www.peakstone.com Automotive Industry Insight August 2017 Automotive Industry Insight | August 2017 Automotive M&A Update Automotive categories continue to see strong M&A activity For the 2017 YTD period, strategic buyers accounted for 83% of the automotive M&A transactions with financial buyers making up the difference; during 2016, strategic buyers accounted for approximately 88% of the transactions Select Recent Notable Publicly Announced M&A Transactions Transaction Date Status Target Buyer Size Dec-2016 Announced $310 million Nov-2016 Closed $3.42 billion Oct-2016 Closed $670 million Oct-2016 Closed $500 million Jul-2016 Closed $580 million www.peakstone.com 1 Automotive Industry Insight | August 2017 U.S. Automotive Industry – M&A Market Overview U.S. Automotive transaction activity has been strong U.S. Number of Transactions by Buyer Type U.S. Transaction Multiples 10.8x 14 22 8.9x 8.9x 7.6x 10 10 9 15 7.5x 10 NA 79 72 68 68 69 62 6 58 29 1.6x 0.8x 0.8x 0.7x 0.7x 0.6x 2010 2011 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 YTD YTD Financial Strategic EV / EBITDA EV / Revenue Source: Capital IQ, data as of 8/8/2017. www.peakstone.com 2 Automotive Industry Insight | August 2017 Peakstone Automotive Index – Trading Statistics Automotive categories performed favorably compared to the S&P 500 Relative Stock Performance 250% 200% International OEM Suppliers: 202% Automotive Manufacturers: 147% 150% Dealers and Service Providers: 124% Domestic OEM Suppliers: 119% 100% Aftermarket Suppliers: 119% S&P 500: 77% Aftermarket Retailers and Distributors: 29% 50% Peakstone Index Company details on pages 5-7 0% -50% Source: Capital IQ, data as of 8/8/2017. Note: Peakstone Indexes are equally weighted. www.peakstone.com 3 Automotive Industry Insight | August 2017 Peakstone Automotive Index – Trading Statistics Automotive categories performed favorably compared to the S&P 500 Comparable Valuation Trends – Enterprise Value / EBITDA 15.0x S&P 500: 12.2x 12.0x Dealers and Service Providers: 11.8x Aftermarket Retailers and Distributors: 10.5x Aftermarket Suppliers: 9.3x 9.0x International OEM Suppliers: 6.8x Domestic OEM Suppliers: 6.8x Automotive Manufacturers: 6.5x 6.0x Peakstone Index Company details on pages 5-7 3.0x 0.0x Source: Capital IQ, data as of 8/8/2017. Note: Peakstone Indexes are equally weighted. www.peakstone.com 4 Automotive Industry Insight | August 2017 Public Trading Comparables by Sector Select Automotive Public Trading Comparables ($ 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 $168,703 $297,926 1.2x 8.3x 14.1x 10.5x 17% 13% Volkswagen AG $76,837 $229,169 0.9x 6.1x 9.0x 5.2x 18% 13% Daimler AG $75,957 $195,583 1.0x 8.5x 10.8x 6.8x 21% 11% Ford Motor Co. $43,252 $160,944 1.0x 10.4x 35.5x 6.4x 10% 9% Bayerische Motoren Werke Aktiengesellschaft $61,742 $158,625 1.4x 9.7x 13.0x 7.4x 19% 14% General Motors Company $51,946 $120,708 0.7x 5.1x 9.6x 6.1x 13% 13% Nissan Motor Co. Ltd. $38,505 $102,611 1.0x 8.9x 13.0x 7.8x 19% 9% Honda Motor Co., Ltd. $50,585 $96,525 0.8x 7.0x 10.3x 8.7x 22% 9% Hyundai Motor Company $26,462 $69,213 0.8x 8.6x 11.5x 6.6x 19% 8% Tesla Motors, Inc. $60,950 $68,948 NM NM NM NM 24% 7% Fiat Chrysler Automobiles N.V. $18,402 $26,124 0.2x 2.1x 3.6x 4.4x 15% 9% AUDI AG $34,533 $13,173 0.2x 1.3x 1.8x 0.0x 17% 14% Peugeot S.A. $19,137 $13,125 0.2x 2.1x 3.2x 7.5x 19% 9% Kia Motors Corp. $12,573 $12,013 0.3x 3.4x 6.1x 6.3x 19% 7% Mazda Motor Corporation $9,115 $9,155 0.3x 4.4x 7.0x 7.4x 24% 6% Automotive Manufacturers Median $43,252 $96,525 0.8x 6.5x 10.0x 6.7x 19% 9% Aftermarket Suppliers The Goodyear Tire & Rubber Company $7,926 $13,335 0.9x 5.7x 8.1x 8.7x 27% 16% Snap-on Incorporated $8,881 $9,916 2.6x 10.2x 11.0x 14.6x 52% 25% Allison Transmission Holdings, Inc. $5,699 $7,997 4.0x 11.3x 14.9x 11.7x 49% 36% Meritor, Inc. $1,706 $2,505 0.8x 8.4x 11.2x 10.1x 14% 8% Dorman Products, Inc. $2,594 $2,465 2.8x 12.5x 13.9x 21.1x 40% 22% Cooper Tire & Rubber Company $1,787 $1,879 0.6x 3.7x 5.0x 9.3x 21% 18% Fox Factory Holding Corp $1,460 $1,481 3.3x 19.9x 22.6x 25.2x 32% 17% Standard Motor Products, Inc. $1,049 $1,112 1.0x 7.3x 8.5x 14.6x 30% 13% Aftermarket Suppliers Median $2,191 $2,485 1.8x 9.3x 11.1x 13.2x 31% 17% Source: Capital IQ, data as of 8/8/2017. www.peakstone.com 5 Automotive Industry Insight | August 2017 Public Trading Comparables by Sector (continued) Select Automotive Public Trading Comparables ($ in millions) Market Enterprise Enterprise Value / Forward Gross EBITDA Company Name Cap Value Revenue EBITDA EBIT P/E Ratio Margin % Margin % Domestic OEM Suppliers Johnson Controls International plc $36,932 $51,818 1.1x 10.5x 13.8x 13.9x 23% 10% Delphi Automotive PLC $25,062 $28,732 1.7x 9.3x 11.9x 13.3x 22% 18% Magna International Inc. $18,093 $20,900 0.5x 4.7x 6.6x 8.1x 15% 11% BorgWarner Inc. $9,914 $11,826 1.3x 7.4x 9.9x 12.0x 22% 17% Lear Corporation $10,080 $10,927 0.6x 5.4x 6.6x 8.7x 12% 10% American Axle & Manufacturing Holdings, Inc. $1,635 $5,329 1.1x 6.5x 9.9x 4.6x 19% 17% Dana Incorporated $3,562 $4,983 0.8x 6.9x 9.6x 10.2x 15% 11% Linamar Corporation $3,606 $4,396 0.9x 5.3x 7.7x 8.2x 17% 17% Tenneco Inc. $2,980 $4,311 0.5x 6.8x 10.0x 7.9x 17% 7% Gentex Corporation $4,980 $4,225 2.4x 6.9x 8.1x 13.2x 39% 35% Visteon Corporation $3,607 $3,402 1.1x 10.0x 12.7x 17.5x 15% 11% Cooper-Standard Holdings Inc. $1,819 $2,200 0.6x 5.0x 7.1x 10.3x 19% 12% Martinrea International Inc. $723 $1,212 0.4x 4.3x 7.2x 5.4x 15% 9% Gentherm Incorporated $1,138 $1,137 1.2x 7.2x 9.8x 12.3x 33% 16% Domestic OEM Suppliers Median $3,607 $4,689 1.0x 6.8x 9.7x 10.3x 18% 12% International OEM Suppliers Continental Aktiengesellschaft $45,136 $49,201 1.0x 6.7x 9.7x 11.0x 26% 15% Valeo SA $16,288 $17,995 0.9x 7.5x 10.7x 12.5x 18% 11% Autoliv, Inc. $9,472 $10,314 1.0x 8.1x 11.9x 16.7x 21% 12% Faurecia S.A. $7,686 $8,464 0.4x 4.8x 6.6x 10.4x 10% 8% GKN plc $7,288 $7,998 0.7x 5.5x 8.6x 9.3x 60% 11% Compagnie Plastic Omnium SA $5,666 $6,568 0.8x 6.9x 9.1x 11.4x 16% 11% Brembo S.p.A. $4,927 $5,262 1.9x 9.9x 13.4x 15.7x 47% 18% Cie Automotive, S.A. $3,206 $4,857 1.2x 8.5x 12.0x 11.5x 42% 15% ElringKlinger AG $1,121 $1,887 1.0x 6.7x 10.8x 0.0x 26% 15% Autoneum Holding AG $1,187 $1,433 0.6x 6.0x 8.7x 12.1x 54% 10% International OEM Suppliers Median $6,477 $7,283 0.9x 6.8x 10.2x 11.4x 26% 12% Source: Capital IQ, data as of 8/8/2017. www.peakstone.com 6 Automotive Industry Insight | August 2017 Public Trading Comparables by Sector (continued) Select Automotive Public Trading Comparables ($ 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. $17,870 $20,447 2.3x 10.5x 11.9x 16.6x 53% 22% AutoZone, Inc. $14,883 $19,944 1.9x 8.3x 9.6x 11.9x 53% 22% LKQ Corporation $10,603 $13,321 1.5x 12.6x 15.7x 17.3x 39% 12% Genuine Parts Company $12,253 $13,193 0.8x 10.8x 12.4x 17.2x 30% 8% Advance Auto Parts, Inc. $8,077 $9,025 1.0x 8.9x 12.0x 15.9x 44% 11% Uni-Select Inc. $933 $1,127 0.9x 10.2x 12.3x 13.9x 31% 9% U.S. Auto Parts Network, Inc. $94 $97 0.3x 11.3x 119.4x 0.0x 30% 3% Aftermarket Retailers and Distributors Median $10,603 $13,193 1.0x 10.5x 12.3x 15.9x 39% 11% Dealers and Service Providers CarMax Inc. $11,887 $24,102 1.4x 18.6x 21.4x 17.6x 15% 8% AutoNation, Inc. $4,018 $10,428 0.5x 11.4x 13.6x 11.2x 15% 4% Penske Automotive Group, Inc. $3,530 $9,084 0.4x 11.8x 13.3x 9.6x 15% 3% KAR Auction Services, Inc.