INDUSTRIALS & MANUFACTURING · 2019. 4. 17. · Caraustar Industries is a vertically integrated...

STRATEGIC MARKET INSIGHTS

Q4 2018 REPORT

INDUSTRIALS &

MANUFACTURING

www.g2cap.com 2

U.S. manufacturing employment has experienced a slow, steady rebound since 2010, growing at an 8-year

CAGR of 1.2% to just under 12.7MM employees. While current employment is dwarfed by the peak reached

in 1979 of 19.5MM, 2010 to today represents the longest consecutive yearly increase in the number of

manufacturing jobs since the 1960’s.

While companies of various sizes continue to opt for offshore manufacturing capabilities, an increasing

number of firms are opting for onshore scalability, choosing proximity to customers, simplified supply chains,

and a narrowing cost arbitrage abroad.

Onshore Manufacturing

Source: G2 Insights, U.S. Bureau of Labor Statistics, A.T. Kearney, Reshoring Initiative, McKinsey &

Company

- Victoria Arrigoni, Managing Director

Industrials & Manufacturing Practice Lead

Uncertainties abroad combined with new cost consideration developments, speed, and added supply chain

complexities must be weighed in the strategic decision to invest in onshore or offshore manufacturing

capabilities. G2 is prepared to discuss your firm’s manufacturing scalability and growth solutions including

strategic mergers or acquisitions, capital investments, add-on acquisitions, sale processes, and special

situations.

When Onshore Manufacturing Makes Sense

Proximity to Customers Allows for Quick Reaction Time: Higher responsiveness to market allows for

quicker ramp up on new projects and can make manufacturers more competitive, particularly as the lifecycle

from design concept to high volume production shortens

Simplified Supply Chain Management: Avoid macroeconomic or political noise associated with import

uncertainty, facilitates shorter lead times

Rising Labor Costs Abroad Combined with Added Logistics Costs: While labor prices remain lower

abroad, the wage gap is narrowing, technology improvements allow for more flexible automated solutions,

and with logistics costs taken in to account the total cost savings can nearly disappear

Decreasing Cost of Automation vs. Increase in Domestic and International Labor Costs

▪ While growth in Chinese labor costs continues to significantly outpace the growth of U.S. labor costs, total

cost requirements remains substantially below the U.S., posing a significant cost savings to offshore

▪ Unlike labor costs, automation costs are relatively the same no matter location but are more easily

justified domestically than abroad to replace high labor costs

▪ Decreasing automation costs allow manufacturers with lower volumes to consider the investment at the

time they begin to consider manufacturing offshore

▪ Technology is increasingly agile, and can augment skilled laborers with relatively easy integration and

significant benefits to quality, worker safety, scalability, and production timing

▪ As firms choose to invest in automation, they increase their cost to “reshore”, locking themselves in to

either onshore or offshore manufacturing

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Index

U.S. Labor Cost China Labor Cost Automation Cost

Market Update – G2 Insights

www.g2cap.com 3

Key Trading Statistics

LTM1

SectorNumber of

Companies

Median

Enterprise

Value ($MM)

Median

Revenue

Growth

Median

EBITDA

Growth*

EV / Revenue EV / EBITDA

Building Products 16 3,380 6.4% 5.6% 1.4x 8.8x

Chemicals 10 11,734 10.9% 20.1% 1.7x 9.3x

Food Processing

& Distribution13 26,384 4.1% 4.9% 2.2x 11.9x

Mining 9 20,547 1.5% (2.3%) 2.4x 6.3x

Paper Packaging 9 9,757 6.5% 14.6% 1.0x 6.8x

Plastics

Packaging12 6,268 6.0% 5.0% 1.4x 9.9x

Steel Mills 9 8,215 16.7% 27.4% 0.7x 4.6x

Steel Service

Centers &

Distribution

6 1,418 16.3% 27.0% 0.4x 6.2x

Key Trading Statistics in Millions USD (converted where necessary)

Data sourced from S&P Capital IQ on Dec 31, 2018

1 LTM Multiples and comparison to Dec 31, 2017; Trend graph covered on pages 5 through

12; Excludes outliers above 20.0x EV / EBITDA

Industrials & Manufacturing

www.g2cap.com 4

▪ High Road Capital Partners acquires Radix Wire & Cable – On November 2, 2018, High Road Capital

Partners, a private equity firm specializing in investing in the middle market, acquired Radix Wire &

Cable for an undisclosed amount. Radix Wire & Cable is a leading manufacturer of high-temperature

and fire-resistant wire and cable. High Road Capital Partners seeks to acquire niche manufacturing

companies with high potential for growth. Under new ownership, Radix Wire & Cable will seek to

growth organically in new markets, as well as through acquisitions in complementary product

categories.

▪ Patrick Industries acquires Arran Isle – On December 3, 2018, Patrick Industries (Nasdaq:PATK), a

manufacturer and distributer of building products and materials, acquired Arran Isle for $54.0MM. Arran

Isle sources, manufactures, and distributes building products for the factory-built housing, recreational

vehicle (RV), commercial, and other related markets across the United States and Canada. The

acquisition includes Arran Isle subsidiary, LaSalle Bristol. Through this acquisition, Patrick Industries

will be able to leverage increased distribution capabilities and capacity to increase overall content per

unit within the manufactured housing and RV space.

▪ Advanced Emission Solutions acquires ADA Carbon Solutions – On December 7, 2018, Advanced

Emission Solutions (NASDAQ:ADES), a leader in clean coal technology and the associated specialty

chemicals, serving the coal-fueled power plant industry, acquired ADA Carbon Solutions for $75.0MM

or 5.9x EV/EBITDA (4.2x EV/pro forma run-rate EBITDA). ADA Carbon Solutions designs and

manufactures powdered activated carbon products optimized for mercury compliance in emission

control applications. The acquisition allows Advanced Emission Solutions to diversify emissions control

offerings, expand their customer base, and broaden markets served.

▪ Greif Packaging announces its acquisition of Caraustar Industries – On December 20, 2018, Greif

Packaging (NYSE:GEF), an operator of containerboard mills and manufacturer of recycled and virgin

fiber medium, linerboard, and specialty industrial grade products, entered into a definitive agreement to

acquire Caraustar Industries for $1.8B or 10.3x EV/EBITDA (6.8x EV/pro forma run-rate EBITDA).

Caraustar Industries is a vertically integrated leader in the manufacturing of paperboard and converted

paperboard products. The acquisition is the latest in the rapidly consolidating paper and packaging

sector.

▪ American Industrial Partners acquires Armstrong Wood Products – On December 31, 2018, American

Industrial Partners, an operationally-oriented middle market private equity firm, acquired Armstrong

Wood Products for $100.0MM or 7.2x EV/EBITDA from Armstrong Flooring (NYSE:AFI). Armstrong

Wood Products manufactures and distributes hardwood flooring products and kitchen and bathroom

cabinets. This platform acquisition is American Industrial Partners’ second in the building products

space. The seller, Armstrong Flooring, plans to focus on its fastest growing line of resilient tile products

following the divestiture.

Selected Q4 2018 Industry Deals

Several notable transactions have closed or were announced in the Industrials & Manufacturing

space through Q4 2018. G2 has outlined select transactions below.

Data sourced from S&P Capital IQ


www.g2cap.com 5

Public Trading Metrics – Building Products


Size figures in Millions USD (converted where necessary)

Charts show average daily multiples for each year adjusted to exclude outliers

Data sourced from S&P Capital IQ as of trading on Dec 31, 2018

* Outliers above 20.0x EV / EBITDA excluded from calculation of

mean and median

Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $4,538 $3,770 $192 $2,972 $453 17.1% 905 2.1x 1.9x 10.3x

Median $3,380 $2,885 $160 $2,150 $258 15.5% 618 2.1x 1.4x 8.8x

Company Ticker

Size (Millions USD)EBITDA

Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

A. O. Smith

CorporationNYSE:AOS $6,832 $7,257 $260 $3,188 $624 19.6% 221 0.4x 2.1x 11.0x

AAON, Inc.NasdaqGS:A

AON1,816 1,826 7 426 74 17.5% 0 NA 4.3x 24.4x*

Apogee Enterprises,

Inc.

NasdaqGS:A

POG1,033 841 15 1,410 159 11.2% 233 1.5x 0.7x 6.5x

Armstrong World

Industries, Inc.NYSE:AWI 3,386 2,885 327 951 269 28.2% 780 2.9x 3.6x 12.6x

Continental Building

ProductsNYSE:CBPX 1,096 938 105 519 148 28.6% 262 1.8x 2.1x 7.4x

Fortune Brands Home

& SecurityNYSE:FBHS 7,497 5,372 263 5,485 852 15.5% 1,809 2.1x 1.4x 8.8x

Gibraltar Industries,

Inc.

NasdaqGS:R

OCK1,095 1,130 245 1,020 124 12.1% 210 1.7x 1.1x 8.9x

Interface, Inc.NASDAQGS:

TILE1,386 848 107 1,109 161 14.5% 618 3.8x 1.3x 8.6x

Lennox International

Inc.NYSE:LII 9,896 8,816 46 3,884 564 14.5% 741 1.3x 2.5x 17.5x

Masco Corporation NYSE:MAS 11,508 8,933 559 8,359 1,393 16.7% 2,971 2.1x 1.4x 8.3x

Masonite

International CorpNYSE:DOOR 1,804 1,189 193 2,150 258 12.0% 796 3.1x 0.8x 7.0x

Owens Corning NYSE:OC 8,387 4,808 136 6,939 1,117 16.1% 3,669 3.3x 1.2x 7.5x

Simpson

Manufacturing Co.NYSE:SSD 2,322 2,488 160 1,079 211 19.6% 0 NA 2.2x 11.0x

Trex Company, Inc. NYSE:TREX 3,380 3,488 107 666 188 28.2% 0 NA 5.1x 18.0x

Universal Forest

Products, Inc.

NasdaqGS:U

FPI1,792 1,601 26 4,467 253 5.7% 187 0.7x 0.4x 7.1x

USG Corporation NYSE:USG 6,651 5,962 329 3,348 468 14.0% 1,079 2.3x 2.0x 14.2x

1.0x 0.8x 0.9x1.1x 1.1x

1.1x

1.5x1.7x

1.8x1.9x

2.5x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18*

EV

/ T

ota

l R

ev

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Public Trading Metrics – Chemicals Industry


*

Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $31,608 $24,335 $2,065 $20,715 $3,906 20.5% 7,985 2.0x 1.7x 8.4x

Median $11,734 $9,253 $297 $7,051 $1,405 20.6% 2,630 1.8x 1.7x 9.3x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Albemarle

CorporationNYSE:ALB $9,399 $8,185 $641 $3,311 $953 28.8% 1,412 1.5x 2.8x 9.9x

Ashland Global

Holdings Inc.NYSE:ASH 6,669 4,434 149 3,738 627 16.8% 2,275 3.6x 1.8x 10.6x

BASF SE DB:BAS 85,204 63,465 2,826 76,185 12,544 16.5% 19,244 1.5x 1.1x 6.8x

Celanese

CorporationNYSE:CE 15,154 12,034 415 7,155 1,595 22.3% 2,827 1.8x 2.1x 9.5x

Eastman Chemical

CompanyNYSE:EMN 16,746 10,238 0 10,151 2,236 22.0% 0 NA 1.6x 7.5x

FMC Corporation NYSE:FMC 12,557 9,959 177 4,488 1,214 27.1% 2,593 2.1x 2.8x 10.3x

Hawkins, Inc.Nasdaq:HW

KN521 439 7 550 56 10.2% 81 1.4x 0.9x 9.3x

Olin Corporation NYSE:OLN 6,576 3,355 179 6,946 1,206 17.4% 3,104 2.6x 0.9x 5.5x

DowDuPont Inc. NYSE:DWDP 152,344 122,696 13,400 85,977 16,436 19.1% 37,662 2.3x 1.8x 9.3x

Westlake Chemical

CorporationNYSE:WLK 10,912 8,547 788 8,650 2,196 25.4% 2,667 1.2x 1.3x 5.0x




7.3x

6.4x 6.4x7.3x 7.3x

8.0x

9.0x

8.5x

9.9x10.1x

11.1x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18*

EV

/ E

BIT

DA

S&P 500

1.0x 0.9x 0.9x

1.2x 1.3x 1.3x

1.6x1.7x 1.8x

1.9x

2.4x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18*

EV

/ T

ota

l R

ev

en

ue

S&P 500

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Public Trading Metrics – Food Processing and Distribution


Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $32,346 $22,481 $477 $20,485 $2,677 16.0% 8,743 3.2x 2.0x 12.1x

Median $26,384 $19,784 $442 $16,278 $2,043 17.8% 8,051 3.3x 2.2x 11.9x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Campbell Soup

CompanyNYSE:CPB $19,581 $9,931 $205 $9,218 $1,966 21.3% 8,001 4.1x 2.1x 10.0x

Conagra Brands, Inc. NYSE:CAG 21,494 10,373 442 8,179 1,562 19.1% 11,406 7.3x 2.6x 13.8x

General Mills, Inc. NYSE:GIS 38,835 23,237 533 16,278 3,447 21.2% 12,209 3.5x 2.4x 11.3x

Hormel Foods

CorporationNYSE:HRL 22,986 22,817 459 9,546 1,319 13.8% 625 0.5x 2.4x 17.4x

Kellogg Company NYSE:K 28,965 19,784 321 13,547 2,405 17.8% 8,207 3.4x 2.1x 12.0x

Mondelez

International, Inc.

NasdaqGS:M

DLZ77,263 58,197 1,100 25,938 4,567 17.6% 12,531 2.7x 3.0x 16.9x

Performance Food

Group CompanyNYSE:PFGC 4,568 3,343 8 18,099 417 2.3% 1,188 2.9x 0.3x 11.0x

Sysco Corporation NYSE:SYY 40,575 32,570 745 59,646 3,319 5.6% 8,051 2.4x 0.7x 12.2x

The Hershey

CompanyNYSE:HSY 26,384 22,487 588 7,791 2,043 26.2% 3,254 1.6x 3.4x 12.9x

The J. M. Smucker

CompanyNYSE:SJM 16,739 10,635 171 7,609 1,649 21.7% 5,885 3.6x 2.2x 10.2x

The Kraft Heinz

Company

NasdaqGS:K

HC83,687 52,484 1,130 26,259 7,061 26.9% 30,873 4.4x 3.2x 11.9x

Tyson Foods, Inc. NYSE:TSN 29,135 19,525 400 40,016 4,032 10.1% 8,075 2.0x 0.7x 7.2x

US Foods Holding

Corp.NYSE:USFD 10,289 6,876 104 24,175 1,012 4.2% 3,351 3.3x 0.4x 10.2x




10.6x

9.3x 9.2x8.6x 8.7x

9.3x

11.4x 11.2x

13.3x 13.3x

12.1x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

EV

/ E

BIT

DA

S&P 5001.6x

1.4x1.3x

1.4x 1.5x1.5x

1.7x 1.8x

2.5x

2.2x2.1x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18*

EV

/ T

ota

l R

ev

en

ue

S&P 500

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Public Trading Metrics – Mining


Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $37,740 $31,497 $4,038 $16,150 $6,590 37.4% 8,035 1.3x 2.4x 6.3x

Median $20,547 $14,940 $1,697 $9,756 $3,398 38.0% 4,163 1.3x 2.4x 6.3x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Barrick Gold

CorporationTSX:ABX $21,290 $15,770 $1,697 $7,567 $3,333 44.0% 5,687 1.7x 2.8x 6.4x

BHP Billiton Limited NYSE: BHP 138,408 122,023 15,871 43,895 22,111 50.4% 24,436 1.1x 3.2x 6.3x

Freeport-McMoRan

Inc.NYSE: FCX 24,872 14,940 4,217 18,628 6,362 34.2% 11,124 1.7x 1.3x 3.9x

Goldcorp Inc. NYSE: GG 11,175 8,520 125 3,113 1,067 34.3% 2,336 2.2x 3.6x 10.5x

Newmont Mining

CorporationNYSE: NEM 20,547 18,457 3,068 7,109 2,703 38.0% 4,163 1.5x 2.9x 7.6x

Pan American Silver

Corp.

NASDAQ:

PAAS2,032 2,239 186 837 255 30.4% 21 0.1x 2.4x 8.0x

Rio Tinto plc NYSE: RIO 89,051 78,367 5,989 40,625 16,103 39.6% 12,485 0.8x 2.2x 5.5x

Teck Resources

LimitedNYSE: TECK 15,226 12,383 1,147 9,756 3,976 40.8% 4,025 1.0x 1.6x 3.8x

Vedanta Limited NYSE: VEDL 17,059 10,772 0 13,823 3,398 24.6% 0 NA 1.2x 5.0x




www.g2cap.com 9

Public Trading Metrics – Paper Packaging


Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $10,440 $7,064 $393 $9,588 $1,566 15.6% 4,048 2.5x 1.1x 6.7x

Median $9,757 $6,284 $250 $7,878 $1,467 15.4% 2,344 2.5x 1.0x 6.8x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Cascades Inc. TSX:CAS $1,979 $707 $108 $3,505 $350 10.0% 1,275 3.6x 0.6x 5.7x

DS Smith Plc LSE:SMDS 7,406 5,222 555 7,878 984 12.5% 2,344 2.4x 0.9x 7.5x

Greif, Inc. NYSE:GEF 2,890 1,940 94 3,874 512 13.2% 936 1.8x 0.7x 5.6x

International Paper

CompanyNYSE:IP 26,594 16,347 589 23,306 3,849 16.5% 10,015 2.6x 1.1x 6.9x

Mondi Limited JSE:MND 13,510 10,413 63 8,448 1,766 20.9% 2,574 1.5x 1.6x 7.6x

Packaging Corp. of

AmericaNYSE:PKG 10,033 7,825 0 7,015 1,467 20.9% 0 NA 1.4x 6.8x

Smurfit Kappa Group

plcISE:SK3 9,757 6,284 1,226 10,217 1,576 15.4% 4,374 2.8x 1.0x 6.2x

Sonoco Products

CompanyNYSE:SON 6,461 5,303 250 5,334 724 13.6% 1,313 1.8x 1.2x 8.9x

WestRock Company NYSE: WRK 15,329 9,534 261 16,719 2,863 17.1% 9,553 3.3x 0.9x 5.4x




www.g2cap.com 10

Public Trading Metrics – Plastics Packaging


Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $7,255 $4,658 $255 $4,454 $711 15.8% 2,841 3.1x 1.6x 10.2x

Median $6,268 $4,822 $282 $4,003 $594 15.2% 1,626 3.6x 1.4x 9.9x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

AptarGroup, Inc. NYSE:ATR $6,967 $5,909 $291 $2,706 $533 19.7% 1,132 2.1x 2.6x 13.1x

Ball Corporation NYSE:BLL 21,776 15,596 721 11,635 1,828 15.7% 6,510 3.6x 1.9x 11.9x

Bemis Company, Inc. NYSE:BMS 5,569 4,178 76 4,090 573 14.0% 1,349 2.4x 1.4x 9.7x

Berry Global Group,

Inc.NYSE:BERY 11,704 6,226 293 8,065 1,361 16.9% 5,713 4.2x 1.5x 8.6x

CCL Industries Inc. TSX:CCL.B 7,997 6,468 339 3,917 763 19.5% 1,904 2.5x 2.0x 10.5x

Crown Holdings, Inc. NYSE:CCK 14,761 5,620 607 11,151 1,630 14.6% 8,517 5.2x 1.3x 9.1x

Intertape Polymer

Group Inc.TSX:ITP 1,209 730 13 1,003 125 12.4% 484 3.9x 1.2x 9.7x

Myers Industries, Inc. NYSE:MYE 564 534 47 568 53 9.3% 77 1.5x 1.0x 10.7x

Richards Packaging

Income FundTSX:RPI.UN 322 279 2 239 34 14.4% 22 0.7x 1.3x 9.4x

Sealed Air

CorporationNYSE:SEE 8,832 5,467 272 4,733 818 17.3% 3,237 4.0x 1.9x 10.8x

Silgan Holdings Inc.NasdaqGS:S

LGN5,361 2,613 73 4,449 614 13.8% 2,305 3.8x 1.2x 8.7x

Winpak Ltd. TSX:WPK 1,994 2,275 324 890 198 22.2% 0 NA 2.2x 10.1x




www.g2cap.com 11

Public Trading Metrics – Steel Mills


Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $10,112 $7,019 $756 $18,185 $2,593 13.8% 3,084 1.9x 0.6x 4.8x

Median $8,215 $5,320 $699 $11,319 $1,491 13.5% 2,316 1.6x 0.7x 4.6x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

AK Steel Holding

CorporationNYSE:AKS $3,038 $710 $49 $6,818 $636 9.3% 1,994 3.1x 0.4x 4.8x

ArcelorMittal ENXTAM:MT 33,318 21,039 2,354 76,033 10,265 13.5% 9,316 0.9x 0.4x 3.2x

Carpenter

Technology Corp.NYSE:CRS 2,219 1,687 29 2,319 320 13.8% 549 1.7x 1.0x 6.9x

Commercial Metals

CompanyNYSE:CMC 2,421 1,884 52 4,845 339 7.0% 1,308 3.9x 0.5x 7.1x

Gerdau S.A.BOVESPA:G

GBR49,979 6,135 699 11,264 1,491 13.2% 4,003 2.7x 0.9x 6.7x

Nucor Corporation NYSE:NUE 19,001 16,265 1,399 25,067 4,154 16.6% 4,233 1.0x 0.8x 4.6x

Steel Dynamics, Inc.Nasdaqgs:S

TLD8,215 6,896 828 11,822 2,040 17.3% 2,352 1.2x 0.7x 4.0x

Ternium S.A. NYSE:TX 8,422 5,320 399 11,319 2,622 23.2% 1,690 0.6x 0.7x 3.2x

United States Steel

CorporationNYSE:X 4,392 3,233 1,000 14,178 1,471 10.4% 2,316 1.6x 0.3x 3.0x




www.g2cap.com 12

Public Trading Metrics – Steel Service Centers & Distributors





Industry EVMarket

CapCash

LTM

Revenue

LTM

EBITDA

EBITDA

MarginLT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean $2,401 $1,509 $67 $5,224 $371 6.5% 883 3.2x 0.4x 6.8x

Median $1,418 $831 $80 $3,934 $250 6.1% 729 2.9x 0.4x 6.2x

Company Ticker


Margin

Leverage Valuation

EVMarket

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Klöckner & Co SE XTRA:KCO $1,347 $692 $70 $7,733 $228 2.9% 709 3.1x 0.2x 5.9x

Olympic Steel, Inc.Nasdaqgs:Z

EUS457 157 4 1,594 70 4.4% 304 4.3x 0.3x 6.5x

Reliance Steel &

Aluminum Co.NYSE:RS 7,006 5,013 112 11,097 1,178 10.6% 1,981 1.7x 0.6x 5.9x

Russel Metals Inc. TSX:RUS 1,364 971 91 3,052 271 8.9% 325 1.2x 0.4x 5.0x

Ryerson Holding

CorporationNYSE:RYI 1,471 237 31 4,059 189 4.7% 1,229 6.5x 0.4x 7.8x

Worthington

Industries, Inc.NYSE:WOR 2,759 1,984 93 3,808 289 7.6% 748 2.6x 0.7x 9.6x

www.g2cap.com 13

Market Indicators

Industrial Production Index

Last 5 Year EV / EBITDA Trend by Industry


Data sourced through Federal Reserve Economic Data on Dec 31, 2018

The Industrial Production Index (IPI) is published by the Federal Reserve Board of the United States and measures the real production

output of manufacturing, mining, and utilities.

Data sourced through S&P Capital IQ on Dec 31, 2018

www.g2cap.com 14

Industrials & ManufacturingSelect Ongoing G2 Projects

Source: G2 Insights

Project Post

Restructuring

Manufacturer of Custom Print

and Postal Supplies

▪ Project Post – G2 is currently advising on the operational

restructuring of a custom print and postal supplies

manufacturer. G2 is assessing performance improvement

opportunities alongside management to improve

inventory controls and liquidity.

Project Zeus

Sell-Side

Manufacturer of Specialty Rod

and Wire

▪ Project Zeus – G2 is currently advising on the sale of a

specialty rod and wire manufacturer. The Company

serves the telecommunications, utility, automotive, and

construction industries. Products are made through

licensed processes and are sold through a variety of

distribution channels to a global customer base.

▪ Project El Dorado – G2 is currently advising on the sale

of a civil construction company. The Company

specializes in public sector road & highway, and site work

for other public buildings. The Company also works on

underground utility, private sector single & multifamily

residential, and commercial site development projects.

Project El Dorado

Sell-Side

Civil Construction

Company

Project Pi

Buy-Side

Centerless Grinding

▪ Project Pi – G2 is currently serving as the buy-side

advisor to a precision ground bar manufacturer based in

the northeast United States. The Company specializes in

highly engineered bar grinding with a focus on high value

alloys and specialty products. It supplies in to the medical,

aerospace, automotive, and defense end markets.

www.g2cap.com 15

G2 Capital Advisors provides C-level led investment banking and restructuring advisory services to

middle market institutional investors and companies. G2 offers a comprehensive suite of investment

banking services, creating a one-stop shop with non-conflicting strategic alternatives perspectives on

what is truly best fit for each client.

Investment Banking and Restructuring Advisory

FORTY FIVE professionals

across FIVE offices

FOUR Industry Practice Groups

Transportation & Logistics / Supply Chain

Industrials / Manufacturing

Technology / Business Services

Aerospace & Defense / Security

FIVE Service Offerings

Capital Markets

Sell-Side

Buy-Side

Operational

Restructuring

Financial

Restructuring

G2 offers clients an operational, experience-based approach within

each of its practice sectors.

G2 is focused in four sectors; each practice group headed by a leader with 20+ years of C-level

operating experience. G2’s managing directors have navigated all stages of the corporate lifecycle, from

growth to maturity, and apply that experience to provide advisory services to our clients.

Sector-Focused; Experience-Based

Transportation &

Logistics / Supply Chain

Industrials &

Manufacturing

Technology /

Business Services

Aerospace & Defense /

Security

Led by Ron Lentz Led by Victoria Arrigoni Led by Matt Konkle Led by Jim Bullion

▪ Freight Forwarding

▪ Trucking / Final Mile

▪ Warehousing / Distribution

▪ Third Party Logistics (3PL)

▪ e-Commerce Fulfillment

▪ Building Products

▪ Metals / Materials

▪ Container / Packaging

▪ Niche Manufacturing

▪ Distribution

▪ Tech-enabled Services

▪ BPO

▪ Managed Services

▪ Internet & Digital Media

▪ Business Services

▪ Cyber Security

▪ Defense Robotics

▪ UAV, C4ISR, Hardware

▪ Aerospace Electronics

▪ Aerospace Components

G2 Overview

G2 Overview

www.g2cap.com 16

ReferenceContact & Glossary of Terms

For more information about G2, please visit: www.g2cap.com

Our corporate headquarters is located at: 535 Boylston Street, 11th Floor, Boston, MA 02116

Boston | Chicago | Indianapolis | Naples | San Francisco

The information included in this Presentation is not a complete analysis of all material facts regarding any company, industry,

or security and does not constitute investment advice. Opinions expressed or implied by the materials here presented reflect

only the judgement of its author as of the date of the Presentation and is subject to change without notice. The information in

this Presentation has been obtained from sources which G2 generally considers reliable, but we make no representation or

warranty, express or implied, as to the accuracy or completeness of any information herein. This Presentation has been

prepared for informational purposes only and upon the express understanding that it will be used only for the purposes set

forth in the Section captioned G2 Overview above. G2 expressly disclaims any and all liability which may be based on such

information, errors therein or omissions there from. Securities offered through Western International Securities, Inc.,

Member FINRA & SIPC. G2 Capital Advisors, LLC (dba G2 Securities) and Western International Securities are

separate and unaffiliated entities.

Term Definition

Revenue

Total revenue from the sale of goods and services rendered during the reporting period, in normal course of

business, reduced by sales returns and allowances, and sales discounts. For banks, this item is defined as net

interest income after loan loss provisions

EBITDAEarnings before interest, taxes, depreciation, and amortization. Calculated as Revenue – Expenses, excluding

interest, taxes, depreciation and amortization

Market CapMarket value of a company using most recently reported basic weighted average shares outstanding.

Calculated as Market Price (as of period end) * Basic Weighted Average Shares Outstanding

Long-Term DebtSum of the carrying values as of the balance sheet date of long-term debt with a maturity beyond one year or

the normal operating cycle, if longer

Net DebtNet Debt shows the company’s overall debt situation by netting the value of debts with cash and other similar

liquid assets. Calculated as Total Debt – Cash & Cash Equivalents and Short Term Investments

Enterprise Value

Enterprise Value represents the combined economic value of a company as of the most recent fiscal year end.

Calculated as Diluted Market Capitalization + Total Debt + Minority Interest + Preferred Stock – Cash and Short

Term investments

P/EA valuation ratio of a company stock price compared to its per share earnings. Calculated as Market Price /

Earnings per Share for the last annual period

Tangible Book Value Total Shareholder’s Equity – Goodwill and Intangible Assets

Victoria Arrigoni, Managing Director Jeffrey Unger, CEO

[email protected] [email protected]

617.918.7934 617.918.7929

Mike Williams, Director Emily Murphy, Associate

[email protected] [email protected]

917.523.2164 617.918.7940

mailto:[email protected]




INDUSTRIALS & MANUFACTURING · 2019. 4. 17. · Caraustar Industries is a vertically integrated...

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Transcript of INDUSTRIALS & MANUFACTURING · 2019. 4. 17. · Caraustar Industries is a vertically integrated...