HW_Measurement & Control Update

Measurement, Control, and Connectivity

Industry Update Summer 2012

What We’re Reading

1

Rapid changes taking place in the wireless communications industry are driving growth in the wireless

test equipment market. With the growing number of wireless subscribers, smartphones, wireless data

services, mobile banking, and social-networking applications, there is a need for increased

functionality in test and measurement tools. The wireless test equipment market consists of signal

generators, spectrum analyzers, network analyzers, and telecom and datacom test equipment. The

global wireless test equipment market generated revenues of $3.1 billion in 2011 and is expected to

exceed $5.8 billion in 2017 with a CAGR (compound annual growth rate) of 11.0% from 2011 to 2017.

Read the full article here.

Smart Devices Create Opportunities in Test and Measurement Industry

Test & Measurement World 1/20/2012

This article illustrates the attractive growth prospects within the wireless test equipment market.

Accelerated growth could result in increasing M&A activity within the sector as companies look to

capitalize on these growth opportunities.

Power-related issues are a growing predicament on a global scale. The global population and industrial

development are growing more rapidly than existing power infrastructure can handle, having a

detrimental effect on efficiencies worldwide. Over the next two decades, demand for electricity is

forecasted to grow by 40 percent in the U.S. alone. Increased demand is most dramatic in Asia,

averaging 4.7 percent per year until 2030. This exponential growth means increased stress on the grid,

which in turn means more strain on individual electronic items, reducing lifespan, lowering reliability

and affecting everyday life. Read the full article here.

Power Demand Will Outstrip Infrastructure, Leading to Increasing Disturbances

The Data Center Journal 5/07/2012

Growing public awareness of the societal impact and cost of power outages has led to increased

investments in both power integrity products and test and measurement devices. See the following link

for HW&Co.’s recent experience in this sector as the exclusive advisor to Avtron Loadbank in its sale

to Emerson Electric.

Growth in China's production of industrial metals including bellwether crude steel mildly slowed in

May from the previous month as broader macroeconomic demand weakened, National Bureau of

Statistics data showed Monday. Output of key industrial commodities in the world's second-largest

economy is a good gauge of producer confidence, and last month's declines were largely in line with

market expectations. Lackluster downstream demand kept steel makers from fully running furnaces,

after bellwether economic indicators in April, including industrial output and manufacturing indices

pointed to a sharp slowdown. Read the full article here.

China Steel, Copper Output Softens on Weak Demand

The Wall Street Journal 6/11/2012

This article provides further evidence of China’s recent industrial slowdown, which may foreshadow

falling commodity prices worldwide.

The market for sand filters, belt presses, bag filters, and other macrofiltration equipment used to

separate particles from water and liquids will exceed $6.6 billion in 2013, according to McIlvaine

Company’s latest “Liquid Filtration and Media World Market” online report. The report finds the

largest purchasing segment will be municipal water treatment plants. McIlvaine says one of the biggest

new markets is ballast water treatment, noting that a 50-micron filter will be required on most of the

70,000 ships that will be subject to new international maritime rules. Read the full article here.

Liquid Macrofiltration Market to Exceed $6.6 billion in 2013

Flow Control Magazine 6/11/2012

The strong performance in the global filtration industry could lead to increasing investment in

filtration and flow control manufacturers.

CONTENTS

WHAT WE’RE READING

ECONOMIC UPDATE

M&A MARKET TRENDS

PUBLIC MARKETS

PUBLIC COMPARABLES

NOTABLE M&A ACTIVITY

GROUP OVERVIEW

Harris Williams & Co. is a leading

advisor to the test and measurement,

flow control, and power connectivity

and control markets. Our significant

experience covers a broad range of

end markets, products, and

technologies. This particular report

focuses on trends and metrics in the

following areas:

Test and Measurement

• Instrumentation

• Sensors

• Technology and Software

• Life Sciences and Laboratory

Flow Control

• Pumps and Filtration

• Valves and Fittings

Power Connectivity and Control

• Power Integrity

• Electrical Protection and

Connectivity

• Interconnect Components

CONTACTS

Bill Roman | Managing Director

[email protected]

+1(617) 654-2101

Julien Darmon | Managing Director

[email protected]

+44 20 7518 8905

Jay Hernandez | Director

[email protected]

+1(617) 654-2114

Matthew Volinsky | Vice President

[email protected]

+1(617) 654-2138

www.harriswilliams.com

Economic Update

2 Note: Visit www.pnc.com/economicreports to view the full listing of economic reports published by PNC’s economists.

Sales Profits Hiring

Owners Expectations for Their Business

Trending and for the Next Six Months

Expect

Increase

Expect

Decrease

Expect to

Remain Same 34%

10% 20% 13%

30% 38%

58% 40% 48%

37%

18% 31% 23%

36% 39%

43% 29% 37%

65%

7% 14% 7%

62% 65%

28% 20% 24%

4/11 10/11 4/12 4/11 10/11 4/12 4/11 10/11 4/12

• PNC’s Spring survey shows

significant improvements in

optimism compared to

Autumn 2011, and a return

to positive levels unseen

since 2007.

• The improvements are

evident across all industries,

with manufacturing firms

leading the way.

• Findings bolster PNC’s

forecast that U.S. economy

and jobs will continue a

modest recovery in 2012-

2013.

Survey of Small and Middle-Market Business Owners

28% are optimistic about

their own company’s prospects

during the next 6 months, the

highest since Autumn 2007

(34%).

70% plan to spend on capital

investments in the next six

months, up from 60% in the

Autumn and Spring surveys.

Owners’ outlooks for sales,

profits, and hiring for the next

six months are stronger than

the Fall, with double-digit

sales gains expected by 23%.

GDP

• U.S. economic growth has slowed in the Spring of 2012, and this trend is

most apparent in the labor market, where unemployment currently stands at

8.2%.

• Real GDP was revised to 1.9% annualized growth in 1Q 2012, from its

advanced estimate of 2.2%.

• Stuart Hoffman (Chief Economist at PNC) is forecasting 2.1% GDP growth

in 2012 and 2.3% GDP growth in 2013, followed by more robust growth

near 2.6% by 2014.

Economic Outlook

Industrial

Markets

• Factory activity continues to recover moderately and irregularly, with new

orders for manufactured goods increasing 0.7% in May following two months

of declining factory orders.

• Businesses, while remaining profitable and maintaining strong cash balances,

are slowing investment activity due to uncertainty over sovereign issues in

Europe, concern about U.S. fiscal policies, and upcoming U.S. elections.

• Concerns are resulting in Corporate America delaying investments, paying

down debt, and building cash reserves.

• PNC economists forecast roughly 4 – 6% growth in non-residential fixed

investments for the remainder of 2012.

-

50

100

150

200

250

300

350

400

450

Copper Iron and Steel Metal Scrap

Economic Update

PMI Index1

3

A Snapshot

of Key

Economic

Indicators

Durable Goods New Orders ISM Index1

U.S. Manufacturing Capacity Utilization

Copper, Iron and Steel, and Metal Scrap Prices Conference Board Leading Indicators Index

($ in billions)

(1) A PMI Index figure greater than 50% indicates expansion.

53.5

77.6%

Index (2004 = 100)

(1) An ISM Index figure greater than 50% indicates expansion.

60.1 $217.2

99.8

Index (2004 = 100) 326.1

229.2

187.1

As of May 2012

60

70

80

90

100

110

120

$100

$125

$150

$175

$200

$225

$250

25

30

35

40

45

50

55

60

65

70

75

32

38

44

50

56

62

50%

60%

70%

80%

90%

100%

Overall M&A Market Trends

M&A Activity

and Relative

Valuations

4

Key

Indicators

Available

Capital

Financing

Market

Commentary Status

• M&A activity remains solid and Harris Williams & Co. is

experiencing activity that points to a strong 2H 2012.

• Valuations have rebounded to pre-downturn levels for quality

companies.

• Year-to-Date, Harris Williams & Co. has been regularly seeing 4.50x

– 5.25x total leverage. In the last 45 days pricing has increased by up

to 100 bps, which is beginning to result in a modest softening of

leverage multiples.

• Tepid organic growth continues to drive corporate M&A market

activity, supported by cash reserves that have topped $2 trillion for

S&P 500 companies.

• Significant amounts of un-invested capital provide strong liquidity

and pressure to invest from shareholders and LPs.

Recent Large Cap M&A Activity1,2 Recent Middle Market M&A Activity1,2 Recent

Activity

(1) Includes transactions under $1 billion with the target based in the United

States or Canada. (2) Excludes minority purchases, acquisitions of remaining interest, self-

tenders and repurchases.

For the Months May 2007 – May 2012

($ in billions) For the Months May 2007 – May 2012

($ in billions)

(1) Includes transactions over $1 billion with the target based in the United States

or Canada. (2) Excludes minority purchases, acquisitions of remaining interest, self-tenders

and repurchases.

0

10

20

30

40

50

$0

$50

$100

$150

$200

$250

# o

f Tra

nsa

ctio

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Dea

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alu

e

Deal Value ($ in billions) # of Transactions

0

100

200

300

400

500

$0

$10

$20

$30

$40

$50

# o

f Tra

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Dea

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Deal Value ($ in billions) # of Transactions

Trading Values

Stock Prices

EBITDA

Multiples

5

Trailing Twelve Months Stock Price Performance

Current Valuations Versus Historical Five-Year Median

Test and Measurement Flow Control Power Connectivity

and Control

Key Trading

Statistics

Key Trading Statistics

As of July 6, 2012

As of July 6, 2012

As of July 6, 2012

Stock Price % Change TEV / LTM EBITDA Multiple as of TEV / EBITDA LTM Margins

Sub-Sector 1 Month 12 Month Jul-11 Jan-12 Current 2012E 2013E Gross EBITDA

Test and Measurement

Instrumentation (0.2%) (4.2%) 11.6x 10.8x 12.2x 12.5x 9.8x 43.7% 15.5%

Sensors (0.1%) (9.4%) 11.5x 9.2x 11.0x 11.0x 7.2x 40.2% 17.5%

Technology and Software (6.6%) (12.5%) 14.7x 13.8x 12.6x 13.5x 10.6x 54.7% 19.7%

Life Sciences and Laboratory (1.9%) (14.6%) 13.4x 10.4x 10.2x 10.5x 8.6x 50.7% 19.1%

Flow Control

Pumps and Filtration (1.3%) (16.9%) 11.4x 9.2x 9.1x 9.2x 8.4x 31.4% 14.6%

Valves and Fittings (0.2%) (15.7%) 9.0x 8.0x 8.0x 7.7x 6.9x 31.6% 14.1%

Power Connectivity and Control

Power Integrity (2.5%) (24.8%) 9.6x 7.7x 7.3x 7.5x 7.1x 32.4% 16.7%

Electrical Protection and Connectivity 4.5% (7.3%) 8.4x 7.0x 7.7x 8.4x 7.0x 38.5% 21.9%

Interconnect Components (2.6%) (13.7%) 7.7x 6.2x 8.0x 7.8x 6.3x 28.1% 15.8%

70

80

90

100

110

120

Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12

S&P 500 Test & Measurement Flow Control Power Connectivity & Control

104%101%

85%

90%

97%94%

78%

90%

95%

60%

70%

80%

90%

100%

110%

Instrumentation Sensors Technology & Software

Life Sciences & Laboratory

Pumps & Filtration

Valves & Fittings

Power Integrity

Electrical Protection & Connectivity

Interconnect Components

Test and Measurement Public Comparables

Key Trading

Stats

6

($ in millions, except

per share amounts)

As of July 6, 2012

Test and Measurement Public Comparables

Stock Performance

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

EBITDA Gross TEV Price Change Change LTM High LTM 2012E 2013E

Instrumentation

Roper Industries Inc. 29.0% 54.4% $10,088 $97.12 (3.0%) 16.1% 93.8% 4.3% 12.6x 11.5x

AMETEK, Inc. 24.5% 34.8% $9,312 $33.91 (1.9%) 11.4% 96.3% 4.4% 12.9x 11.1x

Teradyne Inc. 24.1% 50.3% $2,095 $13.67 (4.9%) (8.3%) 75.9% 14.4% 5.7x 4.0x

Danaher Corp. 21.8% 51.7% $39,537 $51.37 (0.3%) (5.8%) 91.0% 6.3% 11.1x 9.8x

Spectris plc 19.5% 58.6% $3,341 $23.35 (1.9%) (11.5%) 78.3% 7.0% 10.0x 8.3x

Badger Meter Inc. 15.5% 34.9% $611 $38.17 6.1% 1.0% 93.5% 2.9% 16.0x 11.3x

Teledyne Technologies Inc. 15.0% 33.6% $2,593 $61.82 (0.2%) 22.4% 93.3% 16.0% 8.9x 8.3x

National Instruments Corporation 13.6% 76.2% $2,835 $26.54 1.9% (13.0%) 87.0% 20.0% 18.7x 13.2x

Itron, Inc. 12.7% 30.3% $1,997 $42.50 17.5% (13.2%) 84.4% 6.8% 6.2x 7.1x

ESCO Technologies Inc. 11.8% 38.4% $1,073 $36.43 4.1% (4.2%) 94.9% 4.8% 12.5x 8.3x

Oxford Instruments plc 13.3% 43.7% $1,061 $19.89 7.1% 26.1% 97.8% 7.6% 20.4x 12.2x

Median 15.5% 43.7% (0.2%) (4.2%) 93.3% 6.8% 12.5x 9.8x

Mean 18.2% 46.1% 2.2% 1.9% 89.7% 8.6% 12.3x 9.6x

Sensors

FLIR Systems, Inc. 27.5% 53.7% $2,794.4 $19.42 (8.2%) (43.2%) 57.4% 9.6% 6.5x 6.4x

Sensata Technologies Holding NV 26.6% 35.2% $6,443.0 $27.28 (10.7%) (29.1%) 71.3% 2.6% 13.1x 11.2x

Meggitt plc 23.0% 42.3% $5,992.2 $6.18 5.7% (0.8%) 96.1% 7.0% 11.6x 8.1x

MTS Systems Corp. 17.5% 43.3% $546.6 $39.14 3.9% (10.4%) 71.4% 3.7% 6.1x 5.6x

Measurement Specialties Inc. 16.7% 40.2% $574.6 $32.93 (0.1%) (9.4%) 89.9% 6.4% 11.0x 8.6x

Micronas Semiconductor Holding AG 15.8% 37.3% $114.1 $9.31 3.8% 8.4% 82.6% 17.9% 4.4x 2.9x

Honeywell International Inc. 10.0% 21.9% $46,351.2 $54.89 (2.0%) (7.8%) 88.5% 4.8% 12.9x 7.2x

Median 17.5% 40.2% (0.1%) (9.4%) 82.6% 6.4% 11.0x 7.2x

Mean 19.6% 39.1% (1.1%) (13.2%) 79.6% 7.4% 9.4x 7.2x

Technology and Software

Cognex Corporation 29.4% 75.8% $1,163 $31.84 (7.2%) (12.5%) 71.1% 12.9% 12.2x 11.0x

Hexagon AB 23.0% 53.0% $8,040 $16.41 (5.9%) (33.9%) 72.6% 8.1% 12.8x 10.5x

FARO Technologies Inc. 16.4% 56.4% $573 $42.00 (9.9%) (12.5%) 70.4% 6.0% 14.5x 9.9x

Mistras Group, Inc. 14.1% 33.8% $789 $26.37 19.2% 60.6% 97.7% 0.6% 14.3x 10.7x

Median 19.7% 54.7% (6.6%) (12.5%) 71.8% 7.1% 13.5x 10.6x

Mean 20.7% 54.8% (1.0%) 0.4% 78.0% 6.9% 13.4x 10.5x

Life Sciences and Laboratory

Mesa Laboratories Inc. 38.0% 59.3% $146 $45.90 2.3% 40.4% 77.7% 3.6% 9.9x 0.0x

Waters Corp. 31.9% 60.5% $6,541 $77.31 (1.9%) (21.6%) 77.8% 5.1% 11.0x 10.4x

Agilent Technologies Inc. 20.9% 53.1% $11,478 $37.97 (4.1%) (24.4%) 76.1% 9.6% 8.3x 6.9x

Thermo Fisher Scientific, Inc. 20.1% 42.0% $24,773 $51.43 1.1% (20.6%) 78.8% 3.0% 10.6x 9.1x

Mettler-Toledo International, Inc. 18.1% 52.6% $5,269 $157.18 (0.6%) (8.6%) 82.7% 5.0% 12.6x 11.1x

Sartorius AG 17.9% 48.9% $1,478 $57.81 (1.9%) 15.4% 94.8% 5.9% 9.3x 8.4x

Bruker Corporation 13.4% 46.0% $2,314 $13.36 (10.0%) (35.7%) 64.4% 10.6% 10.4x 8.1x

PerkinElmer Inc. 12.3% 44.9% $3,680 $25.38 (2.5%) (6.9%) 89.9% 6.2% 15.7x 8.9x

Median 19.1% 50.7% (1.9%) (14.6%) 78.3% 5.5% 10.5x 8.6x

Mean 21.6% 50.9% (2.2%) (7.8%) 80.3% 6.1% 11.0x 7.9x

Overall Median 18.0% 45.4% (1.2%) (8.5%) 83.6% 6.2% 11.4x 8.7x

Overall Mean 19.8% 46.9% (0.1%) (4.4%) 83.2% 7.4% 11.4x 8.7x

Test and Measurement M&A Overview

Notable Recent Transactions Announced

M&A

Transactions

Number of Deals and Aggregate Deal Value Test and

Measurement

M&A Trends

Top Acquirers

7

($ in billions)

Median LTM EBITDA Multiple

($ in millions)

From 2006 – Present

($ in millions)

(1) Transaction values only for transactions with disclosed terms.

Enterprise EV/EBITDA

Date Target Target Description Acquirer Value Multiple

Pending LeCroy Corp. Manufactures oscilloscopes and communication protocol analyzers. Teledyne Technologies Inc. 291.4$ 8.8x

07/03/12 BlueView Technologies, Inc. Develops imaging sonar solutions. Teledyne RD Instruments, Inc. NA NA

06/07/12 Meisei Electric Co., Ltd. Manufactures communication, electric measuring, and information processing machines. IHI Corporation 142.3 7.4x

05/15/12 Bios International, Flow Calibrator Business Manufactures gas flow calibrators and gas flow calibration systems. Mesa Laboratories Inc. 23.4 NA

05/14/12 X-Rite, Incorporated Manufactures color solutions through measurement instrumentation systems. Danaher Corp. 625.6 11.4x

04/03/12 PBI-Dansensor A/S Manufactures gas measurement and testing systems. MOCON Inc. 19.8 NA

04/02/12 Cosense, Inc. Manufactures ultrasonic sensors and systems. Measurement Specialties Inc. 11.5 5.8x

03/15/12 Avtron LoadBank, Inc. Designs and manufactures load banks. Emerson Network Power, Inc. NA NA

02/22/12 NovaTech LLC Manufactures power measurement, communication, and automation technologies. The Weir Group PLC 180.0 NA

01/31/12 Racine Federated, Inc. Manufactures electric, gas, and hydraulic concrete vibrators. Badger Meter Inc. 46.6 8.7x

01/26/12 OBCORP LLC Manufactures engineered tubing products. AMETEK Inc. 175.0 NA

10/31/11 Gentech International Ltd. Manufactures sensing and switching products. Measurement Specialties Inc. 12.8 9.8x

10/25/11 EM TEST AG Manufactures electromagnetic compatibility (EMC) generators. AMETEK Inc. 94.2 NA

10/17/11 Reichert, Inc. Manufactures diagnostic instruments and equipment. AMETEK Inc. 150.0 NA

10/05/11 LitePoint Corporation Provides wireless test solutions. Teradyne Inc. 580.0 18.6x

10/03/11 OMEGA Engineering, Inc. Manufactures products for measurement and control of temperature, flow, and conductivity. Spectris plc 475.0 NA

09/30/11 Celesco Transducer Products, Inc. Manufactures linear and rotary measurement transducers. Measurement Specialties Inc. 35.0 5.8x

08/01/11 Sensor-Nite N.V. Manufactures electronic and electro-mechanical sensor systems and subsystems. Sensata Technologies, Inc. 325.0 NA

07/08/11 Eureka Environmental Corporation Provides multiparameter instruments and software solutions. Measurement Specialties Inc. 4.3 21.3x

06/29/11 Beckman Coulter, Inc. Provides biomedical testing instrument systems, tests, and supplies. Danaher Corp. 6,852.8 8.6x

06/03/11 Northern Digital, Inc. Manufactures measurement solutions for medical, industrial, and life sciences applications. Roper Industries Inc. 207.4 NA

Company Number of Transactions Aggregate Transaction Value(1)

Danaher Corp. 29 $10,977

Thermo Fisher Scientific, Inc. 18 14,462

Agilent Technologies Inc. 15 1,579

General Electric Company 13 3,204

Illinois Tool Works Inc. 12 48

Emerson Electric Co. 11 1,086

AMETEK Inc. 11 578

Measurement Specialties Inc. 11 207

Bruker Corporation 10 405

Spectris plc 9 600

Schneider Electric S.A. 8 308

Halma plc 7 61

Roper Industries Inc. 6 451

Teledyne Technologies Inc. 6 86

12.5x

11.4x

6.8x

11.7x10.9x

9.1x9.7x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

2006 2007 2008 2009 2010 2011 2012

YTD

EB

ITD

A M

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2006 2007 2008 2009 2010 2011 2011

YTD

2012

YTD

Aggreg

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Transaction Volume Aggregate Deal Value

Flow Control Public Comparables

8

Key Trading

Stats


per share amounts)

Flow Control Public Comparables

As of July 6, 2012

Stock Performance



Pumps and Filtration

IDEX Corporation 22.5% 41.0% $3,801 $38.96 (0.6%) (16.9%) 83.0% 1.9% 9.2x 8.4x

Gardner Denver Inc. 20.0% 34.0% $2,839 $52.30 (1.8%) (39.7%) 56.3% 1.6% 6.0x 6.1x

Xylem Inc. 16.3% 38.7% $5,532 $25.20 (2.8%) NA 87.3% 2.7% 8.8x 8.5x

Flowserve Corp. 15.7% 33.2% $6,692 $116.26 10.6% 6.6% 94.9% 0.8% 9.3x 8.4x

Gorman-Rupp Co. 15.6% 24.6% $630 $30.55 7.6% (11.0%) 86.3% NM 11.6x 9.3x

Franklin Electric Co. Inc. 15.1% 33.2% $1,278 $51.09 3.2% 2.9% 95.1% 1.0% 10.3x 9.3x

ITT Corporation 14.6% 30.5% $965 $18.09 (10.4%) (84.6%) 15.4% 3.1% 2.9x 3.3x

Pentair, Inc. 14.2% 31.4% $5,368 $39.29 (1.3%) (6.6%) 90.1% 2.3% 10.7x 9.4x

Sulzer, Ltd. 13.8% 30.6% $4,471 $121.78 2.6% (26.0%) 86.3% 2.0% 8.8x 7.6x

Eaton Corporation 13.8% 30.1% $16,305 $39.50 (4.2%) (24.8%) 74.2% 2.6% 7.4x 6.4x

Colfax Corporation 11.9% 31.1% $3,966 $27.39 (7.8%) 4.6% 72.8% 0.4% 35.9x 7.6x

SPX Corporation 9.0% 27.4% $5,035 $64.36 (9.0%) (24.4%) 76.3% 1.4% 9.2x 10.8x

Intermolecular, Inc. 8.2% 53.6% $272 $7.70 19.8% NA 76.9% 33.8% 81.0x 24.3x

Median 14.6% 31.4% (1.3%) (16.9%) 83.0% 1.9% 9.2x 8.4x

Mean 14.7% 33.8% 0.5% (20.0%) 76.5% 4.5% 16.2x 9.2x

Valves and Fittings

The Weir Group PLC 19.4% 34.8% $6,130.7 $24.10 7.2% (30.4%) 69.1% 0.8% 8.8x 7.2x

Cameron International Corporation 15.9% 30.3% $11,146.7 $42.82 (6.9%) (16.3%) 73.2% 0.8% 10.0x 8.3x

Parker Hannifin Corporation 15.0% 24.2% $12,465.1 $75.74 (6.8%) (15.2%) 82.8% 2.7% 6.4x 6.1x

Crane Co. 14.8% 33.6% $2,335.0 $36.09 (5.7%) (29.1%) 68.9% 2.5% 6.2x 5.7x

Aalberts Industries NV 14.2% 59.1% $2,380.7 $14.64 (12.3%) (33.6%) 74.9% NM 7.0x 6.5x

Curtiss-Wright Corp. 14.0% 32.9% $1,798.4 $30.76 2.0% (6.6%) 73.4% 3.0% 6.1x 5.8x

Watts Water Technologies, Inc. 12.7% 35.6% $1,386.8 $33.39 (0.1%) (8.6%) 78.8% 1.4% 7.4x 7.2x

CIRCOR International, Inc. 9.2% 27.3% $654.7 $34.33 5.2% (21.8%) 76.4% 0.7% 8.6x 7.9x

Mueller Water Products, Inc. 7.0% 17.6% $1,208.3 $3.51 0.3% (10.2%) 86.5% 0.7% 12.8x 8.5x

Mueller Industries Inc. 6.8% 12.5% $1,332.1 $42.63 (0.4%) (1.7%) 85.5% NM 8.0x 6.7x

Median 14.1% 31.6% (0.2%) (15.7%) 75.7% 1.1% 7.7x 6.9x

Mean 12.9% 30.8% (1.7%) (17.3%) 76.9% 1.6% 8.1x 7.0x


Overall Mean 13.9% 32.5% (0.5%) (18.7%) 76.7% 3.3% 12.7x 8.2x

Flow Control M&A Overview

Announced

M&A

Transactions

Flow

Control

M&A Trends

Top Acquirers

9

($ in billions)

($ in millions)


($ in millions)


12.0x 12.3x

6.9x

8.5x 8.5x

10.3x 10.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

2006 2007 2008 2009 2010 2011 2012

YTD

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Pending Alesco Corporation Limited Provides water management products and services. DuluxGroup Limited 280.7$ 6.8x

Pending Olaer Group Limited Manufactures accumulators, oil coolers, and filters. Parker Hannifin Corporation NA NA

Pending Jeil Hydraulic Co., Ltd. Manufactures hydraulic pumps, motors, and valves. Eaton Corporation 200.0 NA

Pending Tyco International Ltd., Flow Control Business Manufactures valves and controls, thermal controls, and water systems. Pentair, Inc. 4,900.0 NA

06/01/12 Polimer Kaucuk Sanayi Ve Pazarlama A.S. Manufactures hydraulic and industrial hose. Eaton Corporation NA NA

04/27/12 Schrader International, Inc. Manufactures pressure technologies. Madison Dearborn Partners, LLC NA NA

04/25/12 Aseptomag AG Manufactures valves, components, and systems. GEA Group AG NA NA

04/13/12 Bailey International LLC Manufactures hydraulic cylinders and related components. Pfingsten Partners, L.L.C. NA NA

04/02/12 Snap-Tite Inc. Manufactures hydraulic and high-pressure valves and other components. Parker Hannifin Corporation NA NA

03/13/12 MAAG Pump Systems Textron A.G. Manufactures gear pumps, filtration systems, and pelletizers. Pump Solutions Group 285.0 NA

03/07/12 Pioneer Pump Holdings Inc. Manufactures centrifugal pumps. Franklin Electric Co. Inc. 76.7 NA

03/07/12 Valstone Control Inc. Manufactures control valves. Metso Corp. NA NA

02/22/12 NovaTech LLC Manufactures communication and automation technologies. The Weir Group PLC 180.0 NA

02/16/12 Remosa S.p.A. Manufactures valves. IMI Severe Service 130.5 12.5x

02/15/12 FlexHead Industries, Inc. Manufactures flexible connectors for fire protection systems. Atkore International (NV) Inc. NA NA

01/13/12 Charter International plc Manufactures cutting and automation solutions. Colfax Corporation 2,744.0 11.5x

12/22/11 Clyde Pumps Ltd. Manufactures pumps. SPX Corporation 1,164.0 NA

12/15/11 Robuschi & C. S.p.A. Manufactures centrifugal pumps, vacuum pumps, and lobe blowers. Gardner Denver Inc. 207.2 NA

12/14/11 Seaboard International, Inc. Manufactures oil and gas pressure control equipment. The Weir Group PLC 678.0 NA

10/28/11 Lawrence Pumps, Inc. Manufactures centrifugal and industrial pumps and pumping systems. Flowserve Corp. 89.6 11.2x

07/29/11 Cardo Flow Solutions Manufactures pumps and related equipment. Sulzer, Ltd. 935.9 12.8x

04/29/11 Danfoss Socla S.A.S. Manufactures self-acting and actuated valves and backflow preventers. Watts Industries Deutschland GmbH 175.7 NA

Notable Recent Transactions

Number of Deals and Aggregate Deal Value Median LTM EBITDA Multiple


Parker Hannifin Corporation 11 - -

Pentair, Inc. 8 $6,085

The Weir Group plc 8 1,335

Dover Corp. 8 702

ITT Corporation 8 596

Franklin Electric Co. Inc. 8 318

Rotork plc 7 60

SPX Corporation 6 2,065

IMI plc 6 671

IDEX Corporation 6 360

Eaton Corporation 5 872

Interpump Group SpA 5 100

Flowserve Corp. 4 348

Crane Co. 4 135

Curtiss-Wright Corp. 4 59

Colfax Corporation 2 2,766

-$2

$2

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$10

$14

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50

75

100

125

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Power Connectivity and Control Public Comparables

10

Key Trading

Stats


per share amounts)

Power Connectivity and Control Public Comparables

As of July 6, 2012

Stock Performance



Power Integrity

Emerson Electric Co. 20.4% 39.4% $36,967 $45.16 (3.3%) (21.0%) 79.5% 2.3% 7.5x 7.1x

Hubbell Inc. 17.3% 32.4% $4,814 $81.25 2.9% 22.8% 97.8% 1.3% 9.8x 8.8x

Schneider Electric S.A. 16.7% 37.7% $35,200 $52.69 (2.5%) (33.6%) 77.4% 2.4% 7.6x 7.2x

ABB Ltd. 14.9% 30.4% $36,271 $16.15 0.2% (38.5%) 72.1% 3.7% 6.6x 6.1x

Eaton Corporation 13.8% 30.1% $16,305 $39.50 (4.2%) (24.8%) 74.2% 2.6% 7.4x 6.4x

Median 16.7% 32.4% (2.5%) (24.8%) 77.4% 2.4% 7.5x 7.1x

Mean 16.6% 34.0% (1.4%) (19.0%) 80.2% 2.5% 7.8x 7.1x

Electrical Protection and Connectivity

Legrand 23.0% 52.0% $10,141.3 $32.57 4.5% (18.7%) 92.4% 4.7% 8.4x 8.1x

Littelfuse Inc. 21.9% 38.5% $1,210.7 $56.53 (5.7%) (6.8%) 87.0% 3.0% 8.4x 7.0x

Belden Inc. 11.8% 29.6% $1,726.8 $33.98 6.5% (7.3%) 82.0% 2.8% 7.1x 6.4x

Median 21.9% 38.5% 4.5% (7.3%) 87.0% 3.0% 8.4x 7.0x

Mean 18.9% 40.1% 1.8% (11.0%) 87.1% 3.5% 7.9x 7.2x

Interconnect Components

Amphenol Corporation 22.0% 31.4% $9,337 $53.52 (2.4%) (1.3%) 86.5% 2.2% 10.6x 10.0x

Molex Inc. 18.9% 30.8% $3,515 $23.62 (2.7%) (10.6%) 83.0% 5.0% 5.2x 5.4x

TE Connectivity Ltd. 17.1% 30.7% $14,537 $31.38 (3.4%) (16.8%) 81.7% 5.3% 5.9x 5.8x

AVX Corp. 14.4% 25.4% $973 $10.54 (5.5%) (31.7%) 68.2% 2.0% 2.8x 3.8x

Methode Electronics, Inc. 5.9% 17.9% $277 $8.50 9.3% (22.9%) 75.6% 4.2% 9.8x 7.9x

CTS Corporation 4.6% 17.6% $347 $9.49 0.3% (5.1%) 84.6% 3.6% 9.7x 6.9x

Median 15.8% 28.1% (2.6%) (13.7%) 82.4% 3.9% 7.8x 6.3x

Mean 13.8% 25.6% (0.7%) (14.7%) 79.9% 3.7% 7.3x 6.6x


Overall Mean 15.9% 31.7% (0.4%) (15.5%) 81.6% 3.2% 7.6x 6.9x

Power Connectivity and Control M&A Overview

Announced

M&A

Transactions

Power

Connectivity

and Control

M&A Trends

Top Acquirers

11

($ in billions)

($ in millions)


($ in millions)




Pending Cooper Industries plc Distributes fiber and copper networking products. Eaton Corporation 12,272$ 12.6 x

Pending Steck Industria Eletrica Ltda. Manufactures electrical components and tools. Schneider Electric S.A. NA NA

Pending Miranda Technologies Inc. Provides hardware and software solutions for television facilities. Belden CDT (Canada) Inc. 321 9.4x

Pending Micronetics Inc. Manufactures radio frequency and microwave components and sub-assemblies. Mercury Computer Systems, Inc. 71 10.0x

06/04/12 Elo TouchSystems, Inc. Develops, manufactures, and markets touchscreen products. The Gores Group LLC 380 NA

06/01/12 Accel AB Manufactures optical cables, copper communication cables, and special cables. Littelfuse Inc. NA NA

05/29/12 Numeric Power Systems Ltd., UPS Division Manufactures uninterruptible power supply systems. Indo Asian Electric Private Limited 169 NA

05/21/12 Dunkermotoren GmbH Manufactures engineered audio and multimedia systems. AMETEK Technical & Industrial Products, Inc. 331 NA

05/16/12 Thomas & Betts Corp. Manufactures structured cabling solutions for data centers. ABB Low Voltage Products & Systems 3,766 10.0x

05/15/12 Comverge, Inc. Distributes information technology products and consumer electronics. Bayside Capital, Inc. 51 NA

05/01/12 SmartSynch, Inc. Manufactures thermal management solutions. Itron, Inc. 100 NA

04/03/12 Deutsch Engineered Connecting Devices, Inc. Manufactures electrical connectors and fiber optic connectors. TE Connectivity Ltd. 2,195 NA

03/15/12 Avtron LoadBank, Inc. Designs and manufactures load banks. Emerson Network Power, Inc. NA NA

03/12/12 SoftSwitching Technologies Corporation Manufactures measurement instruments and surface measurement systems. Rockwell Automation Inc. NA NA

02/23/12 Aegide B.V. Provides industrial control and information solutions. Legrand Nederland B.V. NA NA

12/21/11 Temp-Flex Cable, Inc. Manufactures rotary optical encoders, and industrial photo-electronic sensors. Molex Inc. 24 NA

12/02/11 Tri-Star Electronics International, Inc. Manufactures battery and electrical connectors, cables, and tools and related products. Carlisle Interconnect Technologies Inc. 284 NA

Notable Recent Transactions

Number of Deals and Aggregate Deal Value Median LTM EBITDA Multiple


ABB Ltd. 16 $8,760

Schneider Electric S.A. 15 6,280

Avnet Inc. 9 247

Eaton Corporation 8 14,242

Belden Inc. 8 839

Teledyne Technologies Inc. 7 567

Arrow Electronics, Inc. 7 274

Legrand 7 - -

Nexans SA 6 937

Murata Manufacturing Co. Ltd. 6 374

Molex Inc. 6 282

Hubbell Inc. 6 87

Littelfuse Inc. 5 101

Moog Inc. 4 110

Carlisle Companies Inc. 3 521

9.0x

12.0x

7.1x7.9x

10.2x

8.7x

10.1x

0.0x

2.0x

4.0x

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8.0x

10.0x

12.0x

14.0x

2006 2007 2008 2009 2010 2011 2012

YTD

EB

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$0

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Representative Transactions

12

has been acquired by

a portfolio company of

Kirtland Capital

Partners








a joint venture between
















have been acquired by

and

divisions of




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Measurement, Control, and Connectivity

Sources:

• The Wall Street Journal

• Test & Measurement World

• The Data Center Journal

• Flow Control Magazine

• The Financial Times

• PNC Economic Outlook

• S&P Capital IQ

• Thomson Financial – SDC Database

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