AEROSPACE, DEFENSE & GOVERNMENT SERVICES

Transcription

1 Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 603 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.

2 Number of Deals BBD.B BA EMBR3 AIR HEI TDG ROLL WWD KLXI BEAV COL WAI R HXL HRX ATRO KAMN ESL MGGT MOG.A SAF SNR B LMIA MAL DCO AIR TGI BBA GKN SPR ZC AME HON ETN CW PH UTX RR. CR TXT GE AEROSPACE VALUATION AND M&A TRANSACTION DATA STOCK PERFORMANCE AND TRADING MULTIPLES ($ in millions) Aircraft OEMs CY16E CY16E CY16E Current Market % of Stock Price Rev enue EBITDA EBITDA MarginStock Price Cap 52-Wk High YoY Change EV / CY 16E EBITDA Bombardier $17,134 $ % $1.51 $3, % (27.2%) Boeing 93,824, % , % (8.9%) Embraer 6, % , % (19.4%) Airbus 74,514 7, % , % (9.8%) Aerospace Equipment and Structural HEICO $1,388 $ % $64.66 $3, % 7.4% TransDigm Group 3,239 1, % , % 9.7% RBC Bearings % , % (0.2%) Woodward 2, % , % 4.0% KLX Aerospace 1, % , % (33.0%) B/E Aerospace 2, % , % (22.8%) Rockwell Collins 5,417 1, % , % (9.1%) Wesco Aircraft 1, % , % (7.0%) Hexcel 2, % , % (12.9%) Heroux-Dev tek % % 56.4% Astronics % % (50.7%) Kaman 1, % , % (3.9%) Esterline Technologies 1, % , % (40.5%) Meggitt 2, % , % (.2%) Moog 2, % , % (.2%) Safran,284 3, % , % (9.7%) Senior 1, % , % (35.3%) Barnes Group 1, % , % (19.4%) LMI Aerospace % % (13.6%) Magellan Aerospace % % 7.4% Ducommun % % (29.7%) AAR 1, % % (24.7%) Triumph Group 3, % , % (47.5%) BBA Av iation 2, % , % (41.2%) GKN 12,263 1, % , % (26.3%) Spirit AeroSystems 6,688 1, % , % (13.3%) Zodiac Aerospace 5, % , % (36.3%) Diversified Industrial Heavy Aerospace Exposure Ametek $3,951 $1, % $46.87 $, % (.4%) Honeywell 40,658 8,391.6% , % 7.3% Eaton 19,949 3, % , % (.7%) Curtiss-Wright 2, % , %.5% Parker-Hannifin 11,364 1, % , % (8.3%) United Technologies 57,062, % , % (14.1%) Rolls Royce 19,087 2, % , % (34.6%) Crane 2, % , % (.9%) Textron 14,2 1, % 38.07, % (18.4%) General Electric 124,748, % , %.1% NM NM 6.4x 6.3x 14.6x 14.3x 14.1x 12.4x 11.5x 11.2x 11.0x.7x.7x.4x.3x 9.5x 9.2x 9.1x 8.9x 8.5x 8.1x 7.9x 7.9x 7.3x 7.0x 6.2x 6.1x 5.9x 5.7x 5.3x 11.2x.8x.2x 9.9x 9.6x 8.1x Median: 7.4x Median: 9.2x Median: 9.9x AEROSPACE M&A ACTIVITY Enterprise Value > $0 million x 11.5x 11.5x.4x 9.9x 9.8x x 9.3x 8.5x 9.2x 9.8x x Strategic Financial x.0x 6.0x 4.0x 2.0x - Median EBITDA Multiple SELECT RECENT AEROSPACE M&A ACTIVITY Announced Date Target Subsegment Acquirer AC&A AE Industrial Aerial MOB Unmanned Systems 5D Robotics Apr-16 West Star Aviation Aviation and Norwest Equity Partners Support Apr-16 Airpas Aviation Software and Information Sabre Corporation Apr-16 Pegasus Manufacturing Leggett & Platt Select Landmark Aviation Aviation and KSL Capital FBO Assets Support Ferco Aerospace Novaria Group Inc. Bromford Industries Liberty Hall Capital Partners SKF's Fly-By-Wire Systems Avionics and Electronics LORD Corporation PAGE 1

3 Number of Deals NOC LMT RTN GD HO BA HI BA. AIR KTOS LLL MRCY TDY FLIR CUB ESLT HRS OA ULE COB CHG DEFENSE VALUATION AND M&A TRANSACTION DATA STOCK PERFORMANCE AND TRADING MULTIPLES ($ in millions) Defense Prime Contractors CY 16E CY 16E CY 16E Current Market % of Stock Price Revenue EBITDA EBITDA Margin Stock Price Cap 52-Wk High YoY Change EV / CY 16E EBITDA Northrop Grumman $23,821 $3, % $2.08 $38, % 36.1% Lockheed Martin 50,592 6, % , % 26.0% Raytheon 24,460 3,664.0% , % 22.4% General Dynamics 31,730 4, % , % 3.5% Thales 16,771 1, % , % 40.6% Boeing 93,824, % , % (8.9%) Huntington Ingalls 7, % ,9 97.7%.2% BAE Systems 26,019 3, % , % (2.7%) Airbus 74,514 7, % , % (9.8%) 12.8x 12.7x 11.4x 9.6x 8.6x 7.1x Defense Technologies Median: 8.6x Kratos $649 $40 6.2% $4.27 $2 60.0% (.7%) 16.8x L-3 Communications,097 1, % , % 13.2% 11.2x Mercury Systems % % 45.5% 11.0x Teledyne Technologies 2, % ,4 84.4% (9.9%).9x FLIR Systems 1, % , % (3.9%).6x Cubic 1, % , % (18.6%).4x Elbit Systems Holdings 3, % , % 18.3%.0x Harris 7,473 1, % , % (2.0%) 9.7x Orbital ATK 4, % ,7 92.8% 17.3% 9.4x Ultra Electronics Holdings 1, %.04 1, % (2.8%) 7.1x Cobham 2, % , % (44.4%) 5.5x Chemring % % (38.2%) 5.0x Comtech Telecommunications % % (26.6%) 2.5x AeroVironment % % 5.1% NM Median:.0x DEFENSE M&A ACTIVITY SELECT RECENT DEFENSE M&A ACTIVITY Enterprise Value > $50 million x x x.5x 11.9x 9.9x x 8.4x x x.0x x 14.0x.0x 6.0x 4.0x 2.0x Median EBITDA Multiple Announced Date Target Subsegment Acquirer Herndon Aerospace and Defense Vanguard Space Technologies Teledyne Technologies (Circuit Technology Business) Maxwell Technologies Apr-16 (Microelectronics Division) Microsemi RF Integrated Solutions Supply Chain Management & KLX Distribution Satellite Equipment SolAero Technologies Defense Electronics Firan Technology Defense Electronics Data Device Corporation Ground and Space-Based Mercury Systems Satellite Technology Airbus Defense Electronics Defense Electronics KKR Feb-16 API Technologies Defense Electronics J.F. Lehman Feb-16 Bluefin Robotics Unmanned Systems General Dynamics Feb-16 United Uniform Tactical Products & Accessories Safariland Strategic Financial PAGE 2

4 Number of Deals GOVERNMENT SERVICES VALUATION AND M&A TRANSACTION DATA STOCK PERFORMANCE AND TRADING MULTIPLES ($ in millions) Government CY16E CY16E CY16E Current Market % of Stock Price Revenue EBITDA EBITDA Margin Stock Price Cap 52-Wk High YoY Change EV / CY 16E EBITDA KEYW $299 $ % $8.00 $ % 9.0% Engility 2, % % (9.9%) CACI International 4, % , % 7.3% Booz Allen Hamilton 5, % , % (1.7%) ManTech International 1, % , % 19.9% SAIC 4, % , % (0.2%) Leidos 5, % , % 19.7% 11.7x.5x.3x.2x.0x 9.7x 9.1x CSRA 5, % , % N/A Vectrus 1, % % (4.3%) 6.9x 7.7x NCI, Inc % % 13.3% Diversified Heavy Government Exposure Serco $4,095 $ % $1.33 $1, % (32.8%) CGI 8,369 1, % , %.7% Babcock International 7, % , % (11.3%) ICF 1, % %.4% Jacobs 11, % , % 14.3% AECOM 18,6 1, % , % (2.9%) Fluor 18,536 1, % , % (13.5%) 6.7x 6.7x Median: 9.9x.7x 9.5x 9.5x 9.3x 9.1x 8.4x KBR 4, % , % (.6%) 4.1x Median: 9.2x GOVERNMENT SERVICES M&A ACTIVITY Enterprise Value > $50 million 35.3x x 11.9x x 9.9x.0x 11.1x x 9.4x.0x.0x x x 14.0x.0x 6.0x 4.0x 2.0x - Median EBITDA Multiple SELECT RECENT GOVERNMENT SERVICES M&A ACTIVITY Announced Date Target Subsegment Acquirer Wyle Systems Engineering & KBR Technical Operations Prime Solutions Cybersecurity Altamira American Scaffold Platform Maintenance & J.F. Lehman Modernization Apr-16 The Van Dyke Technology Cybersecurity Jacbos Group Feb-16 Clearsoft Technology and Professional Battle Resource Management Jan-16 Wavefront Technologies Cybersecurity Ball Aerospace Jan-16 Lockheed Martin IS&GS Software and Information Leidos Business Unit Jan-16 PAE Systems Engineering & Platinum Equity Technical Operations Jan-16 Tetra Concepts Technology and Professional Preferred Systems Solutions Strategic Financial PAGE 3

5 OUR FIRM Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website. Aerospace, Defense & Government Building Products & Materials Business Consumer Energy, Power & Infrastructure Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston Two International Place 24th Floor Boston, Massachusetts 021 Phone: +1 (617) Cleveland 1900 East 9th Street th Floor Cleveland, Ohio Phone: +1 (216) Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota Phone: +1 (612) UNITED STATES Richmond (Headquarters) 01 Haxall Point 9th Floor Richmond, Virginia Phone: +1 (804) San Francisco 575 Market Street 31st Floor San Francisco, California 945 Phone: +1 (4) EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 4

6 HARRIS WILLIAMS & CO. SOURCES Capital IQ, Harris Williams & Co. Proprietary Information DISCLOSURES Harris Williams & Co. ( and is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 603 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. The information and views contained in this report were prepared by Harris Williams & Co. ( Harris Williams ). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 16 Harris Williams & Co., all rights reserved. PAGE 5