INDUSTRY UPDATE FALL 2015 - Harris Williams | Preeminent Middle Market … · M&A MARKET TRENDS ECONOMIC UPDATE ... lubricating oil analysis equipment, motor current signature analysis,

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INDUSTRIAL TECHNOLOGYINDUSTRY UPDATE │ FALL 2015

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SUMMARY

1

OMRON Corporation (TSE:6645) has signed an agreement to purchase AdeptTechnology, Inc. (“Adept”), a leading provider of intelligent robots, autonomousmobile robotic solutions and services. The acquisition of Adept will enhanceOMRON’s advanced automation technology solutions offering.Source

Honeywell International Inc. (NYSE:HON) has announced an agreement to acquirethe Elster Division (“Elster”) of Melrose Industries plc (LSE:MRO) for $5.1 billion. Elsteris a leading provider of gas, water, and electricity meters for residential,commercial, and industrial markets globally.Source

Hillenbrand, Inc. (NYSE:HI) has completed the acquisition of ABEL Pumps LP andcertain of its affiliates (“ABEL”) from Roper Technologies, Inc. (NYSE:ROP) for €95million in cash. ABEL specializes in designing, developing, and manufacturingpiston diaphragm and piston pumps for the power generation, wastewatertreatment, mining, general industry, oil and gas and marine markets.Source

Sentinel Capital Partners has announced the sale of IEP Technologies (“IEP”) toHOERBIGER Group. IEP provides explosion protection systems and services thatsuppress, isolate, and vent potential combustible dust or vapor explosions inprocess industries. The acquisition will make HOERBIGER one of the world’s leadingproviders of highly engineered safety and explosion protection technology.Source

Sensata Technologies Holding N.V. (NYSE:ST) has announced an agreement toacquire the sensing portfolio of Custom Sensors & Technologies, Inc. (“CST”) for$1.0 billion. The acquisition includes the Kavlico, BEI, Crydom and Newall productlines and brands and includes sales, engineering and manufacturing sites in theUnited States, United Kingdom, Germany, France, China, and Mexico. CST is aleading provider of sensors, controls, and actuators for the aerospace anddefense, transportation, industrial, medical, and energy and infrastructure markets.The transaction is expected to close by the end of Q4 2015.Source


PUBLIC MARKETS | KEY TRADING STATISTICS

CONTENTS RECENT M&A ACTIVITY WHAT WE’RE READING PUBLIC MARKETS M&A MARKET TRENDS ECONOMIC UPDATE PUBLIC COMPARABLES

CONTACTSJeffery PerkinsManaging [email protected]+49 (69) 3650638 13

Jay [email protected]+1 (617) 654-2114

Lars [email protected]+49 (69) 3650638 12

Alex MurrillVice [email protected]+44 (20) 7518 8918

Nicholas [email protected]+1 (617) 654-2134

M&A | SELECT RECENT ACTIVITY

Stock Price % Change TEV / EBITDA TEV / LTM EBITDA LTM MarginsSub-Sector Median 1 Month 12 Month LTM 2015E Oct-14 Apr-15 Gross EBITDA

Test and Measurement

Instrumentation 2.2% 8.7% 12.7x 11.6x 11.2x 13.2x 38.5% 16.4%Sensors (1.4%) 1.6% 11.6x 10.5x 12.2x 12.5x 40.0% 20.1%Technology and Software 3.3% 12.6% 11.2x 10.5x 12.6x 16.0x 47.0% 17.6%Life Sciences and Laboratory (1.6%) 21.1% 15.7x 13.8x 13.1x 14.5x 49.1% 21.6%

Flow Control

Pumps and Filtration 0.8% (2.1%) 11.3x 11.3x 11.0x 12.2x 34.6% 16.1%Valves and Fittings (1.8%) (0.7%) 9.7x 10.2x 9.9x 11.6x 32.8% 14.6%

Process / Motion Control

Motion and Drives (0.0%) (7.4%) 10.4x 9.3x 10.8x 12.2x 35.4% 15.9%Intelligent Automation 0.6% (4.5%) 10.0x 9.3x 10.3x 11.6x 36.9% 12.8%Actuators and Positioners (1.0%) (7.3%) 8.8x 8.8x 9.0x 10.0x 30.9% 15.5%Condition Monitoring (2.5%) 0.9% 11.7x 9.2x 10.2x 13.3x 47.2% 18.3%

Test Services

Testing, Inspection, and Certification 4.2% 2.7% 10.7x 10.3x 10.4x 11.0x 34.0% 17.9%Engineering and Consulting 4.6% (13.2%) 10.6x 9.3x 10.5x 10.9x 17.5% 7.1%

http://www.harriswilliams.com/

https://www.omron.com/media/press/2015/09/c0916.html

https://honeywell.com/News/Pages/Honeywell-To-Acquire-Elster-A-Global-Leader-In-Gas-Heating-Controls-Metering-And-Advanced-Technologi.aspx

http://ir.hillenbrand.com/investor-relations/news/news-details/2015/Hillenbrand-Completes-Acquisition-of-ABEL-Pumps/default.aspx

https://www.hoerbiger.com/en-94/pages/561

http://investors.sensata.com/phoenix.zhtml?c=210277&p=irol-newsArticle&ID=2072678

mailto:[email protected]





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WHAT WE’RE READING

2

THE ROBOTICS REVOLUTION: THE NEXT GREAT LEAP IN MANUFACTURING

GLOBAL MACHINE CONDITIONING MARKET INSTRUMENTATION MARKET TO REACH $2.3 BILLION BY 2020

LABORATORY ANALYTICAL INSTRUMENTATION MARKET TO REACH $11.4 BILLION BY 2021

Boston Consulting GroupThe use of advanced industrial robots is nearing the point of takeoff, a development that could power a new wave ofproductivity growth in many industries and lead to changes of up to 5 percentage points in the cost competitivenessof major export economies relative to the U.S., according to new research by The Boston Consulting Group. The studyprojects that investment in industrial robots will accelerate markedly over the next decade, aided by a combinationof price and performance improvements, from annual growth that now averages 2 to 3 percent to around 10percent. As a result, the total cost of manufacturing labor in 2025 could be 16 percent lower, on average, in theworld's 25 largest goods-exporting nations than they would be otherwise. Depending on the industry and country,output per worker could rise by an estimated 10 to 30 percent over and above productivity gains that typically comefrom other measures.

Read the full article here.

Mordor IntelligenceAs companies are increasingly focusing on asset utilization and increasing productivity, the global machine conditionmonitoring market is expected to grow from $1.7 billion in 2015 to $2.3 billion by 2020, representing a compoundedannual growth rate of 6.5%. Predictive maintenance, through technology such as corrosion monitoring equipment,lubricating oil analysis equipment, motor current signature analysis, thermography equipment, ultrasound emissionequipment, and vibration monitoring equipment, are expected to be utilized in harsh environments, such as energy &power, aerospace, chemicals and heavy industrials, to further prevent major damage or even total failure of theequipment.


Frost & SullivanDriven by increasingly stringent regulatory safety requirements, the global laboratory analytical instrumentationmarket is expected to increase from $7.5 billion in 2014 to over $11.3 billion in 2015 according to a recent study byFrost & Sullivan. The food industry is anticipated to continue to be the prominent user for these instruments, particularlywith sophisticated chromatographic and spectroscopic techniques designed to improve the quality of testing, as wellas mass spectrometry products due to sensitive detection capabilities. Industries ranging from environmental tobiopharmaceuticals to clinical research and diagnostics are also expected to further drive global demand forlaboratory analytical instruments.



FED DOUBTS GROW ON 2015 RATE HIKE

Wall Street JournalThe chances of a Federal Reserve rate increase in 2015 are diminishing amid new signs of anemic economic activity,a disappointing development for central bank officials who have been hoping to move this year after a prolongedperiod of easy-money policies. Lackluster readings on consumer spending, inflation and jobs have virtually eliminatedthe chances of a move in October. The recent trove of data hasn’t reassured top officials about the economicoutlook, with two Fed governors expressing doubts about whether the timing will be right this year. The CommerceDepartment has reported seasonally adjusted retail sales rose just 0.1% in September, and actually fell from August’slevels once car sales were stripped out. The Labor Department also reported producer prices—an indication ofinflation at the wholesale level—fell 0.5% in September and were down 1.1% from a year earlier, the largest 12-monthdecline during this expansion.


https://www.bcgperspectives.com/content/articles/lean-manufacturing-innovation-robotics-revolution-next-great-leap-manufacturing/

http://www.prnewswire.com/news-releases/global-machine-condition-monitoring-market---growth-trends--forecasts-2015---2020-300147408.html

http://ww2.frost.com/news/press-releases/rapid-adoption-laboratory-analytical-instrumentation-increases-across-industries/

http://www.wsj.com/articles/fed-doubts-grow-on-2015-rate-hike-1444866104

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M&A TRANSACTIONS

3

RECENT M&A TRANSACTIONS


Date Target Vertical Business Description Acquirer

10/14/2015 Professional Serv ice Industries, Inc.

Test Serv ices Prov ides building materials testing, geotechnical serv ices, and property and environmental assurance to commercial and civ il construction markets.

Intertek Group plc

10/1/2015 Automated Quality Technologies, Inc.

Test and Measurement Manufactures sensors and measurement equipment forsemiconductor, automotive, packaging, and laboratory research applications.

Motion Tech Automation, LLC

10/1/2015 PRIAMUS SYSTEM TECHNOLOGIES AG

Process / Motion Control Prov ides quality assurance systems for injection moldings applications. Barnes Group Inc.

9/28/2015 President Engineering Group Limited

Flow Control Offers cryogenic valves, flow measurement and control products for oil & gas applications.

Parker-Hannifin Corporation

9/24/2015 Clearlogx, Inc. Flow Control Manufactures water treatment chemical feed automation and control products for municipal drinking water, wastewater treatment, and water reuse applications.

H2O Innovation Inc.

9/24/2015 Outreach Technologies, Inc.

Test Serv ices Prov ides radiochemical analysis and environmental test serv ices. Env ironmental Science Corp.

9/16/2015 Adept Technology Inc. Process / Motion Control Manufactures industrial and mobile robots for electronics, food, semiconductor, warehouse/logistics, medical, and automotive markets.

OMRON Corporation

9/14/2015 Dansk Institut for Certificering A/S

Test Serv ices Prov ides quality assurance and certification serv ices for the transportation, energy, steel, and engineering sectors.

Intertek Group plc

9/9/2015 Seahorse Bioscience, Inc. Test and Measurement Manufactures analytical instruments, biomanufacturing systems, and consumable labware products for biological research and drug discovery to the life sciences industry.

Agilent Technologies Inc.

9/8/2015 VENTREX Automotive GmbH

Flow Control Prov ides compressors and valves to the automotive industry. Aalberts Industries N.V.

9/1/2015 MatriX Technologies GmbH Test and Measurement Prov ides automated X-ray in-line inspection solutions for semiconductor, electronics/PCB assembly, and automotive industries.

Nordson Corporation

9/1/2015 ABEL GmbH & Co. KG Flow Control Manufactures reciprocating positive displacement pumps used in mining and mineral, wastewater management, ceramics, chemical, food, oil & gas, energy, and power industries.

Rotex Global, LLC; Coperion Corporation; Terrasource Global

8/31/2015 Engineered Products Company

Test and Measurement Prov ides filter monitors, switches, and sensors that are used to monitor automotive, construction, agriculture, and irrigation applications.

Donaldson Company, Inc.

8/31/2015 Unity Scientific, LLC Test and Measurement Manufactures infrared spectrometers for at-line, bench, and process environments.

Union Park Capital

8/31/2015 KB Electronics, Inc. Process / Motion Control Prov ides motion control products for industrial automation, HVAC, pumps, and material handling systems.

Nidec Corporation

8/28/2015 Bifold Group Limited Flow Control Offers hydraulic and pneumatic valves and components for the oil & gas and general industrials markets.

Rotork plc

8/27/2015 Draker Inc. Process / Motion Control Offers monitoring, management, and control solutions for commercial utility-scale photovoltaic systems.

BlueNRGY Group Limited

8/25/2015 Cameron International Corporation

Flow Control Prov ides flow control products, systems, and serv ices to the industrials, oil & gas, and energy markets.

Schlumberger Limited

8/25/2015 Thermocouple Technology, Inc.

Test and Measurement Manufactures temperature measurement and control devices for energy, chemical, engineering, aerospace, pharmaceutical, food & beverage, and non-ferrous metal industries.

Viking Capital Holdings

8/24/2015 Anmar Metrology Inc. Test Serv ices Prov ides calibration and repair serv ices for test and measurement equipment.

Transcat Inc.

8/20/2015 IEP Technologies, LLC Test and Measurement Offers explosion protection systems and serv ices that suppress, isolate, and vent potential combustible dust or vapor explosions in process industries.

HOERBIGER Holding AG

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M&A TRANSACTIONS

4


RECENT M&A TRANSACTIONS (CONTINUED)


8/17/2015 Contact Co., Ltd. Process / Motion Control Manufactures automated cleaning systems for semiconductor-related equipment.

Brooks Automation, Inc.

8/17/2015 Vision Experts GmbH Process / Motion Control Prov ides test and inspection systems to packaging manufacturers. I sra Vision AG

8/13/2015 Affinia Group Holdings Inc. Flow Control Prov ides filtration products to the industrials, transportation, and automotive industries.

Mann + Hummel Holding GmbH

8/12/2015 Solare Datensysteme GmbH

Test and Measurement Offers monitoring systems and components for photovoltaic plants. BKW Inc.

8/11/2015 Qualtest, Inc. Test Serv ices Prov ides testing laboratory serv ices to aerospace, defense, military, medical, and other commercial industries.

National Technical Systems Inc.

8/6/2015 Valley Roller Company, Inc.

Process / Motion Control Manufactures roll coverings for flexible packaging, plastics, paper, and industrial applications.

Maxcess International, Inc.

8/4/2015 Prodomax Automation Ltd. Process / Motion Control Prov ides automated manufacturing solutions for assembly, welding, machining, material handling, and laser cutting/welding applications and processes.

Kensington Capital Partners Limited

8/3/2015 M & M INTERNATIONAL Srl Flow Control Manufactures solenoid and piston-actuated valves and other components for the vending and industrial fluid control industry.

Rotork plc

8/3/2015 Sulzer, Ltd. Flow Control Prov ides pumping solutions, rotating equipment maintenance and serv ices, as well as separation, reaction, and mixing technology solutions to the oil & gas, power generation, and industrial markets.

Renova Group

8/3/2015 IDEX Corporation, I smatec Product Line

Flow Control Manufactures tubing, gear, and piston pumps to the chemical, pharmaceutical, food & beverage, environmental, industrials, and electronics industries.

Cole-Parmer Instrument Company, LLC

8/3/2015 Rimrock Corporation Process / Motion Control Prov ides intelligent automation products and systems for industrial applications.

Lincoln Electric Holdings Inc.

8/3/2015 B+ Equipment SAS Process / Motion Control Manufactures automated packing and wedging solutions for order fulfilment applications.

Sealed Air Corporation

8/1/2015 Ray-Ran Test Equipment Ltd.

Test and Measurement Offers polymer testing equipment to the plastics, packaging, and industrial markets.

Industrial Physics ROW Holdings, Inc.

7/30/2015 Delta Tau Data Systems, Inc.

Process / Motion Control Manufactures motion and machine control products for various applications, including intelligent automation, robotics, semiconductor, machine tools, and medical and packaging equipment.

OMRON Corporation

7/30/2015 Custom Sensors & Technologies, Inc.

Test and Measurement Prov ides mission-critical linear, rotary position, and motion control sensors to the aerospace, industrial, agricultural, and medical device markets.

Sensata Technologies Holding N.V.

7/30/2015 IEF-Werner GmbH Process / Motion Control Offers components and systems for intelligent automation applications. INDUS Holding AG

7/30/2015 KL Products, Inc. Process / Motion Control Manufactures process automation systems for food & beverage, packaging, and industrial applications.

Zoetis Inc.

7/28/2015 Elster Group SE Flow Control Prov ides gas, electricity, and water meters as well as thermal gas solutions for commercial, industrial, and residential markets.

Honeywell International Inc.

7/27/2015 Ev ic International Test Serv ices Offers laboratory and testing serv ices for the chemical, cosmetics, food & beverage, medical, and pharmaceutical industries.

Eurofins Scientific SA

7/26/2015 Magnetek Inc. Process / Motion Control Prov ides digital power control systems for material handling and mining applications.

Columbus McKinnon Corporation

7/23/2015 Shanghai INESA Scientific Instrument Co., Ltd.

Test and Measurement Manufactures scientific and analytical instruments for the food safety, water quality testing, sugar, pharmaceutical, and education industries.

INESA Electron Co., Ltd.

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M&A TRANSACTIONS

5


RECENT M&A TRANSACTIONS (CONTINUED)


7/23/2015 THERMOPLAY S.p.A. Process / Motion Control Offers nozzles, manifolds, controllers, and components to the packaging, automotive, cosmetics, medical, and electronics markets.

Barnes Group Inc.

7/23/2015 Centro di Diagnostica Clinica Quarantelli Srl

Test Serv ices Prov ides laboratory diagnostics and testing serv ices to the healthcare industry.

Lifebrain AG

7/22/2015 Applied Inspection Ltd. Test Serv ices Offers non-destructive testing, material testing, and training serv ices to the petrochemical, power, transportation, mining, gas, construction, industrials, and aerospace industries.

Rockwood Serv ice Corporation

7/20/2015 AVEVA Group plc Test and Measurement Prov ides information management software to the oil & gas, marine, power, chemical, pharmaceutical, mining, and pulp and paper industries.

Schneider Electric SE

7/17/2015 Rodelta Pumps International BV

Flow Control Manufactures submersible, cantilever, and centrifugal pumps for oil & gas, paper, and chemical industries.

Kirloskar Prompen BV

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PUBLIC MARKETS OVERVIEW

6


TEV / LTM EBITDA TEV / 2015E EBITDA

Test and Measurement Flow Control Process / Motion Control Test Serv ices

10.6x

10.7x

11.7x

8.8x

10.0x

10.4x

9.7x

11.3x

15.7x

11.2x

11.6x

12.7x

Engineering and Consulting

Testing, Inspection, and Certification

Condition Monitoring

Actuators and Positioners

Intelligent Automation

Motion and Drives

Valves and Fittings

Pumps and Filtration

Life Sciences and Laboratory

Technology and Software

Sensors

Instrumentation

9.3x

10.3x

9.2x

8.8x

9.3x

9.3x

10.2x

11.3x

13.8x

10.5x

10.5x

11.6x






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

NET DEBT / LTM EBITDA AVERAGE EBITDA MARGIN (2013 – 2015P)

2.8x

1.7x

1.3x

2.3x

0.4x

1.3x

1.8x

1.1x

1.4x

2.1x

2.5x

1.4x






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

9.9%

16.8%

20.8%

14.9%

16.4%

16.9%

13.9%

17.0%

20.7%

16.8%

19.9%

16.7%






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

AVERAGE CAPEX / REVENUE (2013 – 2015P) RESEARCH & DEVELOPMENT / LTM REVENUE

3.3%

4.4%

4.0%

2.8%

2.8%

3.1%

2.5%

3.4%

3.6%

4.3%

4.0%

2.9%






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

0.1%

0.3%

10.4%

3.0%

3.7%

4.1%

1.4%

2.1%

5.6%

8.5%

3.9%

7.1%






Motion and Drives

Valves and Fittings




Sensors

Instrumentation

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GLOBAL M&A TRENDS

7

GENERAL MARKET OBSERVATIONS

INDUSTRIAL TECHNOLOGY QUARTERLY M&A ACTIVITY

The global M&A industry saw $3.2 trillion in deals announced during the first nine months of 2015, a 31.5% increasecompared to the $2.4 trillion completed during the same time period in 2014.

The U.S. M&A environment remains strong with aggregate deal value increasing by 24.8% in Q3 2015 year overyear.

European M&A activity has slowed in Q3 2015, with aggregate deal value decreasing by 2.7% during Q3 2015year over year.

The global Industrial Technology sector saw 147 deals close during Q3 2015, demonstrating steady activity through2015.


2010 2011 2012 2013 2014 2015

0

50

100

150

200

250

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Num

ber o

fAnn

ounc

ed M

&A D

eals

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98

100

102

104

106

108

U.S. EU-28

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

2015Q2

U.S. EU-28

ECONOMIC UPDATE

8

INDUSTRIAL PRODUCTION

NEW ORDERS

ECONOMIC SENTIMENT

U.S. Real GDP increased by 1.0% in Q2 2015, increasing at an annual rate of 3.9%.

The increase primarily reflected positive contributions from PCE, exports,nonresidential fixed investment, state and local government spending, andresidential fixed investment. PNC economists forecast GDP growth of 2.5% and unemployment reaching

5.3% in 2015.

EU-28 Seasonally adjusted GDP in the EU for Q2 2015 rose by 0.4%, with 1.9%

annualized growth.

U.S. Industrial production decreased slightly by 0.4% from July 2015 to August 2015.

The decrease in August is largely due to a slowdown in manufacturing andmining output. Capacity utilization has moved to 77.6% as of August 2015.

EU-28 Industrial production during August 2015 modestly decreased by 0.3%, led by

a decrease in the production of energy, capital goods, and non-durableconsumer goods. Capacity utilization has increased to 81.4% as of August2015.

U.S. In August 2015, new orders decreased by 2.0%, primarily led by a slowdown in

purchases of transportation equipment. Construction equipment andelectromedical, measuring, and control instruments saw new orders rise by5.9% and 3.7%, respectively.

EU-28 The EU saw total new orders fall by 1.8% in August 2015, resulting in a total

decrease of 0.4% through Q3 2015.

U.S. The Leading Economic Index increased by 0.1% from July 2015 to August 2015

to reach 123.7.

EU-28 The Euro Commission Economic Sentiment Index slightly increased to 107.0 in

August 2015.


GROSS DOMESTIC PRODUCT

Q2: 0.4%

Q2: 1.0%

Aug-15: 103.1

Aug-15: 107.1

90

100

110

120

130

U.S. EU-28

Aug-15: 106.8

90

100

110

120

130

U.S. EU-28

Aug-15: 123.7

Aug-15: 107.0

Aug-15: 116.5

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PUBLIC COMPARABLES

10


As of October 15, 2015 ($ in Millions, except per share amounts)

TEST AND MEASUREMENT

Test and Measurement Public Comparables

LTM Margins Current 1-Month 1-Year % of R&D / Sales TEV / EBITDAEBITDA Gross TEV Price Change Change LTM High LTM LTM 2015E

InstrumentationAMETEK, Inc. 26.0% 35.4% $14,544 $54.53 2.1% 16.9% 94.6% 3.0% 13.8x 13.2xDanaher Corp. 22.7% 53.1% $60,763 $89.06 0.7% 23.7% 95.8% 6.6% 13.2x 12.7xSpectris plc 18.0% 57.4% $3,386 $26.51 (1.4%) 0.3% 70.8% 7.6% 10.0x 10.3xBadger Meter Inc. 16.4% 36.0% $939 $60.52 2.3% 16.9% 91.9% 2.6% 15.5x 15.8xTeledyne Technologies Inc. 16.4% 38.0% $3,690 $84.37 (13.2%) (10.5%) 75.5% 18.1% 9.5x 9.9xNational Instruments Corporation 16.3% 74.5% $3,247 $28.48 0.6% 5.2% 85.1% 18.8% 16.1x 13.9xESCO Technologies Inc. 15.6% 39.1% $1,016 $37.85 4.9% 12.1% 95.3% 5.3% 12.1x 11.7xJenoptik AG 12.3% 34.5% $1,006 $15.29 12.7% 39.4% 99.4% 6.7% 11.8x 10.0xOxford Instruments plc 11.5% 44.4% $790 $10.61 26.5% (31.2%) 53.3% 8.0% 12.0x 9.1xI tron, Inc. 6.3% 29.3% $1,606 $35.10 17.4% (6.4%) 80.4% 8.9% 13.3x 11.5x

Median 16.4% 38.5% 2.2% 8.7% 88.5% 7.1% 12.7x 11.6x

Mean 16.1% 44.2% 5.2% 6.6% 84.2% 8.6% 12.7x 11.8x

SensorsSensata Technologies Holding NV 23.5% 33.6% $10,585 $47.41 5.4% 9.7% 80.3% 3.9% 16.1x 13.9xFLIR Systems, Inc. 22.7% 49.4% $3,771 $28.27 (1.1%) (3.6%) 82.0% 9.0% 10.8x 10.1xMeggitt PLC 21.9% 40.6% $6,689 $7.22 (2.6%) 6.8% 78.7% 3.6% 11.9x 9.9xHoneywell International Inc. 18.3% 29.5% $77,316 $98.50 (1.8%) 15.7% 91.7% 4.9% 10.8x 9.8xMTS Systems Corporation 14.8% 39.5% $939 $64.02 8.9% (4.4%) 82.7% 3.9% 11.3x 10.9xFirst Sensor AG 10.2% 49.7% $181 $13.27 (2.7%) (4.4%) 89.9% 0.2% 12.1x 11.4x

Median 20.1% 40.0% (1.4%) 1.6% 82.4% 3.9% 11.6x 10.5x

Mean 18.6% 40.4% 1.0% 3.3% 84.2% 4.2% 12.1x 11.0x

Technology and SoftwareHexagon AB 25.0% 59.5% $13,604 $32.10 0.0% 12.8% 13.9% 10.1% 17.0x 13.6xMuehlbauer Holding AG & Co. KGaA 24.0% 38.8% $337 $25.99 5.6% 12.4% 86.1% NM 4.5x 6.1xFARO Technologies Inc. 11.2% 55.1% $480 $36.55 0.9% (28.4%) 55.7% 8.5% 12.6x 12.2xMistras Group, Inc. 9.2% 29.6% $650 $18.65 33.2% 12.8% 86.3% 0.3% 9.8x 8.9x

Median 17.6% 47.0% 3.3% 12.6% 70.9% 8.5% 11.2x 10.5x

Mean 17.4% 45.8% 9.9% 2.4% 60.5% 6.3% 11.0x 10.2x

Life Sciences and LaboratoryWaters Corporation 33.2% 59.0% $9,273 $120.60 (3.3%) 26.8% 87.8% 5.7% 13.7x 13.8xMesa Laboratories Inc. 30.4% 61.3% $409 $107.47 (3.6%) 60.3% 85.3% 4.8% 18.4x NAThermo Fisher Scientific, Inc. 23.9% 46.1% $63,255 $125.47 0.3% 12.9% 88.8% 4.1% 15.7x 14.9xFEI Company 23.5% 49.6% $2,770 $75.63 (0.8%) (2.3%) 81.1% 10.4% 12.6x 12.2xMettler-Toledo International Inc. 21.6% 47.4% $8,457 $288.01 (2.8%) 23.2% 82.3% 4.9% 16.0x 14.9xSartorius Aktiengesellschaft 20.8% 49.1% $4,245 $224.29 (2.7%) 87.0% 88.6% 5.3% 18.3x 14.9xAgilent Technologies Inc. 17.2% 52.3% $11,374 $35.58 (1.6%) (31.3%) 64.2% 10.1% 9.5x 12.8xPerkinElmer Inc. 15.6% 45.4% $6,267 $48.25 (0.3%) 21.1% 88.6% 5.6% 17.9x 13.9xBruker Corporation 12.4% 43.8% $2,889 $17.91 (1.4%) (4.8%) 80.2% 9.4% 13.9x 12.6x

Median 21.6% 49.1% (1.6%) 21.1% 85.3% 5.6% 15.7x 13.8x

Mean 22.1% 50.4% (1.8%) 21.4% 83.0% 6.7% 15.1x 13.7x

Overall Median 18.0% 45.4% 0.0% 12.1% 85.1% 5.7% 12.6x 12.2x

Overall Mean 18.7% 45.6% 2.8% 10.0% 80.6% 6.8% 13.1x 11.9x

Stock Performance

PAGE |

PUBLIC COMPARABLES

11

FLOW CONTROL



Flow Control Public Comparables


Pumps and FiltrationGraco Inc. 26.9% 53.8% $4,272 $69.39 (0.8%) (2.1%) 84.5% 4.6% 12.7x 12.6xIDEX Corporation 24.6% 44.5% $6,358 $74.87 4.8% 10.9% 93.2% 1.8% 12.5x 12.5xIMI plc 19.3% 44.5% $4,645 $15.43 (4.3%) (15.4%) 68.6% 2.9% 9.2x 10.0xEssentra plc 18.9% 62.4% $4,021 $13.18 4.3% 26.2% 79.7% 0.8% 13.7x 12.2xFlowserve Corp. 17.6% 34.5% $7,135 $43.00 (0.6%) (29.7%) 62.6% 0.9% 8.5x 8.9xPentair plc 17.0% 34.8% $13,319 $56.65 4.8% (6.9%) 81.3% 1.7% 11.7x 11.4xITT Corporation 16.5% 33.5% $2,828 $37.01 0.8% (1.4%) 81.6% 3.1% 6.8x 6.9xXylem Inc. 16.2% 38.4% $6,982 $34.74 5.2% 4.3% 88.6% 2.6% 11.5x 11.3xTrelleborg AB 16.1% 35.2% $5,434 $16.25 (1.1%) 4.4% 74.3% 1.4% 11.7x 10.9xESCO Technologies Inc. 15.6% 39.1% $1,016 $37.85 4.9% 12.1% 95.3% 5.3% 12.1x 11.7xDonaldson Company, Inc. 15.3% 34.1% $4,238 $28.72 (6.1%) (23.7%) 66.3% 2.6% 11.7x 11.7xGorman-Rupp Co. 14.5% 24.2% $666 $26.11 9.1% (16.8%) 78.9% NM 11.0x 11.5xFranklin Electric Co., Inc. 13.1% 31.7% $1,465 $27.19 (5.9%) (23.8%) 67.7% 1.9% 11.2x 11.2xColfax Corporation 13.0% 32.1% $4,959 $27.61 (23.7%) (48.0%) 47.9% 1.0% 9.3x 10.0xSPX FLOW, Inc. 12.6% 34.3% $1,752 $36.76 NM NM 87.4% NM 5.4x 6.2xSulzer, Ltd. 11.3% 31.5% $2,970 $104.71 3.6% (0.6%) 82.8% 2.3% 7.9x 9.5x

Median 16.1% 34.6% 0.8% (2.1%) 80.5% 2.1% 11.3x 11.3x

Mean 16.8% 38.0% (0.3%) (7.4%) 77.6% 2.4% 10.4x 10.5x

Valves and FittingsCurtiss-Wright Corporation 17.8% 34.5% $3,791 $65.57 (2.5%) (0.8%) 84.5% 2.9% 9.6x 8.9xThe Weir Group PLC 16.3% 31.9% $5,384 $19.21 (3.6%) (43.2%) 53.2% 1.0% 9.3x 10.4xMueller Water Products, Inc. 15.6% 29.9% $1,782 $8.38 (1.1%) (2.8%) 79.5% 1.2% 9.7x 9.2xParker-Hannifin Corporation 14.7% 24.2% $14,976 $102.37 (5.4%) (0.6%) 76.7% 3.2% 8.0x 8.6xCrane Co. 14.7% 34.5% $3,373 $48.51 (5.1%) (15.6%) 68.8% 2.4% 8.1x 7.3xAalberts Industries NV 14.5% 61.0% $4,469 $32.05 5.3% 34.7% 92.2% NM 11.5x 10.5xWatts Water Technologies, Inc. 13.3% 36.5% $2,236 $55.95 3.5% 0.9% 85.9% 1.6% 11.3x 11.5xIndutrade AB 13.3% 33.7% $2,328 $47.52 (4.8%) 37.7% 90.0% 1.1% 13.6x 12.0xCIRCOR International, Inc. 12.2% 31.9% $817 $46.00 1.8% (25.6%) 60.8% 1.0% 8.9x 10.2xMueller Industries Inc. 8.1% 14.0% $1,770 $31.78 4.5% 11.7% 85.5% NM 9.7x NA

Median 14.6% 32.8% (1.8%) (0.7%) 82.0% 1.4% 9.7x 10.2x

Mean 14.0% 33.2% (0.7%) (0.3%) 77.7% 1.8% 10.0x 9.8x

Overall Median 15.4% 34.4% (0.6%) (1.4%) 80.5% 1.8% 10.4x 10.5x

Overall Mean 15.7% 36.2% (0.5%) (4.6%) 77.6% 2.2% 10.2x 10.3x

Stock Performance

PAGE |

PUBLIC COMPARABLES

12

PROCESS / MOTION CONTROL



Process / Motion Control Public Comparables


Motion and DrivesAMETEK Inc. 26.0% 35.4% $14,544 $54.53 2.1% 16.9% 94.6% 3.0% 13.8x 13.2xDanaher Corp. 22.7% 53.1% $60,763 $89.06 0.7% 23.7% 95.8% 6.6% 13.2x 12.7xRockwell Automation Inc. 21.1% 43.1% $13,460 $105.24 (1.2%) 4.4% 82.8% 4.5% 9.8x 9.3xNidec Corporation 16.2% 23.3% $21,561 $71.76 (1.7%) 14.7% 75.1% 4.3% 15.2x 12.8xRexnord Corporation 15.9% 36.3% $3,372 $17.60 (9.1%) (31.6%) 58.8% 1.9% 10.4x 9.4xSchneider Electric SE 14.8% 37.2% $41,485 $58.61 (6.5%) (16.1%) 68.3% 2.2% 9.7x 9.0xABB Ltd. 14.4% 28.6% $44,467 $18.57 (0.0%) (8.3%) 79.1% 3.7% 8.2x 9.1xYaskawa Electric Corp. 11.5% 32.1% $3,072 $10.75 0.5% (11.0%) 69.5% 4.1% 8.0x 7.6xSiemens Aktiengesellschaft 10.5% 29.0% $100,957 $96.53 0.2% (7.4%) 79.6% 5.8% 11.5x 9.1x

Median 15.9% 35.4% (0.0%) (7.4%) 79.1% 4.1% 10.4x 9.3x

Mean 17.8% 36.1% (1.9%) (0.9%) 78.0% 3.8% 11.0x 10.4x

Intelligent AutomationFanuc Corporation 42.9% 51.1% $24,878 $165.90 2.4% (3.0%) 68.7% 4.4% 9.3x 10.9xRockwell Automation Inc. 21.1% 43.1% $13,460 $105.24 (1.2%) 4.4% 82.8% 4.5% 9.8x 9.3xMetso Corporation 20.0% 30.7% $3,976 $24.48 6.0% (26.4%) 72.7% 1.6% 5.2x 7.1xABB Ltd. 14.4% 28.6% $44,467 $18.57 (0.0%) (8.3%) 79.1% 3.7% 8.2x 9.1xFARO Technologies Inc. 11.2% 55.1% $480 $36.55 0.9% (28.4%) 55.7% 8.5% 12.6x 12.2xATS Automation Tooling Systems Inc. 11.1% 25.2% $1,080 $10.07 0.4% (6.0%) 78.2% NM 12.0x 10.2xKrones AG 9.1% 52.2% $3,161 $109.96 2.3% 32.5% 90.6% 0.0% 10.2x 9.1xKUKA Aktiengesellschaft 9.0% 24.4% $2,688 $74.63 (11.6%) 35.4% 79.1% 3.6% 10.3x 9.2x

Median 12.8% 36.9% 0.6% (4.5%) 78.6% 3.7% 10.0x 9.3x

Mean 17.4% 38.8% (0.1%) 0.0% 75.9% 3.8% 9.7x 9.6x

Actuators and PositionersPentair plc 17.0% 34.8% $13,319 $56.65 4.8% (6.9%) 81.3% 1.7% 11.7x 11.4xCTS Corporation 16.6% 33.2% $591 $19.76 6.3% 22.8% 99.9% 5.6% 8.9x 9.0xEaton Corporation plc 16.3% 31.6% $32,738 $52.10 (6.5%) (11.6%) 70.6% 2.9% 9.2x 9.2xParker-Hannifin Corporation 14.7% 24.2% $14,976 $102.37 (5.4%) (0.6%) 76.7% 3.2% 8.0x 8.6xMoog Inc. 13.4% 29.0% $2,990 $58.72 (3.9%) (16.0%) 74.1% 5.1% 8.6x 8.7xAltra Industrial Motion Corp. 13.2% 30.2% $864 $25.02 2.0% (7.6%) 77.4% 2.2% 8.4x 8.2x

Median 15.5% 30.9% (1.0%) (7.3%) 77.1% 3.0% 8.8x 8.8x

Mean 15.2% 30.5% (0.5%) (3.3%) 80.0% 3.4% 9.1x 9.2x

Condition MonitoringCognex Corporation 32.9% 75.1% $2,816 $35.60 (5.6%) (3.5%) 67.8% 12.7% 15.3x 18.9xAMETEK Inc. 26.0% 35.4% $14,544 $54.53 2.1% 16.9% 94.6% 3.0% 13.8x 13.2xMKS Instruments, Inc. 22.5% 44.4% $1,508 $34.92 1.0% 7.9% 88.1% 8.0% 8.1x 7.7xIsra Vision AG. 20.2% 55.7% $296 $61.43 3.9% 20.7% 80.8% 13.3% 12.0x 7.8xTeledyne Technologies Inc. 16.4% 38.0% $3,690 $84.37 (13.2%) (10.5%) 75.5% 18.1% 9.5x 9.9xNational Instruments Corporation 16.3% 74.5% $3,247 $28.48 0.6% 5.2% 85.1% 18.8% 16.1x 13.9xBasler AG 14.6% 50.1% $156 $43.74 (9.5%) (3.5%) 61.9% 7.1% 11.4x 8.5xSKF AB 12.7% 24.9% $11,005 $17.51 (12.3%) (10.3%) 62.3% 3.3% 9.5x 8.0x

Median 18.3% 47.2% (2.5%) 0.9% 78.1% 10.4% 11.7x 9.2x

Mean 20.2% 49.8% (4.1%) 2.9% 77.0% 10.5% 12.0x 11.0x

Overall Median 16.2% 35.4% 0.2% (3.5%) 78.2% 4.2% 9.8x 9.2x

Overall Mean 17.6% 39.0% (1.7%) (0.4%) 77.6% 5.6% 10.6x 10.1x

Stock Performance

PAGE |

PUBLIC COMPARABLES

13

TEST SERVICES



Test Services

LTM Margins Current 1-Month 1-Year % of TEV / EBITDAEBITDA Gross TEV Price Change Change LTM High LTM 2015E

Testing, Inspection, and CertificationALS Limited 20.6% 91.8% $2,262 $4.14 18.2% (13.1%) 84.8% 10.1x 10.3xSGS SA 20.4% 44.1% $15,845 $1,894.30 7.0% (3.4%) 83.3% 12.5x 12.7xBureau Veritas SA 19.5% 23.9% $12,333 $22.76 4.2% 4.1% 91.4% 12.6x 11.9xSAI Global Limited 18.5% 34.0% $835 $3.25 4.1% 2.7% 95.1% 10.7x 8.7xIntertek Group plc 17.9% 55.6% $7,508 $40.45 4.8% 3.8% 93.5% 12.5x 11.6xEurofins Scientific SA 16.8% 17.7% $5,434 $324.35 (1.2%) 46.9% 89.7% 18.0x 14.0xApplus Serv ices, S.A. 12.4% 34.9% $2,132 $9.83 0.8% (16.5%) 71.8% 9.1x 8.7xMistras Group, Inc. 9.2% 29.6% $650 $18.65 33.2% 12.8% 86.3% 9.8x 8.9xFurmanite Corporation 6.2% 24.8% $284 $6.69 (2.9%) (11.6%) 72.1% 9.0x 8.2x

Median 17.9% 34.0% 4.2% 2.7% 86.3% 10.7x 10.3x

Mean 15.7% 39.6% 7.6% 2.9% 85.3% 11.6x 10.6x

Engineering and ConsultingAbengoa SA 18.8% 43.7% $12,538 $1.47 (18.7%) (62.6%) 34.4% 8.1x 8.3xFCC, S.A. 11.8% 64.1% $8,762 $8.54 4.6% (51.5%) 46.1% 10.1x 9.3xTetra Tech Inc. 9.0% 16.1% $1,668 $26.66 3.9% 9.8% 95.8% 10.6x 8.2xARCADIS NV 7.1% 18.8% $2,923 $26.53 13.6% (10.9%) 74.2% 11.8x 9.4xJacobs Engineering Group Inc. 6.9% 16.7% $5,200 $40.57 3.5% (13.2%) 81.3% 6.2x 7.2xAmec Foster Wheeler plc 6.9% 12.6% $6,367 $12.49 5.5% (20.9%) 72.1% 12.3x 9.5xWSP Global Inc. 6.7% 17.5% $4,189 $36.91 15.2% 31.8% 97.8% 16.4x 12.6x

Median 7.1% 17.5% 4.6% (13.2%) 74.2% 10.6x 9.3x

Mean 9.6% 27.1% 3.9% (16.8%) 71.7% 10.8x 9.2x

Overall Median 12.1% 27.2% 4.4% (7.2%) 84.0% 10.7x 9.4x

Overall Mean 13.0% 34.1% 6.0% (5.7%) 79.4% 11.2x 10.0x

Stock Performance

PAGE |

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