www.peakstone.com Automotive Industry Insight February 2019 Automotive Industry Insight | February 2019 U.S. Automotive Industry – M&A Update Automotive categories continue to perform in line with the S&P 500 index For 2018, strategic buyers accounted for 86% of Automotive M&A transactions. During 2017, strategic buyers accounted for 89% of the transactions. Select Recent Notable Publicly Announced M&A Transactions Transaction Date Status Target Buyer Size 2/8/2019 Dec-2018 Closed $139 million Sep-2018 Announced $759 million Aug-2018 Closed $501 million Jul-2018 Closed $1.0 billion May-2018 Closed $271 million www.peakstone.com 1 Automotive Industry Insight | February 2019 U.S. Automotive Industry – M&A Market Overview U.S. Automotive transaction activity has been strong U.S. Number of Transactions by Buyer Type U.S. Transaction Multiples 13.1x 12.3x 22 14 11 8.9x 8.9x 15 10 10 7 7.5x 6.9x 6.9x 78 73 71 66 64 62 59 1.9x 1.6x 0.8x 0.8x 0.7x 0.7x 0.6x 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 EV / EBITDA EV / Revenue Strategic Financial Source: Capital IQ, data as of February, 2019. www.peakstone.com 2 Automotive Industry Insight | February 2019 Peakstone Automotive Index – Trading Statistics Automotive categories performed in line with the S&P 500 Relative Stock Performance 100% 80% 60% Aftermarket Suppliers: 69% 40% S&P 500: 47% Dealers and Service Providers: 35% 20% Aftermarket Retailers and Distributors: 20% Domestic OEM Suppliers: -22% 0% Automotive Manufacturers: -23% International OEM Suppliers: -33% -20% Peakstone Index Company details on pages 5-7 -40% -60% Source: Capital IQ, data as of February, 2019. Note: Peakstone Indexes are equally weighted. www.peakstone.com 3 Automotive Industry Insight | February 2019 Peakstone Automotive Index – Trading Statistics Automotive categories performed in line with the S&P 500 Comparable Valuation Trends – Enterprise Value / EBITDA 16.0x 14.0x 12.0x S&P 500: 11.6x 10.0x Dealers and Service Providers: 11.4x Aftermarket Retailers and Distributors: 10.7x 8.0x Aftermarket Suppliers: 8.3x Automotive Manufacturers: 7.8x International OEM Suppliers: 5.4x 6.0x Domestic OEM Suppliers: 4.6x 4.0x Peakstone Index Company details on pages 5-7 2.0x 0.0x Source: Capital IQ, data as of February, 2019. Note: Peakstone Indexes are equally weighted. www.peakstone.com 4 Automotive Industry Insight | February 2019 Public Trading Comparables by Sector Select Automotive Public Trading Comparables ($ in millions) Market Enterprise Enterprise Value / Forward Gross EBITDA Company Name Cap Value Revenue EBITDA EBIT P/E Ratio Margin % Margin % Automotive Manufacturers Toyota Motor Corporation $166,535 $309,262 1.1x 7.2x 11.6x 7.7x 19% 14% Volkswagen AG $80,885 $245,985 0.9x 9.4x 11.6x 5.2x 18% 8% Daimler AG $58,169 $195,642 1.0x 10.3x 14.4x 6.1x 20% 10% Ford Motor Company $33,375 $164,686 1.0x 14.1x 48.9x 6.9x 9% 7% Bayerische Motoren Werke Aktiengesellschaft $51,331 $147,048 1.3x 9.9x 13.8x 6.5x 17% 13% General Motors Company $54,547 $141,505 1.0x 10.2x 16.2x 6.0x 10% 8% Nissan Motor Co., Ltd. $32,603 $98,094 0.9x 7.8x 14.8x 6.7x 17% 10% Honda Motor Co., Ltd. $46,947 $92,518 0.6x 6.6x 9.8x 6.9x 21% 8% Hyundai Motor Company $22,387 $67,906 0.8x 10.9x 23.3x 9.2x 16% 7% Tesla, Inc. $52,516 $62,192 2.9x 37.7x NM 50.1x 19% 8% Fiat Chrysler Automobiles N.V. $22,815 $26,587 0.2x 2.2x 3.6x 4.4x 6% 10% AUDI AG $37,887 $17,810 0.3x 1.8x 2.6x 0.0x 16% 13% Peugeot S.A. $20,865 $14,803 0.2x 1.9x 2.5x 5.8x 18% 9% Kia Motors Corporation $12,963 $9,848 0.2x 3.5x 8.8x 7.9x 16% 6% Mazda Motor Corporation $7,234 $6,807 0.2x 3.4x 5.7x 11.6x 22% 5% Automotive Manufacturers Median $37,887 $92,518 0.9x 7.8x 11.6x 6.7x 17% 8% 0 Aftermarket Suppliers Snap-on Incorporated $8,524 $9,535 2.3x 9.1x 10.0x 12.4x 52% 26% The Goodyear Tire & Rubber Company $4,340 $9,508 0.6x 4.8x 7.9x 6.7x 22% 12% Allison Transmission Holdings, Inc. $6,147 $8,448 3.2x 8.0x 9.5x 8.3x 52% 40% Dorman Products, Inc. $2,815 $2,762 2.9x 13.7x 15.7x 18.9x 39% 21% Meritor, Inc. $1,687 $2,497 0.6x 5.2x 6.4x 6.1x 15% 10% Fox Factory Holding Corp. $2,301 $2,343 4.0x 22.2x 25.4x 25.3x 33% 18% Cooper Tire & Rubber Company $1,653 $1,816 0.6x 5.8x 10.6x 13.8x 15% 11% Standard Motor Products, Inc. $1,115 $1,139 1.0x 8.6x 10.5x 14.9x 29% 12% Aftermarket Suppliers Median $2,558 $2,630 1.7x 8.3x 10.2x 13.1x 31% 15% Source: Capital IQ, data as of February, 2019. www.peakstone.com 5 Automotive Industry Insight | February 2019 Public Trading Comparables by Sector (continued) Select Automotive Public Trading Comparables ($ in millions) Market Enterprise Enterprise Value / Forward Gross EBITDA Company Name Cap Value Revenue EBITDA EBIT P/E Ratio Margin % Margin % Domestic OEM Suppliers Danaher Corporation $76,639 $85,604 4.3x 18.2x 25.1x 22.7x 56% 24% Johnson Controls International plc $31,032 $43,953 1.4x 8.9x 11.4x 17.5x 30% 15% Aptiv PLC $19,682 $23,670 1.6x 10.5x 14.6x 14.1x 19% 16% Magna International Inc. $16,356 $20,480 0.5x 4.6x 6.6x 7.4x 14% 10% Lear Corporation $9,252 $10,036 0.5x 4.5x 5.8x 8.1x 11% 10% BorgWarner Inc. $7,973 $9,851 0.9x 5.5x 7.3x 8.6x 21% 16% American Axle & Manufacturing Holdings, Inc. $1,536 $4,988 0.7x 4.1x 6.7x 4.7x 17% 16% Gentex Corporation $5,182 $4,796 2.6x 7.8x 9.4x 12.2x 38% 34% Tenneco Inc. $2,559 $3,967 0.4x 4.6x 6.3x 4.9x 16% 9% Linamar Corporation $2,369 $3,939 0.7x 4.6x 6.6x 5.3x 16% 15% Visteon Corporation $2,124 $2,180 0.7x 7.8x 11.0x 15.3x 13% 9% Cooper-Standard Holdings Inc. $1,242 $1,753 0.5x 4.0x 6.0x 9.0x 17% 12% Gentherm Incorporated $1,407 $1,461 1.4x 10.6x 16.8x 16.6x 29% 13% Martinrea International Inc. $758 $1,223 0.4x 3.7x 5.8x 5.1x 19% 12% Metaldyne Performance Group Inc. $0 $0 0.0x 0.0x 0.0x 0.0x 17% 15% Domestic OEM Suppliers Median $2,559 $4,796 0.7x 4.6x 6.7x 8.6x 17% 15% 0 International OEM Suppliers Continental Aktiengesellschaft $29,185 $32,782 0.7x 5.7x 9.7x 9.0x 25% 11% Valeo SA $6,369 $9,888 0.5x 4.1x 6.1x 7.8x 19% 11% Autoliv, Inc. $6,424 $8,051 0.9x 6.2x 8.9x 10.3x 20% 15% Faurecia S.A. $5,388 $6,331 0.3x 3.3x 4.5x 6.4x 11% 8% Compagnie Plastic Omnium SA $3,511 $4,806 0.6x 5.1x 6.7x 7.4x 17% 12% CIE Automotive, S.A. $3,372 $4,448 1.0x 6.7x 8.9x 11.3x 43% 15% Brembo S.p.A. $3,432 $3,737 1.2x 6.9x 9.7x 11.3x 48% 17% ElringKlinger AG $503 $1,369 0.7x 7.1x 15.4x 7.0x 22% 10% Autoneum Holding AG $709 $1,073 0.5x 4.8x 7.5x 11.3x 54% 10% GKN Limited $0 $0 0.0x 0.0x 0.0x 0.0x 55% 9% International OEM Suppliers Median $3,471 $4,627 0.6x 5.4x 8.2x 8.4x 24% 11% Source: Capital IQ, data as of February, 2019. www.peakstone.com 6 Automotive Industry Insight | February 2019 Public Trading Comparables by Sector (continued) Select Automotive Public Trading Comparables ($ in millions) Market Enterprise Enterprise Value / Forward Gross EBITDA Company Name Cap Value Revenue EBITDA EBIT P/E Ratio Margin % Margin % Aftermarket Retailers and Distributors O'Reilly Automotive, Inc. $28,474 $31,860 3.3x 15.4x 17.6x 20.3x 53% 22% AutoZone, Inc. $22,031 $26,878 2.4x 10.7x 12.5x 14.6x 53% 22% Genuine Parts Company $15,093 $17,700 1.0x 12.9x 15.5x 17.4x 31% 7% LKQ Corporation $8,346 $12,480 1.1x 10.5x 13.7x 10.8x 38% 11% Advance Auto Parts, Inc. $11,838 $11,914 1.3x 12.5x 16.7x 20.6x 44% 10% Uni-Select Inc. $621 $1,004 0.6x 8.4x 11.9x 12.1x 33% 7% U.S. Auto Parts Network, Inc. $38 $39 0.1x 4.8x 18.8x 55.0x 29% 3% Aftermarket Retailers and Distributors Median $11,838 $12,480 1.1x 10.7x 15.5x 17.4x 38% 10% 0 Dealers and Service Providers CarMax, Inc. $10,270 $24,114 1.3x 18.2x 21.1x 12.2x 15% 7% Copart, Inc. $12,106 $12,185 6.6x 16.8x 18.9x 23.8x 47% 39% KAR Auction Services, Inc.