industry update summer 2016 - harris williams...global smart parking market to grow at 32% cagr to...

www.harriswilliams.com

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorized andregulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

INDUSTRIAL TECHNOLOGY

INDUSTRY UPDATE │ SUMMER 2016

PAGE |

www.harriswilliams.com

SUMMARY

1

Thermo Fisher Scientific Inc. (NYSE:TMO) announced the pending acquisition of FEICompany (NASDAQ:FEIC) for $107.50 per share or approximately $4.2 billion. FEIdesigns, manufactures and supports high-performance electron microscopyworkflows that provide images and information at micro-, nano- and picometerscales. Through its offering, FEI enables customers across life sciences andmaterials science markets to make breakthrough discoveries and increaseproductivity.Source

KION Group AG (DE:KGX) has agreed to acquire Dematic Corp from AEA Investorsand Teachers' Private Capital in a deal valuing the company at $3.25 billion.Dematic is a supplier of integrated automated technology, software and servicesto optimize the warehouse supply chain operations.Source

Rexnord (NYSE:RXN) acquired Cambridge International from Industrial GrowthPartners for approximately $210 million. Cambridge is one of the world’s largestsuppliers of metal conveying and engineered woven metal solutions, primarilyused in food processing end markets, as well as in architectural, packaging andfiltration applications.Source

Blue Sea Capital acquired NSi Industries from Summit Park. NSi is a leading supplierof a wide variety of electrical connectors for construction, maintenance andrepair applications. NSi’s well-known brands include Polaris insulated connectors,Tork time and lighting controls, and Easy-Twist wire connectors.Source



PUBLIC MARKETS | KEY TRADING STATISTICS

CONTENTS

RECENT M&A ACTIVITY

WHAT WE’RE READING

PUBLIC MARKETS

M&A MARKET TRENDS

ECONOMIC UPDATE

PUBLIC COMPARABLES

CONTACTS

John ArendaleManaging [email protected]+1 (804) 648-0072

Jeffery PerkinsManaging [email protected]+49 (69) 3650638 13

Jay [email protected]+1 (617) 654-2114

Lars [email protected]+49 (69) 3650638 12

Mike WilliamsVice [email protected]+1 (804) 932-1366

M&A | SELECT RECENT ACTIVITY

DEAL SPOTLIGHT | AWEBA

a subsidiary of

has been acquired by

Harris Williams & Co. Ltd announces that Schuler AG, a subsidiary of Andritz Group (VIA:ANDR), has acquired AWEBA Werkzeugbau GmbH (“AWEBA”). Harris Williams & Co. acted as the exclusive financial advisor to AWEBA. AWEBA is one of the world’s leading full-service providers of dies and fixtures.Read More

Stock Price % Change TEV / EBITDA TEV / LTM EBITDA LTM Margins

Sub-Sector Median 1 Month 12 Month LTM 2016E Jun-15 Dec-15 Gross EBITDA

Test and Measurement

Instrumentation (0.5%) (0.6%) 12.5x 11.0x 13.5x 13.8x 38.1% 16.3%

Sensors (4.8%) (19.0%) 11.9x 10.5x 11.5x 11.4x 35.9% 22.0%

Technology and Software (4.1%) 12.4% 12.8x 9.9x 13.2x 10.9x 40.9% 15.6%

Life Sciences and Laboratory (2.7%) 11.8% 16.9x 15.6x 15.9x 18.2x 48.2% 22.8%

Flow Control

Pumps and Filtration (2.8%) (6.6%) 12.5x 11.1x #VALUE! 11.8x 33.1% 16.0%

Valves and Fittings 1.2% 1.5% 11.7x 10.8x 11.1x 10.2x 31.9% 13.9%

Process / Motion Control

Motion and Drives (3.3%) (6.5%) 11.1x 9.8x 11.7x 10.8x 31.6% 16.3%

Intelligent Automation (2.7%) (12.0%) 10.7x 9.7x 11.0x 10.2x 30.0% 12.9%

Actuators and Positioners (1.7%) (9.7%) 11.3x 9.4x 10.1x 9.0x 31.2% 13.7%

Condition Monitoring (1.6%) (8.3%) 11.2x 10.5x 11.9x 10.5x 44.5% 19.3%

Test Services

Testing, Inspection, and Certification 4.5% 3.8% 11.1x 10.7x 10.5x 9.7x 25.8% 19.1%

Engineering and Consulting 0.1% (14.1%) 10.8x 9.2x 10.7x 8.4x 15.9% 7.2%

As of June 30, 2016

http://www.harriswilliams.com/

http://ir.thermofisher.com/investors/news-and-events/news-releases/news-release-details/2016/Thermo-Fisher-Scientific-to-Acquire-FEI-Company/default.aspx

http://www.dematic.com/en-us/news-and-downloads/news-and-events/press-releases/2016/2016/06/21/02/27/2016-06-21-kion-acquires-dematic/

https://www.pehub.com/2016/06/industrial-growth-partners-exits-cambridge-international-holdings-corp/

https://www.pehub.com/2016/05/3333496/

mailto:[email protected]





http://www.harriswilliams.com/news/harris-williams-co-ltd-advises-shareholders-aweba-werkzeugbau-gmbh-its-pending-sale-schuler-ag

PAGE |

WHAT WE’RE READING

2

INVESTMENT OPPORTUNITIES IN THE AUTONOMOUS VEHICLE SPACE

AEROSPACE MANUFACTURING ON BOARD WITH ROBOTS

GLOBAL SMART PARKING MARKET TO GROW AT 32% CAGR TO 2019



INDUSTRIAL SENSORS MARKET TO GROW AT 10% CAGR TO 2020

RnR Market Research

According to recent reports, the global industrial sensors market is expected to grow by a 10% CAGR through 2020.Growth will be largely driven by increased usage of industrial wireless sensing networks, robotics, and automationsystems, all which are expected to see tremendous growth in the next five years as the internet of things continues toexpand its reach. Industrial wireless sensing networks are gaining significant demand as they allow remote monitoringand control of physical conditions of equipment and organizes the collected data at a central location. Further,sensors are widely used in industrial robots and automation systems for sensing, recognition, and interpretation ofprocess functions and applications, thereby further enabling autonomous execution.

Robotics Industries Association

As with many other industries, aerospace OEMs and suppliers are seeking to increase efficiency, decrease productionflaws, and decrease production costs. This matrix of required targets is further leading aerospace companies toautomate their production lines. Historically, the aerospace industry had favored machine tools, or manual labor, dueto the required level of precision and accuracy. However, this mindset is changing as advancements in robotics haveprogressed to a point that allow for the required precision and accuracy of machine tools, coupled with the flexibilityand functionality of robotics. Robotics and process automation have been increasingly utilized for labor intensive taskssuch as drilling, fastening, sealing, painting, and composite part production.

Read the full article here.

TechCrunch

As the pending mass adoption of autonomous vehicles becomes ever closer, many investors are searching for waysto capture significant value from the autonomous vehicle ecosystem. The following article provides some narrativesaround the variety of angles to play the broader autonomous vehicle megatrend via both hardware and softwareapplications.

Read the full article here.

TechNavio Insights

The global smart parking market is estimated to grow at a 31.7% CAGR to $10.5 billion by 2019. The global smartparking meter market is expected to witness rapid growth due to the increasing adoption of effective parkingsolutions by both private and government enterprises. The use of smart parking is expanding due to their increasedreliability and the ability to accept multiple forms of payments such as cash, credit cards, and coins. Further theability of smart meters to provide valuable data allows for the use of advanced analytics to optimize parking for bothmunicipalities and drivers. Parking behavior is changing Parking behavior is changing from search-to-park to pay-to-park driven by innovative technology, user-friendly apps, and easy payment options.

HIGH DEMAND IN THE GLOBAL INTELLIGENT FLOW METER MARKET

Research and Markets

The global intelligent flow meter market is projected to grow by a 5.4% CAGR to reach $7.8 billion by 2022. Theanticipated growth is largely spurred by the expanding proven benefits of accuracy, stability, and reliability offered byintelligent flow meters. The highest demand for these meters is expected to be from the oil & gas, chemicals, andwater & wastewater industries. Multiphase flow meters are expected to grow at particularly high rates due to theirability to measure oil, gas, and water simultaneously – a function extremely valued by end users in those markets.Wastewater applications are also expected to account for significant growth as public awareness and regulatorrequirements increase regarding the hygiene and conservation water – particularly in Asia-Pacific regions. While initialcost outlays for this advancing technology represents a headwind for broad adoption, particularly in a low oil & gasprice environment, the exponentially increasing benefits are expected to ultimately prove more valuable.

http://www.robotics.org/content-detail.cfm/Industrial-Robotics-Industry-Insights/Aerospace-Manufacturing-on-Board-with-Robots/content_id/5960

https://techcrunch.com/2016/06/11/investment-opportunities-in-the-autonomous-vehicle-space/

PAGE |

M&A TRANSACTIONS

3

RECENT M&A TRANSACTIONS



Date Target Vertical Business Description Acquirer

Pending Dematic Process / Motion Control Prov ides integrated automated technology, software and serv ices to

optimize the warehouse supply chain operations.

KION Group AG

Pending FEI Co. Test & Measurement Supplies scientific instruments for nanoscale applications and solutions

for industry and science

Thermo Fisher Scientific,

Inc.

Pending TestAmerica Test Serv ices Prov ides outsourced laboratory testing serv ices JSTI Group

6/30/2016 AWEBA GmbH Process / Motion Control Manufactures and distributes forming tools and die casting molds Schuler AG

6/20/2016 Capstone Technology

Corp

Process / Motion Control Prov ides software solutions for process control optimization and

decision support.

Spectris plc

6/16/2016 Cambridge CMOS Sensors

Ltd.

Test & Measurement Prov ides sensors, non-dispersive infrared (NDIR) gas sensing,

thermometry, spectroscopy, and presence detection solutions for

consumer applications

ams AG

6/12/2016 Gimatic SRL Process / Motion Control Manufactures and distributes pneumatic electric grippers for industrial

automation applications

AGIC Partners GmbH

6/10/2016 Integrated Paper Serv ices,

Inc.

Test Serv ices Prov ides physical and analytical testing solutions for paper and pulp

products

SGS SA

6/9/2016 Chemko Technical

Serv ices, Inc.

Test & Measurement /

Process / Motion Control

Manufactures process control instruments for the aerospace industry Astro Pak Corp.

6/8/2016 Smits Machine Fabriek BV Process / Motion Control Prov ides machining operations product engineering, heat treatment,

surface treatment, assembling, 3D measurement, and testing

Roosen Nederland BV

6/7/2016 AMK Holding GmbH & Co.

KG

Process / Motion Control Prov ides electric drive and control technology, industrial automation

engineering, and automotive serv ices

Anhui Zhongding Sealing

Parts Co. Ltd.

6/3/2016 Cambridge International,

Inc.

Process / Motion Control Manufactures conveyor belts for manufacturing and commerical

settings

Rexnord Corp.

6/2/2016 ALS Ltd. Test Serv ices Prov ides testing serv ices focused on manufacturing and marketing

commercial chemicals and industrial cleaning agents

Advent International / Bain

Capital

6/2/2016 FTE Automotive GmbH Process / Motion Control Manufactures brake and clutch actuation systems, components for

gearbox and powertrain, clutch hydraulic, brake hydraulic and sensors

Valeo SA

6/2/2016 Orchid Mt. Juliet LLC Process / Motion Control Supplies automation equipment to the metal stamping industry Teknia Manufacturing

Group, SL

6/2/2016 Rowecon Systems Ltd. Process / Motion Control Designs and manufactures continuous belt weighing systems and

industrial process control equipment

Précia SA

6/1/2016 Howaldt & Söhne

Antriebstechnik GmbH

Process / Motion Control Prov ides precision machine components, including bearing, drive belts,

and drive technology

Industrial Parts Holding SAS

6/1/2016 Summit Inspection

Serv ices, Inc.

Test Serv ices Prov ides fugitive emissions inspection serv ices for the OPEX

petrochemical industry

Bureau Veritas SA

5/31/2016 Drash Consultants LLC Test Serv ices Offers geotechnical engineering, environmental consulting and

construction materials testing

TTL, Inc.

5/31/2016 Electro Rent Corp. Test & Measurement Engages in the rental, lease and sale of new and used electronic test

and measurement equipment

Platinum Equity LLC

5/31/2016 Infinite RF Holdings, Inc. Test & Measurement Supplies engineering grade radio frequency (RF) technology

components

Genstar Capital LLC

PAGE |

M&A TRANSACTIONS

4



RECENT M&A TRANSACTIONS (CONTINUED)


5/31/2016 Smartbin Test & Measurement Develops, manufactures and markets telemetry and monitoring

products

One Plus Corp

5/26/2016 Meci SAS Test & Measurement Manufactures industrial metering systems Eiffage SA

5/24/2016 Atlantic Supply &

Equipment Co., Inc.

Flow Control Manufactures and supplies pipe, valves, fittings, tools and equipment

for underground water, sewer and storm water systems

Fortiline LLC,CHS Capital

LLC

5/17/2016 Cattin Filtration SAS Flow Control Offers air cleaning and dust extraction products, including filter units,

fans, ducting systems, and waste management and control systems

Cattin Filtration SAS

5/17/2016 NSi Industries LLC Test & Measurement Supplies a wide variety of electrical connectors for construction,

maintenance and repair applications

Blue Sea Capital

Management LLC

5/16/2016 AWG Fittings GmbH Flow Control Manufactures mobile and stationary fire protection systems, fittings, and

hydraulic rescue equipment

IDEX Corp.

5/12/2016 FIGARO Engineering, Inc. Test & Measurement Manufactures gas sensors and gas detection equipment New Cosmos Electric Co.,

Ltd.

5/12/2016 I ris GmbH Infrared &

Intelligent Sensors

Test & Measurement Develops and manufactures sensor components for automatic

passenger counting in various mass transit applications

Innovation in Traffic

Systems AG

5/12/2016 Schatz AG Test & Measurement Manufactures hardware, software, and related serv ice for torque

measuring applications

Kistler Holding AG

5/11/2016 Vanguard Space

Technologies, Inc.

Test Serv ices Specializes in the engineering, tooling, manufacturing, assembly and

testing of high-performance, lightweight and precision aerospace

structures

SolAero Technologies Corp.

5/2/2016 EAC Corp. (Japan) Test Serv ices Prov ides environmental consulting and related research and testing

serv ices

Eurofins Scientific

5/2/2016 WEDGE Energy Serv ices

LLC

Flow Control Prov ides control valve skids and regulator packages, gas and liquid

chromatograph systems and buildings and header systems for oil and

gas measurement applications

Legacy Measurement

Solutions, Inc.,White Deer

Management LLC

4/29/2016 Mastergear Worldwide Flow Control Manufactures valve actuators and mastergear Rotork Plc

4/22/2016 U-Serv GmbH Test & Measurement Offers serv ices such as meter readings, periodic meter replacements,

processing of collection orders, adjustment of gas appliances for the

electric utility market

Eltel AB

4/20/2016 Jaquet Technology Group

AG

Test & Measurement Prov ides speed sensors and sensor technology for ambient conditions,

over-speed protection, and condition monitoring solutions

TE Connectiv ity Ltd.

4/18/2016 Energy Assets Group Plc Test Serv ices Prov ides industrial and commercial gas metering serv ices Alinda Capital Partners Ltd.

4/15/2016 Wita Wilhelm Taake GmbH Test & Measurement Manufactures industrial instruments and related products for measuring,

displaying, and transmitting public serv ice utilities

Shimge Pump Industry

Group Co., Ltd.

4/12/2016 SINC do Brasil

Instrumentação Científica

Ltda.

Test & Measurement Supplies laboratory equipment products Shimadzu Corp.

4/8/2016 F-Suotimet Oy Flow Control Manufactures and sells ventilation filters and filter components Camfil AB

4/6/2016 Douglas Scientific LLC Test & Measurement Designs and manufactures laboratory instrumentation systems LGC Group Holdings Ltd.

4/6/2016 Fluid Controls Ltd. Flow Control Prov ides pressure control equipment to the oil and gas industries Indutrade AB

PAGE |

M&A TRANSACTIONS

5



RECENT M&A TRANSACTIONS (CONTINUED)


4/6/2016 PCB Group, Inc. (New

York)

Test & Measurement Manufactures piezoelectric quartz sensors, accelerometers, and

associated electronics

MTS Systems Corp.

4/4/2016 Lift Truck Specialists, Inc. Process / Motion Control Prov ides material handling equipment for the warehouse environment Fairchild Equipment, Inc.

4/4/2016 Power Automation

Systems, Inc.

Process / Motion Control Manufactures warehouse automation solutions KUKA AG

4/4/2016 Quantitech Ltd. Test & Measurement Prov ides environmental testing and monitoring instrumentation serv ices Gasmet Technologies

Oy,Alder AB

4/1/2016 Dia-Stron Ltd. Test & Measurement Manufactures automated modular testing systems for single fibre and

filaments

Judges Scientific Plc

3/31/2016 Hydro-Technologies, Ltd. Test Serv ices Prov ides hydrology, environmental monitoring, water quality laboratory

testing, and food product quality testing serv ices

Riversun Nursery Ltd.

3/29/2016 HAUFE GmbH & Co. KG Test & Measurement Manufactures industrial instruments STEMAS AG

3/25/2016 Trialon Corp. Test Serv ices Prov ides engineering and reliability testing serv ices Resilience Capital Partners

LLC

3/21/2016 Boston Dynamics, Inc. Process / Motion Control Prov ides engineering and robotics solutions Demiurge Technologies AG

3/21/2016 CH4 Gas Utility &

Maintenance Serv ices Ltd.

Test & Measurement Prov ides traditional and smart gas and electricity metering installations

to the domestic and industrial and commercial sectors

Smart Metering Systems Plc

3/21/2016 Heusser Neweigh LLC Test Serv ices Prov ides weighing and metrology serv ices Rice Lake Weighing

Systems, Inc.

3/18/2016 Hioki India Pvt Ltd. Test & Measurement Develops, manufactures and markets electrical measuring equipment T.R. Khandelwal Enterprises

Pvt Ltd.

3/18/2016 Senmatic A/S Test & Measurement Produces electronic products and sensors for measurement of

temperature, humidity, and gases

Indutrade AB

3/17/2016 SNAP Sensor SA Test & Measurement Manufactures v ision sensing technologies Analog Devices, Inc.

3/17/2016 Steptech Instrument

Serv ices Ltd.

Flow Control Prov ides testing solutions for filters Hamilton Associates, Inc.

3/15/2016 Neptune-Benson, Inc. Flow Control Prov ides water filtration systems, recirculation components, and filter

accessories to the big-water recreational aquatics industry

Evoqua Water

Technologies

PAGE |

PUBLIC MARKETS OVERVIEW

6



TEV / LTM EBITDA TEV / 2016E EBITDA

Test and Measurement Flow Control Process / Motion Control Test Serv ices

NET DEBT / LTM EBITDA AVERAGE EBITDA MARGIN (2014 – 2016P)

AVERAGE CAPEX / REVENUE (2014 – 2016P) RESEARCH & DEVELOPMENT / LTM REVENUE

10.8x

11.1x

11.2x

11.3x

10.7x

11.1x

11.7x

12.5x

16.9x

12.8x

11.9x

12.5x

Engineering and Consulting

Testing, Inspection, and Certification

Condition Monitoring

Actuators and Positioners

Intelligent Automation

Motion and Drives

Valves and Fittings

Pumps and Filtration

Life Sciences and Laboratory

Technology and Software

Sensors

Instrumentation

9.2x

10.7x

10.5x

9.4x

9.7x

9.8x

10.8x

11.1x

15.6x

9.9x

10.5x

11.0x






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

1.8x

1.7x

1.2x

2.1x

0.3x

1.7x

2.0x

1.4x

1.6x

1.5x

3.0x

1.7x






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

9.3%

19.1%

21.6%

15.0%

15.9%

17.3%

14.8%

16.9%

22.9%

19.1%

19.2%

16.5%






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

0.6%

1.8%

2.1%

0.9%

1.1%

1.1%

0.8%

1.3%

1.6%

5.3%

2.3%

1.2%






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

0.2%

0.4%

7.5%

3.9%

4.2%

4.0%

1.4%

2.3%

5.3%

5.6%

4.4%

5.9%






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

PAGE |

0

50

100

150

200

250

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Nu

mb

er

ofA

nn

ou

nc

ed

M&

A D

ea

ls

GLOBAL M&A TRENDS

7

GENERAL MARKET OBSERVATIONS

INDUSTRIAL TECHNOLOGY QUARTERLY M&A ACTIVITY

The global M&A industry saw $4.7 trillion in deals announced during 2015, a 42.2% increase compared to the $3.3trillion completed during 2014.

The U.S. M&A environment remains strong with aggregate deal value increasing by 64.3% in 2015 relative to2014 despite deal volume decreasing by 1.6% over the same time period.

European M&A activity increased by 2.9% from 2014 to 2015, with aggregate deal value increasing by 7.7%.

The global Industrial Technology sector saw 225 deals close during Q2 2016, representing a 10.8% increase over Q12016.



2010 2011 2012 2013 2014 2015 2016

PAGE |

(1.0%)

(0.5%)

0.0%

0.5%

1.0%

1.5%

2.0%

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

U.S. EU-28

98

100

102

104

106

108

U.S. EU-28

90

100

110

120

130

U.S. EU-28

90

100

110

120

130

U.S. EU-28

ECONOMIC UPDATE

8

INDUSTRIAL PRODUCTION

NEW ORDERS

ECONOMIC SENTIMENT

U.S. Real U.S. GDP increased by 0.2% in Q1 2016, growing at an annual rate of

0.8%. The deceleration in growth during in the first quarter primarily reflected a

larger decrease in nonresidential fixed investment, a deceleration in personalconsumption expenditures, and a downturn in federal government spendingthat were partly offset by an upturn in state and local government spending,and an acceleration in residential fixed investment.

EU-28 EU-28 GDP rose by 0.5% in Q1 2016, increasing 2.0% annually. Growth in the eurozone was driven by better-than-expected recovery in

France and Spain.

U.S. Industrial production decreased 0.4% in May after increasing 0.6% in April. The output of manufacturing decreased by 0.4%, primarily led by a large step-

down in the production of motor vehicles and parts; factory output, excludingmotor vehicles and parts, edged down 0.1%.

EU-28 Industrial production in the eurozone grew 2% year-on-year in April, following a

meager 0.2% rise in March and beating market expectations of a 1.4% gain. Industrial output rebounded after two straight falls, boosted by a surge in the

output of durable consumer goods.

U.S. U.S. new orders increased by 3.4% in April, representing the third consecutive

month of rising new orders. Through the first four months of 2016, new orders have grown by 5.7%.

EU-28 The EU-28 saw new orders increase by 0.8% from February to March. Since December 2015, new orders have grown 1.7% to reach levels that have

not been seen since July 2015.

U.S. U.S. economic sentiment increased 0.6% in April to 123.9, following no change

in March, and a 0.1% increase in February. All components contributed to the rebound from an essentially flat Q1;

however consumer expectations continue to lag behind. Despite a slow start in 2016, labor market and financial indicators, and housing

permits all point to a moderate growth trend throughout the remainder of2016.

EU-28 Economic sentiment in the EU-28 increased by 0.5% to 105.7 in May. The increase in eurozone sentiment was stemmed largely from improvements

in confidence in the retail and construction markets, while confidenceremained stable in industry and decreased slightly in the services sector.



GROSS DOMESTIC PRODUCT

Apr-16:

105.6

May-16:

103.6

Apr-16:

107.8

Apr-16:

123.9

May-16:

105.7

Mar-16:

118.3

Q1:

0.2%

Q1:

0.5%

PAGE |

HARRIS WILLIAMS & CO. OFFICE LOCATIONS

UNITED STATES EUROPE

BostonTwo International Place24th FloorBoston, Massachusetts 02110Phone: +1 (617) 482-7501

Cleveland1900 East 9th Street20th FloorCleveland, Ohio 44114Phone: +1 (216) 689-2400

Minneapolis222 South 9th StreetSuite 3350Minneapolis, Minnesota 55402Phone: +1 (612) 359-2700

Richmond (Headquarters)1001 Haxall Point9th FloorRichmond, Virginia 23219Phone: +1 (804) 648-0072

San Francisco575 Market Street31st FloorSan Francisco, California 94105Phone: +1 (415) 288-4260

FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone: +49 069 3650638 00

London63 Brook StreetLondon W1K 4HS, EnglandPhone: +44 (0) 20 7518 8900

NETWORK OFFICES

Beijing

Hong Kong

Mumbai

New Delhi

Shanghai

Energy, Power& Infrastructure

IndustrialsHealthcare & Life Sciences

Transportation & Logistics

Aerospace, Defense & Government

Services

Business Services

Building Products & Materials

Technology, Media & Telecom

Specialty Distribution

Consumer

Industrials

Industrial Technology

Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website at www.harriswilliams.com/industries.

OUR FIRM



8

PAGE |

PUBLIC COMPARABLES

10



TEST AND MEASUREMENT

As of June 30, 2016 ($ in Millions, except per share amounts)

Test and Measurement Public Comparables

LTM Margins Current 1-Month 1-Year % of R&D / Sales TEV / EBITDA

EBITDA Gross TEV Price Change Change LTM High LTM LTM 2016E

Instrumentation

AMETEK, Inc. 27.5% 38.0% $12,752 $46.23 (3.3%) (16.7%) 80.2% 3.0% 11.7x 12.2x

Danaher Corporation 22.8% 52.5% $82,207 $101.00 2.7% 17.0% 100.0% 0.6% 17.5x 15.4x

Spectris plc 17.2% 54.2% $3,056 $24.40 (0.1%) (26.7%) 72.9% 7.8% 9.8x 10.7x

Badger Meter, Inc. 16.7% 35.9% $1,110 $73.03 (2.6%) 14.5% 92.8% 2.5% 17.6x 16.0x

Teledyne Technologies Incorporated 16.6% 38.3% $4,093 $99.05 0.9% (7.0%) 88.6% 18.7% 10.7x 11.3x

National Instruments Corporation 16.1% 73.6% $3,206 $27.40 (4.1%) (7.3%) 86.4% 13.6% 16.6x 13.5x

ESCO Technologies Inc. 15.3% 36.0% $1,096 $39.94 (0.8%) 5.9% 95.8% 5.3% 13.4x 10.0x

JENOPTIK AG 11.8% 32.7% $978 $16.44 3.1% 30.4% 96.9% 6.2% 11.1x 9.3x

Oxford Instruments plc 13.2% 43.2% $726 $9.50 1.5% (36.3%) 61.9% 5.5% 10.1x 9.5x

I tron, Inc. 7.5% 28.1% $1,918 $43.10 (2.2%) 27.1% 94.3% 8.6% 13.7x 9.7x

Median 16.3% 38.1% (0.5%) (0.6%) 90.7% 5.9% 12.5x 11.0x

Mean 16.5% 43.3% (0.5%) 0.1% 87.0% 7.2% 13.2x 11.8x

Sensors

Sensata Technologies Holding NV 24.7% 26.2% $9,180 $34.89 (5.7%) (33.9%) 65.2% 4.2% 12.7x 11.5x

FLIR Systems, Inc. 22.9% 48.4% $4,139 $30.95 (0.6%) (0.4%) 90.8% 8.5% 11.6x 11.0x

Meggitt PLC 25.1% 35.3% $5,861 $5.43 (3.9%) (26.4%) 67.9% 4.5% 9.3x 10.0x

Honeywell International Inc. 21.1% 36.5% $100,031 $116.32 2.2% 13.1% 98.1% 4.9% 12.3x 11.9x

MTS Systems Corporation 10.6% 38.5% $609 $43.84 (8.3%) (36.0%) 62.9% 4.2% 10.2x 7.6x

First Sensor AG 6.5% 12.0% $139 $10.22 (10.8%) (11.6%) 70.3% 0.2% 14.0x 7.7x

Median 22.0% 35.9% (4.8%) (19.0%) 69.1% 4.4% 11.9x 10.5x

Mean 18.5% 32.8% (4.5%) (15.9%) 75.9% 4.4% 11.7x 10.0x


Hexagon AB 29.4% 54.3% $14,882 $36.10 (6.9%) (1.8%) 86.6% 5.6% 15.0x 13.8x

Muehlbauer Holding AG 20.5% 32.6% $552 $42.24 13.1% 82.8% 95.1% NM 8.9x NA

FARO Technologies, Inc. 7.8% 49.3% $400 $33.83 (4.4%) (27.8%) 71.6% 8.4% 16.2x 9.9x

Mistras Group, Inc. 10.7% 26.0% $801 $23.87 (3.8%) 26.6% 90.2% 0.4% 10.5x 9.1x

Median 15.6% 40.9% (4.1%) 12.4% 88.4% 5.6% 12.8x 9.9x

Mean 17.1% 40.5% (0.5%) 19.9% 85.9% 4.8% 12.6x 11.0x


Waters Corporation 32.7% 58.7% $10,743 $140.65 2.3% 9.0% 99.9% 5.8% 16.1x 15.1x

Mesa Laboratories, Inc. 29.8% 53.9% $502 $123.00 24.7% 37.4% 93.3% 4.7% 19.9x 18.0x

Thermo Fisher Scientific Inc. 24.7% 45.7% $73,121 $147.76 (2.6%) 12.9% 95.4% 4.1% 17.5x 16.1x

Mettler-Toledo International Inc. 23.1% 47.4% $10,595 $364.92 (2.8%) 5.8% 94.4% 5.0% 19.2x 17.7x

Sartorius AG 22.2% 48.9% $5,600 $77.77 12.8% 63.1% 82.1% 4.1% 20.4x 16.2x

Agilent Technologies, Inc. 22.6% 51.4% $14,303 $44.36 (3.3%) 13.0% 95.0% 7.7% 15.5x 15.0x

PerkinElmer, Inc. 18.3% 43.7% $6,739 $52.42 (4.3%) (0.1%) 93.4% 5.5% 16.3x 14.4x

Bruker Corporation 15.1% 44.9% $3,625 $22.74 (13.9%) 10.6% 76.2% 9.0% 14.8x 13.1x

Median 22.8% 48.2% (2.7%) 11.8% 93.9% 5.3% 16.9x 15.6x

Mean 23.5% 49.3% 1.6% 19.0% 91.2% 5.7% 17.4x 15.7x

Overall Median 19.4% 43.5% (2.6%) 5.8% 90.5% 5.3% 13.8x 11.9x

Overall Mean 19.0% 42.4% (0.8%) 4.9% 85.7% 5.9% 14.0x 12.4x

Stock Performance

PAGE |

PUBLIC COMPARABLES

11

FLOW CONTROL




Flow Control Public Comparables




Graco Inc. 27.0% 53.2% $4,906 $78.99 (1.6%) 10.7% 91.2% 4.6% 14.1x 13.7x

IDEX Corporation 25.2% 46.6% $7,034 $82.10 (1.5%) 3.9% 94.2% 1.8% 13.8x 13.5x

IMI plc 17.8% 42.3% $3,891 $12.93 (11.6%) (28.1%) 70.9% 3.1% 9.2x 11.8x

Essentra plc 18.3% 27.3% $2,364 $6.86 (43.2%) (56.5%) 42.6% 0.7% 7.7x 9.0x

Flowserve Corporation 16.5% 34.2% $7,253 $45.17 (6.2%) (13.3%) 85.2% 0.9% 9.6x 11.1x

Pentair plc 17.2% 33.9% $15,312 $58.29 (3.2%) (15.2%) 83.7% 1.9% 13.8x 12.5x

ITT, Inc. 16.0% 32.6% $2,674 $31.98 (9.9%) (23.4%) 75.4% 3.2% 6.7x 6.8x

Xylem Inc. 16.6% 37.6% $8,686 $44.65 (0.0%) 21.3% 95.7% 2.6% 14.3x 13.3x

Trelleborg AB 15.7% 32.6% $5,618 $17.55 (5.9%) (6.6%) 86.7% 1.5% 12.2x 10.6x

ESCO Technologies Inc. 15.3% 36.0% $1,096 $39.94 (0.8%) 5.9% 95.8% 5.3% 13.4x 10.0x

Donaldson Company, Inc. 16.1% 33.6% $4,991 $34.36 2.5% (3.9%) 92.7% 2.8% 13.9x 13.5x

Gorman-Rupp Company 12.7% 23.2% $675 $27.41 (11.4%) (2.8%) 84.1% NM 13.1x NA

Franklin Electric Co., Inc. 14.4% 32.2% $1,701 $33.05 (1.0%) 2.4% 92.9% 2.1% 12.8x 11.5x

Colfax Corporation 12.7% 30.6% $4,705 $26.46 (2.3%) (41.6%) 56.8% 1.0% 9.3x 10.0x

SPX Flow, Inc. 11.0% 32.2% $1,907 $26.07 (13.0%) NA 62.0% NM 7.5x 7.8x

Sulzer AG 10.4% 30.6% $2,276 $86.64 (1.8%) (14.0%) 74.1% 2.5% 7.1x 9.3x

Median 16.0% 33.1% (2.8%) (6.6%) 84.6% 2.3% 12.5x 11.1x

Mean 16.4% 34.9% (6.9%) (10.7%) 80.2% 2.4% 11.2x 11.0x

Valves and Fittings

Curtiss-Wright Corporation 18.8% 35.5% $4,442 $84.25 1.2% 14.5% 96.0% 2.8% 10.7x 10.8x

Weir Group PLC 15.9% 32.0% $5,321 $19.26 10.4% (28.3%) 70.6% 1.3% 11.4x 15.2x

Mueller Water Products, Inc. 16.2% 29.8% $2,257 $11.42 3.7% 24.0% 97.2% 1.3% 11.9x 10.8x

Parker-Hannifin Corporation 13.8% 23.0% $15,905 $108.05 (5.9%) (7.8%) 91.6% 4.8% 13.7x 9.6x

Crane Co. 16.7% 34.8% $3,821 $56.72 (1.2%) (2.8%) 94.2% 2.5% 8.3x 8.5x

Aalberts Industries N.V. 14.1% 17.7% $4,126 $30.05 (14.9%) (5.4%) 82.4% NM 10.7x 9.4x

Watts Water Technologies, Inc. 8.1% 37.7% $2,331 $58.26 1.2% 13.1% 96.2% 1.6% 19.6x 11.0x

Indutrade AB 13.4% 33.1% $2,746 $19.60 (2.1%) 26.4% 92.5% 1.1% 14.6x 13.5x

CIRCOR International, Inc. 11.6% 31.8% $970 $56.99 1.7% 5.7% 92.5% 0.9% 12.7x 13.2x

Mueller Industries, Inc. 7.7% 12.2% $1,785 $31.88 2.5% (8.7%) 90.3% NM 11.1x NA

Median 13.9% 31.9% 1.2% 1.5% 92.5% 1.4% 11.7x 10.8x

Mean 13.6% 28.8% (0.3%) 3.1% 90.3% 2.0% 12.5x 11.3x

Overall Median 15.8% 32.6% (1.7%) (3.9%) 90.7% 2.0% 12.1x 10.9x

Overall Mean 15.3% 32.6% (4.4%) (5.2%) 84.1% 2.3% 11.7x 11.1x

Stock Performance

PAGE |

PUBLIC COMPARABLES

12

PROCESS / MOTION CONTROL




Process / Motion Control Public Comparables



Motion and Drives

AMETEK Inc. 27.5% 38.0% $12,752 $46.23 (3.3%) (16.7%) 80.2% 3.0% 11.7x 12.2x

Danaher Corporation 22.8% 52.5% $82,207 $101.00 2.7% 17.0% 100.0% 6.0% 17.5x 15.4x

Rockwell Automation, Inc. 20.7% 46.9% $14,557 $114.82 (1.1%) (9.1%) 90.6% 4.6% 11.1x 11.5x

Nidec Corporation 16.2% 23.0% $22,433 $75.27 (2.4%) (1.4%) 81.7% 4.4% 14.1x 11.5x

Rexnord Corporation 16.9% 31.6% $3,463 $19.63 (5.4%) (18.4%) 80.7% 2.0% 10.7x 9.2x

Schneider Electric SE 16.3% 36.4% $39,096 $58.95 (8.9%) (15.5%) 82.3% 3.6% 8.1x 9.0x

ABB Ltd. 14.0% 29.8% $45,024 $19.63 (5.6%) (6.5%) 90.2% 3.9% 9.0x 9.7x

Yaskawa Electric Corporation 12.4% 30.9% $3,601 $12.90 1.9% 1.5% 90.0% 4.0% 8.5x 8.3x

Siemens AG 10.7% 28.9% $112,142 $102.00 (5.3%) 0.3% 91.3% 5.9% 12.1x 9.8x

Median 16.3% 31.6% (3.3%) (6.5%) 90.0% 4.0% 11.1x 9.8x

Mean 18.4% 36.1% (2.8%) (6.1%) 87.0% 3.9% 11.3x 10.9x


Fanuc Corporation 38.0% 47.6% $24,171 $161.18 5.3% (21.5%) 77.8% 5.2% 12.3x 13.3x

Rockwell Automation, Inc. 20.7% 46.9% $14,557 $114.82 (1.1%) (9.1%) 90.6% 4.6% 11.1x 11.5x

Metso Oyj 13.3% 30.3% $3,632 $5.84 (0.6%) (14.9%) 81.9% 1.9% 8.3x 9.5x

ABB Ltd. 14.0% 29.8% $45,024 $19.63 (5.6%) (6.5%) 90.2% 3.9% 9.0x 9.7x

FARO Technologies, Inc. 7.8% 49.3% $400 $33.83 (4.4%) (27.8%) 71.6% 8.4% 16.2x 9.9x

Automation Tooling Systems Inc. 12.4% 22.5% $808 $7.48 (8.6%) (38.6%) 59.0% NM 8.2x 8.2x

Krones AG 8.5% 24.4% $3,042 $105.32 (11.7%) (1.0%) 82.9% 4.2% 10.2x 8.4x

KUKA Aktiengesellschaft 8.0% 22.1% $4,417 $119.26 1.9% 40.7% 96.8% 3.1% 16.8x NA

Median 12.9% 30.0% (2.7%) (12.0%) 82.4% 4.2% 10.7x 9.7x

Mean 15.3% 34.1% (3.1%) (9.9%) 81.3% 4.5% 11.5x 10.1x


Pentair plc 17.2% 33.9% $15,312 $58.29 (3.2%) (15.2%) 83.7% 1.9% 13.8x 12.5x

CTS Corporation 13.0% 33.4% $602 $17.92 0.2% (6.7%) 88.5% 5.9% 12.1x 8.7x

Eaton Corp. Plc 16.4% 31.9% $35,580 $59.73 (3.1%) (11.7%) 87.5% 3.0% 10.4x 10.8x

Parker-Hannifin Corporation 13.8% 23.0% $15,905 $108.05 (5.9%) (7.8%) 91.6% 4.8% 13.7x 9.6x

Moog Inc. 13.5% 29.3% $2,744 $53.92 (0.0%) (24.2%) 75.1% 5.2% 8.1x 8.8x

Altra Industrial Motion Corp. 13.6% 30.6% $885 $26.98 (0.2%) (0.2%) 89.9% 2.4% 8.7x 9.1x

Median 13.7% 31.2% (1.7%) (9.7%) 88.0% 3.9% 11.3x 9.4x

Mean 14.6% 30.3% (2.0%) (11.0%) 86.0% 3.9% 11.1x 9.9x


Cognex Corporation 30.4% 77.3% $3,330 $43.10 0.1% (9.3%) 88.4% 15.5% 24.3x 23.2x

AMETEK Inc. 27.5% 38.0% $12,752 $46.23 (3.3%) (16.7%) 80.2% 3.0% 11.7x 12.2x

MKS Instruments, Inc. 22.0% 43.3% $1,640 $43.06 5.1% 13.6% 100.0% 8.4% 9.2x 7.8x

ISRA VISION AG 27.9% 47.6% $387 $81.15 10.5% 26.7% 93.4% 6.2% 10.8x 9.2x

Teledyne Technologies Incorporated 16.6% 38.3% $4,093 $99.05 0.9% (7.0%) 88.6% 18.7% 10.7x 11.3x

National Instruments Corporation 16.1% 73.6% $3,206 $27.40 (4.1%) (7.3%) 86.4% 18.6% 16.6x 13.5x

Basler AG 15.2% 45.6% $188 $54.66 (7.4%) (9.5%) 86.4% 6.7% 13.1x 9.7x

SKF AB 14.9% 27.1% $10,265 $15.83 (9.9%) (31.5%) 68.2% 3.3% 7.7x 8.5x

Median 19.3% 44.5% (1.6%) (8.3%) 87.4% 7.5% 11.2x 10.5x

Mean 21.3% 48.8% (1.0%) (5.1%) 86.5% 10.0% 13.0x 11.9x

Overall Median 16.1% 33.4% (3.1%) (9.1%) 87.5% 4.5% 11.1x 9.7x

Overall Mean 17.4% 37.5% (2.3%) (7.6%) 85.3% 5.7% 11.8x 10.7x

Stock Performance

PAGE |

PUBLIC COMPARABLES

13

TEST SERVICES




Test Services

LTM Margins Current 1-Month 1-Year % of TEV / EBITDA

EBITDA Gross TEV Price Change Change LTM High LTM 2016E


ALS Ltd. 19.4% 29.9% $2,023 $3.64 24.1% (14.5%) 81.8% 10.4x 10.3x

SGS SA 26.0% 38.9% $17,992 $2,284.95 7.1% 25.9% 99.8% 11.7x 13.8x

Bureau Veritas SA 18.8% 15.9% $11,392 $21.11 (1.8%) (9.1%) 87.2% 11.8x 11.1x

SAI Global Limited 21.3% 25.7% $740 $2.73 8.1% (13.3%) 79.6% 7.9x 7.5x

Intertek Group plc 19.8% 14.9% $8,727 $46.51 1.9% 20.8% 95.0% 13.3x 13.4x

Eurofins Scientific 18.4% 11.6% $7,745 $370.61 (4.5%) 16.7% 93.0% 19.4x 15.4x

APPLUS S.A. 11.6% 29.1% $2,029 $9.73 13.8% (15.3%) 82.3% 9.3x 9.6x

Mistras Group, Inc. 10.7% 26.0% $801 $23.87 (3.8%) 26.6% 90.2% 10.5x 9.1x

Median 19.1% 25.8% 4.5% 3.8% 88.7% 11.1x 10.7x

Mean 18.3% 24.0% 5.6% 4.7% 88.6% 11.8x 11.3x


Abengoa S.A. Class A 6.5% 7.9% $11,788 $0.63 14.0% (82.0%) 17.6% 28.3x NA

FCC, S.A. 9.3% 25.9% $9,149 $8.43 0.1% (14.1%) 79.3% 13.7x 9.7x

Tetra Tech, Inc. 10.9% 18.1% $2,065 $30.75 0.5% 20.6% 96.9% 11.0x 9.5x

Arcadis NV 8.4% 15.9% $1,839 $15.08 (9.6%) (46.3%) 53.2% 5.8x 6.8x

Jacobs Engineering Group Inc. 6.2% 16.2% $6,070 $49.81 (1.7%) 22.6% 93.4% 8.1x 9.0x

Amec Foster Wheeler plc 6.6% 9.9% $3,913 $6.55 3.0% (48.2%) 48.7% 7.1x 8.1x

WSP Global Inc. 7.2% 15.3% $3,658 $30.43 (6.7%) (2.9%) 80.1% 10.8x 9.5x

Median 7.2% 15.9% 0.1% (14.1%) 79.3% 10.8x 9.2x

Mean 7.9% 15.6% (0.1%) (21.5%) 67.0% 12.1x 8.8x

Overall Median 10.9% 16.2% 0.5% (9.1%) 82.3% 10.8x 9.5x

Overall Mean 13.4% 20.1% 3.0% (7.5%) 78.5% 11.9x 10.2x

Stock Performance

PAGE |

HARRIS WILLIAMS & CO.

Automation World

Automation.com

Bloomberg

Eurostat

FactSet

Flow Control Magazine

IHS

14

SOURCES



Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

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 THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE 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. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBERS.

The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. 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. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Copyright© 2016 Harris Williams & Co., all rights reserved.

DISCLOSURES

Mergermarket

PitchBook

PNC Economic Outlook

S&P Leveraged Commentary & Data

Sensors Magazine

The Association for Manufacturing Technology

Thomson Reuters

http://www.harriswilliams.com/

industry update summer 2016 - harris williams...global smart parking market to grow at 32% cagr to...

Documents