Environmental Facility Services Industry Update

ENVIRONMENTAL AND FACILITY SERVICES

INDUSTRY UPDATE │ MAY 2017

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0 ENVIRONMENTAL AND FACILITY SERVICES INDUSTRY UPDATE │ MAY 2017

SUMMARY

M&A │ SELECT RECENT ACTIVITY CONTENTS . NOTABLE M&A ACTIVITY FirstService Corporation, a Canadian property-services firm, has acquired Paul Davis . PUBLIC COMPARABLES Restoration of Omaha. The acquisition increases the scale of FirstService’s company-owned . PUBLIC COMPARABLES INDEX operations and expands its geographic footprint with a new regional presence in the Midwest. Paul Davis Restoration is a property damage mitigation, reconstruction, and remodeling company. FirstService is a manager of residential communities and a provider OUR PRACTICE of essential property services delivered through individually branded franchise systems and company-owned operations. Read more here. Harris Williams & Co. is a leading advisor to the environmental and facility services M&A market. Our ISS has acquired EVANTEC from private equity investor Palero Invest. EVANTEC, based in environmental and facility Munich, Germany, provides technical infrastructure services for nuclear facilities, power services practice includes plants, industrial plants, and commercial facilities. With around 800 employees, the experience across a broad company generated around EUR 50M of sales in 2016. Prior to the takeover by Palero, range of sectors, including services and products that EVANTEC was part of the E. ON group. Read more here. meet exacting demands for a variety of end markets. The Dwyer Group, a Waco, Texas-based parent company of trade service brands, ENVIRONMENTAL AND acquired Countrywide Grounds Maintenance, a UK-based commercial grounds keeping FACILITY service provider. Countrywide Grounds Maintenance provides grass cutting, landscape SERVICES SECTORS maintenance, sports grounds maintenance, and winter gritting services through more than 50 franchisees. The Dwyer Group will now have 19 brands with more than 2,850 franchisees . Engineering, Construction, across North America, the UK, and Germany. Read more here. and Consulting (ECC) . Facility Services . Remediation, Cleaning, Macquarie Infrastructure Partners is selling its 71.4% stake in Waste Industries, the Raleigh, and Abatement North Carolina-based non-hazardous services group. Logical strategic buyers Waste . Test, Measurement, Connections and Waste Management are both aware of the sale process. Waste and Control Connections CEO stated that while they are familiar with the company, they will not be participating in Waste Industries sale process as they do not make investments in businesses . Waste Management and Recycling they are not going to own outright. However, Waste Management, the Houston-based environmental services company, considers Waste Industries to be an attractive solid waste . Water and Wastewater business in a geography they believe to have good economic benefits in the mid to long term. Read more here. CONTACTS

Bob Baltimore Covanta, the Morristown, New Jersey-based waste-to-energy (WTE) and waste disposal Managing Director services provider, is seeking tuck-in buys in the drug destruction sector. The Company is [email protected] looking for acquisitions in these niche industries with a particular interest in targets located +1 (804) 915-0129 in the Midwest and West Coast. Read more here. Derek Lewis Managing Director PUBLIC MARKETS │ KEY TRADING STATISTICS* [email protected] +1 (804) 915-0118

Key Trading Statistics Andrew Spitzer Managing Director Stock Price % Change TEV / LTM EBITDA as of TEV / EBITDA P/E [email protected]

1 Month 12 Month Aug-15 Feb-16 Current 2016E 2017P Current 2016E +1 (804) 915-0174

Engineering, Construction, and Consulting 2.6% (23.2%) 9.0x 8.5x 11.3x 8.7x 7.9x 20.7x 15.1x Brian Lucas Managing Director

Facility Services 1.4% 12.1% 11.6x 11.1x 12.1x 11.7x 10.9x 20.7x 19.4x [email protected] +1 (804) 932-1323 Remediation, Cleaning, and Abatement 7.7% 3.7% 9.7x 8.2x 11.8x 12.2x 8.4x 23.3x 23.0x Anthony Basmajian Director Test, Measurement, and Control 2.6% 3.7% 11.9x 10.5x 14.8x 13.4x 12.7x 21.2x 23.4x [email protected] +1 (804) 887-6030 Waste Management and Recycling 2.2% (0.0%) 9.2x 8.7x 9.2x 9.5x 8.1x 21.2x 20.6x Taylor Morris Water and Wastewater 0.1% 11.1% 11.0x 11.5x 13.0x 13.4x 11.4x 24.2x 24.1x Vice President [email protected] S&P 500 2.6% 2.8% 10.5x 9.6x 10.7x 9.6x 8.7x 16.6x 18.4x +1 (804) 887-6019

www.harriswilliams.com * As of May 17, 2017.

PAGE | 1 ENVIRONMENTAL AND FACILITY SERVICES INDUSTRY UPDATE │ MAY 2017

PUBLIC COMPARABLES – MARKET PERFORMANCE

PUBLIC COMPARABLES 5-YEAR PRICE INDEX (’12 – ’17)*

125%

100%

75%

50%

25%

(25%)

(50%) May-12 May-13 May-14 May-15 May-16 May-17

S&P 500 Index - 5-Year Stock Price Index ECC Remediation, Cleaning, and Abatement Test, Measurement, & Control Waste Management & Recycling Water & Wastewater Facility Services

5-Year Minimum 5-Year Median 3-Year Median Current 5-Year Maximum Engineering, Construction, and Consulting (17.3%) 13.4% 9.0% 6.2% 60.9% Facility Services (5.8%) 52.5% 62.3% 100.2% 100.8% Remediation, Cleaning, and Abatement (4.7%) 62.4% 69.8% 93.4% 95.3% Test, Measurement, and Control (5.4%) 45.9% 49.5% 79.3% 80.0% Waste Management and Recycling (6.2%) 37.6% 42.1% 62.8% 63.6% Water and Wastewater (4.8%) 43.5% 46.7% 62.4% 62.4% S&P 500 (4.0%) 48.0% 56.4% 80.5% 80.5%

PUBLIC COMPARABLES TEV/LTM EBITDA (’12 – ’17)*

16x

14x

12x

10x

4x May-12 May-13 May-14 May-15 May-16 May-17 SP50 ECC Remediation, Cleaning, and Abatement Test, Measurement, & Control Waste Management & Recycling Water & Wastewater Facility Services 5-Year Minimum 5-Year Median 3-Year Median Current 5-Year Maximum Engineering, Construction, and Consulting 7.3x 9.1x 9.2x 11.3x 11.6x Facility Services 7.7x 10.0x 10.6x 12.1x 12.2x Remediation, Cleaning, and Abatement 7.2x 8.9x 8.8x 11.8x 12.0x Test, Measurement, and Control 9.7x 12.2x 12.4x 14.8x 15.0x Waste Management and Recycling 6.6x 8.5x 8.7x 9.2x 10.1x Water and Wastewater 8.6x 11.0x 11.4x 13.0x 13.5x S&P 500 8.4x 11.1x 11.6x 12.1x 12.3x

*As of May 17, 2017. PAGE | 2 ENVIRONMENTAL AND FACILITY SERVICES INDUSTRY UPDATE │ MAY 2017

PUBLIC COMPARABLES – INDEX

Engineering, Construction, and Consulting

Abengoa SA Fomento de Construcciones y Contratas, S.A. Stantec Inc. AECOM WSP Global Inc. Tetra Tech Inc. Amec Foster Wheeler plc IHS Inc. TRC Companies Inc. ARCADIS NV Interserve plc CITIC Envirotech Ltd. Cardno Limited Jacobs Engineering Group Inc. WS Atkins plc Chicago Bridge & Iron Company N.V. Leidos Holdings, Inc.

Facility Services

ABM Industries Incorporated Compass Group PLC MITIE Group PLC Aramark ISS A/S Sodexo S.A. Cintas Corporation

Remediation, Cleaning, and Abatement

Products Services Ecolab Inc. EMCOR Group Inc. Federal Signal Corp. Heritage-Crystal Clean, Inc Swisher Hygiene Inc. Newalta Corporation Rentokil Initial plc

Test, Measurement, and Control

Test and Measurement Products and Technologies Testing, Inspection, and Certification Services Control Products and Technologies Badger Meter Inc. Bureau Veritas SA Calgon Carbon Corporation Danaher Corp. Intertek Group plc CECO Environmental Corp. FLIR Systems, Inc. SGS SA CLARCOR Inc. Halma plc ALS Limited Flowserve Corp. HORIBA, Ltd. Eurofins Scientific SA Franklin Electric Co., Inc. Roper Industries Inc. SAI Global Limited IDEX Corporation Teledyne Technologies Inc. Mistras Group, Inc. Johnson Matthey plc Thermo Fisher Scientific, Inc. Furmanite Corporation L'Air Liquide SA Trimble Navigation Limited Pall Corporation Waters Corporation Pentair plc Rockwell Automation Inc.

Waste Management and Recycling

Diversified Waste Management and Recycling Recycled Materials Specialty Waste Fomento de Construcciones y Contratas, S.A. Mondi plc Clean Harbors, Inc. ALBA SE Resolute Forest Products Inc. Stericycle, Inc. Séché Environnement SA Clearwater Paper Corporation US Ecology, Inc. Pennon Group Plc LKQ Corp. Heritage-Crystal Clean, Inc Waste Connections Inc. Colas SA Newalta Corporation Suez Environnement Company SA Eagle Materials Inc. Perma-Fix Environmental Services Inc. Shanks Group plc Sonoco Products Co. Veolia Environnement S.A. Transpacific Industries Group Ltd. WestRock Company Nuverra Environmental Solutions, Inc. Waste Management, Inc.

Metals Processing and E-Waste Solid Waste Management and Recycling Waste to Energy Commercial Metals Company Republic Services, Inc. Covanta Holding Corporation Aurubis AG Progressive Waste Solutions Ltd. Dowa Holdings Co., Ltd. Casella Waste Systems Inc. Metalico Inc. Schnitzer Steel Industries, Inc. Sims Metal Management Limited

Water and Wastewater

Products and Technologies Utilities and Services IDEX Corporation Aegion Corporation Pennon Group Plc Mueller Water Products, Inc. American States Water Company Severn Trent Plc Pentair plc American Water Works Company, Inc. Suez Environnement Company SA Watts Water Technologies, Inc. Aqua America Inc. The York Water Company Xylem Inc. California Water Service Group United Utilities Group PLC Kurita Water Industries Ltd. Veolia Environnement S.A.

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SOURCES

Information included in this industry update was sourced from Factset.

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