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AEROSPACE – DEFENSE – GOVERNMENT SERVICES MID-YEAR UPDATE | JULY 2016

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AEROSPACE, DEFENSE & GOVERNMENT SERVICES—INDUSTRY UPDATE

INTRODUCTION

Opus Advisors is pleased to provide its Aerospace, Defense & Government Services (“ADG”) 2016 Mid-Year Update. This report provides an analysis of valuation and financial performance metrics for selected publicly held companies, as well as an examination of recent acquisition activity within the industry. We invite you to contact us if you would like to discuss our views on valuation trends, credit availability or the state of the market, or our perspectives on strategic initiatives within the global ADG sector.

PROPOSED FISCAL 2017 DEFENSE BUDGET UPDATE

In mid-June, the Senate and the House approved their annual defense policy bills for fiscal 2017. The Senate budget calls for $602 billion ($543 billion base) and the House budget proposes $576 billion ($533 billion base, including a $16 billion OCO transfer) in total spending. The House and Senate differ on defense acquisition reform and overall defense funding, as well as the size of military pay increases, army troop reductions, healthcare reform and housing allowances.

The Senate bill contains aggressive acquisition reform measures, including the implementation of two new defense undersecretaries for innovation and acquisitions management, as well as aggressive language that would curb the use of cost-plus contracts. The House bill adds more troops, aircraft, shipbuilding and rotorcraft than the President's

proposed budget and sets an April 30, 2017 OCO expiration. The President has threatened to veto both bills due to the unconventional treatment of OCO funds (House bill) and acquisition reform provisions (Senate bill), among other reasons. The President’s proposed budget calls for $583 billion, with a base budget of $524 billion.

MIXED SECTOR GROWTH OUTLOOK

Until a year ago, publicly held aerospace equipment & components manufacturers generated reasonable revenue growth and were rewarded through stock price appreciation. However, median revenue growth in the last year has been flat due to weakening demand and order delays. Most recently, commercial aircraft manufacturers are facing potential growth challenges after reaching what appears to be a cyclical peak in deliveries amidst a continued slowdown in bookings (aircraft orders for Airbus and Boeing have declined precipitously from multi-year highs in 2014). Moreover, recent production has been cut due to weaker-than-expected international demand and low oil prices, while orders and deliveries for several business jet manufacturers have also been in decline. We believe that these current headwinds may result in minimal organic growth and place increased pressure on operating margins for commercial aircraft equipment & components suppliers. In addition, we believe that publicly held aerospace suppliers may seek partnerships or niche acquisitions in an effort to subsidize this lack of organic earnings growth and bolster shareholder value.

For both the defense and government technology services subsectors, median three-year revenue growth is -0.5% and -3.4%, respectively. However, we believe that shifting Department of Defense funding priorities, especially relating to big data, cybersecurity and electronic warfare, will generate greater growth opportunities and margin stability in the foreseeable future. The President’s proposed 2017 defense budget calls for $19 billion in a broad-based cybersecurity strategy, a 35% increase over fiscal year 2016. In addition, $25 billion has been

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Obama Iraq/AfghanistanWithrawal (-15%)

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allocated via the Strategic Partners Acquisition Readiness Contract (SPARC) program to support various outsourced I.T. needs within the Department of Health & Human Services for a five-year base period. We expect that a large number of partnerships between niche technology service providers and larger prime contractors will occur as a result of various similar I.T. task orders.

PUBLIC VALUATION TRENDS

In general, most publicly held ADG subsectors have posted share price gains for both 12-month and three-year periods ending July 1, 2016. The aerospace equipment and components subsector declined by 12.2% primarily due to organic sales declines, margin declines and weak earnings growth among a number of aerospace suppliers. Approximately 80% of the companies in our index saw declines.

However, the prime defense contractor group gained 23.3% during this same period and was up over 100% over the last three years as a result of successfully winning key contracts, integrating acquisitions and diversifying their business. We believe that the defense technology and government services subsectors are well-positioned for earnings growth in the next 12 months.

MERGER & ACQUISITION TRENDS

ADG merger and acquisition activity through the second quarter of 2016, as measured on a trailing 12-month (“TTM”) basis, totaled 226 transactions after peaking in March of this year. The aerospace and government services subsectors each accounted for approximately 31% of TTM ADG deal flow, while defense technology and aviation services deals were approximately 28% and 9%, respectively, of industry totals. We believe that current M&A trends will continue based on the slowdown in the commercial aircraft segment as well as a heightened focus on technology advances within the Department of Defense and other federal agencies.

Over the last 12 months, approximately 26% of all ADG transactions were divestitures from an existing parent corporation, an increasing trend and the highest in over three years. Single-entity company sales and private equity exits were approximately 65% and 7%, respectively, of all deals. Approximately 78% of acquirors were standalone strategic operating companies, while 14% were private equity platforms and 8% were private equity-backed strategics.

Over the last three years, approximately 23% of all acquisition targets were manufacturers of components or structures, while 16% were providers of I.T. solutions and 13% were electronics and power solutions manufacturers.

SPARC AWARD RECIPIENTS

The Centers for Medicare & Medicaid announced the recipients of the $25 billion Strategic Partners Acquisition Readiness Contract (“SPARC”) to include 27 large contractors and 54 small business vendors encompassing 120 contracts. A list of the specific recipients can be found here. Any task orders less than $29 million are designated for the small business pool, which includes (with overlap) seven (7) service-disabled veteran-owned businesses, four (4) HUBZone companies, 28 woman-owned businesses and 23 8(a) businesses.

The SPARC contract is an IDIQ vehicle with a five-year base period that replaces the old Enterprise System Development (“ESD”) contract awarded in 2007. The ESD contract had faced scrutiny due to the way it awarded large ($100 million+) task orders to large I.T. contractors.

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7/1/15 10/1/15 1/1/16 4/1/16 7/1/16

1-Year+23.3%+4.4%-12.2%+9.7%+1.2%

3-Year+106%+41.0%+20.8%+23.6%+30.2%

Defense PrimesDefense TechAerospaceGov't ServicesS&P 500

160 148159 159 158 156 149 151 152 151 154 147 149

166 168 172181

197209 216 223

229 228241 238 242 245

254 244237

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Aerospace & AvionicsAviation ServicesDefense TechnologiesGovernment Services


https://govtribe.com/project/strategic-partners-acquisition-readiness-contract-sparc-idiq



NOTABLE INDUSTRY NEWS

AIRBUS AND BOEING FACE CHALLENGES IN COMMERCIAL ORDER BOOKINGS AND DELIVERIES Wall Street Journal (7-14-2016) Following the recent Farnborough air show, Airbus had achieved 380 firm orders compared to a 2016 goal of 650 orders. Boeing had secured 321 firm orders compared to its 2016 target of 740. Despite record backlogs, widebody sales for both companies have been particularly weak in the last several months, and production cuts have been planned. Boeing, in particular, is facing weak demand due to geopolitical instability and lower fuel prices.

Access the full article here.

DESPITE ADVANCED THREATS, DEPARTMENT OF DEFENSE IS STILL BANKING ON DRONES Defense Systems (4-28-2016) In his testimony to the Senate Appropriations Subcommittee on Defense, Secretary Ash Carter explained that continued investment in unmanned systems will be a priority for the Department of Defense. Such investments maximize the U.S. military’s capabilities by utilizing a combination of manned and unmanned systems to help penetrate contested spaces. This new strategy will be vital to the U.S. military as the ability to control airspace through traditional means is becoming more challenging.


U.S. ARMY SPECIAL OPERATIONS HAS BIG APPETITE FOR ISR DefenseNews (5-9-2016) U.S. Army Special Operations is in the process of implementing new unmanned aerial systems (“UAS”) and “smart weapons” that carry multiple sensors to collect intelligence from the battlefield. The Special Operations Aviation Regiment will be increasingly relying on greater deception capabilities, strike precision and imagery intelligence through the use of such sensors. By teaming its Apache helicopters with Shadow UAS, as an example, it will result in enhanced capabilities and greater effectiveness.


NINE KEY TRENDS DISRUPTING AEROSPACE AND DEFENSE Forbes (7-21-2016) The aerospace and defense industries will be undergoing significant change over the next 10 years, including increased competition for fewer contracts and rapid changes in technology. Profit margins of defense contractors are being squeezed by tougher contracts, limiting opportunities for continued cost-cutting. Forward thinking contractors are expanding into cybersecurity and data management, which are key growth areas in the future.


2017 NDAA: THE BIG PICTURE The Heritage Foundation (7-29-2016) Increasing military readiness is the top priority for the 2017 National Defense Authorization Act (“NDAA”). The House of Representatives and the Senate, each taking very different paths, have passed their versions of the NDAA for fiscal year 2017. The House bill increases funding for modernization, readiness and personnel priorities and reduces funding for overseas contingency operations. The Senate bill, while making many small funding changes, follows the budget structure proposed by President Obama.



http://www.wsj.com/articles/airbus-beats-boeing-with-35-billion-in-air-show-deals-1468504000

https://defensesystems.com/articles/2016/04/28/dod-future-plans-for-drones.aspx

http://www.defensenews.com/story/defense/show-daily/aaaa/2016/05/09/us-army-special-operations-has-big-appetite-isr/83883904/

http://www.forbes.com/sites/kpmg/2016/07/21/9-key-trends-disrupting-aerospace-and-defense/#2e539cff30f7

http://www.heritage.org/research/reports/2016/07/2017-ndaa-the-big-picture



AEROSPACE

SELECTED PUBLIC COMPANY VALUATIONS AND FINANCIAL METRICS

(Dollars in U.S. millions) Share Price -- Equity 3-Year TTMPercent of Market TTM Revenue EBITDA

52-Week High Value Revenues Growth Margin EV / TTM EBITDA Multiple

AIRCRAFT OEMsBombardier Inc. 83.5% 3,377$ 17,690$ N/A 2.7%Boeing Co. 86.1% 82,614 96,600 5.6% 9.1%Airbus Group SE 77.1% 44,172 71,210 -0.5% 7.6%Embraer SA 67.0% 4,009 6,800 -1.3% 10.0%

17.8x9.6x

8.5x8.0x

Median: 9.0x

AEROSPACE EQUIPMENT & COMPONENTSHEICO Corp. 98.4% 4,484$ 1,290$ 9.8% 23.8%TransDigm Group Inc. 98.0% 13,920 3,000 16.8% 44.3%Heroux-Devtek Inc. 97.5% 562 315 16.5% 15.3%RBC Bearings Inc. 91.3% 1,714 597 14.0% 24.2%Woodward, Inc. 97.2% 3,539 1,990 3.0% 15.9%Meggitt plc 65.9% 4,152 2,180 -0.3% 21.0%Rockwell Collins Inc. 88.7% 10,990 5,160 5.0% 22.7%B/E Aerospace Inc. 82.2% 4,690 2,760 12.6% 21.5%Kaman Corp. 95.7% 1,147 1,780 4.3% 8.1%KLX Inc. 72.0% 1,675 1,500 9.9% 14.9%Hexcel Corp. 76.2% 3,871 1,930 5.7% 22.2%Magellan Aerospace Corp. 86.1% 1,015 767 10.6% 15.8%Esterline Technologies Corp. 64.0% 1,812 1,890 -1.9% 12.9%LMI Aerospace, Inc. 66.3% 109 370 10.4% 10.8%Ducommun Inc. 72.7% 219 635 -3.8% 7.0%Barnes Group Inc. 79.7% 1,788 1,180 8.7% 21.3%Moog Inc. 74.6% 1,933 2,440 0.8% 13.5%Astronics Corp. 45.5% 851 690 37.5% 17.9%AAR Corp. 71.1% 808 1,660 -2.8% 7.0%GKN plc 87.4% 6,522 9,590 11.1% 11.1%Safran SA 84.3% 28,234 22,377 32.9% 20.5%Spirit AeroSystems Holdings Inc. 73.9% 5,676 6,580 7.2% 15.5%Wesco Aircraft Holdings, Inc. 86.9% 1,337 7,480 24.5% 5.5%Zodiac Aerospace SA 88.3% 7,294 5,620 43.3% 5.6%Triumph Group Inc. 53.2% 1,766 3,890 1.6% -2.5%

Median: 10.2x

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DIVERSIFIED AEROSPACE INDUSTRIALSHoneywell International Inc. 98.3% 88,786$ 39,110$ 0.8% 20.4%Ametek Inc. 80.5% 10,830 3,930 6.0% 27.2%Curtiss-Wright Corp. 95.8% 3,741 2,160 6.6% 18.3%United Technologies Inc. 91.4% 85,970 56,140 -0.9% 18.0%Parker Hannifin Corp. 92.7% 14,726 11,550 -1.1% 13.5%Crane Company 94.2% 3,308 2,720 2.0% 16.6%Textron Inc. 81.8% 9,780 13,820 3.1% 11.8%

12.1x11.8x

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Median: 10.2x





QUARTERLY M&A VOLUME & PRICING (M&A Transactions)

MOST ACTIVE ACQUIRORS (2013—YTD 2016) (Control Acquisitions)

SELECTED RECENTLY ANNOUNCED AND CLOSED TRANSACTIONS

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Aerospace & AvionicsAviation Services

HEICO Corp.TransDigm Group Inc.Kaman Corp.Triumph Group Inc.Astronics Corp.RBC Bearings Inc.Rockwell Collins Inc.B/E Aerospace Inc.AAR Corp.Barnes Group Inc.Esterline Technologies Corp.Moog Inc.

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Date Acquiror / Parent Target / Seller Value (EV) Revenues EBITDA Margin Revenues EBITDATarget TTM Multiple of EV to TTM:

5/31/2016 United Flexible Inc. (Arlington Capital Partners)Romeoville, IL

Kreisler Manufacturing Corp.Elmwood Park, NJ

28.4$ 34$ 3.7$ 10.8% 0.82x 7.62x

Kreisler Manufacturing Corp. is a publicly held manufacturer of precision metal components and assemblies for use in commercial and military aircraft engines as well as industrial gas turbines. The acquisition will allow United Flexible to better serve the aerospace engine manufacturing community as a result of Kreisler's established relationships with aircraft engine OEMs in the fixed tube and complex conduit area. United Flexible, a portfolio company of Arlington Capital Partners, will aquire Kreisler in an all-cash deal at an approximate 57% premium to Kreisler's latest common stock closing price. The combined entity will have over 700 employees.

5/27/2016 Silverfleet CapitalLondon, UK

Sigma Components (Division of Avingtrans plc)Leicestershire, England

94.2$ 52.8$ 5.1$ 9.6% 1.79x 18.57x

Sigma Components is a precision engineering components manufacturer for the commercial aerospace sector and has operated as a division of Avingtrans plc focused on aerospace applications, with a particular focus on aerospace pipes, ducts, fabrications and precision surface finishing. With 750 employees, Sigma operates from four sites in the UK and two sites in China, and serves global aerospace customers including Rolls-Royce, Safran, Airbus, Bombardier and BAE Systems. It has a team of over 40 engineers and has a strong track record of bringing new products to market. The transaction supports the management buyout by Sigma's founder and CEO Mark Johnson, who will retain a minority interest in the company.

4/6/2016 Vishay Precision Group, Inc. (NYSE: VPG)Malvern, PA

Pacific Instruments Inc.Concord, CA

11.0$ 9.0$ 2.8$ 31.1% 1.22x 3.93x

Pacific Instruments Inc. is a designer and manufacturer of high-performance data acquisition systems, selling primarily to the aerospace, commercial aviation and defense markets, mainly in the U.S. Pacific Instruments provides installation, facility integration, training and on-going technical support for their manufactured products. The acquisition allows Vishay to expand Pacific Instruments’ measurement systems to a larger geographic and market footprint in Europe and Asia, while significantly improving the engineering capabilities to Vishay's customer base. The acquisition is structured as a stock transaction and will be financed through a combination of cash on hand and third-party borrowings.




DEFENSE TECHNOLOGY






52-Week High Value Revenues Growth Margin EV / TTM EBITDA Multiple

PRIME DEFENSE CONTRACTORSLockheed Martin Corp. 99.8% 75,915$ 48,990$ -0.7% 13.3%Raytheon Company 98.2% 40,039 23,720 -1.6% 13.7%Northrop Grumman Corp. 99.3% 40,024 23,520 -2.3% 14.9%BAE Systems plc 90.7% 22,560 22,250 -1.0% 9.3%Boeing Co. 86.1% 82,614 96,600 5.6% 9.1%General Dynamics Corp. 91.9% 43,200 31,410 0.5% 14.9%Thales Group SA 94.4% 17,421 16,060 -5.0% 10.1%Airbus Group SE 77.1% 44,172 71,210 -0.5% 7.6%Huntington Ingalls Industries Inc. 98.6% 7,915 7,210 1.5% 13.9%Leonardo Finmeccanica SpA 67.5% 5,799 14,210 -12.1% 11.3%

13.8x13.2x

12.9x11.8x

9.6x9.5x9.5x

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6.6xMedian: 9.6x

DEFENSE TECHNOLOGYAeroVironment, Inc. 86.2% 653$ 264$ 3.2% 6.3%Mercury Systems, Inc. 99.4% 992 249 -0.3% 17.3%Cubic Corp. 80.6% 1,083 1,450 0.6% 5.6%Comtech Telecommunications Corp. 41.5% 208 336 -10.3% 11.1%Ultra Electronics Holdings plc 73.2% 1,523 963 -2.7% 16.2%L-3 Communications Holdings Inc. 99.2% 11,293 10,330 -7.2% 11.2%FLIR Systems, Inc. 91.1% 4,273 1,590 3.5% 22.0%Teledyne Technologies Inc. 88.5% 3,412 2,260 2.6% 16.1%Elbit Systems Ltd. 88.8% 3,892 3,120 2.5% 12.5%Orbital ATK Inc. 89.6% 4,983 4,630 2.0% 13.5%Harris Corp. 92.0% 10,301 7,100 -2.3% 22.0%Cobham plc 50.1% 2,647 2,750 4.6% 20.1%Kratos Defense & Security Solutions, Inc. 63.8% 244 653 -12.2% 2.7%

25.4x21.1x

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N/MMedian: 12.1x

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Teledyne Technologies Inc.Cubic Corp.L-3 Communications Holdings Ultra Electronics Holdings plcFLIR Systems, Inc.Lockheed Martin Corp.Raytheon CompanyCobham plcGeneral Dynamics Corp.Mercury Systems, Inc.Orbital ATK Inc.

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6/23/2016 TransDigm Group Inc.Cleveland, OH

ILC Holdings / Data Device Corp. (Behrman Capital)Bohemia, NY

1,000$ 200$ N/A N/A 5.00x N/A

Data Device Corp. ("DDC"), a portfolio company of Behrman Capital, is a supplier of databus and power controls and related products that are used primarily in military avionics, commercial aerospace and space applications. The company's core MIL-STD-1553 databus product line has an installed base of systems worldwide that spans hundreds of military and commercial platforms. DDC's platforms include the JSF, F-18, Eurofighter, C-130, A400M, F-15 and Apache, as well as newer commercial platforms such as the 787, A350XWB, and 777X. Prior to this transaction, DDC had made three acquisitions beginning in 2013. DDC has approximately 650 employees.

4/22/2016 J.F. Lehman & CompanyNew York, NY

API Technologies Corp. (NASDAQ:ATNY)Orlando, FL

305$ 236$ 20.3$ 8.6% 1.29x 14.99x

API Technologies Corp. is a designer and manufacturer of high performance systems, subsystems, modules, and components for technically demanding RF, microwave, millimeterwave, electromagnetic, power, and security applications. A high-reliability technology pioneer, API Technologies products are used by global defense, industrial, and commercial customers in the areas of commercial aerospace, wireless communications, medical, oil and gas, electronic warfare, unmanned systems, C4ISR, missile defense, harsh environments, satellites, and space. Structured as a stock purchase, the acquisition was an all-cash deal, representing a 98% premium to API's closing stock price prior to announcement.

4/4/2016 Arlington Capital PartnersChevy Chase, MD

Defense & Security Business of iRobot Corporation (NASDAQ:IRBT)Bedford, MA

45.0$ 51.6$ 0.87x

The Defense & Security unit of iRobot Corp. is a designer and provider of four classes of robots--the FirstLook, SUGV, PackBot and Kobra for warfighters and first responders. Manufacturing of the unit's defense and security robots have heretofore been outsourced to two third-party U.S. based manufacturers. The unit's contract/purchase order backlog as of 2015 year-end was $10.5 million. Total Defense & Security divisional revenues were approximately 10% of iRobot's consolidated sales. Arlington Capital Partners purchased the assets of the Defense & Security division for $30 million in upfront cash, plus a $15 million contingent payment based on revenue milestones.

4/27/2016 Data Device Corp. (Behrman Capital)Bohemia, NY

Maxwell Technologies Inc. (Microelectronics Business)San Diego, CA

21.0$ 11.1$ 1.89x

The Microelectronics division of Maxwell Technologies Inc. is a developer and manufacturer of space-qualified microelectronics solutions for satellites and spacecraft. Maxwell Microelectronics has provided space-qualified, radiation-tolerant and radiation-shielded products, including semiconductors and single-board computers, to the space industry for more than two decades. The sale included all assets and certain liabilities related to the microelectronics product line. As part of the purchase agreement, 37 employees have transitioned to Data Device Corp.

5/2/2016 Mercury Systems, Inc. (NASDAQ:MRCY)Chelmsford, MA

Security & Microelectronics Units of Microsemi Corp.AZ, CA and IN

300$ 100$ 28.0$ 28.0% 3.00x 10.71x

The acquisition of Microsemi's Embedded Security, RF, Microwave and Custom Microelectronics lines of business positions Mercury as the defense industry’s largest commercial embedded secure processing company. Moreover, the transaction nearly doubles Mercury’s RF and Microwave business, adding synergies and new capabilities that include embedded security and custom microelectronics. The acquisition and expenses were funded with a combination of a new $200 million bank term loan and cash on hand, which includes net proceeds of approximately $94 million from Mercury’s issuance of common stock in a recent public offering.




GOVERNMENT SERVICES







52-Week High Value Revenues Growth Margin EV / TTM EBITDA Multiple CSRA Inc. 70.2% 3,260$ 4,250$ N/A 11.5%ManTech International Corp. 97.2% 1,435 1,570 -15.6% 7.6%Booz Allen Hamilton Holding Corp. 93.7% 4,344 5,410 -2.1% 9.4%CACI International Inc. 81.7% 2,207 3,500 -4.2% 9.3%Science Applications International Corp. 93.9% 2,607 4,520 -3.4% 7.5%Leidos Holdings Inc. 81.8% 3,538 5,210 -9.9% 8.6%Engility Holdings, Inc. 61.5% 812 2,210 8.0% 9.9%Vectrus, Inc. 99.8% 312 1,230 -13.6% 4.0%NCI Inc. 81.3% 189 336 -3.3% 8.8%KEYW Holding Corp. 99.9% 428 317 8.6% 0.4%

12.5x11.6x

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7.0xN/M

Median: 10.3x

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Average: 14.7


9.63x


9.38x


12.31x

YTD 2016 Median

EV/EBITDA: 7.51x

CSRA Inc.CACI International Inc.ManTech International CorpKEYW Holding Corp.Booz Allen Hamilton Holding Corp.Leidos Holdings Inc.Engility Holdings, Inc.

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5/3/2016 DLH Holdings Corp.Atlanta, GA

Danya International Inc.Silver Spring, MD

38.8$ 45.0$ 6.5$ 14.4% 0.86x 6.00x

Danya International Inc. is a provider of technology-enabled program management, public health expertise, consulting, and digital communications solutions supporting federal health and education programs primarily within the Department of Health and Human Services. Danya also serves the Centers for Disease Control and Prevention ("CDC"), as well as the U.S. Navy and the Department of Homeland Security. Danya currently employs approximately 150 full-time employees. The combined entity has over $300 million of total backlog. The transaction was funded with approximately $30 million in senior debt financing, $2.5 million in bridge financing, $2.5 million in restricted stock and the remainder with cash on hand.




SELECTED RECENTLY ANNOUNCED AND CLOSED TRANSACTIONS (continued)

Remainder of Page Intentionally Left Blank




5/17/2016 KLX Inc. (NASDAQ:KLXI)Wellington, FL

Herndon Aerospace & Defense, LLC (HCI Equity Partners)St. Louis, MO

210$ 133$ 20.3$ 15.3% 1.58x 10.34x

Herndon Aerospace & Defense, LLC, a portfolio company of HCI Equity Partners, is a supply chain management and third-party logistics provider for consumable hardware utilized in military applications including fixed and rotary wing aircraft, wheeled and tracked vehicles, and sea vessels. Herndon serves primarily military depot aftermarket customers, as well as commercial aerospace aftermarket customers. KLX expects to achieve substantial synergies as a result of the integration of Herdon within KLX's Aerospace Solutions Group. The all-cash transaction was structured as a sale of assets.

7/5/2016 KBR, Inc. (NYSE:KBR)Houston, TX

Wyle, Inc.El Segundo, CA

600$ 836$ 67.0$ 8.0% 0.72x 8.96x

Wyle, Inc. is a provider of specialized engineering and professional, scientific and technical services primarily to the U.S. federal government. Wyle's expertise includes systems and sustainment engineering, program and acquisition management, life science research, space medical operations, information technology and the testing and evaluation of aircraft, advanced systems and networks. As of year-end 2015, Wyle's funded backlog was $440 million with an additional $1.1 billion of unfunded but expected orders. KBR acquired 100% of Wyle's outstanding shares in the transaction, which was funded through an existing credit facility and $200 million of cash. KBR will recognize an estimated $30 million in acquired tax benefits.




OUR F IRM

Opus Advisors LLC has a broad range of experience with a diversity of transactions and advisory services across multiple industry sectors. Our knowledge and creativity provides clarity and creates powerful growth and value-maximizing opportunities for our clients. Our clients benefit from our decades of transaction and advisory experience, industry intelligence, relationships with capital providers, and an unwavering commitment to excellence.

Our services broadly include the following:

• Acquisitions & Buyouts: Mergers & acquisitions, management buyouts, divestitures and ESOP buyouts • Capital Markets: Debt capital, growth equity capital, capital structure • Strategic Advisory: Growth strategy development, new market expansion • Financial Advisory: Corporate finance strategy, valuations and fairness opinions, pre-exit planning and financial restructuring

NOTES

1. Sources of information: Opus Advisors LLC proprietary research; S&P Capital IQ; SEC filings; Department of Defense; company filings and publicly available information. 2. Definitions: TTM = Trailing 12 Months; EV = Enterprise Value; EBITDA = Earnings Before Interest, Taxes, Depreciation & Amortization. 3. Share price, equity market value and enterprise value information as of 7/1/2016. Financial metrics are as of the close of the most recent quarter prior to 7/1/2016.

D ISCLOSURES

Opus Advisors LLC (“Opus Advisors” or “Opus”) is a premier investment banking and strategic advisory firm focused on the advisory needs of clients on a global basis. The firm has deep transactional experience, industry knowledge, operational expertise, principal investment experience, and a dedicated commitment to excellence. Opus Advisors provides acquisition and buyout advisory, divestiture advisory, debt and equity private placement, and other financial and strategic advisory services that create and unlock value for shareholders and investors. The firm also works with boards of directors and shareholders on a number of financial and strategic initiatives.

This report may contain references to registered trademarks, service marks and copyrights owned by third-party information providers. None of the third-party information providers is endorsing any offering of, and shall not in any way be deemed an issuer or underwriter of, any securities, financial instruments or other investments discussed in this report, and shall not have any liability or responsibility for any statements made in the report or for any financial statements, financial projections or other financial information contained or attached as an exhibit to the report.

The information contained herein is believed by Opus to be reliable and reflects information known to Opus at the time this publication was written, but Opus makes no representation as to the accuracy or completeness of such information. Opus Advisors and/or its affiliates and principals may act as advisors or lenders to, have positions in and effect transactions in securities of companies that may or may not have been discussed herein and also may provide, may have provided, or may seek to provide investment banking or other advisory services for those companies. Opinions, estimates and projections in this report constitute Opus Advisors’ judgment and are subject to change without notice.

THIS PUBLICATION DOES NOT CONSTITUTE ADVICE OR A RECOMMENDATION NOR IS IT INTENDED TO PROVIDE INFORMATION UPON WHICH TO BASE AN INVESTMENT DECISION, AND SHOULD NOT BE CONSTRUED AS SUCH. THE FINANCIAL INSTRUMENTS DISCUSSED IN THIS REPORT MAY NOT BE SUITABLE FOR ALL INVESTORS, AND INVESTORS MUST MAKE THEIR OWN INVESTMENT DECISIONS USING THEIR OWN INDEPENDENT ADVISORS AS THEY BELIEVE NECESSARY AND BASED UPON THEIR SPECIFIC FINANCIAL SITUATIONS AND INVESTMENT OBJECTIVES. ALSO, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

The information and views contained in this report were prepared by Opus Advisors. It is not a research report, as such term is defined by applicable law and regulations. The information provided herein is for informational purposes only and does not constitute, nor is it intended to constitute, an offer to buy or sell or a solicitation of interest to purchase or sell any securities, or to participate in any particular trading strategy. These materials are not directed to, or intended for distribution to, any person in any jurisdiction where such distribution would be contrary to law or regulation, or which would subject Opus and/or its affiliates to licensing or registration requirements in such jurisdiction. Opus Advisors is not an expert on, and nothing contained in the materials should be construed as advice with regard to, legal, accounting, regulatory, tax or other specialist matters. Any statement contained in the materials as to tax matters was neither written nor intended by Opus Advisors or any of its affiliates to be used, and cannot be used by any taxpayer, for the purpose of improperly avoiding taxes or tax penalties that may be imposed on such taxpayer.

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Copyright © 2016 by Opus Advisors LLC. All rights reserved.


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Burch & Company, Inc. and Opus Advisors LLC are unaffiliated entities.

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