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
+1(617) 654-2101
Julien Darmon | Managing Director
+44 20 7518 8905
Jay Hernandez | Director
+1(617) 654-2114
Matthew Volinsky | Vice President
+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
$250
# o
f Tra
nsa
ctio
ns
Dea
l V
alu
e
Deal Value ($ in billions) # of Transactions
0
100
200
300
400
500
$0
$10
$20
$30
$40
$50
# o
f Tra
nsa
ctio
ns
Dea
l V
alu
e
Deal Value ($ 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
ult
iple
Median LTM EBITDA Multiple
$0
$5
$10
$15
$20
$25
0
50
100
150
200
250
2006 2007 2008 2009 2010 2011 2011
YTD
2012
YTD
Aggreg
ate D
eal V
alu
e
Tra
nsa
ctio
n V
olu
me
Transaction Volume Aggregate Deal Value
Flow Control Public Comparables
8
Key Trading
Stats
($ in millions, except
per share amounts)
Flow Control Public Comparables
As of July 6, 2012
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
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 $42.63 (0.4%) (1.7%) 85.5% NM 8.0x 6.7x
Median 14.1% 31.6% (0.2%) (15.7%) 75.7% 1.1% 7.7x 6.9x
Mean 12.9% 30.8% (1.7%) (17.3%) 76.9% 1.6% 8.1x 7.0x
Overall Median 14.2% 31.4% (0.6%) (16.3%) 76.9% 1.8% 8.8x 7.6x
Overall Mean 13.9% 32.5% (0.5%) (18.7%) 76.7% 3.3% 12.7x 8.2x
Flow Control M&A Overview
Announced
M&A
Transactions
Flow
Control
M&A Trends
Top Acquirers
9
($ in billions)
($ in millions)
From 2006 – Present
($ in millions)
(1) Transaction values only for transactions with disclosed terms.
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
EB
ITD
A M
ult
iple
Median LTM EBITDA Multiple
Enterprise EV/EBITDA
Date Target Target Description Acquirer Value Multiple
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
Company Number of Transactions Aggregate Transaction Value(1)
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
$6
$10
$14
0
25
50
75
100
125
2006 2007 2008 2009 2010 2011 2011
YTD
2012
YTD
Ag
greg
ate D
eal V
alu
e
Tra
nsa
ctio
n V
olu
me
Transaction Volume Aggregate Deal Value
Power Connectivity and Control Public Comparables
10
Key Trading
Stats
($ in millions, except
per share amounts)
Power Connectivity and Control Public Comparables
As of July 6, 2012
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
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 $9.49 0.3% (5.1%) 84.6% 3.6% 9.7x 6.9x
Median 15.8% 28.1% (2.6%) (13.7%) 82.4% 3.9% 7.8x 6.3x
Mean 13.8% 25.6% (0.7%) (14.7%) 79.9% 3.7% 7.3x 6.6x
Overall Median 16.9% 30.8% (2.5%) (18.7%) 81.7% 3.0% 7.6x 7.0x
Overall Mean 15.9% 31.7% (0.4%) (15.5%) 81.6% 3.2% 7.6x 6.9x
Power Connectivity and Control M&A Overview
Announced
M&A
Transactions
Power
Connectivity
and Control
M&A Trends
Top Acquirers
11
($ in billions)
($ in millions)
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 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
Company Number of Transactions Aggregate Transaction Value(1)
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
6.0x
8.0x
10.0x
12.0x
14.0x
2006 2007 2008 2009 2010 2011 2012
YTD
EB
ITD
A M
ult
iple
Median LTM EBITDA Multiple
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
0
50
100
150
200
250
2006 2007 2008 2009 2010 2011 2011
YTD
2012
YTD
Ag
greg
ate D
eal V
alu
e
Tra
nsa
ctio
n V
olu
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Transaction Volume Aggregate Deal Value
Representative Transactions
12
has been acquired by
a portfolio company of
Kirtland Capital
Partners
has been acquired by
a portfolio company of
has been acquired by
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has been acquired by
a portfolio company of
has been acquired by
a joint venture between
a portfolio company of
has been acquired by
has been acquired by
a portfolio company of
has been acquired by
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has been acquired by
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
have been acquired by
and
divisions of
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has been acquired by
has been acquired by
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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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