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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
(269)385-5186Globalequityconsul.ng.net