Energy & Power Industry Update - Harris Williams · past month, Bloomberg Businessweek published...
Transcript of Energy & Power Industry Update - Harris Williams · past month, Bloomberg Businessweek published...
www.harriswilliams.com
Member FINRA/SIPC
Energy & Power Industry Update December 2011
Energy & Power Industry Update December 2011
What We’ve Been Reading
page 1
• Ahead of the U.S. State Department’s decision to delay its decision on Keystone XL pipeline this
past month, Bloomberg Businessweek published “Pipe Dreams,” which posited, “The Keystone XL
pipeline is a solution to the U.S. energy crunch. So why is it one of the most hotly contested
projects in decades? And is it even good business?” The article offers an excellent summation of
the issues at play and fairly presents both the pros and cons of the debate. On the second question
above, it suggests that the underlying oil to be transported in the pipeline may soon be
uneconomical to extract. Industry analysts estimate that once extraction in the Canadian tar sands
moves from mining to in situ extraction, production costs for the oil could reach as high as $115 per
barrel, nearly twice the $60 per barrel current estimated cost of extraction.
• The State Department’s non-decision was followed by a flurry of opinion pieces. Not to spoil any
surprises on the sources here, but The New York Times hailed the decision as “The Right Move on
Keystone,” while The Wall Street Journal decried the decision as the “Keystone Cop-Out.” One of
the more interesting responses was from Michael Levi of the Council on Foreign Relations who, in
The New York Times, proclaimed “A Shortsighted Victory in Delaying the Keystone XL Pipeline.”
Levi argues that the environmental lobby’s ultimate alliance with local opposition groups to halt the
project (rather than on their initial opposition based on increased greenhouse emissions) may come
to haunt other energy initiatives, particularly renewable energy projects and their respective
transmission lines often subject to the same type of local opposition.
• On his blog, Secret Formula, Matthew Nordan of Venrock Capital examines “The State of
Cleantech Venture Capital” in four parts and from several different perspectives. As of this writing,
“Part 1: The Money” and “Part 2: The Investors” had been released, both of which offer some
interesting insights and are well worth reading. In Part 1, Nordan reviews historical funding for
cleantech start-ups and extrapolates that the next several years will see an unprecedented need for
late-stage capital (more than $3 billion per year) for cleantech companies. Based on recent raises
for late-stage funds, Nordan believes the money will be there, but potentially to the detriment of
early stage cleantech companies seeking funds. In Part 2, Nordan notes the “conventional wisdom”
on cleantech investing as: “Cleantech VC must be performing much worse than VC overall. First,
very few exits have occurred relative to the large amount of money invested. Second, cleantech
companies are time-consuming to develop – so when exits do occur, they’ll take longer. Finally,
during the same time period that cleantech VC got under way, Internet VC investment yielded big
wins like LinkedIn and Groupon. Doubtless, cleantech returns must look awful by comparison.” He
then writes, “Every part of the statement above is incorrect,” which is followed by a point-by-point
rebuttal.
• Finally, Foreign Policy, in “The America Issue,” featured a concise review of U.S. energy
consumption from Valclav Smil, one of the world’s foremost experts on energy, titled “A Hummer
in Every Driveway.” Smil opens, “The problems that ail the U.S. economy and American society
are one and the same: Both consume too much and refuse to make badly needed changes. This is
true above all in the realm of energy. The United States doesn't need exotic biofuels or balloon-
borne wind turbines. Its real problems are wasteful private energy use and the near-total absence of
effective, down-to-earth, long-term policies.”
Energy & Power Industry Update December 2011
LTM EBITDA Multiples1
Industry Observations
LTM Indexed Stock Performance1
Indexed LTM EBITDA Multiples1
• The Energy, Power, and Infrastructure and Industrial Services indices have stabilized following
recent momentum.
• The North American rig count continues to set record highs, eclipsing 2,500 total rigs.
• Many commodity prices have risen in recent months amid rising demand and uncertainty
regarding the Euro debt crisis.
– WTI Crude is trading above $100 per barrel, approaching its one-year high of $113.93.
– Gasoline, at $2.63 a gallon, is trading approximately 25% higher than December 2010
levels.
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Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
S&P 500 Energy Power Industrial & Infrastructure Services
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Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11
Energy Power Industrial & Infrastructure Services
page 2
Index
%
Change
S&P 4.95
Energy 9.48
Power (3.72)
I & IS 1.94
Index
%
Change
Energy 51.26
Power (2.70)
I & IS 123.67
Energy & Power Industry Update December 2011
Key Trading Statistics1
Current Valuations Versus Historical 5-Year Average1
Note: Based upon current EV / LTM EBITDA versus 5-year historical average. For Cleantech and Renewables, valuation is based upon EV /
LTM Sales.
5-Year
Average
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
200.0%
Storage and
Transportation
Independent Power
Producers
Electric Utilities
Industrial & Infrastructure
Services
Exploration and
Production
Mid-Cap Power
Energy Services and
Equipment
Integrateds Engineering and
Construction
Diversified Power
Refining Coal Producers
Cleantech Renewables
page 3
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
200.0%
Enegy Power Industrial & Infrastructure Services
Enegy Power Industrial & Infrastructure Services
Stock Price % Change TEV / 2011 P/E Ratio
Industry Segment 1 Month 12 Month 11/17/10 5/17/11 Current EBITDA Current 2009
Energy
Integrateds 3.1% 12.1% 4.8x 4.9x 3.9x 3.6x 9.2x 8.7x
Energy Services and Equipment 8.9% 11.7% 9.6x 9.5x 7.6x 5.6x 18.0x 9.9x
Exploration and Production 4.0% 0.8% 6.8x 9.6x 6.9x 5.6x 25.2x 14.4x
Coal Producers (3.3%) (39.9%) 9.6x 8.3x 6.5x 4.2x 16.3x 10.6x
Refining (4.8%) 43.9% 8.7x 6.5x 3.2x 3.0x NM 5.3x
Storage & Transportation 3.0% 9.1% 14.2x 13.4x 14.3x 10.6x 20.7x 18.4x
Power
Diversified Power (3.7%) (8.6%) 9.8x 9.8x 7.8x 7.2x 13.6x 10.8x
Mid-Cap Power 2.4% 5.4% 8.2x 9.4x 7.5x 6.4x 16.2x 13.3x
Independent Power Producers (2.1%) (1.4%) 6.9x 11.7x 11.2x 8.2x 19.7x 22.0x
Electric Utilities 0.7% 12.9% 7.7x 8.9x 9.1x 8.1x 14.7x 14.3x
Renewables (2.3%) (35.9%) 1.2x 1.4x 1.0x 0.8x 6.3x 11.2x
Cleantech 3.7% (35.5%) 1.7x 1.4x 0.9x 0.8x 15.0x 11.5x
Industrial & Infrastructure Services
Engineering & Construction 1.1% (0.4%) 7.7x 9.9x 7.9x 5.6x 16.6x 12.9x
Industrial & Infrastructure Services 0.1% 11.6% 8.9x 9.0x 6.6x 6.2x 14.7x 11.4x
2011 Revenue
TEV /
TEV / LTM EBITDA Multiple as of
LTM Revenue
Energy & Power Industry Update December 2011
Gasoline and Ethanol1
Oil1 Natural Gas1
North American Rig Counts3
Electricity Prices1 Coal1
0.00
20.00
40.00
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80.00
100.00
120.00
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
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Ap
r-1
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Ma
y-1
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Jun
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g-1
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Sep
-11
Oct-
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No
v-1
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($ p
er b
bl)
0.00
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3.00
4.00
5.00
6.00
No
v-1
0
Dec-1
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Jan
-11
Feb
-11
Ma
r-1
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Ap
r-1
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Ma
y-1
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Jun
-11
Jul-
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g-1
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Sep
-11
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No
v-1
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($ p
er M
MB
tu)
0.00
0.75
1.50
2.25
3.00
3.75
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct-
11
No
v-1
1
($ p
er g
all
on
)
Gas oline Ethanol
0
500
1,000
1,500
2,000
2,500
3,000
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
Jul-
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Au
g-1
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Sep
-11
Oct-
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(# r
igs)
0.0
40.0
80.0
120.0
160.0
0.0
20.0
40.0
60.0
80.0
100.0
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
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Ap
r-1
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Ma
y-1
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-11
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g-1
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-11
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v-1
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er t
on
-R
ott
erd
am
)
($ p
er t
on
-C
en
tra
l
Ap
pa
lach
ian
)
Central Appalachian Rotterdam
0.00
20.00
40.00
60.00
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100.00
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct-
11
No
v-1
1
($ p
er M
Wg
)
$102.60 per bbl
$50.90 per MWg
page 4
$3.48 per MMBtu
$2.47 per gallon
$2.63 per gallon
CAPP:
$69.95 per ton
Rotterdam:
$115.55 per ton
2,525rigs
Energy & Power Industry Update December 2011
Quarterly United States E&P M&A Activity1
Select Recently Announced Energy & Power Transactions1,2
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10
20
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40
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Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
Nu
mb
er o
f T
ran
sact
ion
s
page 5
Date Target Business Description Acquirer
11/27/2011 ASCO plc UK based provider of outsourced logistics services and
solutions to the oil and gas industry
Doughty Hansen & Co.
11/23/2011 Seaboard International, Inc. US based provider of wellhead surface equipment and
services used in the production of oil and gas
The Weir Group Plc
11/15/2011 Powercorp Pty Limited Australia based provider of renewable power
automation systems and remote power solutions
ABB Ltd.
11/14/2011 Hazmasters Environmental Controls,
Inc.
Canada based provider of customized work
environment safety solutions
Trivest
11/10/2011 Kleen Soil US based provider of cleaning services for non-
hazardous petroleum-contaminated soils
Clean Earth
11/9/2011 Agilewaves, Inc. US based provider of building energy management
software and hardware products
Serious Energy, Inc.
11/3/2011 Summit Industrial Construction, LLC US based provider of heavy industrial construction
services
The Stephens Group, LLC
11/1/2011 X3M International - well intervention
tech. division
Oman based provider of down-hole intervention service
tools and technology products
Aker Solutions ASA
10/31/2011 GSE Consulting, LP US based provider of energy management and
consulting services
World Energy Solutions, Inc.
10/31/2011 Gryphon International Engineering
Services, Inc.
Canada based provider of consulting engineering
services
CHA Consulting, Inc.
10/28/2011 Delta Rigging & Tools - offshore
equip. rental division
US based provider of hoisting, winching, and rigging
products to industrial markets
Hertz Global Holdings, Inc.
10/18/2011 Oil Lift Technology, Inc. Canada based manufacturer of progressive cavity pump
products for the artificial lift market
Dover Corporation
10/17/2011 TEC, Inc. US based provider of environmental management
consulting services
Cardno Limited
10/13/2011 Kline Oilfield Equipment, Inc. US based manufacturer of completion and workover
tools used in the oil and gas industry
Logan International Inc.
Member FINRA/SIPC
Energy & Power Industry Update December 2011
page 6
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 11/17/11 Prior Month Prior Year LTM High 11/17/10 5/17/11 Current EBITDA Current 2011 5/17/2011
TEV / LTM EBITDA Multiple as of
Energy
Integrateds
Exxon Mobil Corporation $387,081.5 $77.84 (1.3%) 12.8% 88.2% 7.4x 6.7x 5.5x 4.3x 9.4x 9.3x 0.1x
Chevron Corporation $191,432.5 $100.18 (2.7%) 21.5% 91.1% 4.5x 4.7x 3.8x 3.2x 7.5x 7.7x (0.3x)
ConocoPhillips $114,759.1 $69.56 0.5% 14.4% 85.0% 4.0x 4.4x 3.7x 3.8x 8.9x 8.2x 0.8x
Occidental Petroleum Corporation $81,061.6 $95.45 12.3% 11.4% 81.0% 6.8x 7.5x 6.1x 5.4x 12.8x 11.7x 0.2x
Hess Corporation $25,783.7 $61.55 5.7% (9.2%) 70.4% 4.1x 4.7x 4.0x 3.4x 11.2x 9.2x 0.8x
Marathon Oil Corporation $19,638.8 $26.81 7.9% (19.3%) 49.4% 5.2x 5.0x 2.3x 2.6x 8.7x 7.9x 0.0x
Median 3.1% 12.1% 83.0% 4.8x 4.9x 3.9x 3.6x 9.2x 8.7x 0.1x
Energy Services and EquipmentLarge Cap Diversified
Schlumberger Limited $105,898.8 $72.39 3.5% (2.7%) 75.7% 16.1x 14.7x 11.2x 8.4x 23.2x 15.1x 0.7x
Halliburton Company $37,553.4 $37.38 5.9% 5.3% 64.7% 9.7x 9.6x 6.7x 5.1x 13.2x 9.5x 0.4x
Baker Hughes Incorporated $28,554.8 $56.64 1.7% 18.3% 69.9% 10.7x 10.3x 7.1x 5.2x 14.4x 10.4x 1.0x
National Oilwell Varco, Inc. $26,746.6 $69.35 5.5% 17.2% 80.0% 7.8x 8.7x 8.2x 6.3x 16.1x 12.3x (1.1x)
Weatherford International Ltd. $19,467.9 $15.64 3.5% (20.2%) 55.6% 13.0x 10.8x 8.3x 5.7x 45.3x 10.3x 3.8x
Median 3.5% 5.3% 69.9% 10.7x 10.3x 8.2x 5.7x 16.1x 10.4x 0.7x
Mid and Small Cap Equipment and Service ProvidersMid and Small Cap Equipment and Service Providers
Cameron International Corporation $12,614.8 $49.54 (0.4%) 10.8% 78.4% 10.6x 11.1x 11.6x 8.6x 21.8x 13.9x 0.0x
Oil States International Inc. $4,710.2 $69.82 5.9% 24.4% 80.3% 7.8x 10.3x 7.8x 5.6x 14.6x 10.4x 2.2x
Complete Production Services, Inc. $3,194.8 $34.68 11.9% 27.1% 81.4% 9.2x 6.1x 5.7x 4.0x 14.5x 8.8x 1.0x
RPC Inc. $3,383.4 $21.46 15.1% 18.5% 73.9% 10.2x 7.5x 5.5x 4.0x 11.6x 8.2x 0.3x
Exterran Holdings, Inc. $2,681.2 $10.94 18.0% (52.4%) 43.0% 7.3x 7.7x 7.4x 6.1x NM NM 4.1x
Dril-Quip, Inc. $2,466.8 $66.82 6.4% (10.6%) 79.7% 15.6x 14.6x 16.3x 11.6x 31.0x 20.4x (1.5x)
Key Energy Services Inc. $3,023.0 $14.56 26.9% 45.9% 70.1% 15.3x 16.5x 9.0x 4.8x 42.2x 9.2x 4.3x
Basic Energy Services, Inc. $1,610.4 $21.76 16.2% 61.7% 57.6% 11.9x 9.3x 5.8x 4.0x 41.0x 8.9x 4.4x
Median 13.5% 21.4% 76.2% 10.4x 9.8x 7.6x 5.2x 21.8x 9.2x 1.6x
Member FINRA/SIPC
Energy & Power Industry Update December 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 11/17/11 Prior Month Prior Year LTM High 11/17/10 5/17/11 Current EBITDA Current 2011 5/17/2011
TEV / LTM EBITDA Multiple as of
page 7
Construction and Equipment ContractorsConstruction and Equipment Contractors
Transocean Ltd. $23,735.4 $48.87 (4.5%) (27.6%) 56.8% 6.2x 8.2x 8.2x 5.9x NM 11.2x 2.2x
Noble Corp. $13,841.2 $35.56 9.8% (2.9%) 76.1% 6.9x 12.7x 14.4x 6.6x 27.2x 9.1x 3.5x
Diamond Offshore Drilling Inc. $9,255.9 $63.07 4.1% (7.3%) 77.7% 5.3x 6.2x 5.2x 6.7x 8.8x 12.9x 0.2x
Technip $7,903.8 $89.33 (0.2%) 8.5% 84.6% 7.4x 7.9x 7.1x NA 16.0x NA (1.6x)
Nabors Industries Ltd. $9,788.6 $19.06 23.3% (11.4%) 58.7% 7.9x 7.4x 5.7x 4.3x 20.4x 8.8x 2.6x
Subsea 7 SA $6,754.5 $19.01 (11.5%) (8.5%) 70.6% 8.5x 17.2x 13.4x NA 15.3x NA (0.1x)
Helmerich & Payne Inc. $5,985.6 $54.85 14.2% 21.0% 74.7% 7.2x 7.3x 6.0x 4.4x 13.9x 10.5x (0.2x)
Rowan Companies Inc. $4,625.9 $33.58 (0.3%) 11.3% 74.9% 7.6x 12.0x 12.2x 6.2x 29.4x 9.9x 0.5x
Oceaneering International, Inc. $4,749.5 $45.17 6.6% 31.3% 97.6% 7.8x 9.1x 10.0x 8.5x 22.0x 18.3x (0.4x)
Patterson-UTI Energy Inc. $3,937.4 $22.25 15.2% 12.2% 65.3% 7.9x 6.9x 4.5x 3.3x 12.4x 8.5x 0.6x
Hercules Offshore, Inc. $1,278.7 $3.83 12.6% 44.0% 54.8% 9.0x 8.3x 7.1x 8.2x NM NM 4.0x
Pioneer Drilling Co. $844.8 $11.36 30.0% 62.8% 63.1% 8.2x 6.9x 4.9x 3.5x NM 16.0x 1.7x
Cal Dive International Inc $406.4 $2.29 9.6% (55.6%) 28.0% 11.9x 10.7x 13.3x 3.4x NM 8.5x 2.6x
Median 9.6% 8.5% 70.6% 7.8x 8.2x 7.1x 5.9x 16.0x 10.2x 0.6x
Exploration and ProductionLarge Cap
Anadarko Petroleum Corporation $50,638.9 $76.95 (2.5%) 23.9% 90.0% 6.2x 8.5x 7.5x 5.6x NM 24.2x 1.9x
Apache Corp. $47,224.4 $99.51 10.1% (5.9%) 74.2% 5.5x 5.6x 4.0x 3.6x 10.0x 8.2x 0.7x
Chesapeake Energy Corporation $31,070.2 $24.82 (9.3%) 12.3% 69.0% 1.8x 10.7x 7.5x 5.6x 12.8x 10.0x 4.1x
Devon Energy Corporation $29,101.0 $64.48 4.8% (8.3%) 68.9% 5.1x 7.8x 4.4x 4.3x 13.4x 9.6x 0.5x
EOG Resources, Inc. $30,916.6 $98.44 14.4% 9.2% 81.1% 12.2x 13.3x 8.2x 5.6x 25.8x 22.6x 1.6x
Noble Energy, Inc. $19,228.2 $94.13 12.5% 16.4% 92.9% 7.4x 10.4x 8.7x 5.6x 21.3x 14.3x 1.6x
Southwestern Energy Co. $15,303.5 $38.87 (3.2%) 3.8% 78.9% 5.7x 9.9x 8.8x 7.2x 22.5x 18.0x 0.8x
Pioneer Natural Resources Co. $13,989.0 $91.50 15.5% 19.2% 86.3% 8.0x 13.4x 9.0x 6.9x 21.1x 19.5x 2.5x
Murphy Oil Corporation $10,158.2 $53.16 0.3% (19.0%) 68.0% 4.2x 4.3x 3.4x 3.1x 10.4x 9.3x (0.1x)
Newfield Exploration Co. $8,573.3 $41.47 0.8% (35.4%) 53.2% 6.3x 9.7x 5.4x 4.5x 11.6x 9.3x 2.5x
Ultra Petroleum Corp. $7,027.3 $33.78 12.9% (27.6%) 66.0% 4.0x 10.3x 7.5x 6.5x 14.7x 13.5x 2.2x
Quicksilver Resources Inc. $3,430.3 $7.93 (5.7%) (46.3%) 49.6% 8.4x 8.2x 6.8x 7.2x 3.6x 63.3x 3.8x
Median 2.8% (1.1% ) 71.6% 5.9x 9.8x 7.5x 5.6x 13.4x 13.9x 1.8x
Member FINRA/SIPC
Energy & Power Industry Update December 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 11/17/11 Prior Month Prior Year LTM High 11/17/10 5/17/11 Current EBITDA Current 2011 5/17/2011
TEV / LTM EBITDA Multiple as of
page 8
Mid and Small Cap
Cabot Oil & Gas Corporation $10,043.9 $82.53 18.6% 147.4% 91.7% 8.3x 13.0x 18.3x 9.3x 62.2x 30.3x 2.2x
Plains Exploration & Production Company $8,713.1 $33.09 16.1% 14.4% 78.9% 7.7x 10.0x 7.2x 5.5x 57.1x 11.5x 4.6x
SandRidge Energy, Inc. $6,600.1 $7.28 5.2% 38.1% 54.6% 2.3x NM 6.4x 7.2x 13.2x 43.0x 30.3x
Forest Oil Corp. $3,343.2 $14.86 19.5% (55.6%) 36.9% 7.6x 8.6x 5.3x 5.6x 15.3x 12.9x 2.7x
Swift Energy Co. $1,694.9 $27.56 (0.3%) (20.7%) 57.2% 5.4x 6.9x 4.6x 3.8x 16.8x 15.1x 1.5x
PetroQuest Energy Inc. $583.9 $6.97 (2.7%) 2.7% 71.5% 4.2x 5.1x 5.7x 4.6x 97.1x 14.9x 1.2x
Delta Petroleum Corp. $394.8 $0.63 (73.2%) (91.8%) 4.7% 36.7x 48.1x 12.8x 17.2x NM NM 28.3x
Median 5.2% 2.7% 57.2% 7.6x 9.3x 6.4x 5.6x 37.0x 15.0x 2.7x
Coal Producers
CONSOL Energy Inc. $11,797.1 $38.19 (7.0%) (4.9%) 67.8% 10.2x 10.4x 7.1x 5.7x 16.8x 10.6x 2.0x
Peabody Energy Corp. $11,782.4 $37.39 (3.3%) (33.8%) 50.6% 10.1x 9.6x 6.3x 4.1x 11.3x 7.5x 0.6x
Arch Coal Inc. $7,080.6 $15.08 (10.9%) (46.0%) 40.8% 9.7x 8.5x 8.4x 4.6x 21.7x 5.8x 5.0x
Alpha Natural Resources, Inc. $7,593.3 $23.49 10.4% (49.2%) 34.5% 6.8x 7.6x 6.6x 4.2x 52.6x 12.8x 2.8x
Alliance Resource Partners LP $2,822.1 $72.70 3.2% 21.1% 86.4% 5.1x 5.0x 4.9x 4.5x 9.2x 9.0x 0.8x
Patriot Coal Corporation $1,158.4 $9.55 (2.5%) (31.5%) 32.7% 15.2x 34.3x 15.3x 3.3x NM 12.4x 3.3x
James River Coal Co. $648.0 $7.73 (14.5%) (57.6%) 28.6% 4.0x 7.0x 4.9x 3.7x 16.3x 147.0x 2.9x
Farmacol SA $189.5 $6.71 (3.3%) (51.4%) 52.4% 9.5x 8.1x 5.5x NA 7.6x NA 1.1x
Median (3.3% ) (39.9% ) 45.7% 9.6x 8.3x 6.5x 4.2x 16.3x 10.6x 2.4x
Refining
Valero Energy Corporation $17,462.4 $22.26 (4.8%) 16.5% 71.5% 5.7x 5.1x 3.2x 3.0x 5.8x 5.3x 1.3x
Sunoco, Inc. $6,591.8 $35.74 0.1% (7.2%) 76.1% 8.0x 6.1x 6.8x 7.7x NM 18.1x 1.8x
Tesoro Corporation $4,222.7 $23.69 (9.9%) 64.1% 80.0% 15.4x 5.5x 2.7x 2.7x 5.2x 5.7x 0.6x
Western Refining Inc. $1,881.8 $12.13 (31.0%) 43.9% 55.8% 8.9x 6.5x 3.1x 2.4x 7.0x 4.4x 1.8x
CVR Energy, Inc. $1,435.0 $17.66 (35.7%) 59.8% 59.6% 7.8x 6.9x 2.3x 1.8x 5.7x 4.0x (1.1x)
Hochschild Mining PLC $2,152.8 $7.01 (3.6%) (20.5%) 64.5% 9.4x 6.2x 4.2x NA 10.6x NA (0.9x)
Alon USA Energy, Inc. $1,482.0 $9.93 23.4% 85.3% 63.7% NM 15.4x 5.6x 3.6x 19.6x 4.3x 9.2x
Delek US Holdings Inc. $1,029.6 $12.42 (18.0%) 75.9% 71.0% 23.5x 9.3x 2.9x 3.0x 8.2x 5.8x 2.0x
Fortune Oil plc $335.0 $0.15 (2.5%) 32.0% 64.4% 8.6x 14.6x 10.9x NA 9.3x NA (1.0x)
Median (4.8% ) 43.9% 64.5% 8.7x 6.5x 3.2x 3.0x NM 5.3x 1.3x
Member FINRA/SIPC
Energy & Power Industry Update December 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 11/17/11 Prior Month Prior Year LTM High 11/17/10 5/17/11 Current EBITDA Current 2011 5/17/2011
TEV / LTM EBITDA Multiple as of
page 9
Storage & Transportation
Kinder Morgan Energy Partners LP $38,935.5 $75.70 0.5% 8.8% 97.1% 14.1x 13.0x 14.7x 10.6x NM 34.7x 4.9x
El Paso Corp. $34,326.3 $24.78 0.5% 80.6% 96.3% 8.2x 12.5x 12.1x 10.0x NM 20.2x 5.0x
Plains All American Pipeline, L.P. $15,774.0 $64.12 3.0% 4.6% 96.0% 14.9x 13.8x 11.2x 10.6x 15.3x 15.0x 4.7x
Enbridge Energy Partners LP $14,086.3 $30.15 5.4% (0.1%) 87.2% 26.1x 28.5x 16.2x 10.8x 29.6x 18.8x 11.0x
Magellan Midstream Partners LP $9,201.0 $64.35 3.0% 16.0% 97.6% 16.2x 15.3x 15.0x 14.1x 18.5x 17.8x 3.6x
Buckeye Partners LP $8,683.0 $63.28 (4.2%) (4.3%) 91.8% 14.3x 22.1x 20.3x 14.4x 88.0x 18.0x 7.4x
Sunoco Logistics Partners L.P. $5,576.6 $105.90 11.8% 33.7% 98.5% 13.1x 11.1x 11.7x 10.5x 14.6x 14.7x 4.9x
Holly Energy Partners L.P $1,853.6 $56.37 3.8% 9.4% 92.3% 13.5x 12.0x 13.9x 10.4x 22.9x 19.2x 4.2x
Median 3.0% 9.1% 96.1% 14.2x 13.4x 14.3x 10.6x 20.7x 18.4x 4.9x
Power
Diversified Power
General Electric Company $545,467.7 $15.66 (6.3%) (0.9%) 72.3% 22.8x 18.6x 17.2x 17.8x 13.0x 10.2x 11.8x
Siemens AG $90,233.1 $97.53 (4.5%) (14.2%) 72.7% 7.6x 7.6x 6.4x 5.7x 9.5x 9.4x 0.2x
ABB Ltd. $41,779.4 $18.43 (3.0%) (8.5%) 70.5% 8.9x 11.7x 7.7x 6.6x 14.2x 11.4x (0.2x)
Emerson Electric Co. $40,704.5 $49.68 4.0% (8.6%) 79.8% 10.3x 9.2x 8.0x 7.4x 15.6x 12.4x 0.7x
Schneider Electric S.A. $34,442.5 $52.41 (14.7%) (24.9%) 62.8% 9.3x 9.3x 6.6x NA 11.7x NA 1.3x
Eaton Corporation $18,006.3 $43.77 3.4% (5.3%) 77.5% 10.9x 10.4x 8.4x 7.0x 12.2x 10.1x 1.6x
Alstom SA $14,087.7 $32.88 (7.2%) (27.5%) 53.7% 5.6x 6.7x 5.5x NA 17.0x NA 1.4x
Cooper Industries plc $9,371.8 $51.67 1.3% (0.5%) 73.8% 10.8x 12.4x 10.8x 9.3x 14.2x 12.4x 1.2x
Median (3.7% ) (8.6% ) 72.5% 9.8x 9.8x 7.8x 7.2x 13.6x 10.8x 1.2x
Mid-Cap Power
Ametek Inc. $7,491.6 $40.38 5.0% 10.7% 85.9% 13.5x 12.7x 10.9x 9.7x 18.4x 15.7x 1.5x
Thomas & Betts Corp. $2,821.8 $51.57 14.8% 19.8% 83.3% 8.2x 9.4x 7.9x 6.8x 16.2x 13.3x 0.4x
Valmont Industries, Inc. $2,413.9 $82.95 (4.5%) 5.3% 71.5% 10.2x 10.2x 7.5x 6.4x 14.8x 12.2x 0.6x
Littelfuse Inc. $1,023.9 $46.41 2.4% 5.4% 69.9% 6.5x 8.4x 6.5x 6.4x 11.7x 11.9x (0.5x)
Powell Industries, Inc. $228.6 $30.43 (8.0%) (8.8%) 73.1% 4.2x 6.0x 7.3x 5.4x 199.5x 19.6x (2.8x)
Median 2.4% 5.4% 73.1% 8.2x 9.4x 7.5x 6.4x 16.2x 13.3x 0.4x
Independent Power Producers
NRG Energy, Inc. $13,453.4 $20.70 (1.6%) 6.3% 80.7% 5.1x 6.0x 6.7x 6.8x 18.2x 22.0x 3.6x
Dynegy Inc. $4,885.1 $2.63 (26.5%) (48.0%) 38.0% 8.7x 17.4x 38.5x 11.2x NM NM 15.7x
GenOn Energy, Inc. $4,155.3 $2.75 (2.7%) NA 63.1% NA NA 11.2x 8.2x NM NA 9.0x
Mirrabooka Investments Limited $212.1 $1.72 2.9% (1.4%) 85.1% NM NM NM NA 21.1x NA NM
Median (2.1% ) (1.4% ) 71.9% 6.9x 11.7x 11.2x 8.2x 19.7x 22.0x 9.0x
Member FINRA/SIPC
Energy & Power Industry Update December 2011
page 10
Electric Utilities
Southern Company $58,580.0 $42.99 0.2% 13.4% 97.8% 9.2x 9.9x 9.6x 9.4x 17.6x 16.0x 3.6x
Dominion Resources, Inc. $48,569.6 $50.63 0.3% 19.3% 96.1% 10.6x 9.3x 9.7x 9.5x 19.4x 15.6x 3.9x
NextEra Energy, Inc. $45,571.0 $55.23 0.7% 5.8% 93.6% 7.7x 9.6x 9.6x 8.4x 15.3x 12.1x 4.7x
Duke Energy Corporation $44,995.2 $20.11 (0.0%) 14.3% 95.7% 7.7x 8.6x 9.1x 8.1x 14.7x 14.3x 3.6x
Exelon Corporation $42,477.0 $43.31 1.5% 8.3% 95.3% 5.3x 6.1x 6.4x 8.1x 12.0x 14.4x 2.0x
FirstEnergy Corp. $36,060.3 $43.88 (1.0%) 22.9% 94.3% 8.0x 12.3x 9.9x 8.1x 18.0x 13.4x 5.7x
American Electric Power Co., Inc. $35,855.9 $38.29 (0.7%) 7.2% 95.5% 7.4x 7.6x 7.5x 7.3x 12.1x 12.0x 3.6x
PPL Corporation $34,365.3 $29.13 1.5% 12.9% 96.2% 7.7x 9.5x 8.9x 8.4x 11.4x 11.9x 5.6x
Progress Energy Inc. $28,545.9 $52.18 1.7% 18.8% 97.0% 8.4x 8.9x 10.1x 9.4x 19.8x 16.3x 4.3x
Edison International $26,212.5 $39.50 2.4% 5.4% 95.0% 6.3x 6.7x 6.7x 6.8x 13.4x 15.1x 3.2x
Entergy Corporation $23,993.0 $68.29 2.2% (6.0%) 91.7% 6.2x 6.4x 6.7x 7.4x 8.8x 11.6x 3.1x
Median 0.7% 12.9% 95.5% 7.7x 8.9x 9.1x 8.1x 14.7x 14.3x 3.6x
Renewables 11/17/10 5/17/11 Current
Vestas Wind Systems A/S $3,885.5 $13.59 (17.3%) (57.2%) 32.2% 1.2x 0.7x 0.4x NA 33.3x NA 1.2x
First Solar, Inc. $3,654.7 $44.88 (19.7%) (63.5%) 25.6% 3.8x 4.1x 1.3x 0.9x 7.2x 6.1x (0.2x)
Suntech Power Holdings Co. Ltd. $2,266.3 $2.48 12.2% (67.1%) 22.9% 0.8x 0.9x 0.7x 0.8x 2.7x NM 4.7x
SunPower Corporation $1,321.7 $7.29 (22.6%) (45.2%) 31.2% 0.9x 1.1x 0.5x 0.5x NM 16.3x 2.0x
Clean Energy Fuels Corp. $1,055.5 $12.72 12.1% (9.0%) 71.3% 5.9x 4.1x 3.8x 3.0x NM NM 3.7x
GT Advanced Technologies Inc. $659.3 $8.00 7.4% 12.7% 45.7% 1.1x 1.4x 0.7x 0.6x 5.3x 5.6x (1.4x)
Rentech, Inc. $449.8 $1.59 16.1% 27.2% 80.3% 2.5x 1.7x 2.6x 2.3x NM 160.0x 17.6x
FuelCell Energy Inc. $156.7 $0.94 (5.1%) (26.6%) 39.0% 2.5x 2.3x 1.5x 1.0x NM NM 0.5x
Energy Conversion Devices, Inc. $152.2 $0.38 (19.1%) (91.9%) 7.0% 1.1x 0.7x 0.8x 0.6x NM NM (6.1x)
Ballard Power Systems Inc. $85.9 $1.30 0.4% (15.6%) 54.3% 1.2x 1.3x 1.1x 0.8x NM NM 0.7x
Median (2.3% ) (35.9% ) 35.6% 1.2x 1.4x 1.0x 0.8x 6.3x 11.2x 0.9x
Cleantech
Itron, Inc. $1,864.5 $35.85 11.6% (38.4%) 55.7% 1.4x 1.1x 0.8x 0.8x NM 9.2x 1.1x
ESCO Technologies Inc. $867.5 $28.47 (3.4%) (21.5%) 66.0% 1.8x 1.5x 1.3x 1.1x 15.0x 11.0x 0.8x
Ameresco, Inc. $786.6 $10.82 3.7% NA 62.0% 1.1x 1.3x 1.1x 1.0x 15.0x 12.0x 4.8x
Echelon Corporation $213.5 $5.71 (19.9%) (32.6%) 53.3% 2.7x 3.1x 1.4x 1.2x NM NM 1.9x
EnerNOC, Inc. $189.6 $9.99 8.7% (60.0%) 35.2% 1.7x 1.4x 0.7x 0.6x NM NM (3.3x)
PowerSecure International, Inc. $101.6 $6.08 39.8% (26.6%) 66.5% 1.7x 1.4x 0.9x 0.7x 7.1x 25.3x 14.6x
Comverge, Inc. $36.4 $1.42 (17.9%) (76.3%) 18.0% 1.0x 0.7x 0.3x 0.2x NM NM (0.1x)
Median 3.7% (35.5% ) 55.7% 1.7x 1.4x 0.9x 0.8x 15.0x 11.5x 1.1x
Revenue
TEV / LTM Revenue Multiple as of TEV / 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 11/17/11 Prior Month Prior Year LTM High 11/17/10 5/17/11 Current EBITDA Current 2011 5/17/2011
TEV / LTM EBITDA Multiple as of
Member FINRA/SIPC
Energy & Power Industry Update December 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 11/17/11 Prior Month Prior Year LTM High 11/17/10 5/17/11 Current EBITDA Current 2011 5/17/2011
TEV / LTM EBITDA Multiple as of
page 11
Industrial & Infrastructure Services
Engineering & Construction
Fluor Corporation $7,456.1 $53.39 0.8% (2.8%) 70.5% 8.2x 12.8x 7.6x 5.9x 17.4x 14.5x (2.6x)
Dresser-Rand Group Inc. $4,691.2 $49.13 0.8% 29.9% 86.9% 9.3x 14.6x 16.2x 8.9x 38.9x 15.6x 3.3x
Jacobs Engineering Group Inc. $5,047.7 $40.84 9.8% 1.5% 73.3% 7.7x 10.0x 8.3x 6.5x 15.9x 11.9x (0.4x)
Quanta Services, Inc. $3,892.3 $19.52 (2.6%) 10.1% 80.7% 7.7x 10.5x 11.6x 6.8x 42.8x 17.0x (0.7x)
KBR, Inc. $3,641.6 $28.52 1.3% 8.9% 72.5% 5.3x 8.2x 6.9x 5.1x 9.4x 10.8x (1.1x)
Chicago Bridge & Iron Company N.V. $3,398.9 $37.94 12.1% 36.6% 84.1% 7.2x 9.1x 8.6x 6.6x 15.8x 13.1x (1.3x)
URS Corporation $3,326.0 $35.44 5.2% (11.9%) 73.3% 6.0x 6.0x 5.5x 4.4x NM 9.4x 0.5x
McDermott International Inc. $2,327.9 $11.35 (20.0%) (34.4%) 43.4% 8.9x 9.9x 6.6x 5.9x 14.7x 12.7x (1.1x)
Shaw Group Inc. $1,563.5 $23.62 15.6% (22.9%) 56.8% 5.1x 8.3x 23.7x 4.4x NM 9.4x (0.6x)
MYR Group, Inc. $368.7 $17.95 (9.9%) 26.4% 67.6% 7.5x 9.2x 7.5x 5.4x 20.2x 13.0x 0.1x
Pike Electric Corporation $365.5 $6.77 (3.3%) (2.2%) 64.5% 10.7x 10.5x 6.3x 4.9x NM 14.2x 3.5x
ENGlobal Corp. $83.5 $2.30 2.7% (18.7%) 40.5% NM NM 41.2x 4.8x NM 7.2x (1.7x)
Median 1.1% (0.4% ) 71.5% 7.7x 9.9x 7.9x 5.6x 16.6x 12.9x (0.7x)
Industrial & Infrastructure Services
EMCOR Group Inc. $1,307.4 $24.01 4.3% (4.2%) 73.3% 4.5x 5.8x 4.7x 4.2x 13.2x 10.9x (1.2x)
Cape plc $766.3 $5.36 NA NA 56.7% NA NA 5.2x NA 8.8x NA 0.8x
Mistras Group, Inc. $651.0 $22.50 0.1% 96.3% 95.7% 8.6x 10.6x 12.7x 8.7x 34.3x 22.0x 0.6x
Team Inc. $582.0 $26.24 1.6% 32.9% 91.4% 9.1x 10.1x 9.3x 7.0x 18.6x 14.6x 1.0x
Furmanite Corporation $239.6 $6.45 (8.1%) 11.6% 75.0% 10.7x 9.0x 7.9x 6.2x 14.7x 11.4x 0.0x
Matrix Service Co. $235.0 $10.20 (5.6%) 5.5% 69.4% NA 6.9x 5.4x 3.9x 14.7x 9.6x NM
Median 0.1% 11.6% 74.2% 8.9x 9.0x 6.6x 6.2x 14.7x 11.4x 0.6x
Energy & Power Industry Update December 2011
page 12
Harris Williams & Co. is the premier middle market advisor
with a two-decade legacy of sell side excellence serving
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Energy & Power Industry Update December 2011
page 13
Harris Williams & Co.’s Energy & Power Group has a broad
range of experience including products, services, and
technologies that support or enhance the overall energy and
power infrastructure.
Key Niches:
• Cleantech, Energy Efficiency, and Renewables
• Power Products, Services, and Technologies
• Oil & Gas Products, Services, and Technologies
• Industrial & Infrastructure Services
• Engineering & Construction
For more information on Harris Williams & Co.’s Energy & Power Group as well as archived
copies of the Energy & Power Industry Update, please visit our website. Archived copies of the
Group’s industry whitepapers, including Transmission & Distribution Infrastructure and ESCOs
– Enabling Energy Efficiency, can also be found on the site.
Energy & Power Industry Update December 2011
page 14
Mr. Armstrong co-leads the Energy & Power Group and was Harris Williams & Co.’s second employee, joining the
firm in 1993. In 1999, Mr. Armstrong founded the San Francisco office and has over 19 years of transactional
experience focused in middle market mergers and acquisitions assignments. Having directed over 125 mergers and
acquisitions transactions during his career, Mr. Armstrong has worked across industries including energy and power,
consumer products, building products, business services, distribution, retailing, specialty chemicals, and technology.
As Co-Head of the Energy & Power Group, Mr. Armstrong specializes on the Power segment. Prior to joining Harris
Williams & Co., Mr. Armstrong was with Wheat First Butcher Singer (now Wells Fargo). He earned a B.S. with a
concentration in Finance from the University of Virginia's McIntire School of Commerce and is also a Chartered
Financial Analyst. Mr. Armstrong was past president and director of the San Francisco Chapter of ACG and is
currently a director of the Greater Richmond YMCA.
Mr. Spitzer founded and co-leads the Energy & Power Group at Harris Williams & Co. Over his investment banking
career, Mr. Spitzer has advised clients on a variety of merger and acquisition and strategic advisory assignments, as
well as corporate financings. Mr. Spitzer has advised a diverse range of manufacturing and service businesses in the
energy and power industries. Key niche focus areas have included demand response solutions, power quality
equipment, infrastructure and industrial services, and oilfield products and services. Prior to focusing on energy and
power companies, Mr. Spitzer developed experience in numerous industries including industrial manufacturing,
chemicals, automotive, aerospace and defense, business services, and consumer products. Prior to joining Harris
Williams & Co., Mr. Spitzer worked in the General Industrial Group at Banc of America Securities, LLC and in the
Investment Banking Group at Goldman Sachs & Co. Mr. Spitzer earned an M.B.A. with Honors from Columbia
Business School, where he served as the Caplan Fellow. Mr. Spitzer earned a B.A. in Economics from the University
of Virginia.
Mr. Lucas re-joined Harris Williams & Co. following the completion of an M.B.A. from The Wharton School at the
University of Pennsylvania. Prior to business school, Mr. Lucas served as an Associate with Harris Williams & Co.,
working on mergers and acquisitions transactions in a broad range of industries, including general industrial,
consumer products, plastics, and waste equipment/services. Before re-joining Harris Williams & Co., Mr. Lucas
worked as an Associate with Graham Partners, a private equity group in Philadelphia. Previous experience also
includes work as an Investment Banking Analyst with JP Morgan. Mr. Lucas earned a B.S. in Commerce, with a
concentration in Finance from The McIntire School of Commerce at the University of Virginia.
Prior to joining Harris Williams & Co., Mr. White worked as an Associate in the Equity Capital Markets Group at
SunTrust Robinson Humphrey. Previous experience also includes work in the Capital Finance Group at Wachovia
Securities (now Wells Fargo) where he focused on acquisition financing, growth capital, and workout situations. Mr.
White earned an M.B.A. from the Goizueta Business School at Emory University and a B.S. in Business
Administration from the University of North Carolina at Chapel Hill.
Tiff B. Armstrong
Managing Director [email protected]
+1 (804) 648-0072
Andrew G. Spitzer
Managing Director [email protected]
+1 (804) 915-0174
Brian S. Lucas
Director [email protected]
+1 (804) 932-1323
Matthew G. White
Vice President [email protected]
+1 (804) 915-0131
Prior to joining Harris Williams & Co., Mr. Semple worked as a Global Banking Associate at Deutsche Bank. Within
energy and power, Mr. Semple has advised a diverse range of businesses, including providers of energy efficiency
and clean technology products and services, oilfield products and services, transmission distribution products and
services, and power generation equipment. He earned an M.B.A. from the Darden School of Business at the
University of Virginia and a B.A. from Trinity College in Hartford, Connecticut.
Luke R. Semple
Vice President [email protected]
+1 (804) 648-1158
Sources:
1. Capital IQ.
2. MergerMarket.
3. Baker Hughes.
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© 2011. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams &
Co. Ltd, an Appointed Representative of Sturgeon Ventures LLP, which is authorised and regulated by the FSA. Harris Williams & Co. is a trade name under
which Harris Williams LLC and Harris Williams & Co. Ltd conduct business in the U.S. and Europe, respectively.
Energy & Power Industry Update December 2011