Industrials M&A Report Q4 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 Jami Gold Vice President (813) Greg Bosl Vice President (813) Kenneth Burnside Business Development Officer (864) 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 S&P 500, Nasdaq, and the S&P Global Industrials Sector Index increased 11.2%, 9.8%, and 9.4%, respectively, over the 12-month period ended December 31, The table on the right illustrates select public offerings completed in Q Advanced Disposal Services, Inc. (NYSE:ADSW), which provides waste management services, raised $347 million in the largest IPO during the quarter. The Industrial Conglomerates and Electrical Equipment sectors were the industry s leaders with respect to valuation during the 4th quarter, trading at EBITDA multiples of 13.8x and 12.9x respectively. Public Market Performance (LTM) ($ in millions) Select Public Offerings Industrials (Q4 2016) Offer Date Issuer Industry Sector Transaction Type Public Company Market Performance by Sector Transaction Value 10/24/16 Honeywell International, Inc. Industrial Services Fixed-Income $4,243 11/23/16 Freeport-McMoRan, Inc. Materials Secondary $1,500 11/21/16 Union Pacific Corp. Transportation Fixed-Income $1,044 10/31/16 Illinois Tool Works, Inc. Machinery Fixed-Income $997 11/09/16 Summit Materials, Inc. Construction Secondary $367 10/05/16 Advanced Disposal Services, Inc. Industrial Services IPO $347 10/19/16 Forterra, Inc. Construction IPO $332 10/26/16 AK Steel Holding Corp. Materials Secondary $319 11/18/16 Hunter Maritime Acquisition Corp. Industrial Services IPO $ % 110% 100% 90% 11.2% 9.8% 9.4% Median Change in Stock Price LTM Industry Sector 3 Months 12 months Revenue EBITDA Construction 2.3% 17.0% 1.4x 10.5x Electrical Equipment 2.7% 11.0% 2.5x 12.9x Machinery 7.7% 33.3% 1.8x 12.5x Industrial Services 5.9% 18.6% 2.5x 12.4x Transportation 11.9% 23.5% 1.6x 9.1x Industrial Conglomerates 5.0% 10.1% 3.5x 13.8x Materials 6.3% 18.7% 2.3x 10.6x 80% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 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 detailed in the charts below, U.S. Middle Market M&A activity, or deal volume, in the Industrials industry decreased 21% to 272 closed transactions during the twelve month period ended December 31, 2016, down from 346 during the prior year. The total value of completed Middle Market M&A transactions in the Industrials industry fell 13% during 2016 to $37.1 billion, down from $42.5 billion in Transactions valued between $500 million and $999 million experienced the largest declines in 2016, with transaction volume and value both falling 35% and 34%, respectively, compared to the prior year. ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 236 $ $6.5 (26%) (20%) $100 - $499M 90 $ $21.4 (6%) 4% $500 - $999M 20 $ $9.2 (35%) (34%) Total Middle Market 346 $ $37.1 (21%) (13%) % of Middle Market % Change Less than $100M 68% 19% 64% 17% $100 - $499M 26% 48% 31% 58% $500 - $999M 6% 33% 5% 25% 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 600 $ $70 $60 $50 $67.6 $49.6 $51.3 $46.5 $46.6 $ $40 $40.6 $42.5 $ $30 $20 $ $ $ 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 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 27% during Q compared to Q4 2015; while the value of completed transactions fell 10% to $10.3 billion. Middle Market M&A volume in the Industrials industry has remained relatively flat for four consecutive quarters, although we expect deal volume will increase throughout 2017 because of the new administration s focus on domestic infrastructure. During Q4 2016, transactions valued between $10 million and $100 million saw the largest declines compared with Q as deal volume and value within this size range fell 37% and 24%, respectively. U.S. Middle Market M&A Activity Quarterly Trends: VOLUME 150 ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 60 $ $1.7 (37%) (24%) $100 - $499M 25 $ $5.8 (4%) (5%) $500 - $999M 5 $3.2 4 $2.8 (20%) (12%) Total Middle Market 90 $ $10.3 (27%) (10%) % of Middle Market $21.0 Q Q % Change Less than $100M 67% 19% 58% 16% $100 - $499M 28% 53% 36% 56% $500 - $999M 5% 28% 6% 28% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Quarterly Trends: VALUE $18.0 $15.0 $12.0 $9.0 $8.1 $8.1 $14.2 $16.2 $13.1 $16.0 $12.2 $15.3 $9.8 $9.5 $11.7 $11.5 $9.0 $8.8 $9.0 $ $ $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 Q3 '16 Q4 '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 Q3 '16 Q4 '16 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 (Q4 2016) ($ in millions) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 12/30/16 Rent Co., Inc. General Rental Sales & Service Industrial Services NA NA NA 12/29/16 Terex Corp. 12/21/16 BD Vinton, LLC (dba:vinton Steel, LLC) Zoomlion Heavy Industry Science and Technology Co., Ltd. Construction $4, x 12.3x Kyoei Steel, Ltd. Materials $52.0 NA NA 12/21/16 El Monte Rents, Inc. Tourism Holdings, Ltd. Transportation $64.0 NA NA 12/19/16 American Railcar Leasing, LLC SMBC Rail Services, LLC Industrial Services $2,778.0 NA NA 12/15/16 Register Print Group, Inc. IntegraColor, LLC Industrial Services $ x 5.8x 12/15/16 Folding Guard Corp. Troax, Inc. Materials $ x NA 12/15/16 Republic Conduit, Inc. Nucor Corp. Electrical Equipment $ x NA 12/14/16 Conwed Plastics, LLC DelStar Technologies, Inc. Materials $ x NA 12/09/16 Stillwater Mining Co. Sibanye Gold, Ltd. Materials $2, x 23.8x 12/09/16 Huber Engineered Materials (Silica Business Unit) Evonik Industries AG Materials $630.0 NA NA 12/06/16 Merritt Island Boat Works, Inc. Alexander Marine Co. Machinery NA NA NA 12/02/16 Binder Machinery Co. Komatsu America Corp. Industrial Services $42.0 NA NA 12/01/16 CLARCOR, Inc. Parker-Hannifin Corp. Materials $4, x 17.2x 11/28/16 CEMEX, S.A.B., (Concrete Pipe Manufacturing Business) Quikrete Holdings, Inc. Construction Materials $540.0 NA NA 11/20/16 Headwaters, Inc. Boral Industries, Inc. Construction $2, x 14.8x Source: S&P Capital IQ Screen excludes Aerospace and Defense. 5

6 Recent M&A Activity Industrials Select Announced M&A Transactions (Q4 2016) ($ in millions) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 11/18/16 Intrepid Powerboats, Inc. JDG Capital Machinery NA NA NA 11/15/16 WeatherBug, Inc. xad, Inc. Industrial Services NA NA NA 11/10/16 EnSite Solutions, LLC Cushman & Wakefield, Inc. Industrial Services NA NA NA 11/04/16 Caito Food Service, Inc. & Blue Ribbon Transport, Inc. SpartanNash Co. Transportation $ x NA 11/02/16 Anchor Glass Container Corp. CVC Capital Partners Materials $1,000.0 NA NA 10/31/16 SunCoke Energy Partners, L.P. SunCoke Energy, Inc. Materials $1, x 8.3x 10/31/16 Aurora Jet Center The Sterling Group Industrial Services NA NA NA 10/27/16 Transportation Resources, Inc. TransForce Inc. (nka:tfi International Inc.) Transportation $558.0 NA NA 10/24/16 Contech Holdings, Inc. Quikrete Holdings, Inc. Construction $950.0 NA NA 10/23/16 Mactac Americas, LLC LINTEC Corp. Industrial Services $375.0 NA NA 10/13/16 Giant Cement Holding, Inc. Elementia, S.A.B. de C.V. Construction $ x NA 10/13/16 Sigma Electric Manufacturing Corp. Argand Partners, LLC Materials $ x NA 10/06/16 C2 Aviation Capital, Inc. Avolon Holdings, Ltd. Industrial Services $13, x 21.4x 10/04/16 Golden State Overnight Delivery Service, Inc. General Logistics Systems Industrial Services $ x 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 $1.0 $1.4 38% Electrical Equipment $0.04 $0.5 92% Machinery $1.4 $1.5 6% Industrial Services $2.5 $3.5 29% Transportation $0.1 $ % Materials $4.2 $5.0 16% $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 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 Number of Transactions Private Equity Activity Industrials Commentary Financial sponsors were active across many sectors of the Industrials industry, announcing a number of acquisitions during the 4th quarter of 2016, as shown in the chart below. Select Private Equity Transactions Industrials (Q4 2016) ($ in millions) Enterprise Announced Date Target Buyer Industry Value 12/08/16 Midwest Industrial Rubber, Inc. Incline Equity Partners Machinery NA Several notable private equity backed transactions were announced during the 4th quarter including Argand Partners purchase of Sigma Electric Manufacturing Corp. for $250 million; The Carlyle Group s announced acquisition of Novolex; and Bain Capital s acquisition of MSX, Itl., Inc. During Q4 2016, financial sponsors were most active in the Industrial Services and Materials sectors, announcing 22 and 18 transactions respectively. 12/07/16 Rosboro, LLC Wynnchurch Capital Materials NA 12/01/16 Purchasing Power, LLC Flexpoint Ford Industrial Services NA 11/30/16 Tricorbraun Holdings, Inc. AEA Investors Industrial Services NA 11/28/16 Novolex The Carlyle Group Materials NA 11/18/16 Intrepid Powerboats, Inc. JDG Capital Construction NA 11/17/16 MSX Intl., Inc. Bain Capital Industrial Services NA 11/16/16 Crisis Prevention Institute, Inc. FFL Partners LP Industrial Services NA Financial Sponsors - Sector Focus 11/03/16 PoolPak, LLC The Sterling Group Machinery NA 30 10/31/16 Aurora Jet Center The Sterling Group Industrial Services NA /21/16 IPC Lydon, LLC Warren Equity Partners Industrial Services NA 10/21/16 Southland Flooring Supplies, Inc. Centre Lane Partners Industrial Services NA 10/21/16 Coverall North America, Inc. ICV Partners Industrial Services NA 15 10/17/16 ProAmpac, LLC Pritzker Group Materials NA /14/16 Terra Millennium Corp. Court Square Capital Partners Construction NA /13/16 Sigma Electric Manufacturing Corp. Argand Partners Materials $250 0 Construction Electrical Equipment Industrial Services Machinery Materials Transportation 10/06/16 24 Seven, Inc. Morgan Stanley Private Equity Industrial Services NA 10/05/16 Chromaflo Technologies Corp. American Securities Materials NA Source: S&P Capital IQ. 8

9 Industry Sector Overview Recent Stock Price Performance Commentary 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 December 31, The shaded section is the most recent 3-month period (Q4) for each sector and relative to the S&P 500. For the 12-month period ended December 31, 2016, the industrials industry had a strong performance with the Machinery, Transportation, and Materials sectors increasing the most at 33.3%, 23.5%, and 18.7% respectfully. During Q4 2016, all of the sectors increased, led by the Transportation and Machinery sectors, which increased 11.9% and 7.7%, respectively. Electrical Equipment Construction 130% 120% 17.0% 110% 11.2% 100% 90% 80% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 S&P 500 Construction Machinery 120% 140% 11.2% 130% 33.3% 110% 11.0% 120% 100% 110% 11.2% 100% 90% 90% 80% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 80% Dec-15 Mar-16 Jun-16 Sep-16 Dec-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 130% 130% 23.5% 120% 18.6% 120% 110% 11.2% 110% 11.2% 100% 100% 90% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 90% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 S&P 500 Industrial Services S&P 500 Transportation Industrial Conglomerates Materials 120% 130% 110% 11.2% 10.1% 120% 110% 18.7% 11.2% 100% 100% 90% 90% 80% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 80% Dec-15 Mar-16 Jun-16 Sep-16 Dec-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) Building Products Construction LTM LTM Margins LTM Masco Corp. MAS $ % $10,498 $12,460 $7,313 $2,415 $1, % 16.3% 1.7x 10.4x Fortune Brands Home & Security, Inc. FBHS $ % $8,436 $9,617 $4,985 $1,813 $ % 15.6% 1.9x 12.4x Owens Corning OC $ % $6,002 $8,098 $5,591 $1,375 $1, % 18.6% 1.4x 7.8x A. O. Smith Corporation AOS $ % $8,373 $7,942 $2,686 $1,119 $ % 19.6% 3.0x 15.1x Lennox International Inc. LII $ % $6,824 $7,832 $3,579 $1,042 $ % 13.8% 2.2x 15.9x USG Corp. USG $ % $4,264 $4,858 $3,017 $705 $ % 17.8% 1.6x 9.0x Armstrong World Industries, Inc. AWI $ % $2,343 $3,078 $2,423 $609 $ % 12.0% 1.3x 10.6x Simpson Manufacturing Co., Inc. SSD $ % $2,113 $1,886 $861 $412 $ % 19.4% 2.2x 11.3x Construction and Engineering Average 89% $5,479 $6,187 $3,306 $1,011 $ % 16.7% 1.9x 11.7x Median 90% $6,002 $7,832 $3,017 $1,042 $ % 17.8% 1.9x 11.3x AECOM Technology Corp. ACM $ % $5,715 $9,525 $17,472 $672 $ % 5.4% 0.5x 10.1x Fluor Corp. FLR $ % $7,426 $7,372 $18,418 $794 $ % 4.6% 0.4x 8.6x Jacobs Engineering Group, Inc. JEC $ % $6,925 $6,821 $10,964 $1,768 $ % 6.0% 0.6x 10.4x EMCOR Group, Inc. EME $ % $4,365 $4,389 $7,379 $1,019 $ % 5.4% 0.6x 10.9x Tutor Perini Corp. TPC $ % $1,389 $2,019 $4,927 $406 $ % 4.5% 0.4x 9.0x KBR, Inc. KBR $ % $2,378 $1,840 $4,158 $200 $ % 2.5% 0.4x 17.5x Average 93% $4,700 $5,328 $10,553 $810 $ % 4.7% 0.5x 11.1x Median 92% $5,040 $5,605 $9,172 $733 $ % 5.0% 0.5x 10.3x Source: S&P Capital IQ. 11

12 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Electrical Equipment Rockwell Automation, Inc. ROK $ % $17,522 $16,939 $5,943 $2,505 $1, % 20.1% 2.9x 14.2x Ametek, Inc. AME $ % $11,450 $13,159 $3,855 $1,388 $1, % 26.5% 3.4x 12.9x Acuity Brands, Inc. AYI $ % $10,135 $10,040 $3,406 $1,480 $ % 17.2% 2.9x 17.1x Hubbell, Inc. HUBB $ % $6,500 $7,055 $3,505 $1,131 $ % 17.3% 2.0x 11.7x Woodward, Inc. WWD $ % $4,375 $5,014 $2,021 $552 $ % 16.1% 2.5x 15.4x Belden, Inc. BDC $ % $3,182 $3,955 $2,357 $981 $ % 16.7% 1.7x 10.1x Generac Holdings, Inc. GNRC $ % $2,703 $3,777 $1,385 $498 $ % 18.4% 2.7x 14.9x Brady Corporation BRC $ % $1,910 $1,959 $1,118 $560 $ % 13.6% 1.8x 12.9x Average 93% $5,751 $6,423 $2,521 $941 $ % 18.0% 2.4x 13.6x Median 93% $4,375 $5,014 $2,357 $981 $ % 17.2% 2.5x 12.9x Source: S&P Capital IQ. 12

13 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Machinery Construction and Farm Machinery Caterpillar, Inc. CAT $ % $54,188 $85,790 $38,537 $7,870 $5, % 13.5% 2.2x 16.5x Deere & Co. DE $ % $32,622 $64,861 $26,549 $6,101 $3, % 14.4% 2.4x 17.0x PACCAR, Inc. PCAR $ % $22,480 $29,363 $17,033 $2,635 $2, % 17.3% 1.7x 10.0x Cummins, Inc. CMI $ % $23,399 $24,177 $17,772 $4,544 $2, % 13.1% 1.4x 10.4x AGCO Corp. AGCO $ % $4,727 $6,353 $7,411 $1,516 $ % 7.8% 0.9x 11.1x The Toro Company TTC $ % $6,266 $6,346 $2,392 $875 $ % 16.7% 2.7x 15.9x Oshkosh Corp. OSK $ % $4,818 $5,275 $6,239 $1,074 $ % 8.4% 0.8x 10.0x Joy Global Inc. JOY $ % $2,745 $3,475 $2,371 $522 $ % 7.7% 1.5x 19.1x Manitowoc Co., Inc. MTW $ % $824 $1,035 $1,613 $253 $ % 1.0% 0.6x 66.4x* Average 88% $16,897 $25,186 $13,324 $2,821 $1, % 11.1% 1.6x 13.8x Median 95% $6,266 $6,353 $7,411 $1,516 $ % 13.1% 1.5x 13.5x Industrial Machinery Illinois Tool Works, Inc. ITW $ % $44,551 $49,203 $13,334 $5,577 $3, % 25.7% 3.7x 14.4x Eaton Corp. ETN $ % $30,982 $39,210 $20,153 $6,441 $3, % 15.9% 1.9x 12.2x Stanley Black & Decker, Inc. SWK $ % $17,093 $20,955 $11,279 $4,148 $1, % 16.9% 1.9x 11.0x Parker Hannifin Corp. PH $ % $19,168 $20,319 $11,361 $2,614 $1, % 13.9% 1.8x 12.8x Dover Corp. DOV $ % $11,722 $14,483 $6,791 $2,528 $1, % 17.9% 2.1x 11.9x Flowserve Corp. FLS $ % $6,321 $7,709 $4,358 $1,472 $ % 15.7% 1.8x 11.3x Donaldson Co., Inc. DCI $ % $5,672 $6,040 $2,220 $761 $ % 16.4% 2.7x 16.5x The Timken Co. TKR $ % $3,228 $3,787 $2,779 $756 $ % 15.0% 1.4x 9.1x Average 94% $17,342 $20,213 $9,034 $3,037 $1, % 17.2% 2.2x 12.4x Median 96% $14,408 $17,401 $9,035 $2,571 $1, % 16.2% 1.9x 12.1x 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 $ % $9,267 $16,745 $5,762 $2,438 $1, % 29.8% 2.9x 9.7x W.W. Grainger, Inc. GWW $ % $14,130 $16,103 $10,137 $4,115 $1, % 13.5% 1.6x 11.8x Fastenal Co. FAST $ % $13,585 $13,862 $3,962 $1,965 $ % 22.7% 3.5x 15.4x MSC Industrial Direct Co., Inc. MSM $ % $5,531 $6,043 $2,843 $1,279 $ % 15.7% 2.1x 13.6x Watsco, Inc. WSO $ % $4,826 $5,277 $4,211 $1,029 $ % 8.6% 1.3x 14.6x WESCO International, Inc. WCC $ % $3,214 $4,489 $7,336 $1,448 $ % 5.4% 0.6x 11.3x EnerSys ENS $ % $3,454 $3,643 $2,362 $637 $ % 13.9% 1.5x 11.1x Applied Industrial Technologies, Inc. AIT $ % $2,335 $2,599 $2,500 $708 $ % 8.2% 1.0x 12.7x Titan Machinery Inc. TITN $ % $309 $759 $1,231 $209 $ % 1.8% 0.6x 24.8x* Average 94% $6,295 $7,725 $4,483 $1,536 $ % 13.3% 1.7x 12.5x Median 94% $4,826 $5,277 $3,962 $1,279 $ % 13.5% 1.5x 12.2x 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 $ % $31,775 $41,030 $13,395 $5,029 $3, % 27.3% 3.1x 11.2x Republic Services, Inc. RSG $ % $19,745 $27,458 $9,299 $3,596 $2, % 28.1% 3.0x 10.5x Waste Connections, Inc. WCN $ % $11,057 $14,638 $2,859 $1,221 $ % 31.6% 5.1x 16.2x Stericycle, Inc. SRCL $ % $6,606 $9,590 $3,544 $1,598 $ % 21.0% 2.7x 12.9x Rollins, Inc. ROL $ % $7,372 $7,229 $1,573 $801 $ % 19.6% 4.6x 23.4x Covanta Holding Corp. CVA $ % $2,040 $4,626 $1,674 $509 $ % 19.9% 2.8x 13.9x Clean Harbors, Inc. CLH $ % $3,195 $4,569 $2,776 $817 $ % 14.4% 1.6x 11.4x Tetra Tech, Inc. TTEK $ % $2,527 $2,788 $1,998 $338 $ % 10.5% 1.4x 13.3x Sims Metal Management, Ltd. ASX:SGM $ % $1,881 $1,694 $3,474 $460 $ % 1.6% 0.5x 30.3x Casella Waste Systems, Inc. CWST $ % $510 $1,007 $561 $180 $ % 18.6% 1.8x 9.6x Schnitzer Steel Industries, Inc. SCHN $ % $701 $885 $1,366 $176 $ % 5.5% 0.6x 11.9x Average 91% $7,946 $10,501 $3,865 $1,339 $ % 18.0% 2.5x 15.0x Median 96% $3,195 $4,626 $2,776 $801 $ % 19.6% 2.7x 12.9x Diversified Support Services Cintas Corp. CTAS $ % $12,483 $13,451 $5,079 $2,234 $ % 19.4% 2.6x 13.7x Iron Mountain, Inc. IRM $ % $7,607 $13,633 $3,330 $1,858 $1, % 30.0% 4.1x 13.6x KAR Auction Services, Inc. KAR $ % $5,943 $9,292 $2,973 $1,279 $ % 24.2% 3.1x 12.9x Avery Dennison Corp. AVY $ % $6,369 $7,466 $6,087 $1,700 $ % 12.9% 1.2x 9.5x Copart, Inc. CPRT $ % $6,654 $7,229 $1,326 $594 $ % 35.3% 5.5x 15.4x Pitney Bowes, Inc. PBI $ % $2,871 $5,433 $3,407 $1,892 $ % 22.2% 1.6x 7.2x R.R. Donnelley & Sons Co. RRD $ % $1,149 $4,643 $11,088 $2,431 $1, % 9.3% 0.4x 4.5x Corrections Corp. of America CXW $ % $2,882 $4,268 $1,833 $566 $ % 25.1% 2.3x 9.3x The Brink's Co. BCO $ % $2,068 $2,387 $2,983 $574 $ % 8.4% 0.8x 9.5x Average 79% $5,336 $7,534 $4,234 $1,458 $717 38% 21% 2.4x 10.6x Median 89% $5,943 $7,229 $3,330 $1,700 $757 43% 22% 2.3x 9.5x Source: S&P Capital IQ. 15

16 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Transportation Air Freight and Logistics United Parcel Service, Inc. UPS $ % $101,686 $109,513 $60,906 $24,598 $7, % 12.6% 1.8x 14.2x FedEx Corp. FDX $ % $50,646 $61,183 $55,227 $15,665 $7, % 14.2% 1.1x 7.8x CH Robinson Worldwide, Inc. CHRW $ % $10,476 $11,468 $13,144 $1,213 $ % 6.9% 0.9x 12.6x Expeditors International of Washington, Inc. EXPD $ % $9,737 $8,698 $6,052 $894 $ % 11.9% 1.4x 12.0x Atlas Air Worldwide Holdings, Inc. AAWW $ % $1,296 $3,066 $1,782 $571 $ % 18.4% 1.7x 9.3x Hub Group, Inc. HUBG $ % $1,512 $1,535 $3,485 $451 $ % 4.9% 0.4x 9.0x Forward Air Corporation FWRD $ % $1,450 $1,481 $974 $252 $ % 14.4% 1.5x 10.6x LTM LTM Margins LTM Average 93% $25,257 $28,135 $20,224 $6,235 $2, % 11.9% 1.3x 10.8x Median 94% $9,737 $8,698 $6,052 $894 $ % 12.6% 1.4x 10.6x Road and Rail LTM LTM Margins LTM Union Pacific Corp. UNP $ % $86,614 $100,284 $19,941 $10,307 $9, % 46.7% 5.0x 10.8x CSX Corporation CSX $ % $34,062 $44,335 $11,069 $4,690 $4, % 42.4% 4.0x 9.5x Norfolk Southern Corp. NSC $ % $31,989 $41,245 $9,888 $4,100 $4, % 41.5% 4.2x 10.0x JB Hunt Transport Services, Inc. JBHT $ % $11,004 $11,984 $6,555 $1,294 $1, % 16.5% 1.8x 11.1x Kansas City Southern KSU $ % $9,144 $11,772 $2,334 $1,058 $1, % 48.0% 5.0x 10.5x Ryder System, Inc. R $ % $3,975 $9,308 $6,787 $1,501 $1, % 26.3% 1.4x 5.2x AMERCO UHAL $ % $7,241 $9,169 $3,350 $1,194 $1, % 37.1% 2.7x 7.4x Old Dominion Freight Line, Inc. ODFL $ % $7,134 $7,229 $2,992 $907 $ % 22.4% 2.4x 10.8x Genesee & Wyoming, Inc. GWR $ % $4,028 $6,104 $2,000 $710 $ % 27.5% 3.1x 11.1x Landstar System, Inc. LSTR $ % $3,603 $3,532 $3,169 $696 $ % 8.1% 1.1x 13.7x Werner Enterprises, Inc. WERN $ % $1,951 $2,114 $2,009 $518 $ % 16.4% 1.1x 6.4x Average 92% $18,249 $22,461 $6,372 $2,452 $2, % 30.3% 2.9x 9.7x Median 94% $7,241 $9,308 $3,350 $1,194 $1, % 27.5% 2.7x 10.5x 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 $ % $25,964 $43,949 $40,180 $13,366 $7, % 18.7% 1.1x 5.9x Delta Air Lines, Inc. DAL $ % $37,138 $41,221 $39,639 $12,550 $8, % 22.3% 1.0x 4.7x Southwest Airlines Co. LUV $ % $31,549 $31,631 $20,425 $7,495 $4, % 24.4% 1.5x 6.4x United Continental Holdings, Inc. UAL $ % $24,050 $30,651 $36,556 $13,677 $6, % 19.0% 0.8x 4.4x Alaska Air Group, Inc. ALK $ % $11,093 $10,003 $5,784 $2,440 $1, % 30.9% 1.7x 5.6x JetBlue Airways Corp. JBLU $ % $7,672 $7,907 $6,632 $2,830 $1, % 25.6% 1.2x 4.7x Spirit Airlines, Inc. SAVE $ % $4,080 $4,258 $2,322 $950 $ % 25.2% 1.8x 7.3x Allegiant Travel Co. ALGT $ % $2,744 $3,125 $1,363 $577 $ % 34.6% 2.3x 6.6x Westjet Airlines, Ltd. WJA $ % $2,069 $2,491 $3,069 $1,531 $ % 19.2% 0.8x 4.2x Average 94% $16,262 $19,471 $17,330 $6,157 $3, % 24.4% 1.4x 5.5x Median 95% $11,093 $10,003 $6,632 $2,830 $1, % 24.4% 1.2x 5.6x Marine Kirby Corp. KEX $ % $3,559 $4,286 $1,771 $644 $ % 25.0% 2.4x 9.7x Matson, Inc. MATX $ % $1,544 $2,340 $1,917 $339 $ % 14.8% 1.2x 8.3x Rand Logistics, Inc. RLOG $ % $15 $221 $125 $39 $ % 19.3% 1.8x 9.2x Average 67% $1,706 $2,282 $1,271 $340 $ % 19.7% 1.8x 9.0x Median 82% $1,544 $2,340 $1,771 $339 $ % 19.3% 1.8x 9.2x Source: S&P Capital IQ. 17

18 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Industrial Conglomerates General Electric Co. GE $ % $288,508 $432,008 $123,693 $26,676 $16, % 13.6% 3.5x 25.7x 3M Co. MMM $ % $110,481 $120,164 $30,109 $15,069 $8, % 28.8% 4.0x 13.8x Siemens Aktiengesellschaft SIE $ % $100,903 $114,272 $84,315 $25,399 $10, % 12.7% 1.4x 10.6x United Technologies Corp. UTX $ % $90,546 $107,946 $57,244 $15,784 $10, % 17.7% 1.9x 10.7x Danaher Corp. DHR $ % $54,472 $61,894 $16,882 $9,335 $3, % 23.0% 3.7x 16.0x Average 93% $128,982 $167,257 $62,449 $18,452 $10, % 19.2% 2.9x 15.4x Median 98% $100,903 $114,272 $57,244 $15,784 $10, % 17.7% 3.5x 13.8x Source: S&P Capital IQ. 18

19 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Materials Chemicals The Dow Chemical Co. DOW $ % $64,270 $80,343 $48,158 $10,958 $8, % 17.8% 1.7x 9.4x E.I. du Pont de Nemours and Co. DD $ % $64,374 $67,378 $24,594 $10,125 $5, % 20.6% 2.7x 13.3x Monsanto Co. MON $ % $46,713 $53,173 $13,933 $7,391 $4, % 28.8% 3.8x 13.3x Praxair, Inc. PX $ % $33,722 $43,144 $10,534 $4,674 $3, % 32.8% 4.1x 12.5x Air Products & Chemicals, Inc. APD $ % $31,471 $35,217 $9,541 $3,116 $3, % 32.8% 3.7x 11.3x The Sherwin-Williams Co. SHW $ % $25,393 $26,809 $11,856 $5,922 $1, % 16.4% 2.3x 13.8x Potash Corporation of Saskatchewan Inc. TSX:POT $ % $15,180 $19,739 $3,921 $909 $1, % 32.3% 5.0x 15.6x Eastman Chemical Company EMN $ % $11,161 $17,713 $9,008 $2,365 $2, % 22.5% 2.0x 8.7x Celanese Corp. CE $ % $11,472 $14,245 $5,389 $1,405 $1, % 22.3% 2.6x 11.8x W. R. Grace & Co. GRA $ % $4,799 $6,195 $3,006 $1,185 $ % 22.3% 2.1x 9.3x Valvoline, Inc. VVV $ % $4,408 $4,912 $1,962 $770 $ % 25.1% 2.5x 10.0x Average 90% $28,451 $33,533 $12,900 $4,438 $2, % 24.9% 3.0x 11.7x Median 93% $25,393 $26,809 $9,541 $3,116 $2, % 22.5% 2.6x 11.8x Metals and Mining Freeport-McMoRan Copper & Gold, Inc. FCX $ % $17,384 $32,372 $14,830 $4,166 $3, % 24.5% 2.2x 8.9x Southern Copper Corporation SCCO $ % $24,709 $30,104 $5,380 $2,346 $2, % 41.1% 5.6x 13.6x Newmont Mining Corp. NEM $ % $18,066 $24,010 $8,018 $3,734 $3, % 39.8% 3.0x 7.5x Alcoa Corporation AA $ % $5,126 $7,760 $9,318 $1,420 $1, % 12.0% 0.8x 6.9x United States Steel Corporation X $ % $5,172 $6,689 $10,261 $638 $ % 3.8% 0.7x NM Average 83% $14,091 $20,187 $9,561 $2,461 $2, % 24.2% 2.5x 9.2x Median 84% $17,384 $24,010 $9,318 $2,346 $2, % 24.5% 2.2x 8.2x 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 $ % $22,097 $36,880 $21,566 $6,187 $3, % 14.2% 1.7x 12.0x Domtar Corp. UFS $ % $2,455 $3,632 $5,160 $1,064 $ % 12.7% 0.7x 5.6x Resolute Forest Products, Inc. RFP $ % $482 $1,051 $3,567 $862 $ % 7.4% 0.3x 4.0x Average 84% $8,345 $13,854 $10,098 $2,704 $1, % 11.4% 0.9x 7.2x Median 91% $2,455 $3,632 $5,160 $1,064 $ % 12.7% 0.7x 5.6x 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) has been recapitalized by & has received a growth equity investment from Greg Bosl Vice President bosl@hydeparkcapital.com (813) Jami Gold Vice President gold@hydeparkcapital.com (813) Jeffrey Hendricks Vice President jhendricks@hydeparkcapital.com (678) has been recapitalized by & has been recapitalized by Minera del Norte S.A. de C.V. Kenneth Burnside Business Development Officer burnside@hydeparkcapital.com (864) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC a portfolio company of MTS Markets International Inc. a part of