Fluid Handling Industry - globalequityconsulting.net · 2016 Thru Q3 33 48 2017 Thru Q3 38 54 2018...

HydraulicIns.tuteFallMee.ng2019 1

October23,2019

Fluid Handling Industry

©2019GlobalEquityConsul.ng,LLC.AllRightsReserved

2HydraulicIns.tuteFallMee.ng2019

aboutThomasHaan

FINRARegisteredInvestmentBankingRepresenta.ve

Opera&ngDirector,CityCapitalAdvisors,LLCPrincipal,GlobalEquityConsul.ng,LLC

PreviousExperience:PresidentEagleBurgmannIndustries;PresidentFlowserveCorpora.onFlowSolu.ons(MechanicalSeal)Division,COODurametallicCorp.

Educa2on:SchoolofBusiness-WesternMichiganUniversity

Tom's40yearcareerhasbeenintheFluidHandlingIndustryasaseniorexecu.veandadvisorforbothpublicandprivatelyheldcompanies.Hehasextensive

interna.onalexperiencehelpingbusinessesachieveenhanced

profitablegrowth.TomhasservedontheBoardof

DirectorsoftheHydraulicIns.tuteandaschairmanofits

AssociateMemberCouncil.HeisapastpresidentoftheFluid

SealingAssocia.on.

3HydraulicIns.tuteFallMee.ng2019

aboutGlobalEquityConsul.ng

BusinessDevelopment• StrategicAc2on®Planning–teambasedstrategydevelopmentandexecu.on• Organicgrowthini.a.vesandenhancingvalue• BusinessValua.onsMerger&Acquisi.onSupport• Transi.onownership–sellingabusiness• Inorganicgrowth–buyingabusiness• Raisecapital

•  Buy-side–inorganicgrowththroughacquisi.ons•  Sell-side–planandexecutethesaleofabusiness

•  Capitalraise-forgrowthorownerliquidity

4HydraulicIns.tuteFallMee.ng2019

aboutCityCapitalAdvisors

Mission:toprovideseniorlevelcorporatefinanceadviceandunparalleledexecu.onservicestoleadingmiddlemarketcompaniesandtheirowners.

MemberofFINRAandSIPC

•  EachManagingDirectorhas20+yearsexperience;collec.velytheyhavecompleted500+transac.onstotaling$60+billioninvalue.

•  ProvidesM&Aadvisoryandotherinvestmentbankingservicestoprivateandpublicallyheldmiddlemarketcompaniesvaluedbetween$50and$500million.

5HydraulicIns.tuteFallMee.ng2019

aboutCityCapitalAdvisors

Mission:toprovideseniorlevelcorporatefinanceadviceandunparalleledexecu.onservicestoleadingmiddlemarketcompaniesandtheirowners.

MemberofFINRAandSIPC

GeneralM&AReview

FluidHandlingIndustryM&AAc.vityQ3Update2018

HydraulicIns.tuteFallMee.ng2018 6

M&AAc.vityGlobal

HydraulicIns.tuteFallMee.ng2019 7

M&AAc.vityNorthAmerica

HydraulicIns.tuteFallMee.ng2019 8

M&AAc.vityEurope

HydraulicIns.tuteFallMee.ng2019 9

HydraulicIns.tuteFallMee.ng2019 10

EV/EBITDAMedianEBITDAValua.onMul.ples-NorthAmerica

*2019thruQ3

2015 2016 2017 2018 2019*

9.5 10.2 10.1 9.4 10.2

2010 2011 2012 2013 2014

8.3 9.0 8.9 9.3 9.2

Source:PitchBook

HydraulicIns.tuteFallMee.ng2019 11

MiddleMarketPrivateEquityValua.ons

2019thruQ2

HydraulicIns.tuteFallMee.ng2019 12

MiddleMarketQualityPremium

2019thruQ2

HydraulicIns.tuteFallMee.ng2019 13

MacroFactorsDrivingM&AValua.ons

1)Compe..on–strategicandfinancialbuyersseekingqualityacquisi.ons

2)Costofdebt–lowcostmakeshighvalua.onsaffordable

3)Longtermgrowthoutlook–mostlyposi.ve

FluidHandlingIndustryM&AQ3Update2018

HydraulicIns.tuteFallMee.ng2019 14

HydraulicIns.tuteFallMee.ng2019 15

FluidHandlingIndustryM&AAc.vity

Year NumberofDeals

2014 76

2015 67

2016 ThruQ333 48

2017 ThruQ338 54

2018 ThruQ354 67

2019 ThruQ356 Projected70-75

• 2019ac.vityhasbeenincreasingsequen.ally:Q117deals,Q219dealsandQ320deals

• Ac.vityisstrongdespitesolmacroeconomicgrowthworldwideandpossiblysolergrowthinU.S.in2020

• Assumeac.vityisdrivenbycompanystrategicinterestsandlongtermgrowthoutlook

FHIDisclosedValua.ons2019

HydraulicIns.tuteFallMee.ng2019 16

Company Deal EnterpriseValue

RevenueMul&ple

EBITDAMul&ple

GardnerDenver MergerwithIngersollRandIndustrialDiv $7.7billion 2.03 11.0

Colfax SoldAirandGasHandling $1.8billion 1.27 9.0

Ingersoll-Rand AcquiredPrecisionFlowSystems $1.45billion 3.63 12.95*

Kaman SoldDistribu.onBusiness $700million 10.6

WeirGroup SoldFlowControlBusiness $358million 0.80 10.58

Pentair AcquiredAquion $160million 2.22

IDEX AcquiredVelcoraHolding(Roplan&Steridose) $132million 3.81 14.9

Valmet AcquiredGL&V $128million 0.71

Pentair AcquiredPelicanWaterSystems $120million 3.16

ITT AcquiredRheinhuoePumpen $91.5million 1.39Notes:EBITDA-earningsbeforeinterest,taxes,deprecia.onandamor.za.on;EV-enterprisevalueisthecombinedamountsofmarketcapitaliza.on,minorityinterests,preferredstockandnetdebt;Revenue-amountrecordedasnetsalesfortheperiod.EBITDA,RevenueandValueareUSDmillions.*Es.matedbasedoncompanyinforma.on

FHIDisclosedValua.ons2019

HydraulicIns.tuteFallMee.ng2019 17

Company Deal EnterpriseValue

RevenueMul&ple

EBITDAMul&ple

Dover SoldFinderPompe $24.0million 0.80

FranklinElectric AcquiredMilanSupply $5.90million 0.27

De.mem Pumptech $0.71million 0.42Notes:EBITDA-earningsbeforeinterest,taxes,deprecia.onandamor.za.on;EV-enterprisevalueisthecombinedamountsofmarketcapitaliza.on,minorityinterests,preferredstockandnetdebt;Revenue-amountrecordedasnetsalesfortheperiod.EBITDA,RevenueandValueareUSDmillions.

Q32018M&AUpdate

HydraulicIns.tuteFallMee.ng2018 18

Company #Deals Comments

AxFlow Sixacquisi.ons Expandingdistribu.onandserviceloca.onsinEuropeandAustralia

AtlasCopco Threeacquisi.ons Channelintegra.oninEuropeandU.S.

Sevencompaniesdoingtwotransac.ons:BakerHughes,Dover,FranklinElectric,GardnerDenver,MayRiverCapital,OhioTransmissionCorp.(OTC),andPentair.

MostAc.ve

Q32019M&AUpdateObserva.ons

HydraulicIns.tuteFallMee.ng2019 19

• Morediversifica&onintargetedend-usemarkets

20%oftransac&onshadtargetcompaniesthatarefocusedonmoving,trea&ngormanagingwater–downfrom31%in2018

• NorthAmericamosttargetedregion YTD60%ofthetransac.onshadNorthAmericanbasedtargets,32%Europeanbasedtargetsand8%restoftheworld.

• Distribu.onand/orequipmentservicecon.nuestobeahighlyac.vespace

17%ofthetransac.onshadtargetcompaniesthatareindustrialdistributorsand/orservicecompanies.

• Solwareprovidersarestar.ngtoshowupastargetedcompanies

Ques.ons&AnswerSession

HydraulicIns.tuteFallMee.ng2019 20

©2019GlobalEquityConsul.ng,LLC.AllRightsReserved

ThomasE.Haanthaan@globalequityconsul.ng.com

(269)385-5186Globalequityconsul.ng.net