www.harriswilliams.de 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 7078852. 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.
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 $713 4.2% $1.51 $3,486 73.0% (27.2%) Boeing 93,824,333 11.0% 133.78 84,162 88.8% (8.9%) Embraer 6,219 842 13.5% 5.35 3,924 60.9% (19.4%) Airbus 74,514 7,198 9.7% 62.17 48,350 80.1% (9.8%) Aerospace Equipment and Structural HEICO $1,388 $326 23.5% $64.66 $3,908 99.9% 7.4% TransDigm Group 3,239 1,493 46.1% 249. 13,239 99.1% 9.7% RBC Bearings 6 164 26.3% 72.23 1,690 93.9% (0.2%) Woodward 2,079 349 16.8% 55.29 3,375 97.3% 4.0% KLX Aerospace 1,498 233.6% 29.72 1,847 66.0% (33.0%) B/E Aerospace 2,834 608 21.5% 46.70 4,761 77.1% (22.8%) Rockwell Collins 5,417 1,287 23.8% 88.87 11,617 90.7% (9.1%) Wesco Aircraft 1,529 214 14.0% 14.13 1,418 88.0% (7.0%) Hexcel 2,004 454 22.7% 43.60 4,077 79.7% (12.9%) Heroux-Dev tek 322 50.6% 11.62 418 96.2% 56.4% Astronics 679 114 16.8% 35.75 9 48.6% (50.7%) Kaman 1,850 168 9.1% 41.21 1,117 93.1% (3.9%) Esterline Technologies 1,965 288 14.7% 67.00 1,967 59.6% (40.5%) Meggitt 2,679 655 24.5% 5.56 4,274 74.1% (.2%) Moog 2,478 312 12.6% 52.47 1,901 72.5% (.2%) Safran,284 3,659 18.0% 66.89 27,993 82.4% (9.7%) Senior 1,269 194.3% 3.05 1,260 64.1% (35.3%) Barnes Group 1,224 277 22.6% 33.00 1,758 79.0% (19.4%) LMI Aerospace 370 46 12.5% 8.80 116 71.8% (13.6%) Magellan Aerospace 786 133 17.0% 13.75 800 89.1% 7.4% Ducommun 580 53 9.2% 17.26 193 63.9% (29.7%) AAR 1,736 0 8.6% 23.35 823 71.0% (24.7%) Triumph Group 3,771 5 13.9% 36.22 1,796 52.1% (47.5%) BBA Av iation 2,734 426.6% 2.93 2,946 58.4% (41.2%) GKN 12,263 1,394 11.4% 3.95 6,838 72.6% (26.3%) Spirit AeroSystems 6,688 1,113 16.6% 46.40 5,547 80.0% (13.3%) Zodiac Aerospace 5,721 5 9.2% 23.94 6,633 62.4% (36.3%) Diversified Industrial Heavy Aerospace Exposure Ametek $3,951 $1,051 26.6% $46.87 $,812 81.3% (.4%) Honeywell 40,658 8,391.6% 114.61 86,271 98.3% 7.3% Eaton 19,949 3,338 16.7% 61.79 27,878 83.9% (.7%) Curtiss-Wright 2,197 4 18.6% 81.22 3,566 98.1%.5% Parker-Hannifin 11,364 1,613 14.2% 112.23 14,784 89.5% (8.3%) United Technologies 57,062,618 18.6% 1.74 83,913 85.0% (14.1%) Rolls Royce 19,087 2,142 11.2% 9.55 17,551 64.7% (34.6%) Crane 2,707 451 16.7% 55.50 3,190 87.2% (.9%) Textron 14,2 1,674 11.8% 38.07,041 81.3% (18.4%) General Electric 124,748,850 16.7% 30.03 272,559 93.7%.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 > $0 million 35 30 5 0 12.5x 11.5x 11.5x.4x 9.9x 9.8x 26 23 9.0x 9.3x 8.5x 9.2x 9.8x 21 18 8.9x 17 12 11 9 05 06 07 08 09 11 12 13 14 16 Strategic Financial 8 14.0x.0x 6.0x 4.0x 2.0x - Median EBITDA Multiple SELECT RECENT AEROSPACE M&A ACTIVITY Announced Date Target Subsegment Acquirer AC&A AE Industrial Aerial MOB Unmanned Systems 5D Robotics Apr-16 West Star Aviation Aviation and Norwest Equity Partners Support Apr-16 Airpas Aviation Software and Information Sabre Corporation Apr-16 Pegasus Manufacturing Leggett & Platt Select Landmark Aviation Aviation and KSL Capital FBO Assets Support Ferco Aerospace Novaria Group Inc. Bromford Industries Liberty Hall Capital Partners SKF's Fly-By-Wire Systems Avionics and Electronics LORD Corporation PAGE 1
Number of Deals NOC LMT RTN GD HO BA HI BA. AIR KTOS LLL MRCY TDY FLIR CUB ESLT HRS OA ULE COB CHG DEFENSE VALUATION AND M&A TRANSACTION DATA STOCK PERFORMANCE AND TRADING MULTIPLES ($ 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 $3,419 14.4% $2.08 $38,613 98.3% 36.1% Lockheed Martin 50,592 6,909 13.7% 242.33 73,713 98.8% 26.0% Raytheon 24,460 3,664.0% 131.01 38,699 98.9% 22.4% General Dynamics 31,730 4,744 14.9% 145.04 44,126 94.3% 3.5% Thales 16,771 1,937 11.5% 87.72 18,480 97.7% 40.6% Boeing 93,824,333 11.0% 133.78 84,162 88.8% (8.9%) Huntington Ingalls 7,085 921 13.0% 3.84 7,9 97.7%.2% BAE Systems 26,019 3,060 11.8% 7.06 22,381 91.5% (2.7%) Airbus 74,514 7,198 9.7% 62.17 48,350 80.1% (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 1,211 12.0% 135.40,351 98.2% 13.2% 11.2x Mercury Systems 309 66 21.5%.55 816 93.4% 45.5% 11.0x Teledyne Technologies 2,237 351.7% 94.39 3,4 84.4% (9.9%).9x FLIR Systems 1,643 376 22.9% 30.47 4,161 89.4% (3.9%).6x Cubic 1,552 127 8.2% 39.11 1,045 77.7% (18.6%).4x Elbit Systems Holdings 3,263 424 13.0% 93.87 4,040 92.7% 18.3%.0x Harris 7,473 1,440 19.3% 77.08 9,469 85.8% (2.0%) 9.7x Orbital ATK 4,599 706.3% 88.13 5,7 92.8% 17.3% 9.4x Ultra Electronics Holdings 1,137 213 18.7%.04 1,754 85.1% (2.8%) 7.1x Cobham 2,843 558 19.6% 2.35 2,638 52.7% (44.4%) 5.5x Chemring 643 6 16.5% 1.92 537 55.5% (38.2%) 5.0x Comtech Telecommunications 627 81 12.8% 22.84 363 71.1% (26.6%) 2.5x AeroVironment 285 7.0% 27.98 638 91.3% 5.1% NM Median:.0x DEFENSE M&A ACTIVITY SELECT RECENT DEFENSE M&A ACTIVITY Enterprise Value > $50 million 35 30 13.4x 29 30 12.4x 27 30.5x.5x 11.9x 9.9x 19 8.6x 8.4x 18 8.5x 16 11 5 9.0x.0x 16 7 16.0x 14.0x.0x 6.0x 4.0x 2.0x Median EBITDA Multiple Announced Date Target Subsegment Acquirer Herndon Aerospace and Defense Vanguard Space Technologies Teledyne Technologies (Circuit Technology Business) Maxwell Technologies Apr-16 (Microelectronics Division) Microsemi RF Integrated Solutions Supply Chain Management & KLX Distribution Satellite Equipment SolAero Technologies Defense Electronics Firan Technology Defense Electronics Data Device Corporation Ground and Space-Based Mercury Systems Satellite Technology Airbus Defense Electronics Defense Electronics KKR Feb-16 API Technologies Defense Electronics J.F. Lehman Feb-16 Bluefin Robotics Unmanned Systems General Dynamics 0 05 06 07 08 09 11 12 13 14 16 - Feb-16 United Uniform Tactical Products & Accessories Safariland Strategic Financial PAGE 2
Number of Deals GOVERNMENT SERVICES VALUATION AND M&A TRANSACTION DATA STOCK PERFORMANCE AND TRADING MULTIPLES ($ 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 $35 11.7% $8.00 $314 63.5% 9.0% Engility 2,096 183 8.7% 23.65 857 65.8% (9.9%) CACI International 4,8 364 8.6% 95.23 2,289 85.7% 7.3% Booz Allen Hamilton 5,474 544 9.9% 27.85 4,113 88.9% (1.7%) ManTech International 1,624 123 7.6% 34.86 1,297 89.0% 19.9% SAIC 4,512 334 7.4% 53.13 2,376 97.1% (0.2%) Leidos 5,185 444 8.6% 49.53 3,556 83.2% 19.7% 11.7x.5x.3x.2x.0x 9.7x 9.1x CSRA 5,211 888 17.0% 24.53 3,937 73.4% N/A Vectrus 1,186 47 4.0% 24.57 8 90.1% (4.3%) 6.9x 7.7x NCI, Inc 343 30 8.9% 13.13 182 76.4% 13.3% Diversified Heavy Government Exposure Serco $4,095 $149 3.6% $1.33 $1,447 65.7% (32.8%) CGI 8,369 1,571 18.8% 45.67 13,466 92.6%.7% Babcock International 7,183 948 13.2% 13.80 6,966 83.1% (11.3%) ICF 1,171 117.0% 40.80 764 99.3%.4% Jacobs 11,351 662 5.8% 50.30 5,991 99.2% 14.3% AECOM 18,6 1,064 5.9% 32.59 4,900 92.1% (2.9%) Fluor 18,536 1,032 5.6% 51.22 6,967 86.3% (13.5%) 6.7x 6.7x Median: 9.9x.7x 9.5x 9.5x 9.3x 9.1x 8.4x KBR 4,094 298 7.3% 14.44 2,000 69.5% (.6%) 4.1x Median: 9.2x GOVERNMENT SERVICES M&A ACTIVITY Enterprise Value > $50 million 35.3x 30 26 12.2x 11.9x 24 23 22.5x 9.9x.0x 11.1x 18 7.6x 9.4x.0x.0x 18 19 14 14 6.9x 7 4 5 0 05 06 07 08 09 11 12 13 14 16 1 16.0x 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
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) 482 7501 Cleveland 1900 East 9th Street th Floor Cleveland, Ohio 44114 Phone: +1 (216) 689 2400 Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota 55402 Phone: +1 (612) 359 2700 UNITED STATES Richmond (Headquarters) 01 Haxall Point 9th Floor Richmond, Virginia 23219 Phone: +1 (804) 648 0072 San Francisco 575 Market Street 31st Floor San Francisco, California 945 Phone: +1 (4) 288 4260 EUROPE Frankfurt Bockenheimer Landstrasse 33 35 603 Frankfurt Germany Phone: +49 069 3650638 00 London 63 Brook Street London W1K 4HS, England Phone: +44 (0) 7518 8900 Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 4
HARRIS WILLIAMS & CO. SOURCES Capital IQ, Harris Williams & Co. Proprietary Information DISCLOSURES Harris Williams & Co. (www.harriswilliams.com and www.harriswilliams.com/de) 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 7078852. 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