BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
MARKET VIEW: In this issue of Bryant Park Capital’s Emerging Energy Company Inside this issue: Update, we highlight a notable trend of capital formation in the power sector with the Energy Trends p.1 emerging asset class of “YieldCos”, i.e. entities which have highly contracted cash flows from Power Trends p.3 which dividends and growth are funded. Since mid-2013, six companies have gone public in M&A p.5 North America via this structure, due to the increased market valuation of yield/income oriented equities. For large independent power producers and utilities with portfolios of Private Placements p.7 generating assets, YieldCos enable the separation of the contracted power assets from the Public Comps p.8 merchant (uncontracted) assets, and thereby the potential to unlock shareholder value by
garnering higher valuation multiples owing to improved long-term cash flow visibility. From the debt perspective, we continue to see companies continuing to search for and find efficient capitalization techniques in a market starved for yield; by way of example, asset backed securitizations. In July 2014, SolarCity priced its third solar ABS, a $201.5 million note, which was priced very positively at 4.026% for the $160 million Class A tranche and 5.45% for the $41.5 million Class B tranche, for a weighted average rate of 4.32%. Both the equity and debt markets seem to continue to be in favor of energy/power capital issuers as the Fed appears committed to keep interest rates low for a considerable period of time.
ENERGY TRENDS
MARKET OBSERVATIONS: ■ Crude Oil: □ U.S. production averaged 8.6 million bbl/d, the highest monthly production since July 1986. □ Production is expected to continue to grow in the Bakken, Eagle Ford, and Permian regions through 2015, fueling an increase in supply □ For the first time in 14 months, Brent Spot Prices fell outside the range of $107/bbl and $112/bbl, due in part to weakening global demand and increased Libyan oil exports Oil Prices vs. Gas Prices
Sources: EIA SEPTEMBER 2014 1 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
ENERGY TRENDS
■ The Henry Hub average natural gas spot price was $4.59/MMBtu in June, decreasing 15% to $3.91/MMBtu in August. Henry Hub natural gas prices are projected to average $4.46/MMBtu and $3.87/MMBtu in 2014 and 2015, respectively. ■ Since the beginning of 2014, oil has traded in a band between $90 and $110 per barrel (WTI), and more recently has been in the lower to middle $90 range. ■ Due to falling crude oil prices, U.S. regular gasoline retail prices continue to fall; $3.49/gal was the average price for August, which was 12 cents and 21 cents below the average for July and June, respectively. Prices are estimated to continue to fall to $3.18/gal in December, making the average for 2014 $3.46/gal – five cents below the 2013 average. □ U.S. Number 2 Diesel retail prices fell from an average of $3.91/gal in June to $3.84/gal in August. ■ U.S. oil and natural gas wells are continuing to see steady increases in productivity in many basins due to the increase in precision and efficiency of horizontal drilling and hydraulic fracturing in the extraction process. ■ Over the last few years, five of the six main U.S. shale basins (Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara and Permian) have seen an overall increase in oil and natural gas production per rig. □ Permian is expected to have the largest increase in production of oil per rig from September to October and Haynesville is expected to have the largest increase in production of natural gas per rig from September to October. ■ Shale Oil □ Since 2009, Eagle Ford, Permian and Bakken basins have witnessed the largest increase month-over-month of barrels per day, producing on average 31 thousand, 39 thousand and 27 thousand barrels per day, respectively. ■ Shale Gas □ The Marcellus Shale basin exceeded natural gas production of 15 billion cf/d, the first time ever recorded; production rate is expected to increase by 247 million cf/d due to the impact of new wells. □ The Marcellus region accounts for roughly 40% of all US shale gas production.
Oil (bbl/d) Production per Rig by Shale Play Natural Gas (Mcf/d) Production per Rig by Shale Play
Sources: EIA SEPTEMBER 2014 2 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
POWER TRENDS
MARKET OBSERVATIONS: ■ Year to date through June, the US generated 2 billion mWh of electricity. This is an increase over the same period in 2013, when 1.96 billion mWh were generated. Coal was the biggest generator, generating 806 million mWh followed by natural gas, which created 504 million mWh. ■ For the first half of 2014, retail residential electricity prices increased to an average of 12.3 cents/kWh or 3.2% from the same period last year; this is the highest year-over-year increase for the first half of the year since the beginning of 2009. □ The average price of electricity rose in all areas of the country except for the Pacific Census Division (excluding Hawaii and Alaska); this is due to the $35 California Climate Credit that most customers received; New England experienced the largest jump with an increase of 11.8% ■ 4,350 MW of new utility scale generating capacity came online in the first half of 2014. Natural gas plants accounted for more than half, solar plants for over a quarter, and wind plants one-sixth. This new generating capacity is 40% less than the same period last year, while solar increased by roughly 70% and wind nearly doubled from the same period. ■ Florida and California added the most utility scale generating capacity, creating approximately 1,210 MW and approximately 1,100 MW respectively; Utah and Texas followed, creating a combined 1,000 MW U.S. Average Levelized Cost of Electricity (2012 $/MWh) for Plants Entering Service in 2019
Sources: EIA SEPTEMBER 2014 3 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
POWER TRENDS
■ Yield Cos □ YieldCos are increasingly populating in clean energy universe; six companies have gone public since July 2013 □ In July, SunEdison (Nasdaq: SUNE) took TerraForm Power (Nasdaq: TERP), its holding company of operating solar PV projects, public by spinning it off and creating a YieldCo. The IPO raised approximately $530 million. ■ Coal Fired □ No new coal plants went live in the first half of 2014; the only plants planned for 2014 are the Kemper integrated gasification combined-cycle (IGCC) in Mississippi and a small conventional steam coal in North Dakota. □ This reflects the pressure coal fired power plants are experiencing from the natural gas spark spread and increased regulatory demands □ The U.S. produced 242 MMst of coal in the first quarter of 2014 ■ Solar □ 1,133 MW of solar PV installations occurred during Q2; this is an increase of 21% over the same quarter in 2013; solar accounted for 53% of the total capacity of all new electric generating capacity in Q2 and was the fourth- largest quarter for solar installations. □ California installed the most MW during Q2, 672 MW; followed by Massachusetts and New Mexico which installed 112 MW and 72 MW, respectively. □ Over half a million homeowners and commercial customers installed solar PV in the first half of 2014. ■ Wind □ Wind generation increased to more than 30% of total renewable generation from 3% between 2003 and 2013 □ EIA estimates that wind power capacity will be increasing substantially over the next several years with electricity generated by wind projected to reach 4.5% of all electricity generation by 2015. Wind power capacity is anticipated to grow by 8.6% and 13.9% in 2014 and 2015, respectively. □ In the first half of 2014, 675 MW of utility-scale wind capacity was added, more than double the same period in 2013 (329 MW) □ California added the most at 228 MW followed by Nebraska, Michigan and Minnesota. ■ Other Renewables □ 2014 is expected to be the first year when annual non-hydro generation surpasses annual hydropower generation; by 2040 non-hydro is expected to provide twice as much generation as hydro power. □ The increase in popularity in wind and solar as well as declining costs of technology have contributed to the increase in non-hydro renewable generation □ In 2015 it is estimated that electric power and heat renewables generation will increase by 3.4% from the amount estimated in 2014. □ Non-hydropower renewables are projected to increase by 4.0% with hydropower increasing by 2.2% in 2015.
Sources: EIA, GTM Research, Broker Dealer Research Reports SEPTEMBER 2014 4 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
Middle Market Trends for Energy & Power Companies
MERGERS AND ACQUISITIONS
RECENT ENERGY TRANSACTIONS: ■ September 2nd – Pacific Ethanol, Inc. (NasdaqCM: PEIX) acquired an additional 5% stake in Pacific Ethanol Holding Co. LLC for $6 million. Pacific Ethanol now owns 96% of Pacific Ethanol Holding Co. Pacific Ethanol is a holding company for its subsidiaries which produce ethanol. ■ August 13th – HII Technologies, Inc. (OTCPK:HIIT) acquired Hamilton Investment Group through a stock purchase for $11.3 million. The $11.3 million was a combination of cash and stock. Hamilton Investment Group is a provider of frack water transfer services to oilfield operators and is based in Gurthrie, Oklahoma. ■ August 11th – Redbird Gas Storage LLC acquired the remaining 57.8% of Cardinal Gas Storage Partners, LLC from Energy Capital Partners for $120 million. Redbird plans to finance this through its revolving credit facility. Cardinal Gas Storage is a developer, operator and manager of natural gas storage facilities. ■ August 1st – Worthington Industries, Inc. (NYSE: WOR) acquired Midstream Equipment Fabrication, LLC for $40 million. Midstream Equipment Fabrication manufactures and markets horizontal heated and high pressure separators used to separate oilfield fluids and gas and is based in Skiatook, Oklahoma. ■ August 1st – Anchor Drilling Fluids USA, Inc. acquired almost all of the assets of Specialty Oilfield Solutions, LLC for $30 million in cash. Specialty Oilfield Solutions, LLC is a provider of specialty chemicals and drilling fluids to independent oil and gas companies.
Source: Cap IQ, SEPTEMBER 2014 5 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
MERGERS AND ACQUISITIONS
■ July 21th – Seadrill Partners LLC (NYSE:SDLP) acquired an additional 28% stake in Seadrill Operating LP from SeaDrill Limited (NYSE:SDRL) for $370 million. Seadrill Operating LP owns and operates drilling rigs, and is based in the Marshall Islands. ■ July 16th – U.S. Silica Holdings, Inc. (NYSE: SLCA) acquired Cadre Services, Inc. through a stock purchase for $96 million. Cadre Services is a producer of frac – sand proponents for oil and natural gas explorations. Cadre Services is based in Houston, Texas. ■ July 15th – Corsa Coal Corp. (TSXV: CS) acquired PBS Coals Limited, based in Friedens, Pennsylvania, from Lybica Holding B.V. Corsa Coal paid $140 million in cash from PBS Coal. PBS mines, buys and markets bituminous coal and ignite. ■ July 15th – RDX Technologies Corporation (TSXV:RDX) acquired the assets of Renewable Energy Products, LLC from Paladin Capital Group in a cash and stock deal worth $2.85 million. Renewable Energy Products, LLC produces and markets biodiesel and crude glycerin and is located in Santa Fe Springs, California. ■ July 1st – QEP Midstream Partners, LP (NYSE:QEPM) acquired a 40% stake in Green River Processing LLC from QEP Field Services Company for $230 million. Green River Processing LLC offers oil and natural gas refining services and is based in the United States. ■ July 1st – Sunrise Coal, LLC acquired Vectram Fuels from Vectram Utility Services, Inc. Sunrise Coal paid approximately $300 million, but final purchase price is subject to working capital adjustments at closing. Vectram Fuels is based in Evansville, Indiana and is a miner and marketer of coal. ■ June 30th – Nine Energy Service, Inc. acquired Crest Pumping Technologies, LLC for $170 million. Crest Pumping Technologies, LLC provides oilfield services to oil and gas producers and is based in Fort Worth, Texas. ■ June 26th – Rupert Ireland of Virtus Oil and Gas acquired a 57.38% stake in Virtus Oil and Gas Corp. (OTCBB:VOIL) for $2.05 million. Virtus Oil and Gas Corp. operates an oil and gas exploration operation, and is based in Houston, Texas. ■ June 25th – Velocys Plc (AIM:VLS) acquired Pinto Energy, LLC for $8.5 million in stock and warrants. Pinto Energy, LLC develops, operates, and finances gas-to-liquids facilities and is based in Houston, Texas. ■ June 23rd – Dome Energy Inc. purchased VisaTex Energy LLC for $35 million cash. VisaTex Energy engages in the exploration and productions of oil and gas and is based in Houston, Texas. Dome Energy plans to finance the purchase price through its new $40 million credit facility from Green Bank. ■ June 23th – Rose Rock Midstream Operating, LLC acquired the remaining 33.34% stake in SemCrude Pipeline, LLC from Rose Rock Midstream Holdings, LLC for $300 million. SemCrude Pipeline, LLC owns and operates crude oil transportation pipeline and is based in Tulsa, Oklahoma. ■ June 19th – Midcoast Energy Partners, L.P. (NYSE: MEP) acquired an additional 12.6% stake in Midcoast Operating L.P. from Enbridge Energy Partners, L.P. (NYSE: EEP). Midcoast Energy Partners paid $350 million and plans to finance the transaction through its revolving credit facility. Midcoast Operating, L.P, an operating subsidiary of Enbridge Energy Partners,. gathers, processes, treats and transports natural gas, natural gas liquids and condensate and is based in Houston, Texas. ■ June 18th – Platinum Partners Arbitrage Fund, L.P. entered into an asset purchase and sale agreement to acquire assets of Gridway Energy Holdings, Inc. from Glacial Energy Holdings for $32.8 million in cash. Gridway Energy Holdings, Inc. supplies natural gas to industrial, commercial, and residential customers, and is based in Sandwich, Massachusetts.
Source: Cap IQ, SEPTEMBER 2014 6 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
MERGERS AND ACQUISITIONS
RECENT POWER TRANSACTIONS: ■ August 6th - Dynegy Inc. (NYSE: DYN) sold 50% stake in Nevada Cogeneration Associates #2, an operator of natural gas power plants, for $14 million in cash. Nevada Cogeneration Associates is based in Las Vegas, Nevada. ■ August 5th – Macquarie Infrastructure Company, LLC (BYSE:MIC) acquired a stake in Idaho Wind Partners 1, LLC for $11.5 million in cash. Idaho Wind Partners 1, LLC constructs, owns and operates wind farms and is based in Hagerman, Idaho. ■ July 2nd – SunEdison, Inc. (NYSE:SUNE) acquired a 50% stake in Silver Ridge Power Inc. from the AES Corporation (NYSE:AES) for $180 million in cash. Silver Ridge Power Inc. is an independent power producer that owns, constructs, and operates utility-scale solar power generation plants, and is located in Arlington, Virginia. ■ June 20th – EIF-NEC, LLC acquired the remaining 50% stake in Newark Energy Center from the Hess Newark Plant Holdings, LLC for $590 million. Hess NEC, LLC operates a gas-fired electricity generating facility, generating electricity from natural gas, and is located in Newark, New Jersey. PRIVATE PLACEMENTS RECENT ENERGY PRIVATE PLACEMENT TRANSACTIONS: ■ September 3rd – CelluFuel Inc. raised $5 million in an equity round of funding, through the issuance of common stock. Boralex Inc., Tatro Group and others participated. CelluFuel is a producer of synthetic renewable fuels and is based in Halifax, Canada. ■ August 21st – THQ, an oil and gas exploration services company, received $450 million in an equity round of funding. Quantum Energy Partners and Tug Hill, Inc. both participated in the round. ■ July 24th – Central Oil & Gas of America received $6.0 million in funding from an undisclosed investor. Central Oil & Gas of America engages in the acquisition and exploitation of identified reserves, and is based in Dallas, Texas. ■ July 18th – Furie Operating Alaska, LLC received $160 million in funding from new investor Energy Capital Partners Mezzanine Opportunities Fund, LP. Furie Operating Alaska, LLC focuses on the exploration and production of natural gas and oil, and is based in League City, Texas. ■ July 17th – Mississippi Resources, LLC announced a private placement of senior debt and convertible preferred stock for gross proceeds of $55.5 million from investor TPG Specialty Lending, Inc. Mississippi Resources, LLC is an independent oil and gas exploration and production company located in Metairie, Louisiana. ■ July 16th – SND Energy Co., Inc. announced that it received a second round of funding worth $50 million from Vortus Investment Advisors, LLC. SND Energy Co., Inc. operates and explores oil wells, and is based in Dallas, Texas. ■ July 1st – Southwest Iowa Renewable Energy, LLC announced it received a private placement of subordinated term loan notes for gross proceeds of $26,200,000. The notes matured in August and carry a coupon of LIBOR plus 6.25%, and are due 2023. Southwest Iowa Renewable Energy, LLC operates and owns an ethanol plant, and is based in Council Bluffs, Iowa. RECENT POWER PRIVATE PLACEMENT TRANSACTIONS: ■ August 7th – Sunnova Energy Corporation, a provider of solar power services to homeowners, received $110 million. Sunnova Energy Corporation is based in Houston, Texas. ■ August 6th – Northern Utilities, Inc. a distributer of natural gas in New Hampshire and Maine, announced the placement of a $50 million unsecured note. The note is due in 2044 and carries a coupon of 4.42%. Source: Cap IQ, SEPTEMBER 2014 7 Emerging Energy Company Update Analysis of Comparable Publicly Traded Smid Cap Companies & Utilities (US$ in millions, except per share data) Market Statistics Operating Metrics Valuation Metrics Sales EBITDA Net Income EV / Sales EV / EBITDA Mkt Cap Enterprise LTM Company Ticker 9/22/14 Value LTM $ 2014 E LTM 2014 E LTM LTM 2014 E
Smid Cap Pipelines/MLP's: Chesapeake Granite Wash Trust CHKR $491.3 $490.2 $106.3 NA NA $59.4 $118.7 4.6x NA NA Calumet Specialty Products Partners LP CLMT $1,912.5 $3,508.1 $5,524.5 $243.8 $294.6 $0.3 ($15.4) 0.6x 14.4x 11.9x Delek Logistics Partners, LP DKL $1,016.7 $1,247.0 $906.3 $81.7 $94.7 $38.7 $68.2 1.4x 15.3x 13.2x Holly Energy Partners L.P HEP $2,149.8 $2,957.7 $317.6 $210.1 $213.0 $30.0 $72.5 9.3x 14.1x ` 13.9x Memorial Production Partners LP MEMP $1,946.6 $3,101.2 $409.6 $67.7 $354.8 ($104.8) $147.8 7.6x NM 8.7x Midcoast Energy Partners, L.P. MEP $1,030.1 $4,288.4 $5,967.9 $150.7 $91.8 ($5.8) $8.3 0.7x NM NM Enduro Royalty Trust NDRO $385.1 $385.0 $46.8 NA NA $28.8 $37.7 8.2x NA NA Niska Gas Storage Partners LLC NKA $482.8 $1,267.4 $207.3 $127.2 $124.0 ($8.4) ($22.9) 6.1x 10.0x 10.2x NuStar GP Holdings, LLC NSH $1,859.1 $1,883.6 ($1.2) NA $67.6 ($3.1) $64.7 NM NA NM QR Energy, LP QRE $1,326.8 $2,747.9 $501.2 $136.1 $287.6 ($35.9) $67.4 5.5x NM 9.6x Summit Midstream Partners, LP SMLP $2,885.8 $3,614.2 $267.3 $136.8 $203.1 $18.9 $37.8 NM NM 17.8x Southcross Energy Partners, L.P. SXE $1,116.1 $2,711.7 $744.4 $41.9 $62.7 ($2.7) ($7.3) 3.6x NM NM USA Compression Partners, LP USAC $1,096.7 $1,327.1 $190.5 $93.6 $113.5 $11.1 $24.1 7.0x 14.2x 11.7x Western Refining Logistics, LP WNRL $1,556.2 $2,364.1 $96.1 $17.3 $70.0 $1.5 $53.2 NM NM NM
High 9.3x 15.3x 17.8x Low 0.6x 10.0x 8.7x Mean 5.0x 13.6x 12.1x Median 5.5x 14.2x 11.8x
Generation: American DG Energy, Inc. ADGE $53.8 $70.3 $8.2 ($2.3) NA ($3.0) NA 8.5x NM NA Ameresco, Inc. AMRC $337.8 $476.6 $581.1 $28.8 $35.9 $1.3 $8.8 0.8x 16.5x 13.3x Capstone Turbine Corp. CPST $366.0 $331.7 $132.0 ($13.2) ($8.8) ($10.0) ($14.2) 2.5x NM NM Covanta Holding Corporation CVA $2,821.7 $4,897.7 $1,680.0 $473.0 $492.9 $71.9 $56.7 2.9x 10.4x 9.9x FuelCell Energy Inc. FCEL $596.2 $572.6 $181.0 ($24.8) ($18.7) ($21.0) ($31.9) 3.2x NM NM USEC Inc. USU $7.1 $540.5 $972.1 ($126.0) NA ($104.6) NA 0.6x NM NA
High 8.5x 16.5x 13.3x Low 0.6x 10.4x 9.9x Mean 3.1x 13.5x 11.6x Median 2.7x 13.5x 11.6x
8 Emerging Energy Company Update Analysis of Comparable Publicly Traded Smid Cap Companies & Utilities (US$ in millions, except per share data) Market Statistics Operating Metrics Valuation Metrics Sales EBITDA Net Income EV / Sales EV / EBITDA Mkt Cap Enterprise LTM Company Ticker 9/22/14 Value LTM $ 2014 E LTM 2014 E LTM LTM 2014 E
Infrastructure: Badger Meter Inc. BMI $736.4 $798.3 $353.1 $62.0 $62.2 $29.3 $31.0 2.3x 12.9x 12.8x CECO Environmental Corp. CECE $358.2 $419.6 $242.3 $34.2 $45.4 $13.4 $25.2 1.7x 12.3x 9.2x CIRCOR International, Inc. CIR $1,213.0 $1,140.1 $847.8 $109.8 $109.8 $54.5 $65.0 1.3x 10.4x 10.4x Enphase Energy, Inc. ENPH $689.6 $658.6 $268.7 ($9.2) $3.3 ($11.0) $1.6 2.5x NM NM ESCO Technologies Inc. ESE $939.5 $947.3 $524.3 $83.0 $91.6 $40.8 $43.6 1.8x 11.4x 10.3x Fuel Systems Solutions, Inc. FSYS $194.6 $107.5 $358.8 $8.3 $2.8 ($2.5) ($22.6) 0.3x 12.9x NM Graham Corporation GHM $305.8 $244.6 $102.5 $14.8 $18.5 $7.9 $11.0 2.4x 16.5x 13.2x Global Power Equipment Group Inc. GLPW $257.7 $273.1 $471.2 $32.9 $28.6 $13.4 $10.4 0.6x 8.3x 9.6x Gorman-Rupp Co. GRC $815.9 $808.9 $412.6 $61.1 $71.8 $29.4 $37.6 2.0x 13.2x 11.3x MFRI, Inc. MFRI $68.7 $90.7 $224.2 $19.0 NA $8.4 NA 0.4x 4.8x NA MTS Systems Corporation MTSC $1,009.1 $1,017.5 $576.0 $93.7 $96.8 $47.9 $49.3 1.8x 10.9x 10.5x PMFG, Inc. PMFG $111.8 $108.3 $130.7 ($7.5) ($6.8) ($7.8) ($11.5) 0.8x NM NM Powell Industries, Inc. POWL $617.7 $533.1 $695.1 $59.3 $54.0 $30.8 $27.4 0.8x 9.0x 9.9x Power Solutions International, Inc. PSIX $761.2 $830.4 $276.2 $21.3 $29.4 ($0.4) $14.8 3.0x NM NM
High 3.0x 16.5x 13.2x Low 0.3x 4.8x 9.2x Mean 1.5x 11.1x 10.8x Median 1.7x 11.4x 10.4x
Technology: Advanced Emissions Solutions, Inc. ADES $457.6 $475.7 $269.3 $9.2 $20.1 ($8.1) ($5.3) 1.8x NM NM Advanced Energy Industries, Inc. AEIS $749.2 $623.6 $582.7 $87.9 $83.4 $44.5 $59.3 1.1x 7.1x 7.5x Energy Recovery, Inc. ERII $202.3 $175.4 $38.4 ($1.3) $0.8 ($3.2) ($6.8) 4.6x NM NM Hydrogenics Corporation HYGS $186.9 $173.5 $39.0 ($5.8) ($0.4) ($4.7) ($4.4) 4.4x NM NM Lightbridge Corp. LTBR $35.0 $34.0 $1.3 ($5.6) NA ($3.5) ($5.5) NM NM NA Plug Power Inc. PLUG $722.6 $559.8 $35.6 ($25.8) ($15.2) ($73.9) ($99.7) NM NM NM
High 4.6x 7.1x 7.5x Low 1.1x 7.1x 7.5x Mean 3.0x 7.1x 7.5x Median 3.1x 7.1x 7.5x
9 Emerging Energy Company Update Analysis of Comparable Publicly Traded Smid Cap Companies & Utilities (US$ in millions, except per share data) Market Statistics Operating Metrics Valuation Metrics Sales EBITDA Net Income EV / Sales EV / EBITDA Mkt Cap Enterprise LTM Company Ticker 9/22/14 Value LTM $ 2014 E LTM 2014 E LTM LTM 2014 E
Services: Broadwind Energy, Inc. BWEN $120.6 $113.5 $244.4 $13.9 $16.6 $1.0 $4.8 0.5x 8.2x 6.8x Ecology & Environment, Inc. EEI $42.8 $40.7 $125.1 ($2.6) NA ($3.6) NA 0.3x NM NA ENGlobal Corp. ENG $60.8 $57.1 $122.6 $6.3 NA $2.1 NA 0.5x 9.1x NA EnerNOC, Inc. ENOC $549.5 $440.6 $411.0 $51.2 $69.1 $17.0 $43.0 1.1x 8.6x 6.4x Fuel-Tech, Inc. FTEK $95.5 $80.8 $96.6 $6.8 $1.9 $2.5 ($2.1) 0.8x 11.8x NM Furmanite Corporation FRM $286.4 $313.0 $501.1 $31.9 $40.3 $10.6 $16.3 0.6x 9.8x 7.8x GSE Systems Inc. GVP $29.5 $11.4 $41.1 ($4.3) NA ($2.8) NA 0.3x NM NA Integrated Electrical Services, Inc. IESC $163.0 $151.9 $500.3 $9.0 NA $1.9 NA 0.3x 16.9x NA Mistras Group, Inc. MG $586.6 $674.5 $623.4 $63.2 $70.7 $20.2 $19.2 1.1x 10.7x 9.5x Matrix Service Company MTRX $672.1 $608.3 $1,263.1 $79.1 $88.5 $35.7 $37.7 0.5x 7.7x 6.9x PowerSecure International, Inc. POWR $210.3 $194.1 $265.0 $8.2 ($0.8) ($0.8) ($7.7) 0.7x NM NM TRC Companies Inc. TRR $195.7 $169.0 $372.9 $28.4 NA $12.2 $14.4 0.5x 5.9x NA
High 1.1x 16.9x 9.5x Low 0.3x 5.9x 6.4x Mean 0.6x 9.9x 7.5x Median 0.5x 9.1x 6.9x
Utility Scale Generation: DTE Energy Company DTE $13,416.1 $21,912.1 $11,548.0 $2,461.0 $2,599.7 $665.5 $779.0 1.9x 8.9x 8.4x NextEra Energy, Inc. NEE $41,288.1 $70,616.1 $15,727.0 $6,188.0 $6,614.1 $1,737.5 $2,323.1 4.5x 11.4x 10.7x NRG Energy, Inc. NRG $10,457.7 $29,524.7 $13,392.0 $2,486.0 $3,246.9 $98.6 $575.3 2.2x 11.9x 9.1x PG&E Corporation PCG $21,303.1 $36,841.1 $15,993.0 $3,864.0 $4,890.9 $638.8 $1,424.2 2.3x 9.5x 7.5x Public Service Enterprise Group Inc. PEG $19,228.8 $27,670.8 $10,344.0 $3,523.0 $3,809.8 $1,139.4 $1,384.2 2.7x 7.9x 7.3x Southern Company SO $38,935.9 $64,006.9 $18,055.0 $6,422.0 $6,554.2 $2,092.5 $2,507.7 3.5x 10.0x 9.8x Sempra Energy SRE $25,897.6 $39,692.6 $10,729.0 $2,925.0 $3,323.0 $829.6 $1,095.0 3.7x 13.6x 11.9x
High 4.5x 13.6x 11.9x Low 1.9x 7.9x 7.3x Mean 3.0x 10.4x 9.2x Median 2.7x 10.0x 9.1x
10 BRYANT PARK CAPITAL EMERGING ENERGY COMPANY UPDATE
MERGERS & ACQUISITIONS CAPITAL RAISING ADVISORY VALUATION
EXECUTIVES & SELECTED ENERGY TRANSACTIONS PRINCIPALS
Joel Magerman Managing Partner
Dan Avnir Managing Director
Volfi Mizrahi Managing Director
Dan Pickens Managing Director
John Poeta Managing Director
Edward Wu Managing Director
NEW YORK CITY 489 Fifth Avenue 16th Floor New York, NY 10017
212-798-8200 Founded in 1991, Bryant Park Capital (“BPC”) is a boutique investment bank which assists both public and PHILADELPHIA private companies in meeting their strategic objectives through Merger and Acquisition, Capital Raising and Eight Tower Bridge Strategic Advisory services. BPC's principals have an average of 20 years of experience as investment bankers, 161 Washington Street portfolio managers, entrepreneurs and operators in both private and public enterprises and have successfully Suite 310 completed over 385 M&A and capital raising assignments with an aggregate deal value of over $80 billion. Conshohocken, PA 19428 Securities are offered through Bryant Park Capital Securities, Inc., a licensed broker-dealer and FINRA and 484-586-8200 SIPC member firm Why Bryant Park? . Energy and Power Experience www.finra.org . We have extensive experience working with and advising energy and power driven www.sipc.org businesses . We understand the issues www.bryantparkcapital.com . We know how to analyze the company . We know how to position it properly . Access to Capital Sources . Extensive network of investors, lenders and buyers in the space . Proven Track Record . Have consistently brought incremental value to our clients The information in this newsletter is believed by Bryant Park Capital to be accurate and current and comes from reliable sources. However, unintentional errors may occur. With this being said the information is “as is” and without any representation or warranty of any kind, implied or expressed. Reproduction, retransmission, republication, or use of any of this document is prohibited. SEPTEMBER 2014 11