INSIDER - Brown Gibbons Lang & Company (BGL) Middle Market ... · GLOBAL AUTOMATION MARKET Dollars...

INDUSTRIALTECHNOLOGY

B G L C O . C O M A P R I L | 2 0 1 9

2

3

1 8

M A C R O E N V I R O N M E N T

I N D U S T R I A L T E C H N O LO G Y

A B O U T U S

TA B L E O F C O N T E N T SANDREW K. PETRYKMANAGING DIRECTOR & GROUP [email protected]

JUSTIN A. [email protected]

KEVIN H. [email protected]

REBECCA A. DICKENSCHEIDTDIRECTOR OF [email protected]

INSIDER

MANUFACTURING EXPANSION

In December 2018, the Institute for Supply Management (ISM) released its Semiannual Economic Forecast, revealing optimism for continued growth in the U.S. manufacturing sector in 2019. ISM is projecting 5.7 percent revenue growth for the year, down modestly from 5.8 percent in 2018. Sixty-four percent of ISM survey respondents are forecasting higher revenues in 2019, and revenue growth is projected for 17 of the 18 manufacturing industries. Any indications of softening are not predicted until the second half of 2019.

2 D I V E R S I F I E D I N D U S T R I A L S | M A C R O E N V I R O N M E N T

OUTLOOK POSITIVE FOR CONTINUED GROWTH

Unemployment

Consumer Confidence

Housing Starts

Source: The University of Michigan.

Source: U.S. Census Bureau. Source: U.S. Census Bureau.

Manufacturing Activity

Source: Institute for Supply Management.

50

60

70

80

90

100

110

Jan

-05

May

-07

Sep-

09

Feb-

12

Jun

-14

Nov

-16

Mar

-19

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

Jan

-05

May

-07

Sep-

09

Feb-

12

Jun

-14

Nov

-16

Mar

-19

50

52

54

56

58

60

62

Jan-

18

Mar

-18

May

-18

Jul-1

8

Sep-

18

Nov

-18

Jan-

19

Mar

-19

0

500

1,000

1,500

2,000

2,500

Jan-

05

May

-07

Sep-

09

Jan-

12

Jun-

14

Oct

-16

Feb-

19

(In T

hous

ands

)

Total In Structures with 1 Unit In Structures with 5 Units or More

3

According to the Manufacturing ISM Report on Business, the March PMI registered 55.3 percent, indicating continued expansion in the manufacturing sector and marking the 119th consecutive month of growth in the economy.

In the March 2019 Federal Reserve meeting, Fed officials revised quarterly economic projections, forecasting 2.1 percent growth in 2019. The unemployment rate is forecasted at 3.7 percent.

INDUSTRIAL TECHNOLOGY

3 D I V E R S I F I E D I N D U S T R I A L S | I N D U S T R I A L T E C H N O L O G Y

THE CASE FOR AUTOMATIONMarket forces, notably rising labor costs, resource shortages, increasing quality requirements, global competition, and an aging workforce, are driving demand for automation.

According to the World Economic Forum, 60 percent of people now live in countries with stagnant or shrinking workforces. By 2050, more than a quarter of China’s population will be over 65, up from only eight percent in 2016. The workforce in Germany is expected to shrink by 6 million people over the next 15 years.

In a recent McKinsey study, it was estimated that about 60 percent of occupations have at least 30 percent of their activities that are automatable. Activities with the highest automation potential include predictable physical activities (81 percent), processing data (69 percent), and collecting data (64 percent). The World Economic Forum estimates that 57 percent of jobs could be impacted by automation.

INDUSTRIAL AUTOMATION

AUTOMATION POTENTIAL

SECTOR COUNTRY

50

46

46

51

52

55

Rest of world

Europe Big 5

United States

China

India

Japan

44

44

47

49

51

53

57

58

60

73

Wholesale

U�li�es

Construc�on

Other services

Mining

Retail trade

Transporta�on andwarehousing

Agriculture

Manufacturing

Accommoda�on andfood services

Abili

ty to

aut

omat

e (%

)

Abili

ty to

aut

omat

e (%

)

Source: A Future That Works: Automation, Employment, and Productivity, January 2017, McKinsey Global Institute.

Technology is transforming the industrial value chain with accelerated adoption of automation and robotics.

Automation solutions are addressing improved safety, quality, and productivity needs in manufacturing settings. Increased use of robotics technology in distribution and fulfillment centers is helping to increase efficiency and scalability.

Robust demand is projected to sustain high-single to double-digit growth in the Industrial Automation market for the foreseeable future, with broad-based adoption of automation and robotics beyond the automotive industry and onshoring of U.S. manufacturing cited as key drivers.


Technological developments such as increasing sophistication of automation software and equipment, greater connectivity, and use of intelligent components and advanced sensors, are paving the way for smart manufacturing with improved quality, productivity gains, and operational cost savings driving increased investment and market growth.


Investment in robotics continues to grow. Advancements in technology, such as machine learning and artificial intelligence (AI), industrial internet of things (IIOT), and autonomous mobile systems, are accelerating the evolution of smart factories, with intelligent robots integral to digitization of the manufacturing industry, according to the International Federation of Robotics (IFR).

Global supply of industrial robots has shown five consecutive years of record growth, according to the 2018 IFR World Robotics Report, with industrial robot sales increasing more than two-fold between 2012 and 2017. Global market value for robotic systems reached $16.2 billion in 2017, up 21 percent from 2016. The market expands to $48 billion when including the cost of software, peripherals, and systems engineering.

The global installed base of industrial robots surpassed 2 million (2,098,000 units) for the first time in 2017, a significant milestone for the global manufacturing industry. Global sales are projected to increase 14 percent annually through 2021, equating to the installation of more than 2 million new industrial robots over the period.

China is the largest geographic market, where industrial robot sales are surging. In 2017, more than every third robot worldwide was installed in China. The five largest markets (China, Japan, the Republic of Korea, the United States, and Germany) accounted for 73 percent of global sales in 2017. Industries with the highest demand for robotic automation include automotive, electronics, and metals.


5

GLOBAL SUPPLY OF INDUSTRIAL ROBOTSGlobal annual supply of industrial robots1

Global annual supply of industrial robots by major market Global annual supply of industrial robots by major industry

Global installed base of industrial robots1

60

121166 159

178221

254294

381421

484

553

630

0

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

1,021 1,059 1,153

1,235 1,332

1,472 1,632

1,828

2,098

2,408

2,778

3,218

3,788

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

20

28

38

35

69

20

31

41

39

87

21

33

40

46

138

Germany

United States

Rep. of Korea

Japan

China

2017 2016 2015

7

20

29

65

98

8

20

29

91

103

10

21

45

121

126

Food and beverage

Plastic and chemical products

Metal

Electrical/electronics

Automotive

2017 2016 2015

Uni

ts (0

00)

Uni

ts (0

00)

Uni

ts (0

00)

Uni

ts (0

00)

Source: IFR World Robotics 2018

CAGR 26.0%

NOTE: 1 2009-2017 Actual and 2018-2021 Projected

CAGR 14.4%

Lorem ipsum NOTE: 1 2009-2017 Actual and 2018-2021 Projected

CAGR 9.4%

CAGR 16.3%


Companies are investing in digitization and automation to enhance their competitive position:

A resounding majority (72 percent) of manufacturers surveyed in a recent PwC study are substantially increasing their investment in digitization to be “digitally advanced” by 2020, up from only 33 percent today. This investment represents annual spend of $907 billion, or roughly 5 percent of revenues, toward greater connectivity and smarter factories. The 2018 Global Digital Operations survey comprised 1,155 manufacturing executives in 26 countries.


Findings from a recent Capgemini study propose that smart factories are revolutionizing manufacturing:

• Smart factories have the potential to deliver a 7x improvement in productivity, 9x improvement in labor cost, and 12x increase in quality by 2022.

• Smart factories could contribute an additional $500 billion to $1.5 trillion in value to the global economy over the next five years.


Manufacturing processes have become highly sophisticated, and there is a keen drive to improve efficiency. Efficiency and productivity are achieved through automation but also real-time information which is driven by data capture.

Data integration and the Internet of Things (IoT) have transformed system monitoring across the supply chain through the advancement of smart sensors. In manufacturing settings, sensors facilitate real-time information on equipment condition and utilization rates as a means to increase efficiency and profitability. Additionally,

“Digitization and smart automation are expected to

contribute as much as 14 percent to global GDP gains

by 2030, equivalent to about $15 trillion in today’s value.”

2018 Global Digital Operations Study

PwC

GLOBAL AUTOMATION MARKET

Dol

lars

in B

illio

ns

Source: Statista.

$-

$50

$100

$150

$200

$250

2016 2020

Drones

Artificial intelligence

3D printing

Industrial software

Process automation

Factory automation

$156 billion

$209 billion

• Investment in smart factories is ramping. Seventy-six percent of manufacturing executives Capgemini surveyed either have a smart factory initiative that is ongoing or in development, with 14 percent of companies satisfied with their level of accomplishment. The survey polled 1,000 senior executives of large corporations across key sectors and countries.

sensors have become smaller in size enabling more widespread use, even in harsh environments. In logistics, smart sensors play an instrumental role in asset management, providing robust data on asset location and inventory control. In the automotive industry, sensors are vital to the operation of autonomous systems, providing data on such functions as LiDAR, safety controls, and fuel systems. Increasing collaboration between sensor and connector manufacturers has been a driver of recent M&A activity. In November 2018,

TEST & MEASUREMENT - Sensors & Instrumentation

Amphenol Corporation (NYSE:APH) announced it was acquiring SSI Controls Technologies (SSI), for approximately $400 million, valuing the business at 2.2x Revenue. SSI manufactures sensors for the global automotive and industrial markets. Amphenol acquired All Sensor Corporation in June 2018, a maker of pressure sensors used to measure fluid, gas, and mechanical pressure in industrial applications. The company has annual revenues of approximately $15 million.


6 D I V E R S I F I E D I N D U S T R I A L S | I N D U S T R I A L T E C H N O L O G Y 7

1ST REVOLUTION 2ND REVOLUTION 3RD REVOLUTION INDUSTRY 4.0

FactoryProduction

MassProduction /

AssemblyLine

DigitalAutomation

Smart-Systems /

Cyber-Physical Systems

Smart Components

Smart Machines

Digital Factory

Connected Factory

Smart Supply Chain

20%

19%

18% 18%

17% 17%

IndustrialManufacturing

Automotive ConsumerGoods

Energy &Utilities

Aerospace &Defense

Pharma, LifeScience,BioTech

20%19%

18%17%

16%15%


Automotive Pharma, LifeScience,BioTech

Energy &Utilities

ConsumerGoods

Aerospace &Defense

67%62%

50%

42% 40%37%


Aerospace &Defense

Automotive &Transportation

Energy &Utilities

ConsumerGoods

Pharma, LifeScience,BioTech

DIGITAL INDUSTRIAL REVOLUTION

SMART FACTORIESManufacturers are expecting big gains from smart factories

Annual gains since 1990 vs. expected annual gains in smart factories in next 5 years

Average realized quality gains from smart factories so far

Share of manufacturers who have an ongoing smart factory initiative

Average realized overall productivity gains from smart factories so far

Source: Capgemini Digital Transformation Institute, Smart Factory Survey, February-March 2017

Source: Forbes, Mordor Intelligence.

0.42% 0.44% 0.38% 0.45% 0.53%0.74%

5.52%

5.13%

4.60%4.78%

4.60%

5.04%

On-time-Delivery Quality & Scrap Capex & Inventory Material, Logistics &Transportation

Labor Cost Overall Productivity

Improvements Since 1990 (CAGR) Improvements Expected in Next 5 years (CAGR)

13x 12x 12x 11x 9x 7x


ABB (SWX:ABBN) is building its market position in industrial automation, recently announcing strategic initiatives to shape its portfolio for the future of digitalization.

Acquisitions of Intrion and AB Rotech completed in September 2018:

With Belgium-based Intrion, ABB gains entry into the fast-growing logistics automation market. Sami Atiya, President of ABB’s Robotic and Motion division, commented on the acquisition: “The acquisition is a milestone for ABB’s entry into the logistics market and will significantly advance our logistics robotics automation offering.” Intrion brings more than a decade of logistics automation experience serving the warehouse and distribution, food and beverage, and pharmaceutical sectors and a blue-chip customer base that has included Mars, Kraft, Mondelez, Johnson Controls, HP, DHL, Fedex, TNT, Pfizer, and GSK. Capabilities include inline checking, product picking, packing, palletizing, conveying, storage, sorting and sequencing, and order picking.


AB Rotech, located in Turkey, expands ABB’s robotic welding capabilities in the automotive segment, which it identifies as the largest global market for robotics, seeing record growth of 21 percent in 2017. AB Rotech brings expertise in robot welding, including arc, spot, and laser welding, as well as machining and tooling capabilities. “This acquisition strengthens our position as partner of choice for automotive OEMs and Tier 1 suppliers in Turkey and beyond. It further strengthens our leading robotic solutions and customer intimacy, which is a clear competitive differentiator of ABB,” said Per Vegard Nerseth, Managing Director of Robotics for ABB.

In October 2018, ABB announced a $150 million investment to build an advanced robotics factory serving the Chinese market, where the manufacturing sector has a “great need to automate,” according to ABB Chairman Peter Voser. The facility will be located in Shanghai, China and is expected to begin operations by the end of 2020. ABB declared it a “factory of the future” where robots will make other robots. “What will be driving the industries in the future is going to be automation, towards autonomous manufacturing,”

CORPORATE PIPELINE

Voser told attendees at the Nikkei Global Management Forum in Tokyo, reported CNBC. “For that, you need robots, but it’s not just the robot itself as a product—but you need also end-to-end solutions for manufacturing. That’s why we are building this factory.”

In December 2018, ABB announced it was divesting its Power Grids Business for a price tag of $9.4 billion, in a strategy to solidify its market leading position in digital solutions and developing technologies, citing artificial intelligence as a focus area. In the divestment announcement, ABB stated the goal to be the number one or number two global player in growth markets, highlighting Industrial Automation and Robotics & Discrete Automation. Industrial Automation, with an addressable market of $90 billion, is forecasted to grow 3 to 4 percent annually long-term, according to company estimates. ABB reported revenues of approximately $7 billion in Industrial Automation for the twelve-month period ending September 2018. “The new ABB will be positioned to write the future as a customer focused technology leader in digital industries,” said Voser.

S o u r c e s : P i t c h B o o k , C o m p a n y F i l i n g s , p u b l i c d a t a .

INVESTMENT IN AUTOMATION IS ACCELERATING, WITH CORPORATE BUYERS AGGRESSIVELY BUILDING OUT TECHNOLOGY PORTFOLIOS THROUGH ACQUISITIONS AND STRATEGIC PARTNERSHIPS.

Teradyne (NasdaqGS:TER) CEO Mark Jagiela, in the company’s Q3 2018 earnings call, cited M&A as a key driver of “continued high growth of our Industrial Automation segment,” speaking to an active pipeline and favorable mix of hardware and software products. Teradyne’s Industrial Automation segment, comprised of Universal Robots and newly-acquired MiR and Energid, saw 54 percent growth in 2018. The company is forecasting 30 to 40 percent growth for the business through 2022.

“We’re aggressively expanding our next-generation Industrial Automation portfolio and widening its competitive modes,” said Teradyne CFO Gregory Beecher. Teradyne acquired Universal Robots (UR) in 2015. Recognized as a pioneer of collaborative robots, UR marked its early entry into a “high growth segment of industrial automation.”

The company completed two automation acquisitions in 2018, Mobile Industrial Robots (MiR) in April and Energid Technologies in February. MiR is a leader in collaborative autonomous mobile industrial robots. Energid, a developer of automation-related software products, extends the company’s automation capabilities and expand UR’s addressable market, the company said. Energid’s core product, Actin, enables advanced motion control in robotic applications for the industrial, medical, aerospace and energy sectors.

Teradyne is targeting $1 billion in Industrial Automation sales in 2021—up from $261 million in 2018. “These next-generation automation businesses have favorable long-term secular trends, such as the worldwide shortage of workers, particularly for robotic-type tasks; cost and inflation worries; increasing quality requirements; and growing global industrial competition,” commented Beecher.



CORPORATE PIPELINE

Emerson Electric’s (NYSE:EMR) Automation Solutions segment is seeing double-digit growth. The business grew 10 percent in 2018 to $11.4 billion and is forecasting 5 to 8 percent growth in 2019. A strong

macroeconomic environment and broad-based demand were cited as growth drivers.

Emerson announced several industrial technology investments in 2018:

December 2018 – Acquisition of Belgium-based Advanced Engineering Valves (A.E. Valves), a supplier of innovative ball valve technology to the LNG industry, as well as oil and gas, chemical, and petrochemical customers. The company manufactures torque-seated, friction-free, zero-leakage ball valves that offer improved performance, cost, and reliability over traditional ball valves. “Adding A.E. Valves makes Emerson’s value to customers along the entire global LNG value chain even more compelling as a single, accountable partner for all of their valve needs,” said Lal Karsanbhai, executive president of Emerson Automation Solutions. “Our expanded portfolio of leading valve technology will help customers unlock greater capital efficiency and asset productivity as they embark on a wave of investment to meet rising global energy demand.”

Rockwell Automation (NYSE:ROK) is accelerating its penetration into smart

manufacturing, announcing in June 2018 a $1.0 billion equity investment in PTC (NasdaqGS:PTC). The partnership with software developer PTC provides for technology sharing, leveraging Rockwell’s industrial automation platforms with PTC’s expertise in IoT and augmented reality, to deliver integrated solutions that offer improved productivity and efficiency for the connected enterprise.

”As information technology and operational technology converge, it was a natural fit for PTC—which is a software company with innovative offerings—to work with a company like Rockwell—which has lived on the plant floor for a long time,” said Rockwell CEO Blake Moret in an interview with TheStreet at

July 2018: $616 million acquisition of Germany-based Aventics, a supplier of pneumatic components used in machine and factory automation applications in the food and beverage, life sciences, and energy industries. The company operates from five manufacturing locations in Germany, France, Hungary, China, and the United States and reported sales of $425 million in 2017. The acquisition extends Emerson’s presence in the $13 billion fluid automation market (Emerson estimate). “Aventics brings technologies, capabilities, and expertise that are critical to digitalization of manufacturing, including predictive maintenance through integrated diagnostics, an important priority for our Automation Solutions business,” said Mike Train, Executive President, Emerson Automation Solutions.

Emerson CEO David Farr, added: “We will now offer the industry’s widest range of fluid automation products and solutions with unmatched delivery, reliability, and performance, and now with the addition of Aventics’ expertise, Emerson is positioned to be the most capable global company when it comes to fluid automation technologies.”

July 2018: $810 million acquisition of Textron’s Tools and Test Business: Business manufactures electrical and utility tools, diagnostics, and test and measurement instruments, expanding Emerson’s technology portfolio and geographic presence in the professional tools market. The business reported revenues of $470 million in 2017.

October 2018: Announced acquisition of GE Intelligent Platforms, completed in February 2019, a developer of programmable logic controller (PLC) technologies. “This is another important investment in our global portfolio of automation technologies, offering discrete and machine control capabilities that complement our process control expertise to provide better solutions to our customers,” commented Farr.

the Stifel 2018 Cross Sector Insight Conference. Moret expects the partnership will help manufacturers in using data to unlock productivity, reported TheStreet.

Moret conveyed optimism when asked about the health of the economy, saying, ”Industrial production numbers are showing strong growth ahead, we are seeing that in conversations with our customers. We are confident that we are in the early stages of a period of manufacturing expansion.”

In November 2017, Emerson Electric (NYSE:EMR) bid to acquire Rockwell in a third attempt for a price tag of approximately $29 billion, valuing the business at an estimated 23.0x multiple of EBITDA, which the company subsequently rejected. Emerson withdrew its offer later that month.

S o u r c e s : S & P C a p i t a l I Q , C o m p a n y F i l i n g s , p u b l i c d a t a .




CORPORATE PIPELINE

2018 marked a record year of capital deployment in industrial technology acquisitions for AMETEK (NYSE: AME). The company acquired 6 businesses, deploying more than $1.1 billion in capital and adding approximately $350 million in annual sales.

November 2018: $190 million acquisition of Spectro Scientific, a provider of machine condition monitoring solutions for critical assets in high-value industrial applications. Spectro provides both lab-based and onsite instrumentation, consumables, and cloud-based software analytics to help customers determine and monitor the condition of fluids in mission-critical equipment. AMETEK CEO David Zapico commented on the acquisition: “Spectro is an excellent acquisition for AMETEK. Their differentiated solutions serve an increasing need for predictive maintenance in a broad and growing set of end markets, including military and defense, process, power generation, and transportation. Spectro’s solutions nicely complement our strategy to integrate instrumentation data with cloud-based software and analytics.” Spectro has annual sales of approximately $50 million, equating to a ~3.8x Revenue multiple.

November 2018: $525 million acquisition of Telular Corporation, a provider of communication solutions for logistics management, tank monitoring, and security applications. Telular’s end-to-end IoT solutions, including purpose-built hardware, proprietary software, and wireless connectivity services, provide for efficiency improvements, cost savings, and real time monitoring of critical assets. Ametek expects to leverage Telular’s IoT capabilities across its other businesses, forming the core of an expanded digital strategy and presenting significant growth opportunities for the company. Telular has annual sales of approximately $165 million, equating to a ~3.2x Revenue multiple.

Xylem (NYSE: XYL) is aggressively seeking acquisitions to accelerate its stated strategy to be a leading provider of smart technology solutions in the global water

industry. The acquisition of Pure Technologies in January 2018, a provider of intelligent leak detection sensor technologies and condition assessment solutions and service capabilities, established a scalable platform in smart water infrastructure, specifically in the municipal end market. The buy combines the sensing, communications, analytics, and control capabilities for the water sector, following acquisitions of Sensus and Visenti in 2016.

November 2018: $40 million acquisition of Forza Silicon Corporation, a producer of specialized solutions for complex image sensors used in medical, defense, commercial, and industrial applications. The company has annual sales of approximately $20 million, equating to a ~2.0x Revenue multiple.

February 2018: $235 million acquisition of FMH Aerospace, a supplier of products and assemblies for aerospace and defense OEMs and Tier 1 suppliers. Products include ducts and tubes, bellows, flexible metal hoses, and sheet metal components and assemblies with applications in aircraft airframes, aircraft engines, and industrial gas turbines. Products are designed to facilitate the transfer of fluids and gases at extreme temperatures and pressures with highly demanding, mission-critical applications. “FMH is a high-quality acquisition for our Thermal Management Systems businesses with excellent positions across a number of attractive aerospace and defense platforms,” Zapico said. “Its proprietary products and solutions further broaden our differentiated product offering serving these markets.” FMH Aerospace has annual sales of approximately $50 million, equating to a ~4.7x Revenue multiple.

February 2018: $38 million acquisition of Arizona Instrument, a manufacturer of differentiated, high-precision moisture and gas measurement instruments for use in high-value applications. “Arizona Instrument is an exciting addition to AMETEK’s growing presence in the food, pharmaceutical, and environmental markets and nicely complements our Brookfield Engineering business,” added Zapico. “Its differentiated products are supporting customers’ increasingly complex production processes and more stringent environmental and safety standards.” Arizona Instrument has annual sales of approximately $15 million, equating to a ~2.5x Revenue multiple.

In August 2018, Brunswick Corporation

(NYSE:BC) completed the acquisition of the Power Products Mobile Business from Genstar Capital. The $910 million purchase price valued the business at 3.9x Revenue. The business includes the global marine, specialty vehicle, mobile, industrial power, and transportation aftermarket products businesses of Power Products. Electrical products include battery and power management and digital switching, as well as marine and transportation parts and accessories, for the marine and other recreational and specialty vehicle markets. ”This transaction advances Brunswick’s leadership by adding integrated electrical systems solutions to the marine market and an array of other mobile, specialty vehicle, and industrial applications. Power Products has an extensive aftermarket presence which provides a consistent revenue stream, with attractive margins, that helps to strengthen Brunswick’s overall business profile,” said Brunswick CEO Mark Schwabero.

S o u r c e s : S & P C a p i t a l I Q , C o m p a n y F i l i n g s , p u b l i c d a t a .



1 0

PRIVATE EQUITY ACTIVE

D I V E R S I F I E D I N D U S T R I A L S | I N D U S T R I A L T E C H N O L O G Y

2015 INVESTMENT

Crestview Partners has pursued an aggressive acquisition strategy to build JR Automation Technologies’ global presence in the industrial automation market, completing five add-ons since its purchase from Huizenga Automation Group in March 2015. JR Automation manufactures automated or operated assembly line equipment used in the automotive, aerospace and defense, life sciences, battery and energy, electronics and consumer goods, food and beverage, construction, and amusement industries. Products include sonic welders, riveters, adhesive dispensers, vision inspectors and verifiers, leak testers, robotic palletizers, and other equipment. During its ownership, Crestview grew the company from $170 million of sales and 5 production facilities in North America to $600+ million of sales and 23 facilities worldwide.

Recent acquisitions include :June 2018: Esys Automation, which designs and builds robotic systems and software used in vehicle assembly applications for the automotive industry

April 2018: Setpoint Systems and Setpoint, which design and engineer custom automation solutions and motion control systems.

December 2017: Automation Systems Group of Doerfer Corporation, which marked the first major acquisition for the platform, expanding the company’s North American footprint and gaining entry into Europe and Asia.

In April 2019, Crestview agreed to sell JR Automation to Hitachi in a $1.425 billion transaction, valuing the business at 2.4x Revenue. The acquisition of JR Automation marks Hitachi’s entry to the North American robotic systems integration market and follows its purchase of Japanese robotic system integrator KEC Corporation in March 2019.

2015 INVESTMENT

LFM Capital is aggressively growing Eckhart through acquisitions to solidify its position as an Industry 4.0 leader, counting seven add-ons since purchasing the company in 2015.

February 2019: Gasper Engineering, a full service industrial automation systems integrator that builds highly automated assembly, conveyance, labeling, and sortation systems for diverse industries including aerospace, automotive, life science, packaging, and power generation and distribution.

January 2019: PRI Robotics & Automation, an integrator of robotic systems specializing in machine load/unload, arc welding, dispensing, material handling, assembly, and material removal. PRI’s installed base exceeds 500 systems. The acquisition expands Eckhart’s footprint in the Twin Cities region.

July 2018: Eagle Engineering, a specialty robotic systems integrator that designs custom fixtures for highly automated manufacturing cells, including custom weld stations, assembly fixtures, and automated test stands. End markets include the aerospace, agriculture, high speed rail, renewable energy, construction, mining, and oil & gas industries.

March 2018: Logic Plus, which specializes in custom electrical controls design and integration for diverse end markets including consumer packaged goods, food, medical, pharmaceutical, and wastewater treatment.

Eckhart’s suite of advanced industrial solutions includes autonomous guided vehicles, collaborative robotics, 3D printing, automated conveyance and assembly systems, mechanical and electrical design services, simulation, and specialized ergonomic assembly line tools and equipment.

LFM Capital acquired Eckhart in June 2015. Executive Managing Director Steve Cook commented on the investment, saying, “We believe that this is a great time to bet on U.S. manufacturing as it continues to experience an on-shore renaissance. Eckhart is right at the heart of what is happening to increase production, improve workplace safety, and control manufacturing costs in order to build successful and profitable U.S. manufacturing leaders.”

2017 INVESTMENT

Saw Mill Capital acquired iAutomation Solutions in January 2017. The provider of engineered automation products, solutions, and services serves

as the foundational asset for a buy-and-build strategy in industrial automation. Tim Nelson, a Partner at Saw Mill Capital, highlighted iAutomation’s management team and engineering and technical capabilities among the merits of the investment, saying: “iAutomation positions customers with distinct and scalable product advantages by leveraging its deep line card of the most technologically advanced automation suppliers in the world. We look forward to our new partnership and to continuing the growth of this team.”

iAutomation was backed by The Riverside Company since 2007, which completed three add-ons during its 10-year investment, including most recently Piedmont Automation in September 2016. Under Riverside’s ownership, iAutomation grew revenues by more than 450 percent and EBITDA by more than 300 percent.

S o u r c e s : S & P C a p i t a l I Q , P i t c h B o o k , p u b l i c d a t a .

INDUSTRIAL TECHNOLOGY HAS ATTRACTED STRONG INVESTOR INTEREST, ILLUSTRATED BY ROBUST FINANCIAL SPONSOR PLATFORM AND ADD-ON ACTIVITY.

2019 INVESTMENT

TSS Technologies represents a new platform investment for Resilience Capital Partners, which acquired the company in January 2019. TSS operates in diverse industries, including healthcare, consumer goods, industrial, aviation, and aerospace. The company designs and builds complex automated assembly lines and production equipment for material handling and assembly, web handling, and vision inspection applications. Bassem Mansour, co-CEO of Resilience Partners, commented on the investment: ”We are very excited to leverage opportunities to scale the business through organic growth as well as strategic acquisitions that expand its service offerings and market reach.”


1 1



2019 INVESTMENT

In January 2019, Summit Park completed the recapitalization of Freedom Electronics, a leading remanufacturer and reseller of high-value electronic components for mission-critical equipment, including circuit boards, LCD displays, controllers, power supplies, card readers, printers, sensors, scanners, and gauges. The company serves a diverse and longstanding base of service companies, distributors, end users, and aftermarket suppliers. Summit Park has also invested in Tennessee Industrial Electronics (TIE), which repairs and refurbishes industrial electronic components.

2018 INVESTMENT

JMC Capital Partners is building industrial lighting platform Phoenix Products Company through acquisitions, announcing its first add-on with Bright Light Systems in February 2019. Phoenix manufactures industrial lighting equipment including LED fixtures, dock and searchlights, explosion-proof and floodlights, linear and area lights, and vapor-proof and berth lights that are designed to withstand harsh environments while offering reduced maintenance cost and energy consumption. Products are used in heavy equipment, corrosive conditions, hazardous locations, and other demanding applications. The acquisition of Bright Light Systems strengthens its capabilities in the ports and terminals markets. JMC acquired Phoenix in August 2018, stating plans to pursue “aggressive growth both organically and through add-on acquisitions.”

2017 INVESTMENT

Dunes Point Capital launched a new growth platform in power generation equipment with the purchase of Power Distribution from Smiths Group plc in January 2017. Power manufactures custom power distribution, static switching, and power monitoring equipment used in sensitive environments such as data centers, telecommunications, medical, and defense. The transaction, valued at $203.7 million, valued the business at 1.8x Revenue.

2015 INVESTMENT

GED Integrated Solutions is a growth platform in industrial technology within the building products industry. GED manufactures insulated glass and vinyl sash fabrication equipment and is recognized as the innovation leader, developing and commercializing some of the most prevalent products in the window and patio door manufacturing industry. Altus cited GED’s technological advancements which have the positioned the company as a market leader.



2017 INVESTMENT

The May 2018 acquisition of Acolyte is the first add-on for General LED, a portfolio company of The CapStreet Group, which it purchased in April 2017. The acquisition adds a key product line of linear LED and architectural products serving to broaden General LED’s portfolio. Adrian Guerra, a Principal at CapStreet, commented on the investment: “This acquisition is an exciting and important step in the evolution of General LED. We look forward to making additional acquisitions to further leverage the significant investments made in the company’s global platform and information technology systems.” Acolyte’s offering includes fully-integrated LED lighting systems and ribbon lighting used in illuminated signs and architectural lighting for indoor and outdoor applications.

2017 INVESTMENT

Industrial Lighting Products (ILP) manufactures LED products used in commercial, industrial, and outdoor applications. Harbour Group is executing on its stated strategy to support growth through complementary acquisitions, completing two add-ons to date with Energy Planning Associates (Envirobrite) in October 2018 and Green Creative in October 2017. Harbour Group acquired ILP in March 2017. Envirobrite manufactures commercial and industrial LED lighting fixtures, retrofit kits, and other lighting solutions. Green Creative supplies LED lamps and LED luminaires to the North American commercial lighting market.


1 2



2019 INVESTMENT

LOFA Industries is a supplier of advanced engine controls for mobile industrial equipment applications. Products include control panels, sensors, and wiring harnesses featuring automation and telemetry technology, allowing for system monitoring in demand demanding and harsh applications. Harbour Group CEO Jeff Fox stated plans to “…invest heavily in new product development, customer service initiatives, and complementary acquisitions …” to accelerate growth.

2019 INVESTMENT

Cattron Holdings manufactures wireless controls for the rail and industrial markets. The company was the former Wireless Automation & Controls Solution business of Laird Ltd. With the new partnership, Cattron will look to expand into new product categories and geographies. Jeff Fox commented on the merits of the investment, highlighting Cattron’s “…highly engineered control products and customized offerings, which provide strong brand recognition, especially in safety and reliability…” and underscored plans to support growth efforts“…with all of Harbour Group’s resources.”

2012 INVESTMENT

Onicon is a manufacturer of flow meters and energy management systems for water-based systems. Harbour Group has completed five add-ons since acquiring the company, including its latest purchase in December 2018, Pulsar Process Measurement, which expands its international footprint and reach within the water and wastewater markets. Pulsar manufactures ultrasonic- and radar-based non-contact level and flow measurement instruments used by utilities and industrial customers for level, open channel flow, pipe flow, sludge interference measurement, and pump control.

2019 INVESTMENT

Truck-Lite is growing its industrial lighting portfolio through acquisitions, completing the purchase of Lumitec this April. The transaction marks the first add-on for BDT Capital Partners and Koch Equity Development since acquiring the company in December 2015. Lumitec is a supplier of extreme environment LED lighting and controls to the marine and commercial vehicle industries. Truck-Lite CEO Brian Kupchella commented on the acquisition, saying: “Combining Lumitec and Truck-Lite allows us to take advantage of each other’s distribution networks and share technology, helping Truck-Lite to expand into different markets while staying true to our core business.”



CASE STUDYIn October 2018, Barnes Group (NYSE:B) completed the acquisition of Gimatic, gaining entry into the global industrial automation market, one for which Barnes believes growth “will meaningfully exceed GDP”.

The acquisition furthers Barnes Group’s stated strategy to expand its offerings of differentiated industrial technologies and establishes a growth platform for future investment.

Italy-based Gimatic supplies robotic tooling solutions. Products include robotic grippers, advanced end-of-arm tooling systems, fencers, and other automation components used in industrial automation applications. Automotive represents its largest end market at 42 percent of sales. Other markets include factory automation (20 percent), food and beverage (10 percent), consumer goods (8 percent), and healthcare (5 percent).

Geographic markets include Europe (83 percent of sales), Asia (5 percent), and the Americas (12 percent).

Commenting on the acquisition, Barnes Group President Scott Mayo, said: “With the accelerating adoption of robotic technologies, we expect favorable long-term industry trends will continue to support Gimatic’s growth into the future.”

“As an anchor investment, we can build upon both organically and through additional acquisitions, we have the opportunity to develop a new business platform,” remarked CEO Patrick Dempsey. “By leveraging Barnes Group’s global resources and infrastructure, we look to enhance Gimatic’s growth by expanding their sales, design, and engineering activities in key geographic regions around the globe.”


“ Gimatic’s patented technologies and intellectual property based solutions, coupled

with its strong market position, provide a highly attractive gateway into the industrial

automation market.”

Patrick Dempsey CEO, Barnes Group

Sources: S&P Capital IQ, PitchBook, Equity Research, Company Filings, public data,

1 3

Enterprise Value: $418.8 million

Enterprise Value/Revenue: 8.8xEnterprise Value/EBITDA: 21.1x

R AT I O N A L E

Enterprise Value (EV): $340M

Enterprise Value (EV): $1.27BEV/Revenue: .60xEV/EBITDA: 15.6x

M&

A T

RA

NS

AC

TIO

NS

1 4 D I V E R S I F I E D I N D U S T R I A L S | I N D U S T R I A L T E C H N O L O G Y | I N D U S T R Y M E T R I C S

R AT I O N A L EDAT E TA R G E T B U Y E R

D e c - 1 8Genesis develops robotic system solutions used in welding, non-destructive inspection, machine vision, materials handling, removal, and dispensing applications. Acquisition furthers IPG’s strategy to become a more complete solutions provider to its customers.

Enterprise Value (EV): $115MEV/Revenue: 1.15x

J a n - 1 9PRI designs and builds robotic systems for manufacturers. Acquisition grows footprint in the Twin Cities region, providing for technology sharing and cross-selling opportunities across an expanded customer base.

J a n - 1 9Acquisition establishes growth platform in building automation controls. Functional Devices manufactures relays, power supplies, transformers, sensors, enclosures, and wireless devices for the HVAC, building and lighting controls, and energy management industries.

J a n - 1 9Acquisition establishes growth platform in industrial automation. TSS provides custom automation systems to customers in the medical device and life sciences, consumer goods/products, industrial, and aviation and aerospace markets.

D e c - 1 8Acquisition extends reach within the water and wastewater markets and expands international footprint. Pulsar manufactures ultrasonic- and radar-based non-contact level and flow measurement instruments for water utilities and industrial customers.

D e c - 1 8 Acquisition accelerates automation strategy and expands presence in aerospace and appliance end market applications.

S o u r c e s : S & P C a p i t a l I Q , P i t c h B o o k , E q u i t y R e s e a r c h , p u b l i c d a t a .N o t e s : 1 E V d e f i n e d a s E n t e r p r i s e Va l u e .

D E A LM E T R I C S 1

N o v - 1 8 Software-enabled IoT capabilities provide growth opportunities across businesses.

EV: $525MEV/Revenue: 3.2x

A p r - 1 9Manufacturer of extreme environment LED lighting, kitted lighting systems, and lighting controls for aftermarket and OEM vehicle customers and a leading supplier to the marine industry. The acquisition expands Truck-Lite’s market reach while allowing for technology sharing across a broader distribution network.

M a r - 1 9Supplier of engine controls, including control panels, sensors, and wiring harnesses, for mobile industrial equipment applications. Harbour Group stated plans to pursue strategic acquisitions to accelerate company growth.

M a r - 1 9Manufacturer of wireless control solutions for safety and mission-critical applications in the rail and industrial markets. The partnership with Harbour Group is expected to accelerate growth through product line and geographic expansion.

N o v - 1 8

Acquisition enhances strategy to integrate instrumentation data with cloud-based software and analytics. Spectro Scientific provides lab-based and onsite instrumentation, consumables, and cloud-based software analytics to monitor fluid levels in mission-critical equipment, addressing the increasing need for predictive maintenance in key markets such as military and defense, process, power generation and transportation.


N o v - 1 8Acquisition furthers capabilities as a systems provider in the industrial refrigeration market, adding custom-designed regulation and control automation solutions to offering.

Platform acquisition in aftermarket electronic components. J a n - 1 9

Fe b - 1 9Acquisition expands portfolio of automation technologies with discrete and machine control capabilities which complement Emerson’s process control expertise. Newly developed cloud-connected controllers and devices are enabling smart factories.

Acquisition strengthens capabilities to serve the ports and terminals markets. Fe b - 1 9

Acquisition expands automation capabilities and footprint in the Midwest. Transaction marks the seventh add-on acquisition for Eckhart under LFM Capital’s ownership.

Fe b - 1 9

Pe n d i n gAcquisition establishes an entry to the robotic systems integration market in North America. Hitachi is building its presence in the global industrial automation market with the acquisition of Japanese robotic system integrator KEC Corporation in March 2019.

Enterprise Value (EV): $1.43BEV/Revenue: 2.36x

SELECT RECENT INDUSTRIAL TECHNOLOGY M&A ACTIVITY

R AT I O N A L EDAT E TA R G E T B U Y E R D E A L S TAT S



M&

A T

RA

NS

AC

TIO

NS

R AT I O N A L E


DAT E TA R G E T B U Y E R


D E A LM E T R I C S 1

O c t - 1 8Acquisition of technology and intellectual property assets. Rethink Robotics designs collorative robots (cobots) which require a smaller footprint for flexible manufacturing systems.

O c t - 1 8Platform acquisition in industrial automation. EMX manufactures sensors and controls for the access control industry and process automation applications for various industrial markets. Products include photoeyes, vehicle detectors, color sensors, luminescence sensors, and other custom specialty sensors.

O c t - 1 8 Acquisition marks entry into industrial automation market. Gimatic designs and builds robotic tooling solutions with sales in Europe, Asia, and the Americas.

EV: $418.8MEV/Revenue: 8.8xEV/EBITDA: 21.1x

J u l - 1 8Acquisition expands capabilities in robotic welding solutions and services for automotive OEMs and Tier 1 suppliers in Turkey and other geographies.

J u l - 1 8EV: $616MEV/Revenue: 1.5xEV/EBITDA: ~12.0x

Acquisition expands automation solutions capabilities in sensors and pneumatic devices and systems.

J u l - 1 8

Platform acquisition in industrial automation. Epic designs and builds modular process systems, packaging lines, and machine vision inspection systems for customers in the consumer packaged goods, oil and gas, food and beverage, pharmaceutical, agricultural, and industrial chemical markets.

J u l - 1 8Manufactures custom weld stations, assembly fixtures, and automated test stands for the aerospace, agriculture, high speed rail, renewable energy, construction, mining, and oil and gas industries.

Tools and Test BusinessJ u l - 1 8

Business consists of electrical and utility tools, diagnostics, and test and measurement instruments. Acquisition solidifies market position in professional tools and technologies for the global mechanical, electrical, and plumbing segments.


J u n - 1 8

Provides mission-critical solutions for highly demanding industries and applications. Products and services include specialty coated exhaust ducts for the semiconductor and wastewater markets, customized process equipment for the semiconductor and biopharmaceutical industries, and engineering services.

EV: $111M

J u n - 1 8 Provider of automotive and industrial conveyor systems, conveyor system integration, custom conveyor design, and controls automation.

EV: $141MEV/Revenue: .58x

N o v - 1 8Advanced sensor capabilities accelerate development of next generation sensor technology.


O c t - 1 8 Acquisition strengthens position in the precision motion control market.Automation & Specialty

Platform

EV: $2.69BEV/Revenue: 2.8xEV/EBITDA: 11.7x


R AT I O N A L EDAT E TA R G E T B U Y E R D E A L S TAT S



M&

A T

RA

NS

AC

TIO

NS


DAT E TA R G E T B U Y E R


D E A LM E T R I C S 1R AT I O N A L E

Fe b - 1 8

M a y - 1 8 Manufactures semiconductor wafer handling robots, motion control products, and integrated tool automation.

J u n - 1 8Platform acquisition in industrial automation. Redzone provides end-to-end solutions including robotic hardware platforms, inspection services, data processing and hosting, and reporting and asset management software primarily for the wastewater market.

A p r - 1 8Designs and builds automation solutions for the e-commerce, amusement, and other industries. Acquisition expands JR Automation’s position as a global automated systems integrator.

Fe b - 1 8Acquisition of robotic automation specialist solidifies market position in secondary packaging automation as a leading FANUC integrator.

Acquisition of robot maker specializing in collaborative robots.

M a y - 1 8 Acquisition adds a key product line of linear LED and architectural products.

A p r - 1 8Acquisition adds leader in collaborative autonomous mobile robots (AMRs) for industrial applications, expanding market position in next-generation automation products.


M a r - 1 8

Designs and builds advanced automation systems, including intelligent optical inspection and digital sorting systems, vibratory conveying systems, and process and preparation systems, for food processing and other end markets. Acquisition significantly expands Duravant’s reach across food processing with new complementary products and applications.

EV: $172.1MEV/Revenue: 1.2xEV/EBITDA: 17.4x

Fe b - 1 8 Acquisition of integrator, engineering firm, and developer of robot control, simulation, and machine vision software.

EV: $27.6M

Fe b - 1 8 Acquisition broadens offering of proprietary products and solutions for the aerospace and defense markets.


J a n - 1 8Acquisition strengthens position in intelligent leak detection and condition assessment solutions for water distribution networks.

EV: $413MEV/Revenue: 4.0xEV/EBITDA: 26.5x

J u n - 1 8Provider of automated material handling to the US Postal Service and integrator to parcel and e-commerce customers. Acquisition furthers stated strategy to expand into new industrial markets to drive digital transformation through automation.

J u n - 1 8Full-service automation solutions provider to the automotive industry. Esys provides automation design, simulation, and machine building, including advanced robotic systems and industry-specific software solutions.


INDUSTRY METRICS


PUBLIC COMPANY OPERATING METRICS

NOTE: (1) As of 4/19/2019.(2) Market Capitalization is the aggregate value of a �rm's outstanding common stock.(3) Enterprise Value is the total value of a �rm (including all debt and equity).Source: S&P Capital IQ.

($ in millions, except per share data) Current % of Market Enterprise Total Debt/ TTMCompany Name Country Ticker Stock Price (1) 52W High Capitalization (2) Value (3) Revenue EBITDA EBITDA Revenue Gross EBITDAINDUSTRIAL TECHNOLOGY

AUTOMATION AND ROBOTICS

Emerson Electric Co. United States EMR $72.51 91.0% $44,566 $49,319 2.8x 13.5x 1.6x $17,739 42.8% 20.5%

ABB Ltd Switzerland ABBN 20.87 86.0% 44,494 51,049 1.9x 16.1x 3.0x 28,068 31.0% 11.4%

Fanuc Corporation Japan 6954 196.15 82.4% 38,020 32,681 5.2x 14.4x 0.0x 6,259 43.5% 34.1%

Rockwell Automation, Inc. United States ROK 189.92 95.8% 22,704 23,817 3.5x 16.3x 1.3x 6,722 43.3% 21.7%

Metso Corporation Finland METSO 38.03 98.4% 5,708 5,913 1.7x 12.5x 1.4x 3,633 28.9% 13.3%

Krones AG Germany KRN 98.97 71.7% 3,127 2,885 0.7x 8.7x 0.0x 4,469 47.0% 7.6%

KUKA Aktiengesellschaft Germany KU2 66.46 53.1% 2,644 2,831 0.8x 23.8x 3.6x 3,712 22.4% 3.3%

ATS Automation Tooling Systems Inc. Canada ATA 15.42 83.7% 1,417 1,404 1.6x 13.0x 2.5x 883 26.1% 12.0%

FARO Technologies, Inc. United States FARO 56.94 81.1% 986 853 2.1x 35.4x 0.0x 404 56.6% 6.0%

Median $66.46 83.7% $5,708 $5,913 1.9x 14.4x 1.4x $4,469 42.8% 12.0%

Mean $83.92 82.6% $18,185 $18,972 2.2x 17.1x 1.5x $7,988 38.0% 14.4%

MOTION AND DRIVES

Siemens Aktiengesellschaft Germany SIE $119.66 87.6% $95,980 $125,033 1.3x 12.5x 4.0x $95,417 29.8% 10.6%

Danaher Corporation United States DHR 126.77 94.3% 90,759 98,942 4.9x 20.4x 2.2x 20,078 55.8% 24.1%

Schneider Electric S.E. France SU 86.59 97.9% 47,182 54,591 1.9x 11.4x 1.8x 29,448 39.0% 16.3%

ABB Ltd Switzerland ABBN 20.87 86.0% 44,494 51,049 1.9x 16.1x 3.0x 28,068 31.0% 11.4%

Nidec Corporation Japan 6594 140.94 89.0% 41,477 42,724 3.1x 20.3x 1.6x 14,004 24.0% 15.4%


AMETEK, Inc. United States AME 86.49 99.7% 19,678 21,957 4.5x 16.9x 2.0x 4,846 34.2% 26.8%

YASKAWA Electric Corporation Japan 6506 38.77 88.5% 10,229 10,314 2.4x 17.0x 0.7x 4,261 33.0% 13.7%

Rexnord Corporation United States RXN 28.02 87.3% 2,936 3,951 1.8x 9.6x 3.2x 2,246 37.3% 18.2%

Median $86.59 89.0% $41,477 $42,724 2.4x 16.3x 2.0x $14,004 34.2% 16.3%

Mean $93.11 91.8% $41,715 $48,042 2.8x 15.6x 2.2x $22,788 36.4% 17.6%

SENSORS AND INSTRUMENTATION

Emerson Electric Co. United States EMR $72.51 91.0% $44,566 $49,319 2.8x 13.5x 1.6x $17,739 42.8% 20.5%

Amphenol Corporation United States APH 104.57 99.6% 31,158 33,484 4.1x 16.8x 1.8x 8,202 32.4% 24.2%

TE Connectivity Ltd. Switzerland TEL 89.43 88.2% 30,250 33,776 2.4x 10.9x 1.3x 13,999 33.5% 22.1%


AMETEK, Inc. United States AME 86.49 99.7% 19,678 21,957 4.5x 16.9x 2.0x 4,846 34.2% 26.8%

Teledyne Technologies Incorporated United States TDY 252.43 99.0% 9,144 9,752 3.4x 17.7x 1.4x 2,902 38.4% 19.0%

Sensata Technologies Holding plc United States ST 51.25 91.1% 8,413 10,948 3.1x 12.1x 3.6x 3,522 36.2% 25.6%

Spectris plc United Kingdom SXS 36.11 93.9% 4,179 4,565 2.2x 13.6x 1.4x 2,045 56.6% 16.1%

MTS Systems Corporation United States MTSC 55.70 97.7% 997 1,388 1.8x 12.8x 4.3x 787 39.5% 13.8%

First Sensor AG Germany XTRA:SIS 26.32 92.1% 269 293 1.7x 13.1x 2.4x 180 53.0% 12.6%

Median $79.50 94.9% $14,411 $16,453 2.9x 13.6x 1.7x $4,184 39.0% 21.1%

Mean $96.47 94.8% $17,136 $18,930 2.9x 14.4x 2.1x $6,094 41.0% 20.3%

FLOW CONTROL

Xylem Inc. United States XYL $82.93 99.3% $14,915 $16,941 3.3x 17.7x 2.4x $5,207 39.0% 18.3%

IDEX Corporation United States IEX 154.52 97.1% 11,712 12,094 4.9x 18.4x 1.3x 2,484 45.0% 26.5%

Pentair plc United Kingdom PNR 38.22 53.8% 6,561 7,853 2.7x 14.7x 2.6x 2,921 35.3% 18.3%

Flowserve Corporation United States FLS 49.45 87.0% 6,483 7,365 1.9x 15.5x 3.2x 3,833 32.1% 12.1%


Badger Meter, Inc. United States BMI 56.00 91.0% 1,631 1,627 3.8x 25.0x 0.2x 434 38.3% 15.0%

Median $52.73 89.1% $6,522 $7,609 3.0x 16.6x 2.5x $2,703 37.8% 18.2%

Mean $68.19 85.9% $7,373 $8,305 3.0x 16.8x 2.1x $2,854 37.8% 18.1%

MATERIALS PROCESSING MACHINERY

Regal Beloit Corporation United States RBC $84.69 97.6% $3,625 $4,712 1.3x 9.0x 2.5x $3,646 26.5% 14.3%

Dürr Aktiengesellschaft Germany DUE 46.78 83.6% 3,238 3,148 0.7x 8.6x 1.9x 4,431 22.4% 8.4%


Hillenbrand, Inc. United States HI 42.85 80.2% 2,679 2,992 1.7x 10.2x 1.2x 1,783 36.2% 16.4%

ATS Automation Tooling Systems Inc. Canada ATA 15.42 83.7% 1,417 1,404 1.6x 13.0x 2.5x 883 26.1% 12.0%

Tsubakimoto Chain Co. Japan 6371 36.76 74.4% 1,392 1,508 0.7x 4.8x 1.3x 2,154 28.6% 14.8%

Kardex AG Switzerland KARN 158.39 89.2% 1,222 1,079 2.3x 16.9x 0.0x 485 35.9% 13.6%

Median $42.85 83.7% $2,679 $2,992 1.6x 9.6x 1.9x $2,154 28.6% 14.3%

Mean $58.99 85.2% $2,358 $2,685 1.4x 10.3x 1.8x $2,232 30.4% 14.0%

TTM MarginsEnterprise Value / TTM

DIVERSIFIED INDUSTRIALS

1 8 D I V E R S I F I E D I N D U S T R I A L S | A B O U T U S

FOCUS AREAS

• Industrial equipment

• Manufacturing equipment

• Material handling

• Specialty vehicles

• Wood processing consumables and equipment

• Machining centers

• Machine tools

• C.A.S.E.

• Coatings

• Erosion control and soil amendments

• Industrial consumables

• Lubricants

• Plastic and resin compounds

• Rubber compounds

• Sealants and adhesives

• Actuators, regulators, and valves

• Automation technologies

• Electronic components, sensors, and systems

• Fluid controls

• Industrial instrumentation

• Motor, drivers, servo systems

• Signaling devices

• Test and measurement

• Wireless communications

• Process controls

• Security systems

• Adhesives and sealants

• Aluminum and PVC extrusions

• Engineered wood products

• Infrastructure

• Erosion control

• Masonry and precast products

• Structural panels

• Windows and doors

BUILDING PRODUCTS(RESIDENTIAL & COMMERCIAL) ENGINEERED MATERIALS

INDUSTRIALTECHNOLOGY

The information contained in this publication was derived from proprietary research conducted by a division or owned or affiliated entity of Brown Gibbons Lang & Company LLC. Any projections, estimates or other forward-looking statements contained in this publication involve numerous and significant subjective assumptions and are subject to risks, contingencies, and uncertainties that are outside of our control, which could and likely will cause actual results to differ materially. We do not expect to, and assume no obligation to update or otherwise revise this publication or any information contained herein. Neither Brown Gibbons Lang & Company LLC, nor any of its officers, directors, employees, affiliates, agents or representatives makes any representation or warranty, expressed or implied, as to the accuracy, completeness or fitness of any information contained in this publication, and no legal liability is assumed or is to be implied against any of the aforementioned with respect thereto. This publication does not constitute the giving of investment advice, nor a part of any advice on investment decisions and nothing in this publication is intended to be a recommendation of a specific security or company, nor is any of the information contained herein intended to constitute an analysis of any company or security reasonably sufficient to form the basis for any investment decision. Brown Gibbons Lang & Company LLC, its affiliates and their officers, directors, employees or affiliates, or members of their families, may have a beneficial interest in the securities of a specific company mentioned in this publication and may purchase or sell such securities in the open market or otherwise. Nothing contained in this publication constitutes an offer to buy or sell or the solicitation of an offer to buy or sell any security.

For questions about content and circulation, please contact editor, Rebecca Dickenscheidt, at [email protected] or 312-513-7476.

WHO WE ARE

• Independent investment banking advisory firm focused on the middle market since 1989

• Senior bankers with significant experience and tenure; partners average over 20 years of experience

• Offices in Chicago, Cleveland, and Philadelphia

• Founding member and U.S. partner of Global M&A Partners, Ltd., the world’s leading partnership of investment banking firms focusing on middle market transactions

• Deep industry experience across core sectors of focus, including: Consumer, Diversified Industrials, Environmental & Industrial Services, Healthcare & Life Sciences, Metals & Metals Processing, and Real Estate

LEADING INDEPENDENT FIRM COMPREHENSIVE CAPABILITIES

Sell-Side Advisory

Acquisitions & Divestitures

Public & Private Mergers

Special Committee Advice

Strategic Partnerships & Joint Ventures

Fairness Opinions & Fair Value Opinions

All Tranches of

Debt & Equity Capital for:

Growth

Acquisitions

Recapitalizations

Dividends

General Financial & Strategic Advice

Balance Sheet

Restructurings

Sales of Non-Core Assets or Businesses

§363 Auctions

M&A ADVISORY PRIVATE PLACEMENTS

FINANCIAL ADVISORY

Primary Research

Industry Benchmarking

Operating Advisor Network

White Papers

Industry Surveys

RESEARCH

CAPITAL GOODS AUTOMATION SYSTEMS

DISTRIBUTION

• Aggregates

• Building products

• Electrical

• MRO

• Plumbing

PLASTICS

• Blow molding

• Compression molding

• Film and sheet extrusion

• Injection molding

• PET, PVC, PEEK, HDPE, UHMWP

• Pipe, profile, and tube extrusion

PRECISION MANUFACTURING

• Machining

• Stamping

• Electrical


1 9 C O N S U M E R & R E T A I L | A B O U T U S

DEDICATED LEADERSHIP

A N D R E W P E T R Y KManaging DirectorGroup Head

• Leads BGL’s Diversified Industrials practice

• Over 25 years of investment banking and corporate finance experience

• Ernst & Young Entrepreneurial Services Group

• Formerly with the Structured Finance Group at KeyBanc Capital Markets

• Prior experience in private equity, corporate finance, and institutional sales

• Non-practicing Certified Public Accountant

• Former President of the ACG Cleveland Chapter

• B.S., Miami University

• M.B.A., Weatherhead School of Management at Case Western Reserve University

PROFESSIONAL EXPERIENCE EDUCATIONEDUCATION

One Magnif icent Mile 980 N. Michigan Avenue Suite 1880 Chicago, IL 60611p. 312.658.1600

One Cleveland Center1375 East 9th StreetSuite 2500 Cleveland, OH 44114p. 216.920.6613

C H I C A G O C L E V E L A N D

One Liberty Place 1650 Market StreetSuite 3600 Philadelphia , PA 19103p. 610.941.2765

P H I L A D E L P H I A

EDUCATIONEDUCATIONB O B K E N TManaging DirectorFinancial Sponsor Coverage

• Over 20 years of M&A and corporate finance experience

• Former Managing Director in the Financial Sponsors Group at Stifel Investment Banking

• Investment banking positions at Banc of America Securities in San Francisco and Charlotte and at Brown Brothers Harriman in New York

PROFESSIONAL EXPERIENCE

• A.B., Princeton University

• Diploma in Accounting and Finance from the London School of Economics

• M.B.A., Darden School of Business at the University of Virginia

• Chartered Financial Analyst

J U S T I N W O L F O R TDirector • Over 15 years of M&A and corporate finance experience

• Former investment banking and corporate finance positions at Western Reserve Partners, KeyBanc Capital Markets, and McDonald Investments


• B.S., Syracuse University

• M.B.A., Indiana University Kelley School of Business

EDUCATIONEDUCATION

K E V I N S A R G E N TDirector

EDUCATIONEDUCATION

• Over 20 years of M&A and corporate finance experience

• Former investment banker at KeyBanc Capital Markets and research analyst for the Federal Reserve Bank of Cleveland


• B.S., Miami University


2 0 D I V E R S I F I E D I N D U S T R I A L S | A B O U T U S

One Magnif icent Mile 980 N. Michigan Avenue Suite 1880 Chicago, IL 60611p. 312.658.1600

One Cleveland Center1375 East 9th StreetSuite 2500 Cleveland, OH 44114p. 216.920.6613

C H I C A G O C L E V E L A N D

One Liberty Place 1650 Market StreetSuite 3600 Philadelphia , PA 19103p. 610.941.2765

P H I L A D E L P H I A

INSIDER - Brown Gibbons Lang & Company (BGL) Middle Market ... · GLOBAL AUTOMATION MARKET Dollars...

Documents

Transcript of INSIDER - Brown Gibbons Lang & Company (BGL) Middle Market ... · GLOBAL AUTOMATION MARKET Dollars...