x 11.0x Newmont Mining Corp. NEM $ % $20,489 $26,609 $7,789 $3,429 $2, % 37.1% 3.4x 9.2x Southern Copper Corp. SCCO $ % $21,229 $26,559 $5,016 $2,042 $1, % 37.8% 5.3x 14.0x Alcoa Inc. AA $ % $12,101 $21,509 $21,060 $3,930 $2, % 11.7% 1.0x 8.7x United States Steel Corp. X $ % $2,466 $4,883 $10,643 $132 ($249) 1.2% (2.3%) 0.5x NM Average 81% $13,785 $23,538 $11,952 $2,706 $2, % 21.4% 2.5x 10.7x Median 81% $12,641 $26,559 $10,643 $3,429 $2, % 22.7% 2.5x 10.1x 19

20 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Materials Paper and Forest Products International Paper Co. IP $ % $17,649 $32,432 $21,566 $6,187 $3, % 14.2% 1.5x 10.6x Domtar Corp. UFS $ % $2,202 $3,379 $5,160 $1,064 $ % 12.7% 0.7x 5.2x Resolute Forest Products, Inc. RFP $ % $476 $1,045 $3,567 $862 $ % 7.4% 0.3x 3.9x Average 71% $6,776 $12,286 $10,098 $2,704 $1, % 11.4% 0.8x 6.6x Median 82% $2,202 $3,379 $5,160 $1,064 $ % 12.7% 0.7x 5.2x Source: Capital IQ. 20

21 Integrity Expertise Results John Hill Senior Managing Director (813) John McDonald Senior Managing Director (813) Recent Transactions Third-Party Logistics Provider Keith Hodgdon Managing Director (813) has been recapitalized by & Strategic Buyer Sell-side Advisory Hyde Park Capital Advisors, LLC Greg Bosl Vice President (813) *Confidential Transaction Jami Gold Vice President (813) has been recapitalized by has been recapitalized by Jeffrey Hendricks Vice President (678) & Minera del Norte S.A. de C.V. Kenneth Burnside Business Development Officer (864) MTS Markets International Inc. Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: a portfolio company of Member FINRA/SIPC a part of