i Significant Q1 Transactions March 2, 2010 – Bain Capital, LLC signed a definitive agreement to acquire Styron Corp., a manufacturer and marketer of styrenes and polycarbonates, from The Dow Chemical Company (NYSE: DOW) for approximately $1.63 billion. March 1, 2010 – Bemis Co., Inc. (NYSE: BMS) completed the acquisition of the Alcan Packaging Food Americas division which comprises 23 flexible packaging facilities in the U.S., Canada, Mexico, Brazil, Argentina, and New Zealand of Alcan Packaging, Inc. for approximately $1.2 billion. February 23, 2010 – Pactiv Corp. (NYSE: PTV) completed the acquisition of PWP Industries, Inc., a manufacturer of plastic packaging products, for approximately $200 million. February 23, 2010 – Thomas & Betts Corporation (NYSE: TNB) completed the acquisition of PMA AG, a developer and manufacturer of polyamide cable protection systems, for approximately $114 million. January 29, 2010 – OM Group, Inc. (NYSE: OMG) completed the acquisition of EaglePicher Technologies, LLC, a designer, manufacturer, and supplier of power solutions for military and commercial customers, for approximately $170 million. January 29, 2010 – Bel Fuse, Inc. (NasdaqGS: BELF.B) completed the acquisition of Cinch Connectors, Inc., a designer, manufacturer, and supplier of electrical connectors, harnesses, cables, and assemblies for approximately $37.5 million. January 26, 2010 – Thomas & Betts Corp. (NYSE: TNB) completed the acquisition of JT Packard & Associates, Inc., a service provider for network‐critical power equipment, for approximately $22 million. For additional information, contact the NCA Industrial Growth Investment Banking Team: Edward Casas, MD Senior Managing Director Head of Navigant Capital Advisors 847/583‐1619 [email protected]Gregory F. Hagood, CFA Managing Director Investment Banking Practice Area Leader 404/504‐2017 [email protected]Matthew Caine, CFA Director Industrial Growth Group Head 404/504‐2010 [email protected]Alan J. Mustacchi Managing Director 646/227‐4348 [email protected]Julie DeLong, CFA Director Valuation Services 404/602‐5021 [email protected]About Navigant Capital Advisors Navigant Capital Advisors is the dedicated corporate finance business unit of Navigant Consulting, Inc. (NYSE: NCI). Navigant Consulting is a specialized independent consulting firm providing financial, operational, dispute and regulatory advisory services to large companies, financial institutions, legal counsel and government agencies. We offer independent and objective advice supported by advanced technical skills, proven competence and in‐depth industry knowledge. The NCA Quarterly Dialogue for Industrial Growth contains news, statistics, and trends impacting select companies within the Industrial Manufacturing and Distribution sectors. Analysis is further organized to include: (i) Analytical Instrumentation and Testing Equipment, (ii) Electronics and Components, (iii) Precision Machine Products, Tooling and Stampings, (iv) Metals (v) Resource Recovery and Waste Management, (vi) Chemicals, and (vii) Plastics and Packaging companies. Significant Q1 Transactions March 31, 2010 – Sherwin‐Williams Co. (NYSE: SHW) completed the acquisition of the industrial wood coatings business of Arch Chemicals, Inc. (NYSE: ARJ), a biocides company, for approximately $54 million. March 9, 2010 – Bruker Corporation (NasdaqGS: BRKR) entered into an agreement to acquire certain product lines of Varian, Inc. (NasdaqGS: VARI) for approximately $37.5 million. Industrial Growth Quarterly Dialogue Industrial Growth FIRST QUARTER 2010 QUARTERLY DIALOGUE Restructuring • Valuation • Mergers, Acquisitions & Divestitures • Private Placements Realizing Value … Delivering Results Atlanta • Chicago • New York • San Francisco Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC. Member FINRA/SIPC.
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i
Significant Q1 Transactions March 2, 2010 – Bain Capital, LLC signed a definitive agreement to acquire Styron Corp., a manufacturer and marketer of styrenes and polycarbonates, from The Dow Chemical Company (NYSE: DOW) for approximately $1.63 billion.
March 1, 2010 – Bemis Co., Inc. (NYSE: BMS) completed the acquisition of the Alcan Packaging Food Americas division which comprises 23 flexible packaging facilities in the U.S., Canada, Mexico, Brazil, Argentina, and New Zealand of Alcan Packaging, Inc. for approximately $1.2 billion.
February 23, 2010 – Pactiv Corp. (NYSE: PTV) completed the acquisition of PWP Industries, Inc., a manufacturer of plastic packaging products, for approximately $200 million.
February 23, 2010 – Thomas & Betts Corporation (NYSE: TNB) completed the acquisition of PMA AG, a developer and manufacturer of polyamide cable protection systems, for approximately $114 million.
January 29, 2010 – OM Group, Inc. (NYSE: OMG) completed the acquisition of EaglePicher Technologies, LLC, a designer, manufacturer, and supplier of power solutions for military and commercial customers, for approximately $170 million.
January 29, 2010 – Bel Fuse, Inc. (NasdaqGS: BELF.B) completed the acquisition of Cinch Connectors, Inc., a designer, manufacturer, and supplier of electrical connectors, harnesses, cables, and assemblies for approximately $37.5 million.
January 26, 2010 – Thomas & Betts Corp. (NYSE: TNB) completed the acquisition of JT Packard & Associates, Inc., a service provider for network‐critical power equipment, for approximately $22 million.
For additional information, contact the NCA Industrial Growth Investment Banking Team:
Edward Casas, MD Senior Managing Director Head of Navigant Capital Advisors 847/583‐1619 [email protected]
Gregory F. Hagood, CFA Managing Director Investment Banking Practice Area Leader 404/504‐2017 [email protected]
Matthew Caine, CFA Director Industrial Growth Group Head 404/504‐2010 [email protected]
Julie DeLong, CFA Director Valuation Services 404/602‐5021 [email protected] About Navigant Capital Advisors Navigant Capital Advisors is the dedicated corporate finance business unit of Navigant Consulting, Inc. (NYSE: NCI). Navigant Consulting is a specialized independent consulting firm providing financial, operational, dispute and regulatory advisory services to large companies, financial institutions, legal counsel and government agencies. We offer independent and objective advice supported by advanced technical skills, proven competence and in‐depth industry knowledge.
The NCA Quarterly Dialogue for Industrial Growth contains news, statistics, and trends impacting select companies within the Industrial Manufacturing and Distribution sectors. Analysis is further organized to include: (i) Analytical Instrumentation and Testing Equipment, (ii) Electronics and Components, (iii) Precision Machine Products, Tooling and Stampings, (iv) Metals (v) Resource Recovery and Waste Management, (vi) Chemicals, and (vii) Plastics and Packaging companies.
Significant Q1 Transactions
March 31, 2010 – Sherwin‐Williams Co. (NYSE: SHW) completed the acquisition of the industrial wood coatings business of Arch Chemicals, Inc. (NYSE: ARJ), a biocides company, for approximately $54 million.
March 9, 2010 – Bruker Corporation (NasdaqGS: BRKR) entered into an agreement to acquire certain product lines of Varian, Inc. (NasdaqGS: VARI) for approximately $37.5 million.
Atlanta • Chicago • New York • San Francisco Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC. Member FINRA/SIPC.
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Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
May 2010 To The Friends and Clients of Navigant Capital Advisors:
The U.S. industrial sector experienced a solid Q1’10 with good momentum across several sectors, including order volume with early and mid‐cycle industrials and v‐shaped book/bill ratios. Late Q1 seemed to be an inflection point for producers as many had remained cautious on outlooks as late as the end of February. During March, industrial spending did pick up, particularly with small equipment, repair services and exports to Asia. As reflected below, the ISM Index is above 50, a key threshold, having reached its highest point since mid 2004 and, consistent with history, has rebounded sharply. Also, the industrial sector profitability appears to have troughed in 2009 and is ahead of past cycles due to pricing discipline and flexible labor strategies. Obviously, all is not glowing as currency concerns and international monetary policies have weighed on the market and will impact demand and overall capacity utilization has not yet signaled evidence of recovery with its historically low percentages.
ISM Index: 1948‐2010 Median Earnings Margins: Industrials, 1989‐2010
We believe the current year to be a transition year for the industrial sector and expect stronger recovery to be sustained in 2011 as inventory excesses decline, production of newer technologies accelerate and more global project‐oriented demand solidifies. With a rising ISM above 50, which is evidence to an early‐mid cycle position, industrial sectors poised for growth and performance this year appear to be power generation, HVAC, oil & gas, water, aerospace parts and mining. To the flip side, construction still is mired in weak activity as commercial and industrial starts are at their lowest point in 45 years; while demand for electrical equipment has little visibility on growth over the next year. U.S. stimulus spending will continue to support industrial demand as roughly two‐thirds of the total funding ($499 billion) is targeted for industrial sector spending. Further, 75% of the approved funds have been allocated, while only 40% of the funds have been paid out; therefore, more upside is to come. We at NCA recognize these market dynamics and deep industry implications, particularly the impact on middle market companies. We welcome the opportunity to discuss with you our wide array of advisory services for industrial growth firms.
Matt Caine, CFA Director Navigant Capital Advisors [email protected] (404) 504‐2010 Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC. Member FINRA/SIPC.
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Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
INDUSTRIAL GROWTH QUARTERLY DIALOGUE
First Quarter 2010
TABLE OF CONTENTS
Upcoming Industry Conventions and Conferences 1
Market Summary 2
Industrial Growth Industry Stock Market Value Index 4
NCA Industrial Growth Universe – 5 Public Company Equity Market Value Analysis
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
1
Upcoming Industry Conventions and Conferences Analytical Instrumentation and Testing Equipment ISA 55th Analysis Division Symposium 2010 Denver X‐ray Conference April 25 – 29, 2010 August 2 – 6, 2010 New Orleans, Louisiana Denver, Colorado Electronics and Components Electronic Components and NI Worldwide Graphical System Design Technology Conference (ECTC) Conference & Exhibition June 1 – 4, 2010 August 3 – 5, 2010 Las Vegas, Nevada Austin, Texas Precision Machine Products, Tooling and Stampings EASTEC 2010 Association for Manufacturing Excellence May 25 – 27, 2010 November 15 – 19, 2010 West Springfield, Massachusetts Baltimore, Maryland Metals AISTech 2010 MetalCon International May 3 – 6, 2010 October 20 – 22, 2010 Pittsburgh, Pennsylvania Las Vegas, Nevada Resource Recovery and Waste Management Waste Expo 2010 The Air & Waste Management Association May 3 – 6, 2010 Annual Conference Atlanta, Georgia June 22 – 25, 2010 Calgary, Alberta, Canada Chemicals Chemical Week’s 15th Annual CFO Conference The American Institute of Chemical May 25, 2010 Engineers Annual Meeting New York, New York November 7 – 12, 2010 Salt Lake City, Utah Plastics and Packaging NPE 2010: International Plastics Showcase IoPP Annual Leadership Conference June 22 – 26, 2010 September 29 – 30, 2010 Chicago, Illinois St. Louis, Missouri
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
Analytical Instrumentation & Testing Equipment NASDAQ Composite Index S&P 500 Index
Valuation MetricsRecent Shares Market Enterprise Last Twelve Months
Stock Price Outstanding 52‐Week 52‐Week Capitalization Value EV/ EV/ EV/Company Ticker (3/31/2010) (mm) High Low ($mm) ($mm) Revenue EBITDA1 EBIT2
Analytical Instrumentation and Testing EquipmentAmetek Inc. AME $41.46 106.7 $41.84 $29.42 $4,424.7 $5,215.0 2.49x 12.1x 14.2xCognex Corp. CGNX 18.49 39.7 19.81 12.41 733.4 558.0 3.18x 228.9x NMElectro Scientific Industries Inc. ESIO 12.81 27.6 14.60 5.71 353.1 201.2 1.87x NM NMESCO Technologies Inc. ESE 31.81 26.4 46.87 29.90 841.1 976.2 1.67x 11.7x 14.5xHEICO Corp. HEI 51.56 26.1 52.11 23.36 1,159.2 1,331.7 2.45x 12.4x 14.5xMeasurement Specialties Inc. MEAS 14.71 14.5 16.23 3.73 213.5 269.8 1.41x 14.7x 69.8xMettler‐Toledo International, Inc. MTD 109.20 33.7 111.45 49.93 3,683.9 3,893.2 2.25x 12.3x 13.8xMTS Systems Corp. MTSC 29.03 16.5 30.92 20.04 479.0 407.1 1.07x 11.6x 17.3xVarian Inc. VARI 51.78 29.1 52.00 23.00 1,504.7 1,294.2 1.62x 13.6x 18.9x
High 3.18x 14.7x 18.9xLow 1.07x 11.6x 13.8x
[1] Cognex Corp. is excluded from the EV/EBITDA calculations. Mean 2.00x 12.6x 15.5x[2] Measurement Specialties Inc . is excluded from the EV/EBIT calculations. Median 1.87x 12.3x 14.5x
March 9, 2010 – Bruker Corporation (NasdaqGS: BRKR), a designer and manufacturer of life science and materials research systems, and related products, entered into a definitive asset purchase agreement to acquire certain product lines of Varian, Inc. (NasdaqGS: VARI) that design and manufacture scientific instruments for approximately $37.5 million. January 26, 2010 – AMETEK, Inc. (NYSE: AME), a manufacturer and seller of electronic instruments and electromechanical devices, completed the acquisition of the assets of Sterling Ultra Precision, Inc., a distributor of ultra‐precision machining systems for the production of contact lenses and intra‐ocular lenses. The financial terms of the transaction were not disclosed. January 7, 2010 – Mettler‐Toledo International, Inc. (NYSE: MTD), a manufacturer and supplier of precision instruments and services worldwide, completed the acquisition of the assets of Anachem, Ltd., a distributor of liquid handling products, plastics, and consumables, from Diploma PLC (LSE: DPLM) for approximately $14 million.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
Ametek Inc. $2,098.4 HEICO Corp. ‐6.1%Mettler‐Toledo International, Inc. 1,728.9 ESCO Technologies Inc. ‐6.6%Varian, Inc. 799.7 Mettler‐Toledo International, Inc. ‐12.4%ESCO Technologies Inc. 584.4 Measurement Specialties Inc. ‐14.6%HEICO Corp. 543.4 Ametek Inc. ‐17.1%MTS Systems Corp. 381.2 Varian, Inc. ‐18.7%Measurement Specialties Inc. 191.3 MTS Systems Corp. ‐18.8%Cognex Corp. 175.7 Cognex Corp. ‐27.6%Electro Scientific Industries Inc. 107.4 Electro Scientific Industries Inc. ‐58.3%
Ametek Inc. 17.4% Ametek Inc. 20.6%HEICO Corp. 16.9% HEICO Corp. 19.8%Mettler‐Toledo International, Inc. 16.3% Mettler‐Toledo International, Inc. 18.3%ESCO Technologies Inc. 11.5% ESCO Technologies Inc. 14.3%Varian, Inc. 8.6% Varian, Inc. 11.9%MTS Systems Corp. 6.2% Measurement Specialties Inc. 9.6%Measurement Specialties Inc. 2.0% MTS Systems Corp. 9.2%Cognex Corp. ‐4.1% Cognex Corp. 1.4%Electro Scientific Industries Inc. ‐42.3% Electro Scientific Industries Inc. ‐30.8%
Electro Scientific Industries Inc. 0.0% Electro Scientific Industries Inc. 0.0xCognex Corp. 0.0% Cognex Corp. 0.0xVarian, Inc. 2.8% Varian, Inc. 0.2xHEICO Corp. 7.2% HEICO Corp. 0.4xMTS Systems Corp. 17.1% Mettler‐Toledo International, Inc. 0.9xESCO Technologies Inc. 24.7% MTS Systems Corp. 1.2xMettler‐Toledo International, Inc. 29.3% ESCO Technologies Inc. 2.0xMeasurement Specialties Inc. 32.5% Ametek Inc. 2.4xAmetek Inc. 39.9% Measurement Specialties Inc. 4.4x
SIZE HISTORICAL GROWTH(Revenue in $mm) (Annual Revenue)
[1] Bel Fuse, Inc. is excluded from the EV/EBITDA calculations. Mean 1.25x 10.7x 17.5x[2] Littlefuse, Inc. and Molex, Inc. are excluded from the EV/EBIT calculations. Median 1.28x 11.2x 15.5x
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Electronics & Components (continued)
First Quarter 2010 News
February 23, 2010 – Thomas & Betts Corporation (NYSE: TNB), a designer and manufacturer of electrical components for industrial, construction, utility, and communications markets, completed the acquisition of PMA AG, a developer and manufacturer of polyamide cable protection systems, for approximately $114 million. February 3, 2010 – Coleman Cable, Inc. (NasdaqGM: CCIX), a designer, manufacturer, and supplier of electrical wire and cable products, completed a private placement of senior notes due 2018 for gross proceeds of $235 million. The use of proceeds is to fund the repurchase, repayment or other discharge of all of its outstanding 9.875% senior notes due 2012. January 29, 2010 – Bel Fuse, Inc. (NasdaqGS: BELF.B), a designer, manufacturer, and seller of products used in networking, telecommunications, high speed data transmission, and consumer electronics, completed the acquisition of Cinch Connectors, Inc., a designer, manufacturer, and supplier of electrical connectors, harnesses, cables, and assemblies, from SAFRAN USA, Inc. for approximately $37.5 million. January 26, 2010 – Thomas & Betts Corp. (NYSE: TNB) completed the acquisition of JT Packard & Associates, Inc., a service provider for network‐critical power equipment, from S.R. Bray Corporation for approximately $22 million.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Electronics & Components (continued)
Benchmarking
Eaton Corporation $11,873.0 Littelfuse Inc. ‐19.0%Cooper Industries plc 5,069.6 Baldor Electric Co. ‐22.0%Molex Inc. 2,479.7 Cooper Industries plc ‐22.3%Thomas & Betts Corp. 1,898.7 Molex Inc. ‐22.5%Baldor Electric Co. 1,524.1 Eaton Corporation ‐22.8%Coleman Cable, Inc. 504.2 Thomas & Betts Corp. ‐23.2%Littelfuse Inc. 430.1 Bel Fuse Inc. ‐29.3%Technitrol Inc. 398.8 Technitrol Inc. ‐36.3%Bel Fuse Inc. 182.8 Coleman Cable, Inc. ‐48.2%
Baldor Electric Co. 12.0% Baldor Electric Co. 16.6%Cooper Industries plc 11.3% Thomas & Betts Corp. 14.5%Thomas & Betts Corp. 10.6% Cooper Industries plc 14.2%Eaton Corporation 6.0% Littelfuse Inc. 13.5%Coleman Cable, Inc. 5.2% Molex Inc. 12.5%Littelfuse Inc. 5.0% Eaton Corporation 10.8%Technitrol Inc. 2.8% Coleman Cable, Inc. 9.8%Molex Inc. 2.5% Technitrol Inc. 7.4%Bel Fuse Inc. ‐3.1% Bel Fuse Inc. 0.6%
Bel Fuse Inc. 0.0% Bel Fuse Inc. 0.0xMolex Inc. 12.3% Molex Inc. 0.9xLittelfuse Inc. 14.3% Littelfuse Inc. 1.1xCooper Industries plc 24.0% Cooper Industries plc 1.3xThomas & Betts Corp. 33.2% Thomas & Betts Corp. 2.4xEaton Corporation 33.7% Eaton Corporation 2.7xBaldor Electric Co. 56.2% Technitrol Inc. 4.4xTechnitrol Inc. 66.1% Baldor Electric Co. 4.7xColeman Cable, Inc. 97.8% Coleman Cable, Inc. 4.8x
SIZE HISTORICAL GROWTH(Revenue in $mm) (Annual Revenue)
[1] Kennametal, Inc . is excluded from the EV/EBITDA calculations. Mean 1.26x 10.2x 16.5x[2] Kennametal, Inc . is excluded from the EV/EBIT calculations. Median 1.01x 9.9x 16.2x
March 31, 2010 – Hardinge Inc. (NasdaqGS: HDNG), a designer, manufacturer, and distributor of computer‐numerically controlled cutting lathes, machining centers, grinding machines, collets, chucks, index fixtures, and other industrial products, entered into a definitive agreement to acquire the assets of Jones & Shipman Precision Limited, a supplier of cylindrical, surface, and creep feed grinding machines, from Precision Technologies Group Ltd. for approximately $3 million. February 11, 2010 – Corporate Property Associates 17 – Global, Inc., a fund of W.P. Carey & Co., LLC (NYSE: WPC) completed the acquisition of two manufacturing facilities in Cleveland and Cincinnati, Ohio from Curtiss‐Wright Corp. (NYSE: CW), a designer and manufacturer of precision components and systems, for approximately $13.8 million.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Precision Machine Products, Tooling & Stampings
(continued)
Benchmarking
Timken Co. $3,141.6 Curtiss‐Wright Corp. ‐1.1%Curtiss‐Wright Corp. 1,809.7 Kaydon Corporation ‐15.6%Kennametal Inc. 1,662.7 RBC Bearings Inc. ‐23.5%Kaydon Corporation 441.1 Shiloh Industries Inc. ‐30.2%Shiloh Industries Inc. 304.3 Kennametal Inc. ‐33.9%RBC Bearings Inc. 278.7 Timken Co. ‐37.7%Hardinge Inc. 214.1 Hardinge Inc. ‐38.0%Hurco Companies Inc. 83.3 Hurco Companies Inc. ‐56.5%
Kaydon Corporation 16.6% Kaydon Corporation 22.0%RBC Bearings Inc. 13.6% RBC Bearings Inc. 17.7%Curtiss‐Wright Corp. 9.7% Curtiss‐Wright Corp. 13.9%Timken Co. 3.9% Timken Co. 9.7%Kennametal Inc. 0.7% Kennametal Inc. 6.4%Shiloh Industries Inc. ‐4.6% Shiloh Industries Inc. 4.8%Hardinge Inc. ‐8.6% Hardinge Inc. ‐4.7%Hurco Companies Inc. ‐8.8% Hurco Companies Inc. ‐6.2%
Hurco Companies Inc. 0.0% Hurco Companies Inc. 0.0xKaydon Corporation 0.0% Kaydon Corporation 0.0xHardinge Inc. 3.0% RBC Bearings Inc. 1.1xRBC Bearings Inc. 16.7% Timken Co. 1.7xKennametal Inc. 19.5% Curtiss‐Wright Corp. 1.9xTimken Co. 24.3% Kennametal Inc. 3.2xCurtiss‐Wright Corp. 31.2% Shiloh Industries Inc. 3.7xShiloh Industries Inc. 36.1% Hardinge Inc. NM
SIZE HISTORICAL GROWTH(Revenue in $mm) (Annual Revenue)
[1] Commercial Metals Co., Sims Metal, and SSAB Svenskt are excluded from the EV/EBITDA calculations. Mean 0.96x 16.4x 16.2x[2] Allegheny Technologies, Schnitzer Steel, and Synalloy Corp. are excluded from the EV/EBIT calculations. Median 0.79x 14.2x 14.2x
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
March 16, 2010 – United States Steel Corp. (NYSE: X), a producer and seller of steel products, completed a fixed‐income offering of 7.375% senior notes due 2020 for approximately $600 million. The use of proceeds is for general corporate purposes and working capital. March 11, 2010 – Steel Dynamics, Inc. (NasdaqGS: STLD), a manufacturer and seller of steel products, completed a private placement of 7.625% senior notes due 2020 for gross proceeds of $350 million. The use of proceeds is to repay amounts outstanding under its senior secured revolving credit facility and for general corporate purposes, including debt repayment, capital expenditures, working capital, and acquisitions. January 29, 2010 – Commercial Metals Company (NYSE: CMC), a recycler, manufacturer, and distributor of steel and metal products, registered 10.0 million shares of common stock at $14.05 per share issuable pursuant to the 2006 Long‐Term Equity Incentive Plan and the 2010 Employee Stock Purchase Plan.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Metals (continued)
Benchmarking
Metals Processors Metals ProcessorsSims Metal Management Limited $6,455.3 Schnitzer Steel Industries Inc. ‐37.4%Commercial Metals Company 5,778.4 Sims Metal Management Limited ‐38.6%Reliance Steel & Aluminum Co. 5,318.1 Reliance Steel & Aluminum Co. ‐39.0%Allegheny Technologies Inc. 3,054.9 Worthington Industries, Inc. ‐41.0%Schnitzer Steel Industries Inc. 1,980.2 Russel Metals Inc. ‐41.4%Russel Metals Inc. 1,971.8 Allegheny Technologies Inc. ‐42.5%Worthington Industries, Inc. 1,788.2 Commercial Metals Company ‐42.5%AM Castle & Co. 812.6 AM Castle & Co. ‐45.9%
Tube and Pipe Producers Tube and Pipe ProducersSSAB AB 29,838.0 Northwest Pipe Co. ‐1.6%United States Steel Corp. 11,082.0 Tenaris SA ‐32.0%Tenaris SA 8,149.3 Synalloy Corp. ‐38.0%AK Steel Holding Corp. 4,076.8 SSAB AB ‐45.1%Steel Dynamics Inc. 3,958.8 AK Steel Holding Corp. ‐46.7%Wolverine Tube Inc. 478.9 Wolverine Tube Inc. ‐46.9%Northwest Pipe Co. 389.9 Steel Dynamics Inc. ‐51.0%Synalloy Corp. 103.6 United States Steel Corp. ‐53.3%
Metals Processors Metals ProcessorsReliance Steel & Aluminum Co. 4.7% Reliance Steel & Aluminum Co. 6.9%Allegheny Technologies Inc. 3.0% Allegheny Technologies Inc. 6.9%Schnitzer Steel Industries Inc. 2.2% Schnitzer Steel Industries Inc. 5.3%Worthington Industries, Inc. 0.0% Worthington Industries, Inc. 3.6%Sims Metal Management Limited ‐0.6% Sims Metal Management Limited 1.9%Commercial Metals Company ‐2.1% Commercial Metals Company 0.7%AM Castle & Co. ‐4.4% AM Castle & Co. ‐1.8%Russel Metals Inc. ‐5.1% Russel Metals Inc. ‐3.8%
Tube and Pipe Producers Tube and Pipe ProducersTenaris SA 22.3% Tenaris SA 28.4%Northwest Pipe Co. 11.1% Northwest Pipe Co. 12.4%Steel Dynamics Inc. 5.1% Steel Dynamics Inc. 10.7%Synalloy Corp. 0.7% AK Steel Holding Corp. 3.6%AK Steel Holding Corp. ‐1.7% Synalloy Corp. 2.9%Wolverine Tube Inc. ‐3.7% SSAB AB 1.0%SSAB AB ‐7.4% Wolverine Tube Inc. ‐1.8%United States Steel Corp. ‐15.5% United States Steel Corp. ‐9.5%
Metals Processors Metals ProcessorsSims Metal Management Limited 0.0% Sims Metal Management Limited 0.0xSchnitzer Steel Industries Inc. 9.8% Schnitzer Steel Industries Inc. 1.0xAM Castle & Co. 21.9% Reliance Steel & Aluminum Co. 2.5xWorthington Industries, Inc. 23.7% Worthington Industries, Inc. 3.6xReliance Steel & Aluminum Co. 26.5% Allegheny Technologies Inc. 5.1xRussel Metals Inc. 30.1% Commercial Metals Company 32.0xAllegheny Technologies Inc. 33.9% AM Castle & Co. NMCommercial Metals Company 50.4% Russel Metals Inc. NM
Tube and Pipe Producers Tube and Pipe ProducersSynalloy Corp. 0.0% Synalloy Corp. 0.0xTenaris SA 13.0% Tenaris SA 0.6xNorthwest Pipe Co. 21.6% Northwest Pipe Co. 1.7xSSAB AB 37.8% AK Steel Holding Corp. 4.1xUnited States Steel Corp. 40.5% Steel Dynamics Inc. 5.2xAK Steel Holding Corp. 40.8% SSAB AB 65.1xSteel Dynamics Inc. 52.6% United States Steel Corp. NMWolverine Tube Inc. 140.2% Wolverine Tube Inc. NM
SIZE HISTORICAL GROWTH(Revenue in $mm) (Annual Revenue)
[1] CECO Environmental and Heritage‐Crystal Clean, Inc. are excluded from the EV/EBITDA calculations. Mean 1.73x 8.0x 14.3x[2] CECO Environmental and Heritage‐Crystal Clean, Inc. are excluded from the EV/EBIT calculations. Median 1.83x 8.2x 14.0x
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Resource Recovery & Waste Management (continued)
First Quarter 2010 News March 1, 2010 – Republic Services, Inc. (NYSE: RSG), a provider of nonhazardous solid waste collection, transfer, and disposal services, announced a private placement of 5% senior notes due March 1, 2020 for proceeds of $850 million and 6.2% senior notes due March 1, 2040 for proceeds of $650 million for total gross proceeds of $1.5 billion. The use of proceeds is to finance the call of its 6.125% senior notes due 2014 on March 8 and as cash on hand until the call of its 7.25% senior notes due 2015 on March 31, to reduce balances outstanding under its revolving credit facility, and for general corporate purposes. February 2, 2010 – Action Carting Environmental Services, Inc., a provider of solid waste collection and environmental services for industrial and commercial businesses in New York, entered into a definitive agreement to acquire recycling and recovery assets in New York City from Republic Services, Inc. (NYSE: RSG). The financial terms of the transaction were not disclosed. January 26, 2010 – Waste Services, Inc. (NasdaqGM: WSII), a provider of collection, transfer, landfill disposal, and recycling services for commercial, industrial, and residential customers, registered 4,328,125 shares of common stock at $9.31 per share issuable pursuant to the Company’s 2007 Equity and Performance Incentive Plan.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
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Resource Recovery & Waste Management (continued)
Benchmarking
Waste Management, Inc. $11,791.0 Republic Services Inc. 122.5%Republic Services Inc. 8,199.1 Waste Connections Inc. 13.5%Waste Connections Inc. 1,191.4 Clean Harbors, Inc. 4.2%Clean Harbors, Inc. 1,074.2 WCA Waste Corporation ‐6.7%Casella Waste Systems Inc. 511.2 Waste Services Inc. ‐8.1%Waste Services Inc. 434.5 Heritage‐Crystal Clean, Inc ‐9.0%WCA Waste Corporation 194.1 Casella Waste Systems Inc. ‐11.0%CECO Environmental Corp. 139.0 Waste Management, Inc. ‐11.9%US Ecology, Inc. 132.5 CECO Environmental Corp. ‐24.2%Heritage‐Crystal Clean, Inc 98.4 US Ecology, Inc. ‐24.6%
Waste Connections Inc. 19.7% Republic Services Inc. 30.7%Republic Services Inc. 19.0% Waste Connections Inc. 30.6%Waste Management, Inc. 17.1% Waste Management, Inc. 27.0%US Ecology, Inc. 16.9% WCA Waste Corporation 26.5%WCA Waste Corporation 12.9% US Ecology, Inc. 22.8%Waste Services Inc. 12.5% Waste Services Inc. 22.7%Clean Harbors, Inc. 8.1% Casella Waste Systems Inc. 22.6%Casella Waste Systems Inc. 7.7% Clean Harbors, Inc. 14.1%Heritage‐Crystal Clean, Inc 3.3% Heritage‐Crystal Clean, Inc 7.2%CECO Environmental Corp. 0.9% CECO Environmental Corp. 2.7%
Heritage‐Crystal Clean, Inc 0.0% Heritage‐Crystal Clean, Inc 0.0xUS Ecology, Inc. 0.0% US Ecology, Inc. 0.0xCECO Environmental Corp. 29.8% Clean Harbors, Inc. 2.0xClean Harbors, Inc. 32.9% Waste Connections Inc. 2.4xWaste Connections Inc. 39.7% Republic Services Inc. 2.8xRepublic Services Inc. 47.9% Waste Management, Inc. 2.8xWaste Services Inc. 52.8% CECO Environmental Corp. 3.6xWaste Management, Inc. 57.4% Waste Services Inc. 4.1xWCA Waste Corporation 58.7% WCA Waste Corporation 4.4xCasella Waste Systems Inc. 91.3% Casella Waste Systems Inc. 5.0x
SIZE HISTORICAL GROWTH(Revenue in $mm) (Annual Revenue)
[1] Penford Corp. is excluded from the EV/EBITDA calculations. Mean 4.22x 8.6x 13.3x[2] Cabot Corp. and Dow Chemical are excluded from the EV/EBIT calculations. Median 1.07x 8.3x 12.4x
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
March 31, 2010 – Sherwin‐Williams Co. (NYSE: SHW), a manufacturer and distributor of paints, coatings, and related products, completed the acquisition of the industrial wood coatings (IWC) business of Arch Chemicals, Inc. (NYSE: ARJ), a biocides company, for approximately $54 million. March 23, 2010 – Konrad Hornschuch AG, a producer of design films, functional films, and wall, floor, and table coverings, completed the acquisition of OʹSullivan Films, Inc., a developer and manufacturer of films, sheets, laminates, and prints made from flexible vinyl, thermoplastic olefins, and thermoplastic urethanes. The financial terms of the transaction were not disclosed. March 17, 2010 – Eastman Chemical Co. (NYSE: EMN), a manufacturer and seller of chemicals, plastics, and fibers, signed a definitive agreement to acquire Genovique Specialties Corporation, a manufacturer and seller of benzoic acid, benzoate esters, sodium benzoate, and specialty plasticizers, from Arsenal Capital Partners, Inc., a private investment firm. The financial terms of the transaction were not disclosed.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
25
Chemicals (continued) March 11, 2010 – HB Fuller Co. (NYSE: FUL), a manufacturer and marketer of adhesives, sealants, paints, and other specialty chemical products worldwide, signed a stock purchase agreement to acquire Revertex Finewaters Sdn Bhd, a manufacturer and supplier of adhesives in Malaysia and internationally, from Revertex (Malaysia) Sdn Bhd. The financial terms of the transaction were not disclosed. March 3, 2010 – Air Products & Chemicals, Inc. (NYSE: APD), a provider of atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide, acquired a 51% stake in SAGA Gaz Industriels SAS, a manufacturer of industrial gases. The financial terms of the transaction were not disclosed. March 2, 2010 – Bain Capital, LLC, a private investment firm, signed a definitive agreement to acquire Styron Corp., a manufacturer and marketer of styrenes and polycarbonates, from The Dow Chemical Company (NYSE: DOW), a manufacturer and seller of chemicals, plastic materials, agricultural, and other products and services worldwide, for approximately $1.63 billion. February 23, 2010 – Artek Surfin Chemicals Limited, a metal finishing and electroplating company, and Aterian Investment Partners, LLC entered into an agreement to acquire Chemtura Vinyl Additives GmbH from Chemtura Corporation (OTCPK: CEMJ.Q), a manufacturer and seller of specialty chemical solutions and consumer products worldwide, for approximately $16.2 million. January 29, 2010 – OM Group, Inc. (NYSE: OMG), a developer and marketer of specialty chemicals and advanced materials to complex chemical and industrial processes worldwide, completed the acquisition of EaglePicher Technologies, LLC, a designer, manufacturer, and supplier of power solutions for military and commercial customers, from EaglePicher Corporation (OTCPK: EGLP) for approximately $170 million. January 25, 2010 – Arkema S.A. (ENXTPA: AKE), a producer and seller of vinyl products, industrial chemicals, and performance products, completed the acquisition of certain acrylates and latex assets in North America from The Dow Chemical Company (NYSE: DOW) for approximately $50 million. January 15, 2010 – Eastman Chemical Co. (NYSE: EMN) completed the acquisition of Tongxiang Xinglong Fine Chemical Co., Ltd., an owner and operator of a cellulose‐based specialty polymers manufacturing facility. The financial terms of the transaction were not disclosed.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
26
Chemicals (continued)
Benchmarking
Diversified Chemicals Diversified ChemicalsThe Dow Chemical Company $44,875.0 Penford Corporation 28.8%EI DuPont de Nemours & Co. 27,293.0 Ashland Inc. ‐3.3%Ashland Inc. 8,160.0 FMC Corp. ‐9.3%Eastman Chemical Co. 5,047.0 Olin Corp. ‐13.2%FMC Corp. 2,826.2 EI DuPont de Nemours & Co. ‐14.0%Cabot Corp. 2,270.0 The Dow Chemical Company ‐21.8%Olin Corp. 1,531.5 Eastman Chemical Co. ‐25.0%Penford Corporation 263.0 Cabot Corp. ‐27.5%
Specialty Chemicals Specialty ChemicalsEcolab Inc. 5,900.6 International Flavors & Fragrances Inc. ‐2.6%Lubrizol Corporation 4,586.3 Ecolab Inc. ‐3.9%Valspar Corp. 2,911.9 HB Fuller Co. ‐6.1%Chemtura Corporation 2,541.0 Arch Chemicals Inc. ‐6.7%International Flavors & Fragrances Inc. 2,326.2 Lubrizol Corporation ‐8.8%PolyOne Corporation 2,060.7 Valspar Corp. ‐13.3%Albemarle Corp. 2,005.4 Minerals Technologies Inc. ‐18.4%Ferro Corp. 1,657.6 Albemarle Corp. ‐18.7%Arch Chemicals Inc. 1,391.9 Stepan Company ‐20.2%Stepan Company 1,276.4 Quaker Chemical Corporation ‐22.4%HB Fuller Co. 1,265.5 PolyOne Corporation ‐24.8%Minerals Technologies Inc. 907.3 Ferro Corp. ‐26.2%OM Group Inc. 871.7 Chemtura Corporation ‐28.3%Quaker Chemical Corporation 451.5 OM Group Inc. ‐49.8%
Industrial Gases Industrial GasesPraxair Inc. 8,956.0 Airgas Inc. ‐12.8%Air Products & Chemicals Inc. 8,234.4 Praxair Inc. ‐17.0%Airgas Inc. 3,875.7 Air Products & Chemicals Inc. ‐19.3%
Diversified Chemicals Diversified ChemicalsFMC Corp. 15.9% FMC Corp. 20.4%Olin Corp. 11.5% Olin Corp. 16.2%Eastman Chemical Co. 10.6% Eastman Chemical Co. 15.9%EI DuPont de Nemours & Co. 10.1% EI DuPont de Nemours & Co. 15.6%Ashland Inc. 6.9% Cabot Corp. 11.1%Cabot Corp. 3.7% Ashland Inc. 10.9%The Dow Chemical Company 3.6% The Dow Chemical Company 9.9%Penford Corporation ‐4.1% Penford Corporation 1.5%
Specialty Chemicals Specialty ChemicalsLubrizol Corporation 18.2% Lubrizol Corporation 22.0%International Flavors & Fragrances Inc. 15.7% International Flavors & Fragrances Inc. 19.1%Ecolab Inc. 12.9% Ecolab Inc. 18.6%Valspar Corp. 11.7% Albemarle Corp. 15.5%Albemarle Corp. 10.5% Valspar Corp. 14.6%HB Fuller Co. 9.6% HB Fuller Co. 13.2%Stepan Company 8.2% Minerals Technologies Inc. 12.9%Quaker Chemical Corporation 6.8% Stepan Company 11.1%Arch Chemicals Inc. 6.1% OM Group Inc. 11.1%OM Group Inc. 5.3% Chemtura Corporation 10.4%Minerals Technologies Inc. 4.9% Arch Chemicals Inc. 9.4%PolyOne Corporation 4.6% Quaker Chemical Corporation 9.2%Chemtura Corporation 3.8% Ferro Corp. 8.9%Ferro Corp. 3.5% PolyOne Corporation 7.8%
Industrial Gases Industrial GasesPraxair Inc. 17.9% Praxair Inc. 27.3%Air Products & Chemicals Inc. 15.1% Air Products & Chemicals Inc. 25.5%Airgas Inc. 11.2% Airgas Inc. 17.1%
Diversified Chemicals Diversified ChemicalsAshland Inc. 29.8% FMC Corp. 1.1xOlin Corp. 32.6% Olin Corp. 1.6xCabot Corp. 34.3% Ashland Inc. 1.8xFMC Corp. 36.2% Eastman Chemical Co. 2.0xPenford Corporation 50.7% EI DuPont de Nemours & Co. 2.6xThe Dow Chemical Company 51.4% Cabot Corp. 2.6xEastman Chemical Co. 51.6% The Dow Chemical Company 5.0xEI DuPont de Nemours & Co. 59.1% Penford Corporation 22.7x
Specialty Chemicals Specialty ChemicalsOM Group Inc. 0.0% OM Group Inc. 0.0xMinerals Technologies Inc. 12.2% Stepan Company 0.7xStepan Company 26.7% Ecolab Inc. 0.9xQuaker Chemical Corporation 30.1% Minerals Technologies Inc. 0.9xHB Fuller Co. 32.3% Lubrizol Corporation 1.4xEcolab Inc. 32.5% Quaker Chemical Corporation 1.6xValspar Corp. 36.8% HB Fuller Co. 1.7xAlbemarle Corp. 39.3% Valspar Corp. 2.1xLubrizol Corporation 39.5% Arch Chemicals Inc. 2.2xArch Chemicals Inc. 41.8% International Flavors & Fragrances Inc. 2.3xFerro Corp. 43.2% PolyOne Corporation 2.6xPolyOne Corporation 55.1% Albemarle Corp. 2.6xInternational Flavors & Fragrances Inc. 56.7% Ferro Corp. 2.9xChemtura Corporation 89.3% Chemtura Corporation 5.4x
Industrial Gases Industrial GasesAir Products & Chemicals Inc. 46.0% Praxair Inc. 2.1xPraxair Inc. 47.2% Air Products & Chemicals Inc. 2.1xAirgas Inc. 49.1% Airgas Inc. 2.5x
March 1, 2010 – Bemis Co., Inc. (NYSE: BMS), a manufacturer and seller of flexible packaging products and pressure sensitive materials, completed the acquisition of the Alcan Packaging Food Americas division which comprises 23 flexible packaging facilities in the U.S., Canada, Mexico, Brazil, Argentina, and New Zealand of Alcan Packaging, Inc., a provider of packaging products for food and beverage, pharmaceutical and medical, beauty and personal care, and tobacco industries, for approximately $1.2 billion. March 1, 2010 – A. Schulman, Inc. (NasdaqGS: SHLM), a supplier of plastic compounds and resins to consumer products, industrial, automotive, and packaging markets, completed the acquisition of McCann Color, Inc., a producer of color chips, for approximately $10 million. March 1, 2010 – CCL Industries, Inc. (TSX: CCL.B), a developer of label and specialty packaging solutions to producers of consumer brands, completed the acquisition of Purbrick Pty. Ltd., a manufacturer of labels, for approximately $2 million.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
29
Plastics & Packaging (continued) February 23, 2010 – Pactiv Corp. (NYSE: PTV), a manufacturer and seller of consumer and foodservice/food packaging products, completed the acquisition of PWP Industries, Inc., a manufacturer of plastic packaging products, from Omninet Capital, LLC, a private investment firm, for approximately $200 million. February 15, 2010 – Greif, Inc. (NYSE: GEF), a manufacturer and seller of industrial packaging products, and containerboard and corrugated products worldwide, completed the acquisition of Storsack International GmbH, a manufacturer and marketer of flexible intermediate bulk containers. The financial terms of the transaction were not disclosed.
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
30
Plastics & Packaging (continued)
Benchmarking
Paper and Corrugated Packaging Paper and Corrugated PackagingInternational Paper Co. $23,366.0 Graphic Packaging Holding Company 0.4%MeadWestvaco Corporation 6,049.0 Rock‐Tenn Co. ‐4.9%Smurfit‐Stone Container Corp. 5,574.0 International Paper Co. ‐5.9%Graphic Packaging Holding Company 4,095.8 Temple‐Inland Inc. ‐7.9%Sonoco Products Co. 3,597.3 MeadWestvaco Corporation ‐8.9%Temple‐Inland Inc. 3,577.0 Packaging Corp. of America ‐9.0%Greif, Inc. 2,835.6 Sonoco Products Co. ‐12.7%Rock‐Tenn Co. 2,800.0 Smurfit‐Stone Container Corp. ‐20.8%Packaging Corp. of America 2,147.6 Greif, Inc. ‐21.5%
Plastics/Films Plastics/FilmsAptarGroup, Inc. 1,841.6 Inter Parfums SA ‐2.1%A. Schulman, Inc. 1,312.2 Radient Pharmaceuticals Corporation ‐2.8%Spartech Corp. 914.6 AptarGroup, Inc. ‐11.1%Myers Industries Inc. 701.8 Myers Industries Inc. ‐13.7%Tredegar Corp. 648.6 A. Schulman, Inc. ‐21.3%Inter Parfums SA 259.2 Spartech Corp. ‐25.2%Radient Pharmaceuticals Corporation 20.8 Tredegar Corp. ‐26.6%
Flexible Packaging Flexible PackagingSealed Air Corporation 4,242.8 CCL Industries Inc. 0.8%Bemis Co. Inc. 3,514.6 Winpak Ltd. ‐1.2%Pactiv Corp. 3,360.0 Multi‐Color Corp. ‐2.1%CCL Industries Inc. 1,199.0 Pactiv Corp. ‐5.8%AEP Industries Inc. 721.8 AEP Industries Inc. ‐6.1%Winpak Ltd. 506.0 Bemis Co. Inc. ‐7.0%Multi‐Color Corp. 274.6 Sealed Air Corporation ‐12.4%
Paper and Corrugated Packaging Paper and Corrugated PackagingPackaging Corp. of America 16.4% Packaging Corp. of America 23.5%Rock‐Tenn Co. 16.0% Rock‐Tenn Co. 21.1%International Paper Co. 14.4% International Paper Co. 20.7%Temple‐Inland Inc. 11.3% Smurfit‐Stone Container Corp. 17.6%Smurfit‐Stone Container Corp. 11.0% Temple‐Inland Inc. 16.9%Greif, Inc. 10.8% Greif, Inc. 14.5%Sonoco Products Co. 7.8% Graphic Packaging Holding Company 14.3%Graphic Packaging Holding Company 7.1% MeadWestvaco Corporation 13.7%MeadWestvaco Corporation 6.4% Sonoco Products Co. 12.6%
Plastics/Films Plastics/FilmsInter Parfums SA 13.5% AptarGroup, Inc. 18.4%AptarGroup, Inc. 11.2% Inter Parfums SA 15.7%Tredegar Corp. 6.8% Tredegar Corp. 13.0%Spartech Corp. 4.3% Spartech Corp. 8.7%A. Schulman, Inc. 4.0% Myers Industries Inc. 8.4%Myers Industries Inc. 3.2% A. Schulman, Inc. 5.7%Radient Pharmaceuticals Corporation ‐16.4% Radient Pharmaceuticals Corporation ‐8.9%
Flexible Packaging Flexible PackagingPactiv Corp. 17.2% Pactiv Corp. 22.7%Winpak Ltd. 13.0% Winpak Ltd. 18.2%Sealed Air Corporation 11.8% CCL Industries Inc. 17.3%Multi‐Color Corp. 9.2% Sealed Air Corporation 15.4%CCL Industries Inc. 9.0% Multi‐Color Corp. 14.0%Bemis Co. Inc. 8.7% Bemis Co. Inc. 13.2%AEP Industries Inc. 4.4% AEP Industries Inc. 7.1%
Paper and Corrugated Packaging Paper and Corrugated PackagingSonoco Products Co. 29.6% Sonoco Products Co. 1.3xMeadWestvaco Corporation 42.2% Packaging Corp. of America 1.3xPackaging Corp. of America 43.1% Temple‐Inland Inc. 1.5xGreif, Inc. 47.2% International Paper Co. 1.9xTemple‐Inland Inc. 50.3% Rock‐Tenn Co. 2.2xInternational Paper Co. 59.2% Greif, Inc. 2.4xRock‐Tenn Co. 59.7% MeadWestvaco Corporation 3.0xGraphic Packaging Holding Company 79.6% Smurfit‐Stone Container Corp. 3.9xSmurfit‐Stone Container Corp. 156.8% Graphic Packaging Holding Company 4.8x
Plastics/Films Plastics/FilmsTredegar Corp. 0.3% Tredegar Corp. 0.0xRadient Pharmaceuticals Corporation 7.8% Inter Parfums SA 0.7xInter Parfums SA 14.1% AptarGroup, Inc. 1.0xAptarGroup, Inc. 21.2% A. Schulman, Inc. 1.4xA. Schulman, Inc. 22.6% Myers Industries Inc. 1.8xMyers Industries Inc. 28.8% Spartech Corp. 2.5xSpartech Corp. 44.8% Radient Pharmaceuticals Corporation NM
Flexible Packaging Flexible PackagingWinpak Ltd. 0.0% Winpak Ltd. 0.0xMulti‐Color Corp. 39.2% Pactiv Corp. 1.7xCCL Industries Inc. 39.8% Multi‐Color Corp. 2.4xBemis Co. Inc. 40.5% CCL Industries Inc. 2.4xSealed Air Corporation 43.0% Sealed Air Corporation 2.5xPactiv Corp. 56.0% Bemis Co. Inc. 2.7xAEP Industries Inc. 73.8% AEP Industries Inc. 3.9x
SIZE HISTORICAL GROWTH(Revenue in $mm) (Annual Revenue)
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
31
Industrial Growth Industry Transactions *
Announced First Quarter 2010
Enterprise Enterprise Value to:Date Target Buyer Primary Industry Value Revenue EBITDA EBIT
3/31/2010 OTT Promotions, Inc. RICH LTD Fabricated Structural Metal Products ‐ ‐ ‐ ‐3/31/2010 Vanguard Solar, Inc. Natcore Technology, Inc. (TSXV:NXT) Electrical Components and Equipment ‐ ‐ ‐ ‐3/31/2010 InnoWare Plastic , Inc. Solo Cup Co. Plastic Packaging $24.0 ‐ ‐ ‐3/29/2010 Formrite Companies, Inc. HMF Innovations, Inc. Fabricated Structural Metal Products ‐ ‐ ‐ ‐3/29/2010 Litchfield Landscape Co Inc. Engledow, Inc. Environmental and Facilities Services ‐ ‐ ‐ ‐3/28/2010 BWAY Holding Company (NYSE:BWY) Madison Dearborn Partners, LLC Plastic Packaging $900.9 1.0x 6.5x 9.9x3/26/2010 Venture Metals, LLC Industrial Services of America, Inc.
(NasdaqCM:IDSA)Environmental and Facilities Services $4.4 ‐ ‐ ‐
3/26/2010 Texas Process Equipment Co., Canned Motor Pump Service Business
Teikoku USA Inc. Industrial Machinery ‐ ‐ ‐ ‐
3/25/2010 Bowmar LLC Undisclosed Electrical Components and Equipment $1.8 ‐ ‐ ‐3/25/2010 Forex365, Inc. (OTCPK:FRXT) Individual Investor Industrial Machinery $0.3 ‐ ‐ ‐3/24/2010 PV Powered, Inc. Advanced Energy Industries, Inc.
(NasdaqGS:AEIS)Electrical Components and Equipment $90.0 4.3x ‐ ‐
3/24/2010 S&C Electric Company, Polymer Cutout Business
3/18/2010 InPhase Technologies, Inc. Signal Lake Measuring, Analyzing, and Controlling Instruments
‐ ‐ ‐ ‐
3/17/2010 CSM Worldwide, Inc. IHS Inc. (NYSE:IHS) Measuring, Analyzing, and Controlling Instruments
$27.0 ‐ ‐ ‐
3/17/2010 Genovique Specialties Corporation Eastman Chemical Co. (NYSE:EMN) Commodity Chemicals ‐ ‐ ‐ ‐3/17/2010 Peninsula Packaging Company, LLC Odyssey Investment Partners, LLC Plastic Packaging ‐ ‐ ‐ ‐3/15/2010 Ace Animals, Inc. Sigma‐Aldrich Corporation (NasdaqGS:SIAL) Environmental and Facilities Services ‐ ‐ ‐ ‐3/15/2010 GE Energy, ESP and Emissions Monitoring
Business UnitsBabcock & Wilcox Power Generation Group Inc. Industrial Machinery ‐ ‐ ‐ ‐
3/12/2010 Interlocking Deck Systems International LLC LB Foster Co. (NasdaqGS:FSTR) Fabricated Structural Metal Products $7.0 ‐ ‐ ‐3/11/2010 Super Steel Products, Corp. Individual Investor Fabricated Structural Metal Products ‐ ‐ ‐ ‐3/11/2010 Trash Prince, Inc. Advanced Disposal Services, Inc. Environmental and Facilities Services ‐ ‐ ‐ ‐3/11/2010 North American Phoenix Energy Services ALSTOM Measuring, Analyzing, and Controlling
Instruments‐ ‐ ‐ ‐
3/10/2010 Milwaukee Forge, Inc. NOG Inc. Fabricated Structural Metal Products $3.0 ‐ ‐ ‐3/10/2010 Demay International, LLC and Church Energy
ServicesAxon Energy Products Industrial Machinery ‐ ‐ ‐ ‐
3/9/2010 Artific ial Muscle, Inc. Bayer MaterialScience, LLC Industrial Machinery ‐ ‐ ‐ ‐3/9/2010 Morse Manufacturing Company, Inc. Altec, Inc. Industrial Machinery ‐ ‐ ‐ ‐3/9/2010 Varian Inc., Certain Product Lines Bruker Corporation (NasdaqGS:BRKR) Measuring, Analyzing, and Controlling
Instruments$37.5 ‐ ‐ ‐
3/8/2010 Andrews Paper & Chemical Company Inc. Aceto Corp. (NasdaqGS:ACET) Diversified Chemicals ‐ ‐ ‐ ‐3/8/2010 RathGibson, Inc. Blackrock Financial Management Inc.; Eaton
Vance Management; Wayzata Investment Partners LLC; CI Investments Inc.
Industrial Machinery $343.6 1.2x ‐ ‐
3/5/2010 Edge Adhesives Holdings, Inc. Superior Capital Partners L.L.C. Specialty Chemicals ‐ ‐ ‐ ‐3/2/2010 Styron Corp. Bain Capital, LLC Commodity Chemicals $1,630.0 0.5x ‐ ‐3/2/2010 Patco Electronics, Inc. Technology Research Corp. (NasdaqGM:TRCI) Electrical Components and Equipment $6.4 1.1x 2.3x 2.3x3/2/2010 Terra Industries Inc. (NYSE:TRA) CF Industries Holdings, Inc. (NYSE:CF) Industrial Gases $4,928.3 3.1x 12.2x 14.8x3/1/2010 Ocala Recycling, Inc. The David J. Joseph Company Environmental and Facilities Services ‐ ‐ ‐ ‐3/1/2010 Excel Waste Services LLC Advanced Disposal Services, Inc. Environmental and Facilities Services ‐ ‐ ‐ ‐3/1/2010 McCann Color, Inc. A. Schulman, Inc. (NasdaqGS:SHLM) Specialty Chemicals $10.0 ‐ ‐ ‐2/26/2010 Alexander Chemical Corporation Carus Corporation Industrial Gases ‐ ‐ ‐ ‐2/26/2010 Best Solar Co. Ltd., Crystalline Module
Manufacturing PlantLDK Solar Co.Ltd. (NYSE:LDK) Electrical Components and Equipment $21.5 ‐ ‐ ‐
2/26/2010 Remediation Services, Inc., Prior to RM with China LianDi Clean Technology Engineering Ltd.
Remediation Services, Inc. (OTCBB:RMSI) Environmental and Facilities Services ‐ ‐ ‐ ‐
2/26/2010 Koch Filter Corporation Tomkins plc (LSE:TOMK) Industrial Machinery $35.5 0.9x ‐ ‐2/23/2010 PWP Industries, Inc. Pactiv Corp. (NYSE:PTV) Plastic Packaging $200.0 1.4x ‐ ‐2/22/2010 VUDU, Inc. Wal‐Mart Stores Inc. (NYSE:WMT) Electronic Equipment and Instruments ‐ ‐ ‐ ‐2/22/2010 AquaStar Corporation Real Paper Displays Inc. (OTCPK:RPPR) Industrial Machinery ‐ ‐ ‐ ‐2/21/2010 Smith International Inc. (NYSE:SII) Schlumberger Limited (NYSE:SLB) Specialty Chemicals $13,658.4 1.7x 13.4x 20.8x2/19/2010 Insight Technology Incorporated L‐3 Communications Holdings Inc. (NYSE:LLL) Electrical Components and Equipment ‐ ‐ ‐ ‐
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
32
Industrial Growth Industry Transactions * (continued)
Announced First Quarter 2010
Enterprise Enterprise Value to:Date Target Buyer Primary Industry Value Revenue EBITDA EBIT
2/19/2010 Waste Associates Holdings, LLC BlackEagle Partners, LLC Environmental and Facilities Services ‐ ‐ ‐ ‐2/19/2010 IntelliPack, Inc. Pregis Management Corp. Industrial Machinery $31.5 ‐ ‐ ‐2/18/2010 PECO II Inc. (NasdaqCM:PIII) Lineage Power Corporation Electrical Components and Equipment $9.4 0.2x ‐ ‐2/18/2010 Shovon, LLC Healthcare Of Today, Inc . Electronic Equipment and Instruments $15.0 ‐ ‐ ‐2/18/2010 Global Renewable Energy Systems, Inc. Universal Media Corp. (OTCPK:UMED) Environmental and Facilities Services $4.7 ‐ ‐ ‐2/18/2010 Equipment Brokers, Inc . Anthony, Inc . Industrial Machinery ‐ ‐ ‐ ‐2/17/2010 Scalise Industries Corporation EMCOR Group Inc. (NYSE:EME) Environmental and Facilities Services ‐ ‐ ‐ ‐2/17/2010 Nova Analytics Corporation ITT Corporation (NYSE:ITT) Electronic Equipment and Instruments $390.0 2.9x ‐ ‐2/17/2010 Nordic Air Incorporated HDT Engineered Technologies Industrial Machinery ‐ ‐ ‐ ‐2/17/2010 GH Induction Atmospheres, LLC GH Electrotermia, S.A. Industrial Machinery ‐ ‐ ‐ ‐2/17/2010 Arch Chemicals Inc., Industrial Wood Coatings
2/2/2010 Republic Services Inc., New York City Assets Action Carting Environmental Services, Inc. Environmental and Facilities Services ‐ ‐ ‐ ‐2/2/2010 East End Sanitation, Inc . Action Carting Environmental Services, Inc. Environmental and Facilities Services ‐ ‐ ‐ ‐2/2/2010 NuStar Terminals Operations Partnership L.P.,
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
33
Industrial Growth Industry Transactions * (continued) Announced First Quarter 2010
Enterprise Enterprise Value to:
Date Target Buyer Primary Industry Value Revenue EBITDA EBIT1/25/2010 GeoInstruments, Inc., Prompt Fission Neutron
BusinessUranium Exploration Australia Ltd. (ASX:UXA) Electronic Equipment and Instruments $1.3 ‐ ‐ ‐
1/25/2010 The Green Plan, Inc . The Brickman Group, Ltd. Environmental and Facilities Services ‐ ‐ ‐ ‐1/25/2010 Talon Massman, LLC Massman Automation Designs, LLC Industrial Machinery ‐ ‐ ‐ ‐1/23/2010 Custom Marketing Company, Inc . Capital For Business, Inc .; Diamond State
Ventures; MidStates Capital L.P.Industrial Machinery ‐ ‐ ‐ ‐
1/20/2010 JT Packard & Associates, Inc . Thomas & Betts Corp. (NYSE:TNB) Diversified Support Services $22.0 0.4x ‐ ‐1/20/2010 Defcon FORCE LLC The Selinsky FORCE, LLC Industrial Machinery ‐ ‐ ‐ ‐1/19/2010 American Insulated Wire Corporation Southwire Company Electrical Components and Equipment ‐ ‐ ‐ ‐1/19/2010 Simco Ltd., Micro Air Core Auto Meter Products, Inc. Electrical Components and Equipment ‐ ‐ ‐ ‐1/19/2010 Ahura Scientific , Inc. Thermo Fisher Scientific , Inc . (NYSE:TMO) Electronic Equipment and Instruments $145.0 3.2x ‐ ‐1/19/2010 Two Salt Water Disposal Facilities Located in
Wibeaux and Sidney Areas of MontanaCustom Carbon Processing, Inc . Environmental and Facilities Services ‐ ‐ ‐ ‐
1/19/2010 Delta Sanitation LLC Waste Pro USA Inc . Environmental and Facilities Services $25.0 ‐ ‐ ‐1/18/2010 Leading Edge Turbine Technologies, Ltd. Dresser‐Rand Company Industrial Machinery $35.0 1.4x ‐ ‐1/18/2010 Zemetrics, Inc. Zygo Corp. (NasdaqGS:ZIGO) Electronic Equipment and Instruments $1.8 ‐ ‐ ‐1/18/2010 Alliance Source Testing LLC, Environmental,
Engineering and Health, and Safety DivisionsLittleJohn Engineering Associates, Inc. Environmental and Facilities Services ‐ ‐ ‐ ‐
1/18/2010 Premier Equipment Corporation, Inc ., Compressor Division
* Includes transactions occurring within segments of the “NCA Industrial Growth Universe”
Industrial GrowthF I R S T Q U A R T E R 2 0 1 0 Q U A R T E R L Y D I A L O G U E
35
General Distressed Market Indicators
Business Bankruptcy Filings
Source: Federal Judiciary
U.S. Speculative‐Grade Default Rate Versus Distressed Credit Ratio
Source: Standard and Poor’s “U.S. Distressed Debt Monitor,” March 23, 2010
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Chapter 7BankruptcyReform
Chapter 11
Chapter 12/13
Business bankruptcy filings totaled 60,837 in 2009, up 40% from the 43,533 filings during 2008.
Standard & Poorʹs distress ratio, defined as the number of high‐yield securities trading at spreads greater than 1,000 bps relative to Treasuries divided by the total number of speculative‐grade‐rated issues, fell to 9.7% on March 15 from 12.7% in February. The distress ratio is still below its long‐term average of 16% after a prolonged period at more elevated levels.
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Distribution of Standard and Poor’s Distress Ratio by Industry
Source: Standard and Poor’s “U.S. Distressed Debt Monitor,” March 23, 2010
Institutional Loans That Have Defaulted During 1Q10 Issuer Industry Deal Date Default Date
New World Gaming Gaming & Hotel Jun-07 Jan-10 1,012$ 1,012$
Regent Communications Media Nov-06 Jan-10 115$ 115$
International Aluminum Corp Building Materials Apr-07 Jan-10 145$ 125$ Source: Standard & Poor’s LCD “1Q10 Institutional Loan Default Quarterly Review”
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Industrial Growth Industry Distressed News – First Quarter 2010
March 31, 2010 – Electrical Components International, Inc., Standard & Poorʹs Downgrade and Credit Watch/Outlook Action D/‐‐/‐‐ from CCC‐/Negative/‐‐: Local Currency Rating March 30, 2010 – Xerium Technologies, Inc. (NYSE: XRM), Standard & Poorʹs Downgrade and Credit Watch/Outlook Action D/‐‐/‐‐ from CC/Negative/‐‐: Local Currency Rating March 30, 2010 – Xerium Technologies, Inc., along with Xerium V US Ltd., Weavexx Corporation, Xerium III US Ltd., Stowe Woodward Licensco, LLC, Stowe Woodward, LLC, XTI, LLC, Huyck Licensco, Inc., Xerium IV (US) Limited, Huyck Wangner Austria GmbH, Xerium Germany Holding GmbH, Xerium Canada, Inc., Xerium Italia S.p.a. and Xerium Asia, LLC, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The company listed assets of $693.51 million and liabilities of $813.17 million. The main unsecured creditors were Österreichische Forschungsförderungsgesellschaft, Teijin Monofilament Germany Gmbh, JLM Advanced Technical Services, Inc., Mare S.p.A., Perlon‐Monofil GmbH, INVISTA, Inc., Tonak a.s., Sandusky International, Inc., EMS‐Griltech and EconGas GmbH. Christopher Updike, Sharon J. Richardson and Zachary H. Smith of Cadwalader Wickersham & Taft LLP and Jason M. Madron and Mark D. Collins of Richards, Layton & Finger, P.A. represented the company as its legal counsels. March 30, 2010 – Electrical Components International, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The company listed assets and liabilities in the range of $100 million and $500 million. The main unsecured creditors were Tyco Electronics Corporation, Vulkor, Inc., Coleman Cable, Inc., Jabil Circuit, Inc., Molex Connector Corporation, Southwire Company, Power & Signal Group, JST Corporation, Sager Electrical Supply Company, Inc. and Therm‐O‐Disc, Inc. Chun I. Jang, Paul Noble Heath and Travis A. McRoberts of Richards, Layton & Finger, P.A. represented the company as its legal counsel. March 23, 2010 – Plastifar S.A., Ranor, Inc. and Hub Technologies, Inc. filed an involuntary petition for liquidation under Chapter 7 against Gloucester Engineering Co., Inc. in the U.S. Bankruptcy Court for the District of Massachusetts, Boston. The total petitioning claim amount against company is $0.48 million. Frederic D. Grant, Jr. represented Plastifar, Thomas P. Smith of Caffrey & Smith, P.C. represented Ranor and Michael Lane represented Hub Technologies as their respective legal counsels. March 16, 2010 – Total Waste Logistics, LLC filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The company listed assets in the range of $1 million and $10 million and liabilities in the range of $10 million to $50 million. The main unsecured creditors were Coppola Corp., First Insurance Funding Corporation, Ohio Environmental Protection Agency, Evergreen Uni, URS Corporation, Clark Enterprises and Shook Brothers, Inc. Michael Jason Barrie of Benesch Friedlander Coplan & Aronoff LLP represented the company as its legal counsel.
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Industrial Growth Industry Distressed News – First Quarter 2010 March 12, 2010 – EnviroSolutions, Inc., Standard & Poorʹs Downgrade and Credit Watch/Outlook Action D/‐‐/‐‐ from CCC/Negative/‐‐: Local Currency Rating March 10, 2010 – EnviroSolutions, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York, Manhattan. The company listed assets and liabilities in the range of $100 million to $500 million. The main unsecured creditors were U.S. Bank National, PNC Bank, NA, CSX Transportation, Inc., Liberty Waste Transpotation, LLC, Wills Trucking, Inc., FAES Amadeo Farell S.A.U., Covanta Energy, Inc., English Paving Co., Drew Transport Services, LLC, and Holtzman Propane LLC. It retained John Longmire of Willkie Farr & Gallagher LLP as the legal counsel. March 2, 2010 – Smurfit‐Stone Container Enterprises, Inc. filed its 10‐K for the period ending December 31, 2009. In this report its auditor, Ernst & Young LLP, gave an unqualified opinion expressing doubt that the company can continue as a going concern. March 1, 2010 – American Pacific Corp. (NasdaqGM: APFC), Standard & Poorʹs Downgrade and Credit Watch/Outlook Action B/Stable/‐‐ from B+/Negative/‐‐: Local Currency Rating February 26, 2010 – Bemis Co., Inc. (NYSE: BMS), Standard & Poorʹs Downgrade and Credit Watch/Outlook Action BBB/Positive/A‐2 from A/Watch Neg/A‐1: Local Currency Rating February 25, 2010 – W.R. Grace & Co. filed its 10‐K for the period ending December 31, 2009. In this report its auditor, PricewaterhouseCoopers LLP, gave an unqualified opinion expressing doubt that the company can continue as a going concern. February 24, 2010 – EPV Solar, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of New Jersey. The company listed both assets and liabilities ranging between $50 million and $100 million. The main unsecured creditors were Guardian Manufacturing, Heller Ehrman LLP, Grant Thornton LLP, Advanced Energy Industries, Inc., Kraft Electronics, AGC Flat Glass North America, Inc., Newport Corp., Goodwin Procter LLP, Edwards Vacuum, Inc., and Sterne Kessler Goldstein & Fox. Kenneth A. Rosen and S. Jason Teele of Lowenstein Sandler PC represented the debtor as its legal counsel. February 16, 2010 – Micro Imaging Technology, Inc. filed its K for the period ending October 31, 2009. In this report its auditor, Jeffrey S. Gilbert, CPA, gave an unqualified opinion expressing doubt that the company can continue as a going concern. February 12, 2010 – Casita Enterprises, Inc. filed its 8‐K for the period ending December 31, 2008. In this report its auditor, Salberg & Company, P.A., gave an unqualified opinion expressing doubt that the company can continue as a going concern.
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Industrial Growth Industry Distressed News – First Quarter 2010
February 3, 2010 – Zayat Stables, LLC filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of New Jersey, Newark. The company listed assets and liabilities in the range of $10 million to $50 million. The main unsecured creditors were Darley Stud Management, LLC, White & Case, LLP, Adena Springs, Steve Asmussen Racing Stables, ES&S, LLC, H.E. Sutton Forwarding, LLC, Gainesway, Equine Medical and Surgical Group, Stockplace and Nicholas P. Zito Racing Stable, Inc. Michael D. Sirota of Cole, Schotz, Meisel, Forman & Leonard, P.A. represented the company as its legal counsel and J.H. Cohn LLP represented the company as its financial advisor. February 3, 2010 – Neenah Enterprises, Inc., along with its affiliates Neenah Foundry Co., NFC Castings, Inc., Advanced Cast Products, Inc., Mercer Forge Corporation, Deeter Foundry, Inc., Dalton Corporation, Belcher Corporation, A&M Specialties, Inc., Dalton Corp. Kendalville Manufacturing Facility, Dalton Corporation Stryker Machining Facility, and Morganʹs Welding, Inc., filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The company listed its assets in the range of $1 million to $10 million and liabilities in the range of $100 million to $500 million. The unsecured creditors include Tontine Capital Management, LLC, Sadoff & Rudoy Industries, LLP, Gerdau Ameristeel U.S., Inc., Dana Holding Corporation, Oudenhoven Construction, Inc., Louis Padnos Iron & Metal Company, The Timken Corporation, SandMold Systems, Inc., Wisconsin Electric Power Co. and Caterpillar, Inc. The company hired Edmon L. Morton & Kenneth J. Enos of Young, Conaway, Stargatt & Taylor and Larry J. Nyhan of Sidley Austin LLP as its debtor counsels. February 2, 2010 – S.H. Leggitt Company filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Western District of Texas. The debtor listed its assets within $1 million to $10 million and liabilities within $10 million to $50 million. Chase Brass & Copper Company, Inc., Headwaters MB, LLC, Manth‐Brownell, Inc., Ka Shui Manufactory Co., Ltd., Hutmen SA, Novasfer Srl, Halcor Metalworks S.A. (Greece), NSF International, Flex‐Tech Hose and Tubing, Inc. and Protech Global Solutions. The debtor hired Joseph D. Martinec of Martinec, Winn, Vickers & McElroy, P.C. as its legal advisor. February 1, 2010 – Wurzburg, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Western District of Tennessee, Memphis. The company listed assets and liabilities in the range of $10 million to $50 million. The main unsecured creditors were 3M Co., Gibson Corrugated, LLC, American Express Corp., AEP Industries, Inc., Free‐Flow Packaging International, Inc., Sigma Stretch Film Corp., Averitt Express, Inc., Pregis Corporation, Signode Distributor Sales and American Container, Inc. Jonathan E. Scharff of Harris Shelton Hanover Walsh, PLLC represented the company as its legal counsel.
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Industrial Growth Industry Distressed News – First Quarter 2010 January 26, 2010 – Perry Uniontown Ventures I, LLC filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Alabama. The debtor listed both its assets and liabilities within $50 million to $100 million. The major unsecured creditors were Phillips and Jordan, Inc., Phill‐Con Services, LLC, MetLife, Inc., Ensign Peak Advisors, Inc., Perry County Alabama, Alabama Department of Revenue and Seagull Consulting II Corp. The debtor hired Jeffery J. Hartley of Helmsing, Leach, Herlon, Newman & Rouse, PC as its legal counsel. January 20, 2010 – Coleman Cable, Inc. (NasdaqGM: CCIX), Standard & Poorʹs Downgrade and Credit Watch/Outlook Action B+/Stable/‐‐ from BB‐/Negative/‐‐: Local Currency Rating January 15, 2010 – Sherwood Farms, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida. The company listed its assets and liabilities in the range of $10 million to $50 million. The unsecured creditors include AmeriGas, Inc., Bank of America Corp., Chase Bank USA, NA and Agro Distribution, LLC. The company hired Mariane L. Dorris & R. Scott Shuker of Latham Shuker Eden & Beaudine LLP as its debtor counsel. January 13, 2010 – Protective Products of America, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Florida. The company both listed assets and liabilities ranging between $10 million to $50 million. The main unsecured creditors were N/S Sawgrass Office Associates, LLC, PricewaterhouseCoopers LLP, Sidley Austin LLP, and Gowling Lafleur Henderson LLP. Debi E. Galler and Jordi Guso of Berger Singerman, P.A. represented the debtor as its legal counsel. January 13, 2010 – Neah Power Systems, Inc. filed its 10‐K for the period ending September 30, 2009. In this report its auditor, Peterson Sullivan PLLC, gave an unqualified opinion expressing doubt that the company can continue as a going concern. January 13, 2010 – Magnum dʹOr Resources, Inc. filed its 10‐K for the period ending September 30, 2009. In this report its auditor, Weinberg & Company, P.A., gave an unqualified opinion expressing doubt that the company can continue as a going concern. January 12, 2010 – Boomerang Systems, Inc. filed its 10‐K for the period ending September 30, 2009. In this report its auditor, Liebman Goldberg & Drogin LLP, gave an unqualified opinion expressing doubt that the company can continue as a going concern.
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Notes
Certain industry participants were excluded from this newsletter due to a lack of trading volume, a lack of available financial information, a bankruptcy filing or a change in their business plan.
Enterprise Value (EV) = Common equity value + preferred equity + debt – cash & short‐term investments.
EBITDA = Earnings before interest, taxes, depreciation and amortization.
EBIT = Earnings before interest and taxes.
YTM = Yield to Maturity.
EV multiples are based on the book value of the companies’ debt and not current trading volume. The numbers presented in this report have been adjusted to exclude non‐recurring and extraordinary items, net of taxes.
NA = Not available.
Sources: Capital IQ, Bloomberg, company 10‐K, 10‐Q and 8‐K SEC filings, annual reports and press releases.
Any public companies chosen for the “NCA Industrial Growth Universe” are companies commonly used for industry information to show performance within a sector. They do not include all public companies that could be categorized within the sector and were not created as benchmarks; they do not imply benchmarking and do not constitute recommendations for a particular security and/or sector. The charts and graphs used in this report have been compiled by Navigant Capital Advisors solely for purposes of illustration.
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