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Industry Update: Industrial & Manufacturing M&A – November 2015

November, 2015

Stock price performance and valuation trends have been strong across most sectors. The following is an overview of the selected industries and their respective stock price performance over the last three years and current valuation levels [(Relative Stock Price) (Enterprise Value to EBITDA)]

– Aerospace & Defense (57.7%) (14.3x)
– Automotive (84.9%) (8.1x)
– Building Materials (56.3%) (16.5x)
– Business Services (65.8%) (15.8x)
– Distribution (-9.0%) (14.3x)
– Electrical Equipment (13.8%) (9.2x)
– Engineering Services (38.4%) (8.5x)
– Environmental Services (33.1%) (10.5x)
– Industrial Filtration (-2.7%) (8.1x)
– Machinery (49.6%) (11.2x)
– Packaging (29.2%) (9.5x)
– Paper & Forest Products (27.8%) (10.3x)

For year-to-date 2015, strategic buyers accounted for 91% of industrial manufacturing M&A transactions During 2014, strategic buyers accounted for just over 85% of the transactions.
For closed transactions, industrial manufacturing transaction multiples increased from 8.4x EBITDA and 1.3x revenue in 2014 to 12.1x EBITDA and 1.1x revenue year-to-date in 2015.

Notable publicly announced 2015 M&A transactions:
– Lockheed Martin Corporation entered into a definitive agreement to acquire Sikorsky Aircraft Corporation for $9.0 billion
– BorgWarner, Inc. entered into a definitive agreement to acquire Remy International, Inc. for approximately $1.3 billion
– SCA Americas, Inc. signed a definitive merger agreement to acquire Wausau Paper Corporation for approximately $693 million
– Westport Innovations, Inc. entered into a merger agreement to acquire Fuel Systems Solutions, Inc. for approximately $136 million
– Handy & Harman Ltd. made an offer to acquire SL Industries, Inc. for approximately $180 million

Notable IPO’s include TransUnion, Milacron Holdings Corporation, Blue Bird Corporation and Sunrun, Inc.

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