Diversified Industrials

European Winter Update February 2013

Thierry Monjauze Managing Director [email protected]

Julien Darmon Managing Director [email protected]

Red Norrie Managing Director [email protected]

Francois Morin Director [email protected]

63 Brook Street London W1K 4HS United Kingdom Phone: +44 20 7518 8900 This report has been prepared by Harris Williams & Co. Ltd a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and www.harriswilliams.com regulated by the Financial Services Authority (FRN #540892). Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. Quarterly Quick Read

GDP2 Manufacturing Confidence3 Consumer Confidence3 Consumer Prices3 European Economic (0.1%) +2.6% (2.3%) (0.4%) Environment1

Business Diversified Energy & Healthcare & Transport & ADG4 Consumer TMT6 Services Industrials5 Power Life Sciences Logistics7

Last Quarter 1.4% 6.1% 4.2% 4.0% (2.2%) 0.4% 1.6% 5.4% European Equity Market8 Last Year 19.3% 19.4% 14.4% 13.0% (2.1%) 20.5% 13.4% 13.0% Last 3 Years 36.4% 13.4% 23.3% 17.2% (7.5%) 0.4% 26.1% 7.3%

European M&A Deal Volume (62.5%) 2.3% (18.8%) 3.3% (44.8%) (22.9%) (15.6%) (16.1%) Activity9

Inbound M&A Deal Volume 0.0% 133.3% (5.6%) 0.0% 0.0% (66.7%) (30.0%) (77.8%) to Europe9

Sources: Eurostat, Bloomberg, Markit Economics, S&P Capital IQ • European M&A activity declined across nearly all sectors in Q4 2012, falling 27% compared to Q4 2011, as macro-economic M&A concerns persisted. Only Business Services and Diversified Industrials saw quarter-on-quarter increases in activity Environment • Within Europe, Scandinavia accounted for 19% of overall European activity by volume compared to 15% in Q3 2012. UK & Eire fell from 33% to 28% by volume during the same period

• Boeing’s 601 deliveries and over 1,200 orders allowed it to surpass European rival Airbus for the first time since 2002. However, teething issues have seen the grounding of all new 787 Dreamliners ADG • The outlook for aerospace orders remains strong, but headwinds are expected in defence as governments reduce spending on armed forces • The increasingly competitive environment for government contracts is likely to lead to industry consolidation amongst UK business services providers Business Services • M&A activity in the HR outsourcing industry has remained robust in 2012 with ADP, Insperity and Paychex each making acquisitions • Following a Christmas trading period seeing discounting by many high-street retailers to sure sales in the UK, retail chains Blockbuster, HMV and Jessops all entered administration, with difficult trading conditions expected to continue throughout Consumer 2013 • According to Markit, UK consumer spending in December 2012 dropped 1.7% year-on-year and 0.9% month-on-month as shoppers pursued online bargains rather than turn to high street retailers for their Christmas shopping • The Eurozone’s industrial production declined further in Q4 2012 with industrial output at its lowest point in nearly three Diversified years. The decline has been felt across the board with capital goods production falling at its steepest pace since 2009 Industrials • Recent improvements in the US economic outlook have driven gains in European Diversified Industrial equities in the second half of the quarter • Norwegian upstream capital spending hit a record $25 billion in 2012, while M&A activity increased by 70% to $3.9 billion Energy & Power • UK utilities have instituted a series of gas and electricity price hikes amidst increased wholesale energy costs and government social schemes • M&A activity in UK and US healthcare is expected to rise in 2013 following new regulations designed to enhance private Healthcare & sector activity in the NHS and regulation imposed by the healthcare reform law in the US Life Sciences • Baxter International, the world’s second largest provider of dialysis products, agreed to buy Swedish competitor Gambro for €2.5 billion • The value of M&A in the sector decreased as firms opted for smaller, strategic buys, with the number of deals in Europe in TMT Q4 2012 dropping 17% year-on-year, while deal value fell 58% over the same period • Global mobile advertising spend doubled last year and is expected to reach $37 billion by 2016

• UPS abandoned the €5.2 billion takeover offer for TNT Express due to opposition from the European Commission amidst Transport & antitrust concerns Logistics • Manchester Airport Group agreed to acquire Stansted Airport for £1.5 billion Notes: For the purposes of this Quarterly Update, Europe is defined as: United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); Evolution calculation based on the quarter finishing 31 December, 2012 (1) For the countries based in the EU27; (2) Year-on-year GDP growth for Q3, 2012; (3) PMI, CCI and CPI quarterly growth shown for September-December, 2012; (4) Aerospace, Defence & Government Services; (5) Also includes Building Products and Paper & Packaging; (6) Telecom, Media & Technology; (7) Also includes Speciality Distribution; (8) For all listed companies based in the countries mentioned above and with a market cap greater than €50m; (9) Change from Q3 2012 to Q4 2012 1 European Economic Climate

• Final data from Eurostat showed that the Eurozone GDP contracted by 0.1% y-o-y in Q3 2012, in-line with preliminary estimates for the quarter and confirming a technical recession • Britain's economy shrank 0.3% in Q4 2012, signalling output was stagnant over the whole of last year and increasing the prospect of a triple-dip recession, according to forecasts from the National Institute of Economic and Social Research • Fitch estimates the Eurozone contracted by 0.5% in 2012 and expects stagnation in 2013, followed by a modest return to growth of 1.2% in 2014

Quarterly Real GDP Growth (% Y-o-Y for EU-27)

% Y-o-Y Growth 6% Key Countries Q3 12A Q3 13E Germany +0.9% +0.9% 4% Sweden +0.3% +1.0%

2% UK +0.0% +0.6% France 0.0% (0.1%) 0% Netherlands (1.5%) (0.0%) Spain (1.5%) (1.6%) (2%) Italy (2.4%) (1.0%)

(4%)

(6%) Q1 08 Q4 08 Q3 09 Q2 10 Q1 11 Q4 11 Q3 12 Q2 13E Q1 14E Q4 14E Q3 15E

Source: Eurostat, latest available data as of January 29th, 2013 • The Eurozone Composite Purchasing Managers Index registered a nine-month high of 47.2 in December, in-line with the annual average but still below levels indicating growth (>50.0) • Industrial output across the Eurozone declined by 0.3% in November, representing the third consecutive monthly fall and underperformance versus consensus estimates • Consumer confidence remained depressed in December with the Consumer Confidence Indicator declining 0.6 points relative to the September figure • Inflation across the 17 European Union countries was unchanged at an annual rate of 2.2% both in November and December • Unemployment rate in the Eurozone rose to a record high of 11.8% in November from 11.7% in October • European Central Bank held its benchmark interest rate at 0.75% for a sixth straight month

European Manufacturing Confidence European Consumer Confidence

10% 60 20 10%

10 5%

M) 5% 55

- o - 0 0%

0% 50 (10) (5%)

(20) (10%) PMI Index Value Index PMI

(5%) 45 Change in PMI (M PMI Change in

(30) (15%) (%) Index PriceConsumer Consumer Confidence Indicator ConfidenceConsumer

(10%) 40 (40) (20%) Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 (1) (2) (3) Change (M-o-M %) Eurozone PMI CCI CPI Y-o-Y %

Sources: Bloomberg, Markit Economics, S&P Capital IQ Notes: (1) Purchasing Managers’ Index – A figure above 50 indicates economic growth, and below 50 indicates decline; (2) Consumer Confidence Index; (3) Consumer Price Index 2 European M&A Environment

Market Observations • The European M&A middle-market decreased by 13.3% in Q4 2012, the third successive quarter of contraction. Deal volume fell to levels not seen since Q3 2009. The decline was primarily driven by the Consumer and TMT sectors which exhibited the largest absolute reduction in activity • Senior loan volume in LBOs for the 3 months to 30th November 2012 increased to circa €7.9 billion, up from €5.2 billion for the 3 previous months • The average purchase multiple1 for LBOs with purchase price of less than €250 million was 7.4x EBITDA during the eleven months ending in November 2012 • Equity contribution2 in LBOs averaged 52% for 2012, compared to 47% during 2011

Source: S&P Leveraged Commentary & Data Notes: (1) Multiple of pro-forma trailing EBITDA, where pro-forma figures are available; (2) Equity contribution including retained equity/vendor financing and contributed equity Middle-Market M&A Activity – By Sector

1,600

Q4 - 12 Change of 1,400 Sector Q4 - 12 over Breakdown Q4 - 11 1,200 ADG 0.3% (76.9%)

1,000 Energy & Power 1.7% (46.7%)

Transportation & Logistics 7.7% (22.3%) 800 Healthcare 6.7% (33.3%) 600

Business Services 14.2% (17.7%) Number ofTransactions Number 400 Diversified Industrials 16.6% (30.4%)

200 TMT 29.1% (16.6%)

Consumer 23.7% (34.6%) 0 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Total 100.0% (26.9%)

Source: S&P Capital IQ Note: Includes closed M&A transactions of majority stakes only, where deal vale was undisclosed or between €25m – €650m, within United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland)

Buyer Segmentation Q4 20121 Transactions by Target Country2

100% 6% 4% Italy 6% 7% 8% 12% 7% Spain 80% 15% 16% Benelux3 950 60% 17% 19% Middle-Market France Transactions 40% 15% 19% DACH4

88% 5 20% Scandinavia 33% 28% UK & Eire

Strategics Financials 0% Q3-12 Q4-12 Source: S&P Capital IQ Notes: (1) Strategic buyers may include portfolio companies of private equity groups; (2) By volume; (3) Benelux defined as Belgium, the Netherlands and 3 Luxembourg; (4) DACH defined as Germany, Austria, Switzerland; (5) Scandinavia defined as Denmark, Norway, Sweden and Finland European Inbound M&A Environment

Market Observations • International inbound M&A volume declined by 21.6% in the fourth quarter with 105 closed transactions • The ADG and TMT sectors attracted the highest level of international inbound M&A investment whilst Business Services was the only sector to register an increase in international interest, up 133.3% compared to the previous quarter • North American groups dominated non-European buyers closing 80 transactions during the quarter Acquisitions by Non-European Buyers1,2

200 10,000

8,000

150 m)

6,000 € 100

4,000 Deal Value ( ValueDeal 50 Number ofTransactions Number 2,000

0 0 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12

International Activity by Number International Activity by Value

Non-European Buyers by Country Q4 121,2

Africa & Middle East 7% Asia (excl. China & India) 12%

India 3% China 2%

South America North America 0% 76%

Non-European Buyers as a Percentage of Sector Deal Volume1,2,3

% of Total Deal Volume Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 ADG 0% 0% 17% 14% 23% 0% 29% 25% 67% Business Services 5% 12% 5% 10% 9% 10% 8% 5% 10% Consumer 7% 5% 6% 8% 8% 9% 9% 6% 8% Diversified Industrials 10% 8% 8% 10% 10% 8% 11% 10% 9% Energy & Power 10% 21% 13% 18% 23% 19% 8% 7% 13% Healthcare 13% 14% 9% 18% 9% 15% 16% 14% 6% TMT 15% 15% 14% 20% 17% 16% 18% 21% 18% Transportation & Logistics 4% 9% 6% 7% 7% 5% 5% 10% 3%

Source: S&P Capital IQ Notes: (1) Includes closed M&A transactions of majority stakes only, where deal value was undisclosed or between €25m – €650m, within United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (2) International buyer defined as from outside Europe; (3) By volume 4 Aerospace, Defence & Government Services

European ADG Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter (2.3%) (1.8%) 7.0% NA 17.7% 9.8% 1.1% Cash on Balance Sheet (€ bn) 6.6 4.4 0.3 NA 1.1 0.2 NM Net Debt / LTM EBITDA Multiple 1.3x 1.5x 1.0x NA NM NM 2.7x LTM EBITDA Multiple 7.8x 8.6x 7.8x NA NM 10.0x 7.8x Change since last quarter 0.6x (0.5x) 0.7x NA NA 0.8x 4.0x LTM EBITDA Margin 15.5% 9.2% 9.5% NA 1.3% 11.0% 9.1% Consensus 2Yr Fwd Revenue Growth (p.a.) 4.3% 5.8% 10.8% NA 0.1% 3.2% (0.4%)

European ADG Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers 16 5 14 4 12

10 3 8 6 2 4

1 Numberof Transactions 2 Numberof Transactions

0 0 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 North America Asia (excl. China & India) UK & Eire Scandinavia DACH France Benelux Spain Italy China India South America Africa & Middle East Selected European ADG M&A

Target Country Acquirer Country Sub Sector EV (€m) Paul Fabrications AGC Composites Group Aerospace Components NA Ets LABASA Betri - Collet Amblard Group Aerospace Components NA

GMA Holding Mistras Group Testing Services 28

Market Observations • Germany and France agreed a new shareholders pact under which both the French and German governments own 12% stakes in EADS. Spain maintains its 4% stake • GE Aviation acquired Italian aviation propulsion component and system manufacturer Avio Spa for €3.3 billion in December 2012 • On 7th January, Precision Castparts completed its acquisition of Titanium Metals, a producer and seller of titanium melted and mill products for $2.9 billion • Boeing delivered 601 aircraft in 2012, surpassing European rival Airbus in passenger jet deliveries for the first time since 2002 • The outlook for aerospace orders remains strong, but headwinds are expected in defence as governments reduce spending on armed forces • Cerberus Capital Management has announced the planned sale process for gun manufacturer Freedom Group • Management moves3: Chemring, Cobham, Dassault, Meggitt, Senior and Ultra Electronics

Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Aerospace, Defence, & Government Services companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman 5 Business Services

European Business Services Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 8.7% 6.8% 5.7% 4.4% (1.5%) 7.4% 1.0% Cash on Balance Sheet (€ bn) 4.3 8.3 3.7 199.3 24.7 0.1 NM Net Debt / LTM EBITDA Multiple 1.5x 1.6x 1.0x 6.0x 2.8x 2.4x 2.2x LTM EBITDA Multiple 8.1x 7.4x 8.2x 10.0x 8.2x 7.6x 7.9x Change since last quarter (0.4x) 0.5x 0.4x 0.2x 2.3x 1.0x (0.2x) LTM EBITDA Margin 9.7% 9.9% 7.2% 8.0% 8.4% 7.0% 9.8% Consensus 2Yr Fwd Revenue Growth (p.a.) 7.2% 4.5% 6.0% 8.0% 1.8% 5.5% 3.9%

European Business Services Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers

300 25

250 20

200 15 150 10 100

5 Numberof Transactions

Numberof Transactions 50

Selected European Business Services M&A

Target Country Acquirer Country Sub Sector EV (€m) Heritage House M&G Securities Distribution 27 S.I.E.L.V. Bilfinger Facility Management NA SF Group Hamilton Bradshaw Employment Services NA IPD Group MSCI Research Services 96 TMC Group Gilde Buy Out Partners Staffing Services 64 Kingsmam Platts Research Services NA Air Energi Group LGV Capital Staffing Services NA NES Group AEA Investors Staffing Services 290

Market Observations • AEA Investors and LGV Capital, seeking to gain exposure to positive trends in the energy industry, each acquired providers of professional services to the oil and gas sector • The increasingly competitive environment for government contracts is likely to lead to industry consolidation amongst UK business services providers • American Express announced plans to eliminate 5,400 jobs primarily in travel services, as consumers and businesses rely more on digital technology for bookings • Management moves3: Babcock International

Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Business Services companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman 6 Consumer

European Consumer Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 7.5% 2.5% 2.9% 7.5% 3.3% 2.3% 4.7% Cash on Balance Sheet (€ bn) 26.5 31.7 22.9 4.6 4.5 NM NM Net Debt / LTM EBITDA Multiple 1.5x 2.0x 1.4x 4.4x 2.3x 1.9x 2.5x LTM EBITDA Multiple 8.3x 7.1x 8.7x 10.1x 8.0x 8.3x 9.3x Change since last quarter 0.2x (0.1x) 0.9x 0.2x 0.8x 0.5x 1.0x LTM EBITDA Margin 12.9% 10.6% 10.8% 16.0% 10.7% 11.0% 8.8% Consensus 2Yr Fwd Revenue Growth (p.a.) 4.9% 3.3% 5.8% 5.6% 3.9% 5.0% 4.7%

European Consumer Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers

450 35

400 30 350 25 300 250 20 200 15 150 10

100 Numberof Transactions Numberof Transactions 5 50 0 0 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 North America Asia (excl. China & India) UK & Eire Scandinavia DACH France Benelux Spain Italy China India South America Africa & Middle East Selected European Consumer M&A Deals Target Country Acquirer Country Sub Sector EV (€m) Britvic A.G.Barr Beverage 1,710

Douglas Holding Advent International Specialty Stores 1,379

Harry Winston (Watch and Jewellery) Swatch Group Jewellery 747

Petra Foods (Cocoa Ingredients) Barry Callebaut Ingredients 732

KP Snacks Intersnack Packaged Food 616

EmbanetCompass Pearson Education Services 499

Cole Haan Apax Partners Apparel 449

Marcolin PAI Partners Eyewear 281

Umbro International Iconix Brand Group Apparel 174

AURUM Apollo Global Retail NA Market Observations • Following a challenging Christmas trading period for many high-street retailers in the UK, retail chains Jessops, HMV and Blockbuster entered administration in quick succession in early 2013. Difficult trading conditions are expected to continue in 2013. In contrast, on-line retailers reported significant growth for the Christmas period • According to Markit, UK consumer spending in December 2012 dropped 1.7% year-on-year and 0.9% month- on-month as shoppers pursued online bargains rather than turn to high street retailers for their Christmas shopping • Leonard Green & Partners acquired a 25% stake in Topshop for £500 million with the aim of expanding the business in the US • ConAgra Foods, the US food product manufacturer, has acquired Ralcorp Holdings, the private label manufacturer, for $7.1 billion, representing a 28% 1-day premium • Management moves3: Brake Bros, Co-operative Group, Greggs, LVMH, Morrisons, Nestlé, Premier Foods and PUMA Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Consumer companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The 7 Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Diversified Industrials

European Diversified Industrials Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 3.5% 4.7% 4.7% (1.2%) 4.0% 9.6% 2.5% Cash on Balance Sheet (€ bn) 6.1 25.5 34.3 11.6 9.1 0.2 NM Net Debt / LTM EBITDA Multiple 1.3x 2.0x 1.4x 4.7x 3.6x 2.5x 2.1x LTM EBITDA Multiple 7.7x 6.7x 7.9x 7.2x 7.7x 8.2x 8.5x Change since last quarter 0.7x 0.0x 0.5x 0.4x 0.0x 0.3x 0.1x LTM EBITDA Margin 9.8% 11.1% 9.6% 10.3% 10.6% 9.5% 9.7% Consensus 2Yr Fwd Revenue Growth (p.a.) 4.4% 3.1% 4.0% 2.3% 4.9% 4.5% 2.8%

European Diversified Industrials Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers 250 25

200 20

150 15

100 10

50 5

NumberofTransactions Numberof Transactions

Selected European Diversified Industrials M&A

Target Country Acquirer Country Sub Sector EV (€m)

Phönix Armaturen-Werke Bregel Curtiss-Wright Speciality Valves 82

Blohm + Voss Industries SKF Ship Components 98

Cimbria Silverfleet Capital Partners Process Equipment 137

Premier Hytemp Dunedin Engineered Materials 42

Soldo Rotork Instrumentation 27

HSS Hire Exponent Private Equity Rental Equipment NA

Coperion Process Equipment Group Handling Technology 408

Lumera Laser Coherent Laser Manufacturer 39

Ainscough Crane Hire TPG Capital; Goldman Sachs Rental Equipment NA

Valves Entreprise Eriks Valves NA

Market Observations • Earnings season for 2012 Q4 got off to a strong start with Alcoa, the world’s largest aluminium manufacturer, posting a net profit of $242 million and raising its demand forecast by 7%, citing stable markets and less volatile metal prices • Fiat Industrial has acquired the remaining 12% of CNH Global that it did not already own • The European rental equipment sector has further consolidated with both strategic parties, including Finland's Ramirent and PAI Partners-backed Kiloutou, and financial sponsors, including TPG’s buy out of Ainscough Crane Hire and Exponent’s acquisition of HSS Hire, driving activity • Management moves3: B&B Tools, BE Group, Cargotec, CNH Global, Rexel and Travis Perkins Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Diversified Industrials companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman 8 Energy & Power

European Energy & Power Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter (6.2%) (1.8%) (3.0%) 3.4% 2.4% (0.9%) (1.7%) Cash on Balance Sheet (€ bn) 23.5 43.5 9.5 15.3 16.0 0.1 0.1 Net Debt / LTM EBITDA Multiple 0.7x 2.1x 1.6x 3.5x 2.6x 5.5x 2.3x LTM EBITDA Multiple 7.1x 5.9x 6.9x 7.2x 7.6x 9.9x 7.8x Change since last quarter (0.2x) 0.1x (0.3x) 0.1x (0.8x) 0.3x (0.0x) LTM EBITDA Margin 18.8% 18.2% 16.2% 22.7% 15.6% 34.5% 35.2% Consensus 2Yr Fwd Revenue Growth (p.a.) 25.0% 16.9% 3.3% 2.2% 0.5% 6.6% 9.5%

European Energy & Power Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers

9 45 40 8 35 7 30 6 25 5 20 4 15 3

10 2 Numberof Transactions Numberof Transactions 5 1 0 0 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 North America Asia (excl. China & India) UK & Eire Scandinavia DACH France Benelux Spain Italy China India South America Africa & Middle East Selected European Energy & Power M&A

Target Country Acquirer Country Sub Sector EV (€m) Beerenberg Segulah Advisor Integrated O&G NA Red Spider Technology Halliburton Company Oilfield Equipment NA Apply Nemo Kongsberg Oil & Gas Oilfield EPC NA Vector Technology Group Freudenberg Oil & Gas Oilfield Equipment NA Octio Statoil Venture Oilfield Services NA ZaZa Energy France Vermilion REP Exploration and Production 67 GustoMSC Parcom Capital Offshore Service Provider 146 Energonut Hera Electricity Distribution 49 Dudgeon Offshore Wind Statoil Renewables NA

Market Observations • Norwegian upstream capital spending hit $25 billion last year while M&A activity jumped by 70% to $3.9 billion • EDF raised gas and electricity prices nearly 11% in 4Q following similar announcements from British Gas, npower, Scottish Power, and SSE. Utilities have cited rising wholesale prices in addition to cost increases to meet energy efficiency standards and social schemes • Energy-focused private equity groups in Scandinavia made several high-profile exits including HitecVision’s sales of Apply Nemo and Vector Technology as well as Herkules’ exit of Beerenberg Corp. • Operators in the North Sea are expected to incur project delays and cost overruns in 2013 as high activity levels put increased demands on the equipment and services sectors • First Reserve acquired Houston-based Ameriforge Group in a Harris Williams & Co. sale process • Management moves3: BG Group and Saipem Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Energy & Power companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman 9 Healthcare & Life Sciences

European Healthcare & Life Sciences Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter (2.8%) 4.9% (0.6%) 2.6% 13.4% 1.0% 0.2% Cash on Balance Sheet (€ bn) 13.3 2.0 14.5 0.6 0.4 0.1 NM Net Debt / LTM EBITDA Multiple 1.5x 1.4x 1.6x 2.1x 0.3x 1.6x 1.3x LTM EBITDA Multiple 10.2x 8.3x 9.2x 11.3x 8.5x 11.1x 10.8x Change since last quarter 0.5x 0.5x 0.2x 0.3x 0.8x 1.2x (0.0x) LTM EBITDA Margin 18.8% 9.7% 12.5% 16.4% 13.0% 8.6% 11.5% Consensus 2Yr Fwd Revenue Growth (p.a.) 8.8% 11.8% 6.4% 3.9% 8.0% 7.4% 10.1%

European Healthcare & Life Sciences Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers

160 25 140 20 120

100 15 80 60 10 40

5 Numberof Transactions 20 Numberof Transactions

0 0 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 North America Asia (excl. China & India) China UK & Eire Scandinavia DACH France Benelux Spain Italy India South America Africa & Middle East

Selected European Healthcare & Life Sciences M&A

Target Country Acquirer Country Sub Sector EV (€m) Gambro Baxter International Equipment 2,495

Schiff Nutrition International Reckitt Benckiser Supplements 903

Mediq Advent International Distribution 837

Pronova BioPharma BASF Pharmaceuticals 534

Healthpoint Smith & Nephew Pharmaceuticals 489

Amdipharm Mercury Pharma Group Pharmaceuticals 367

LUX MED BUPA Healthcare Services 326 deVGen Syngenta Bio-technology 293

Curanum Korian Deutschland Care homes 215

Enara Group MITIE Group Homecare services 111

Market Observations • UK healthcare services is expected to see an increase in the level of deal activity, amid expectations that private sector involvement in the NHS will increase due to the removal of regulatory barriers • Analysts predict a rise in M&A activity for US hospitals in 2013 due to the threat of fiscal cliff cuts and rules imposed by the healthcare reform law • Warburg Pincus has retained advisers to explore the sale of Bausch & Lomb, seeking $10 billion. Those interested in acquiring the company include Abbott Laboratories, Johnson & Johnson, Sanofi, Merck and Pfizer • Stryker Corporation made a definitive offer to acquire Trauson, a Chinese medical products company, for a total consideration of $764 million • Ambu A/S acquired King Systems, the US-based manufacturer medical devices, for $130 million • Management moves3: Ambu, Basilea Pharma, Shire, Smith & Nephew, Straumann and Tornier Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Healthcare & Life Sciences companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux 10 (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Technology, Media & Telecom

European Technology, Media & Telecom Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 3.0% 3.3% 1.3% (6.6%) (5.3%) 0.2% (1.0%) Cash on Balance Sheet (€ bn) 19.4 23.3 16.5 7.8 7.8 11.3 NM Net Debt / LTM EBITDA Multiple 1.3x 1.4x 1.6x 3.4x 2.9x 1.7x 1.3x LTM EBITDA Multiple 9.4x 6.2x 7.9x 8.4x 8.0x 7.7x 7.2x Change since last quarter 0.1x (0.2x) 0.0x (1.2x) 0.7x (0.2x) (0.1x) LTM EBITDA Margin 17.2% 13.9% 11.2% 8.8% 10.9% 17.3% 10.8% Consensus 2Yr Fwd Revenue Growth (p.a.) 7.0% 4.6% 3.7% 2.1% (1.1%) 5.1% 4.0%

European Technology, Media & Telecom Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers 500 80 450 70 400 60 350 300 50 250 40 200 30 150 20

100

Numberof Transactions NumberofTransactions 50 10 0 0 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 North America Asia (excl. China & India) UK & Eire Scandinavia DACH France Benelux Spain Italy China India South America Africa & Middle East Selected European Technology, Media & Telecom M&A

Target Country Acquirer Country Sub Sector EV (€m) Virgin Media Liberty Global Media 17,665 Invensys Rail Siemens Software 2,156 Cymer ASML Holding Hardware 1,831 ProSiebenSat.1 Media (SBS Nordic Operations) Discovery Communications Media 1,294 Cerved Group CVC Capital Services 1,130 trivago Expedia Internet 715 LMS International Siemens Software 680 E-Plus Mobilfunk (2000 Tower Sites) American Tower Telecom 393 Epsilon ÅF Technology 330 Telia Stofa SYD Energi Telecom 255

Market Observations • The value of M&A in the sector has dropped significantly as firms opt for smaller, strategic buys • Global mobile advertising spend doubled last year and is expected to reach $37 billion by 2016 • IT spend in Europe, the Middle East and Africa is expected to hit $1.2 trillion in 2013 • CES 2013 has highlighted the surge of innovation in consumer-facing body and home monitoring technologies such as the HAPIfork and Flower Power from Parrot • Dell announced that it has entered into an agreement to be acquired by Michael Dell and Silver Lake Partners in a $24.4 billion buyout, including a $2 billion loan from Microsoft • Elliott Management acquired Compuware Corporation for $2.3 billion, representing a 15% 1-day premium • RedPrairie Corporation acquired JDA Software Group for $2.2 billion, representing a 18% 1-day premium • Management moves3: Cap Gemini, Deutsche Telekom, Logitech and VimpelCom Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Technology, Media & Telecom companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or 11 Chairman Transportation & Logistics

European Transportation & Logistics Equity Markets1

UK and Eire France DACH Spain Italy Benelux Scandinavia Price Change since last quarter 5.0% 6.5% 4.4% 10.6% 10.7% 4.4% 2.5% Cash on Balance Sheet (€ bn) 4.2 21.8 48.6 4.3 21.5 0.1 NM Net Debt / LTM EBITDA Multiple 1.4x 3.9x 3.3x 5.4x 2.4x 2.9x 3.7x LTM EBITDA Multiple 6.1x 8.3x 6.9x 9.6x 7.4x 11.1x 6.2x Change since last quarter 0.2x (0.1x) (0.1x) (0.3x) 0.5x 2.3x (2.0x) LTM EBITDA Margin 11.3% 7.3% 14.7% 13.5% 19.6% 11.5% 10.5% Consensus 2Yr Fwd Revenue Growth (p.a.) 2.8% 5.8% 4.0% 3.1% 1.5% 2.3% 4.8%

European Transportation & Logistics Middle-Market M&A Activity2

M&A Deals by Country of Target Acquisitions by Non-European Buyers 140 14

120 12

100 10

80 8

60 6

40 4 Numberof Transactions 20 Numberof Transactions 2

Target Country Acquirer Country Sub Sector EV (€m) ANA Aeroportos de Portugal VINCI Airports Airports 3,080

Virgin Atlantic Airways (49% stake) Delta Air Lines Airlines 566 Newcastle International Airport AMP Capital Airports 366 (49% Stake) Topbonus Etihad Airways Loyalty Management 286 International Consolidated Vueling Airlines SA (54% Stake) Airlines 209 Airlines Group CEVA Logistics (European Container Brambles Logistics 135 Logistics Business) XL Airways France X-Air Aviation Airlines NA

Transportes Azkar DACHSER Distribution NA

Market Observations • The proposed €5.2 billion takeover of TNT Express by UPS collapsed after the European Commission indicated it would block the deal, sending shares in TNT Express down 49% • Overseas Shipholding Group, the largest U.S. tanker operator, filed for bankruptcy protection after global shipping rates fell and the company gave up trying to win a federal loan guarantee • Manchester Airport Group agreed to acquire Stansted Airport for £1.5 billion • Royal Boskalis successfully raised €320 million of equity, which will partly be used to finance its public offer for Dockwise, the Netherlands-based heavy marine transport company • Investindustrial, the European buy out group, acquired a 37.5% stake in Aston Martin for £150 million • Management moves3: Aéroports de Paris, Air Berlin, Air France, Virgin Atlantic and Wincanton

Source: S&P CapitalIQ Notes: (1) Based on HW&Co. indices including the most relevant Transportation & Logistics companies for each country; (2) Includes transactions with a deal value between €25m and €650m and all non disclosed value deals with target based in the UK, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux 12 (Belgium, The Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland); (3) Resignation or appointment of CEO, CFO or Chairman Featured Theme

“Review of 2012 European M&A Market” • Despite a fall in global M&A in 2012, HW&Co. closed a record year with over 75 deals and our momentum continues into 2013 • With 4,589 deals, down from 5,682 in 2011, European M&A fell 19.2% by volume in 2012, a sharper decline than the 11.0% drop seen globally. Europe represented 35% of global M&A in 2012 against 38% in 2011. With a more stable overall deal volume in 2012, the North American market increased its share of the global market to 51% • A closer look at the sector breakdown demonstrates that none were spared in 2012, with no significant change in relative deal activity by sector. TMT performed the strongest, amounting to 29% of European deals versus 26% in 2011 • Inbound M&A remained strong overall in 2012, representing 11.8% of total European deals compared to 10.7% in 2011. Inbound activity continued to be dominated by the US which accounted for 413 acquisitions in Europe in 2012, compared to 442 in 2011 • Continuing weakness in the financing markets in 2012 resulted in private equity activity falling to 11% of transactions in 2012, down from 12% in 2011

European Deals by Sector Global Deals by Region

5,682 deals 4,589 deals 14,914 deals 13,270 deals 16,000 6,000 1% 2% 2% 14,000 8% 8% 1% 2% 5,000 2% 8% 1% 3% 7% 1% Africa & Middle East ADG 12,000 1% 2% 3% 13% 7% 4,000 Energy & Power Asia (excl. China & India) 8% 10,000 46% 17% 13% Transportation & Logistics India 51% 3,000 8,000 Healthcare 15% China 26% Business Services 6,000 2,000

29% South-America Number Number ofTransactions Number Number ofTransactions Diversified Industrials 4,000 North-America 1,000 TMT 38% 35% 26% 2,000 25% Consumer Europe

0 0 2011 2012 2011 2012

Source: S&P Capital IQ Source: S&P Capital IQ Note: Includes closed M&A transactions of majority stakes only, where deal value Note: Includes closed M&A transactions of majority stakes only, where deal value was undisclosed or between €25m – €650m, within the United Kingdom, Eire, was undisclosed or between €25m – €650m, within the United Kingdom, Eire, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, France, DACH (Germany, Austria, Switzerland), Spain, Italy, Benelux (Belgium, the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and the Netherlands, Luxembourg) and Scandinavia (Denmark, Norway, Sweden and Finland) Finland), North-America, South-America, Asia and Africa & Middle East

HW&Co. Selected 2012 Transactions

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13 Contacts and Disclosures

Thierry Monjauze Julien Darmon Red Norrie Francois Morin Managing Director Managing Director Managing Director Director 63 Brook Street 63 Brook Street 63 Brook Street 63 Brook Street London W1K 4HS London W1K 4HS London W1K 4HS London W1K 4HS United Kingdom United Kingdom United Kingdom United Kingdom Phone: +44 20 7518 8901 Phone: +44 20 7518 8905 Phone: +44 20 7518 8906 Phone: +44 20 7518 8907 [email protected] [email protected] [email protected] [email protected]

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