energy services and equipment - harris williams
Post on 24-Apr-2022
2 Views
Preview:
TRANSCRIPT
`-
Page | 1
Energy & Power Industry Update | February 2014 Harris Williams & Co.
SUMMARY
M&A | Select Recent Activity
GE Oil & Gas has agreed to acquire Cameron’s Reciprocating Compression division for $550 million.
The segment provides reciprocating compression equipment and aftermarket parts & services for the
oil and gas production, processing, and distribution industries. Source | Instapaper
Zachry Holdings has signed an agreement to acquire Commonwealth Engineering. Commonwealth is
a provider of engineering and procurement services, primarily to the refining and petrochemical
sectors. Source | Instapaper
Varel International Energy Services has agreed to be acquired by Sandvik for approximately $740
million. Varel is a leading provider of oil & gas drill bits, mining & industrial tools, and other
downhole products. Source | Instapaper
Littelfuse has completed the acquisition of SymCom. The Company is a provider of overload relays
and pump controllers primarily to the industrial market. Source | Instapaper
Public Markets | Key Trading Statistics
Stock Price % Change TEV / EBITDA
1 Month 12 Month Jan-13 Aug-13 Current 2013E 2014E
Energy Services and Equipment
Large Cap Service (3.1%) 16.3% 7.1x 8.3x 8.0x 6.7x 5.6x
Equipment (6.7%) 2.8% 11.7x 12.1x 11.3x 10.0x 8.5x
Small-Cap Service (2.8%) 9.2% 5.7x 8.0x 8.4x 7.1x 5.6x
OCTG (6.3%) (7.5%) 8.8x 9.0x 7.7x 7.7x 6.6x
Distribution (13.5%) (9.1%) 9.2x 7.4x 8.9x 9.7x 8.3x
Logistics (9.7%) 19.1% 8.4x 11.4x 10.3x 8.7x 7.0x
Offshore Drillers (12.4%) (23.4%) 10.0x 9.0x 7.2x 6.5x 5.0x
Land Drillers 1.5% 10.6% 4.5x 4.8x 4.9x 5.4x 4.9x
E&C (7.1%) (20.8%) 7.0x 9.0x 8.1x 6.7x 6.2x
Power Services and Equipment
Large Cap PS&E (5.7%) 15.5% 9.8x 10.1x 10.9x 9.8x 9.0x
Small-Cap PS&E (3.7%) 11.9% 10.1x 11.8x 12.7x 11.6x 10.1x
EE and Cleantech 12.4% 45.0% 13.5x 18.0x 15.0x 13.4x 12.1x
Industrial & Infrastructure Services
Large Cap (5.3%) 21.0% 8.4x 9.6x 9.9x 7.7x 7.4x
Small-Cap (8.0%) 28.2% 8.0x 8.6x 10.5x 9.6x 7.1x
Utility Services (0.2%) 9.6% 6.8x 7.9x 8.0x 8.1x 6.7x
Industrial Services 6.3% 15.7% 8.9x 9.3x 11.9x 9.4x 8.1x
Engineering Services (2.6%) 12.1% 8.8x 9.2x 8.9x 8.2x 7.4x
TEV / LTM EBITDA as of
CONTENTS
WHAT WE’RE READING
M&A TRANSACTIONS
PUBLIC MARKETS
INDUSTRY STATISTICS
PUBLIC COMPARABLES
CONTACTS
United States
Andrew Spitzer | Managing Director
aspitzer@harriswilliams.com
+1 (804) 915-0174
Tiff Armstrong | Managing Director
tarmstrong@harriswilliams.com
+1 (804) 915-0176
Brian Lucas | Managing Director
blucas@harriswilliams.com
+1 (804) 932-1323
Matthew White | Director
mwhite@harriswilliams.com
+1 (804) 915-0131
Luke Semple | Vice President
lsemple@harriswilliams.com
+1 (804) 915-0158
Chris Burnham | Vice President
cburnham@harriswilliams.com
+1 (804) 915-0142
Europe
Julien Darmon | Managing Director
jdarmon@harriswilliams.com +44 (0) 20 7518 8900
Jeffery Perkins | Managing Director
jperkins@harriswilliams.com +49 (69) 3650638 00
`-
Page | 2
Energy & Power Industry Update | February 2014 Harris Williams & Co.
WHAT WE’RE READING
A summary of interesting industry articles we have come across in the past month.
Energy | BP Energy Outlook 2035
BP recently released its 2014 edition of the BP Energy Outlook. The annual publication describes a trajectory of the global
energy system based on likely economic and population growth, as well as developments in policy and technology. BP | Instapaper
Coal | Ten Reasons Why Coal is Here to Stay
Fuel Fix suggests ten reasons for coal’s persistence in the global energy industry. Coal has historically been, and is currently the
leading fuel in the U.S. power generation mix. Fuel Fix | Instapaper
Oil & Gas | Days of Easy Money End
The Wall Street Journal reports on decreasing foreign investment in upstream activity, resulting in reduced spending by oil and
gas exploration companies. The diminished spending signals the end of easy money for U.S. drillers. The Wall Street Journal | Instapaper
Renewable Energy | What to Expect in 2014
Breaking Energy suggests large scale growth of the renewable energy markets in 2014 as wind and solar power move from
adolescence to maturity. 2014 will be marked by expansion of rooftop and utility-scale solar use, as well as the update of utility
business models. Breaking Energy | Instapaper
Oil & Gas | 20 Years of Stable Natural Gas Prices
IHS predicts the price of U.S. produced natural gas will remain stable and relatively low for at least the next two decades,
boosting opportunities for exploiting the fuel’s economic and environmental benefits. The report expects natural gas to sell for
an average of $4 – $5 per thousand cubic feet. IHS | Instapaper
Renewable Energy | Booming Solar Jobs Market
Greentech Media reports that over 24,000 solar related jobs were created in 2013. The industry is growing at roughly ten times
the rate of the broader economy. The jump in jobs is driven by growth in installations and more academic & research jobs. Greentech Media | Instapaper
Coal | The Future of Coal
The Wall Street Journal reports that despite the recent North American natural gas boom, coal production will stay constant for
the next three decades. Two thirds of the resource’s growth will be driven by exploding demand for electricity in China. The Wall Street Journal | Instapaper
Midstream | Keystone XL Environmental Study
The Oil & Gas Journal examines the findings of the U.S. Department of State’s study of the Keystone XL pipeline. According
to the DOS, construction of the proposed 1,700-mile project would not have any significant environmental impact. The Oil & Gas Journal | Instapaper
Oil & Gas | America’s Crude Oil Export Ban
Forbes argues that the ban on exportation of American crude oil must be lifted. Much of the U.S. refining capacity is designed
for heavy, “sour” crude, however, a significant portion of current production is light, and “sweet.” Growth of light, sweet crude
production is causing increased competition for available refining capacity and weakening domestic prices. Forbes | Instapaper
Oil & Gas | Petrochemical Opportunity
The Wall Street Journal sits down with a European investor, Jim Ratcliffe, CEO of the Ineos Group. Mr. Ratcliffe predicts
unprecedented petrochemicals exports in the near future, fueled by an abundance of cheap natural gas. The Wall Street Journal | Instapaper
`-
Page | 3
Energy & Power Industry Update | February 2014 Harris Williams & Co.
M&A TRANSACTIONS
Recent M&A Transactions1,2
Date Target Business Description Acquirer
1/30/2014 CMC Machine Works US based provider of manufacturing and machining services for oil and gas equipment. Packers Plus Energy Services
1/30/2014 Eagle Downhole Solutions US based provider of downhole tools and product development solutions to the oil and gas
industry.
Packers Plus Energy Services
1/30/2014 Commonwealth Engineering &
Construction
US based provider of engineering, procurement, and construction management services
for the energy industry.
Zachry Holdings
1/23/2014 Reservoir Imaging, Select Assets US based provider of geospace equipment, wire line units, and equipment for downhole
microseismic data acquisition services.
MicroSeismic
1/22/2014 American Wellhead US based provider of installation, frac-stack rental, field service, and repair on valves and
wellheads.
Canary
1/20/2014 Cameron, Reciprocating
Compression Segment
US based provider of reciprocating compression equipment and services. GE Oil & Gas
1/14/2014 Green Light Energy Services Us based provider of oilfield services and equipment rental services. IronGate Energy Services
1/13/2014 Offshore Solutions US based provider of marine risk management solutions. Gate, Inc.
1/7/2014 Varel International Energy
Services
US based provider of oilfield tools and oil drilling products. Sandvik AB
1/6/2014 ARITAS Turkey based provider of LNG & cryogenic technology. Worthington Industries
1/6/2014 EMCOR Energy Services US based provider of a range of energy services to utilities and energy service
companies.
TRC Companies, Inc.
1/6/2014 Flare Ignitors Holdings US based provider of flaring and equipment rental services to the oil, natural gas, petro-
chemical, and pipeline industries.
Total Safety U.S., Inc.
1/6/2014 LT Energy Services US based provider of surface equipment rental and oilfield services in the Eagle Ford. B/E Aerospace
1/6/2014 Wildcat Wireline US based provider of cased hole electric wireline services to the oil and gas industry. B/E Aerospace
1/6/2014 SyCom US based designer and manufacturer of electronic control and protection equipment. Littelfuse
1/3/2014 Stabiltec Downhole Tools US based provider of downhole & specialized tools to locate oil and gas resources
internationally.
ESCO Corporation
`-
Page | 4
Energy & Power Industry Update | February 2014 Harris Williams & Co.
PUBLIC MARKETS
Energy Equipment and Services
TEV / LTM EBITDA TEV / 2013E EBITDA
4.9x
7.2x
7.7x
8.0x
8.1x
8.4x
8.9x
10.3x
11.3x
Land Drillers
Offshore Drillers
OCTG
Large Cap Service
E&C
Small Cap Service
Distribution
Logistics
Equipment
5.4x
6.5x
6.7x
6.7x
7.1x
7.7x
8.7x
9.7x
10.0x
Land Drillers
Offshore Drillers
Large Cap Service
E&C
Small Cap Service
OCTG
Logistics
Distribution
Equipment
Average Revenue Growth (2010 – 2012) Average Revenue Growth (2012 – 2014E)
5.8%
12.0%
15.1%
20.4%
23.8%
24.2%
26.1%
30.6%
38.9%
Logistics
OCTG
Offshore Drillers
Distribution
Large Cap Service
Equipment
E&C
Land Drillers
Small Cap Service
0.2%
1.3%
3.4%
4.5%
4.6%
6.8%
9.3%
15.4%
18.1%
Distribution
Land Drillers
E&C
OCTG
Small Cap Service
Large Cap Service
Equipment
Logistics
Offshore Drillers
Average EBITDA Margin (2010 – 2012) Average EBITDA Margin (2012 – 2014E)
5.9%
14.7%
19.4%
19.5%
21.6%
24.4%
31.8%
31.9%
43.2%
Distribution
E&C
OCTG
Equipment
Large Cap Service
Small Cap Service
Logistics
Land Drillers
Offshore Drillers
8.1%
13.6%
19.3%
20.1%
21.5%
21.7%
31.2%
33.8%
42.9%
Distribution
E&C
OCTG
Equipment
Large Cap Service
Small Cap Service
Land Drillers
Logistics
Offshore Drillers
`-
Page | 5
Energy & Power Industry Update | February 2014 Harris Williams & Co.
PUBLIC MARKETS (continued)
Power Equipment and Services
TEV / LTM EBITDA TEV / 2013E EBITDA
10.9x
12.7x
15.0x
Large Cap
Mid and Small-Cap
EE and Cleantech
9.8x
11.6x
13.4x
Large Cap
Mid and Small-Cap
EE and Cleantech
Average Revenue Growth (2010 – 2012) Average Revenue Growth (2012 – 2014E)
6.7%
9.6%
29.3%
Large Cap
Mid and Small-Cap
EE and Cleantech
8.6%
9.2%
18.5%
Mid and Small-Cap
Large Cap
EE and Cleantech
Average EBITDA Margin (2010 – 2012) Average EBITDA Margin (2012 – 2014E)
7.4%
15.9%
16.9%
EE and Cleantech
Large Cap
Mid and Small-Cap
9.5%
15.9%
17.3%
EE and Cleantech
Large Cap
Mid and Small-Cap
`-
Page | 6
Energy & Power Industry Update | February 2014 Harris Williams & Co.
PUBLIC MARKETS (continued)
Infrastructure Services
TEV / LTM EBITDA TEV / 2013E EBITDA
8.0x
8.9x
9.9x
10.5x
11.9x
Utility Services
Engineering Svc
Large Cap
Mid and Small-Cap
Industrial Services
7.7x
8.1x
8.2x
9.4x
9.6x
Large Cap
Utility Services
Engineering Svc
Industrial Services
Mid and Small-Cap
Average Revenue Growth (2010 – 2012) Average Revenue Growth (2012 – 2014E)
8.0%
10.0%
13.4%
13.9%
20.3%
Large Cap
Mid and Small-Cap
Engineering Svc
Industrial Services
Utility Services
3.0%
9.3%
10.8%
13.7%
14.1%
Engineering Svc
Mid and Small-Cap
Utility Services
Industrial Services
Large Cap
Average EBITDA Margin (2010 – 2012) Average EBITDA Margin (2012 – 2014E)
6.4%
7.2%
8.0%
8.7%
9.0%
Large Cap
Mid and Small-Cap
Industrial Services
Engineering Svc
Utility Services
6.9%
7.5%
8.3%
8.8%
10.3%
Large Cap
Mid and Small-Cap
Industrial Services
Engineering Svc
Utility Services
`-
Page | 7
Energy & Power Industry Update | February 2014 Harris Williams & Co.
INDUSTRY STATISTICS
Commodity Prices
Price Change From
Current Prior Month Prior Year Prior Month Prior Year
Natural Gas ($ per MMBtu) $4.94 $4.19 $3.34 17.9% 48.0%
Crude Oil ($ per bbl) 97.49 98.42 97.49 (0.9%) 0.0%
Coal (CAPP) ($ per ton) 56.85 58.04 58.63 (2.1%) (3.0%)
Commodity Prices – Trailing Twelve Months
(Indexed to 100%)
25%
50%
75%
100%
125%
150%
175%
1/31/13 4/30/13 7/31/13 10/31/13 1/31/14
Natural Gas (NYMEX:^NG) Crude Oil (NYMEX:^CL) Coal (NYMEX:^QL)
`-
Page | 8
Energy & Power Industry Update | February 2014 Harris Williams & Co.
INDUSTRY STATISTICS (continued)
Rig Counts3
U.S. Rig Counts International Rig Counts
0
500
1,000
1,500
2,000
2,500
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
International Rig Count by Country
31
36
39
109
46
76
-
102
87
140
266
341
North Sea
Africa
Europe
Asia Pacific
Middle East
Latin America
Offshore Land
U.S. Oil vs. Gas Rig Count U.S. Horizontal/Directional vs. Vertical Rig Count
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Oil
Gas
0
200
400
600
800
1,000
1,200
1,400
1,600
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Horizontal / Directional
Vertical
`-
Page | 9
Energy & Power Industry Update | February 2014 Harris Williams & Co.
INDUSTRY STATISTICS (continued)
Rig Counts3 (continued)
U.S. Oil Rig Count by Region U.S. Gas Rig Count by Region
359
0
0
0
0
8
14
18
29
37
41
51
68
179
185
474
Others
Arkoma Woodford
Fayetteville
Marcellus
Haynesville
Ardmore Woodford
Barnett
Utica
Cana Woodford
DJ-Niobrara
Gulf of Mexico
Granite Wash
Mississippian
Williston
Eagle Ford
Permian
100
0
0
5
6
7
7
9
11
16
18
20
22
28
43
86
Others
Williston
Ardmore Woodford
Arkoma Woodford
Granite Wash
Mississippian
Permian
Fayetteville
Cana Woodford
Barnett
DJ-Niobrara
Gulf of Mexico
Utica
Eagle Ford
Haynesville
Marcellus
% YTD Change in U.S. Oil Rig Count by Region % YTD Change in U.S. Gas Rig Count by Region
12%
(100%)
(20%)
(13%)
(9%)
(3%)
0%
0%
0%
3%
3%
6%
6%
19%
38%
41%
Others
Haynesville
Ardmore Woodford
Barnett
Eagle Ford
Williston
Arkoma Woodford
Fayetteville
Marcellus
Mississippian
Permian
Utica
Granite Wash
DJ-Niobrara
Cana Woodford
Gulf of Mexico
(10%)
(27%)
(22%)
(22%)
(11%)
(5%)
0%
0%
0%
0%
1%
2%
5%
5%
12%
50%
Others
Cana Woodford
Mississippian
Permian
Barnett
DJ-Niobrara
Williston
Ardmore Woodford
Arkoma Woodford
Fayetteville
Marcellus
Haynesville
Utica
Gulf of Mexico
Eagle Ford
Granite Wash
`-
Page | 10
Energy & Power Industry Update | February 2014 Harris Williams & Co.
INDUSTRY STATISTICS (continued)
Well Counts3
U.S. Land Wells U.S. Land Wells per Rig
8,658
8,534
9,011 9,075 9,056
Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13
4.7
5.0
5.1
4.9
5.0
5.35.3
5.3
Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13
Well Count Change from Prior Quarter Well Count Change from Prior Year
(67)
(29)
(22)
(14)
(9)
(8)
(7)
(4)
2
8
12
21
23
75
Others
Fayetteville
Granite Wash
Williston
Haynesville
Barnett
DJ-Niobrara
Ardmore Woodford
Permian
Utica
Cana Woodford
Arkoma Woodford
Marcellus
Mississippian
Eagle Ford
(194)
(78)
(53)
(32)
(20)
(6)
2
6
18
19
69
141
155
174
197
Others
Barnett
DJ-Niobrara
Fayetteville
Granite Wash
Utica
Haynesville
Arkoma Woodford
Ardmore Woodford
Cana Woodford
Mississippian
Marcellus
Permian
Williston
Eagle Ford
`-
Page | 11
Energy & Power Industry Update | February 2014 Harris Williams & Co.
OUR GROUP
Harris Williams & Co. is a leading advisor to the energy and power M&A market. Our Energy & Power Group has
experience across a broad range of sectors, including services, products, and technologies that support or enhance energy and
power infrastructure.
Energy
Oil and Gas Equipment and Services Coal Products and Services
Select Relevant Experience
Power
Power Products and Technology
Electric and Natural Gas Transmission and
Distribution
Energy Efficiency and Clean Technology
Renewable Energy Services and Equipment
Select Relevant Experience
Infrastructure
Industrial and Infrastructure Services
Engineering and Construction
Environmental Services
Select Relevant Experience
has been acquired by
has been acquired by
a portfolio company of
Tanglewood
Investments, Inc.has been acquired by
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
a subsidiary of
has been acquired by
has acquired
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
`-
Page | 12
Energy & Power Industry Update | February 2014 Harris Williams & Co.
OUR GROUP (continued)
Key Contacts
United States Europe
Energy & Power
Andrew Spitzer | Managing Director
aspitzer@harriswilliams.com +1 (804) 915-0174
Tiff Armstrong | Managing Director
tarmstrong@harriswilliams.com +1 (804) 915-0176
Brian Lucas | Managing Director
blucas@harriswilliams.com +1 (804) 932-1323
Matthew White | Director
mwhite@harriswilliams.com +1 (804) 915-0131
Luke Semple | Vice President
lsemple@harriswilliams.com +1 (804) 915-0158
Chris Burnham | Vice President
cburnham@harriswilliams.com +1 (804) 915-0142
Environmental Services
Patrick Hanraty | Managing Director
phanraty@harriswilliams.com +1 (267) 675-5915
Bob Baltimore | Managing Director
bbaltimore@harriswilliams.com +1 (804) 915-0129
Brian Lucas | Managing Director
blucas@harriswilliams.com +1 (804) 932-1323
Energy Technology
Tyler Dewing | Director
tdewing@harriswilliams.com
+1 (617) 482-7501
Julien Darmon | Managing Director
jdarmon@harriswilliams.com
+44 (0) 20 7518 8900
Jeffery Perkins | Managing Director
jperkins@harriswilliams.com
+49 (69) 3650638 00
Harris Williams & Co. Office Locations
United States Europe
Boston Two International Place
24th Floor
Boston, Massachusetts 02110 Phone: +1 (617) 482-7501
Fax: +1 (617) 482-7503
Cleveland
1900 East 9th Street
20th Floor Cleveland, Ohio 44114
Phone: +1 (216) 689-2400
Fax: +1 (216) 689-2401
Minneapolis
222 South 9th Street Suite 3350
Minneapolis, Minnesota 55402
Phone: +1 (612) 359-2700 Fax: +1 (612) 359-2701
Philadelphia 1600 Market Street
21st Floor
Philadelphia, Pennsylvania 19103 Phone: +1 (267) 675-5900
Fax: +1 (267) 675-5901
Richmond (U.S. Headquarters)
1001 Haxall Point
9th Floor Richmond, Virginia 23219
Phone: +1 (804) 648-0072
Fax: +1 (804) 648-0073
San Francisco
575 Market Street 31st Floor
San Francisco, California 94105, USA
Phone: +1 (415) 288-4260 Fax: +1 (415) 288-4269
Frankfurt Bockenheimer Landstrasse 33-35
60325 Frankfurt
Germany Phone: +49 069 3650638 00
Fax: +49 069 3650638 01
London
63 Brook Street
London W1K 4HS, England Phone: +44 (0) 20 7518 8900
Fax: +44 (0) 20 7526 2187
Network Offices
Beijing
Hong Kong
Mumbai
New Delhi
Perth
Shanghai
Sydney
Page | 13
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES
Stock Performance
Stock Price Change from 52-Week TEV / EBITDA EBITDA
TEV Jan-14 Dec-13 Prior Month Prior Year High % of High Jan-13 Aug-13 Current 2013E 2014E
Energy Services and Equipment
Large Cap Service
Schlumberger Limited $119,289 $87.57 $90.11 (2.8%) 12.2% $94.91 92.3% 9.9x 10.1x 9.9x 8.6x 7.6x
Halliburton Company 46,827 49.01 50.75 (3.4%) 20.5% 56.52 86.7% 6.5x 8.2x 7.6x 6.4x 5.4x
Baker Hughes Incorporated 28,086 56.64 55.26 2.5% 26.7% 58.83 96.3% 6.2x 7.2x 7.7x 6.0x 5.2x
Weatherford International Ltd. 19,438 13.54 15.49 (12.6%) 1.4% 17.38 77.9% 7.7x 8.4x 8.3x 7.0x 5.8x
Median (3.1% ) 16.3% 89.5% 7.1x 8.3x 8.0x 6.7x 5.6x
Equipment
National Oilwell Varco, Inc. $31,926 $75.01 $79.53 (5.7%) 1.2% $84.71 88.6% 7.5x 8.2x 7.7x 6.8x 6.0x
Cameron International Corporation 16,335 59.97 59.53 0.7% (5.3%) 67.42 89.0% 12.1x 11.1x 11.2x 10.0x 8.6x
FMC Technologies, Inc. 12,930 49.44 52.21 (5.3%) 4.4% 59.79 82.7% 15.4x 17.0x 14.4x 13.8x 10.8x
Dresser-Rand Group Inc. 5,520 57.00 59.63 (4.4%) (6.6%) 67.38 84.6% 13.1x 12.5x 11.9x 11.1x 9.9x
Oil States International Inc. 5,415 93.95 101.72 (7.6%) 21.1% 113.64 82.7% 5.8x 7.1x 6.3x 6.6x 6.4x
Dril-Quip, Inc. 3,711 100.56 109.93 (8.5%) 24.0% 121.07 83.1% 16.0x 17.4x 16.1x 14.7x 11.4x
Forum Energy Technologies, Inc. 2,831 25.12 28.26 (11.1%) (1.5%) 32.52 77.2% 8.7x 11.7x 11.4x 10.0x 7.9x
Oceaneering International, Inc. 7,311 68.15 78.88 (13.6%) 7.8% 87.64 77.8% 11.3x 13.1x 10.0x 9.8x 8.4x
Median (6.7% ) 2.8% 82.9% 11.7x 12.1x 11.3x 10.0x 8.5x
Mid and Small-Cap Service
Superior Energy Services, Inc. $5,363 $23.64 $26.61 (11.2%) (5.3%) $29.22 80.9% 4.7x 5.1x 4.7x 4.8x 4.4x
Trican Well Service Ltd. 2,245 11.45 11.66 (1.8%) (6.6%) 14.58 78.6% 10.8x 15.7x 13.6x 12.7x 7.2x
Ensign Energy Services Inc. 2,754 14.78 15.03 (1.7%) (3.5%) 16.56 89.2% 5.5x 6.3x 6.2x 6.1x 5.5x
Key Energy Services Inc. 1,879 7.29 7.90 (7.7%) (10.3%) 9.55 76.3% 5.0x 5.5x 6.3x 7.0x 5.2x
Calfrac Well Services Ltd. 1,606 26.79 27.85 (3.8%) 16.3% 32.25 83.1% 5.8x 10.7x 10.3x 9.4x 5.8x
U.S. Silica Holdings, Inc. 1,806 29.62 34.11 (13.2%) 47.6% 37.14 79.7% 8.7x 9.7x 11.7x 8.8x 6.9x
TETRA Technologies, Inc. 1,180 10.32 12.36 (16.5%) 21.4% 13.41 77.0% 9.2x 13.0x 13.2x 7.3x 5.4x
C&J Energy Services, Inc. 1,374 23.38 23.10 1.2% 2.1% 25.35 92.2% 4.2x 4.8x 6.1x 7.0x 6.0x
Basic Energy Services, Inc. 1,470 17.13 15.78 8.6% 32.5% 17.99 95.2% 4.1x 5.4x 6.6x 6.4x 5.3x
CARBO Ceramics Inc. 2,562 115.12 116.53 (1.2%) 43.7% 132.55 86.9% 8.6x 12.2x 14.9x 12.2x 9.9x
Median (2.8% ) 9.2% 82.0% 5.7x 8.0x 8.4x 7.1x 5.6x
OCTG
Tenaris SA $25,880 $22.43 $21.43 4.7% 7.6% $24.90 90.1% 8.8x 9.4x 9.3x 9.3x 8.4x
Vallourec SA 9,299 50.00 53.45 (6.5%) (7.5%) 68.85 72.6% 9.0x 9.0x 7.7x 7.7x 6.6x
OAO TMK 6,186 11.05 11.79 (6.3%) (27.3%) 15.80 69.9% 7.0x 7.2x 6.8x 6.3x 5.6x
Median (6.3% ) (7.5% ) 72.6% 8.8x 9.0x 7.7x 7.7x 6.6x
Distribution
MRC Global Inc. $3,851 $27.92 $32.26 (13.5%) (9.1%) $34.14 81.8% 9.2x 7.4x 8.9x 9.7x 8.3x
Median (13.5% ) (9.1% ) 81.8% 9.2x 7.4x 8.9x 9.7x 8.3x
TEV / LTM EBITDA as of
Page | 14
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Revenue Revenue Growth EBITDA EBITDA Margin Avg. Margin
2010 2011 2012 2013E 2014E '10-12 '12-14E 2010 2011 2012 2013E 2014E 2010 2011 2012 2013E 2014E '10-12 '12-14E
Energy Services and Equipment
Large Cap Service
Schlumberger Limited $26,672 $36,959 $42,149 $45,463 $50,193 25.7% 9.1% $7,255 $9,854 $11,020 $12,356 $14,301 27.2% 26.7% 26.1% 27.2% 28.5% 26.7% 27.3%
Halliburton Company 17,973 24,829 28,503 29,329 32,261 25.9% 6.4% 4,128 6,096 6,087 6,180 7,550 23.0% 24.6% 21.4% 21.1% 23.4% 23.0% 21.9%
Baker Hughes Incorporated 14,414 19,831 21,361 22,275 24,306 21.7% 6.7% 2,620 4,236 3,823 3,882 4,828 18.2% 21.4% 17.9% 17.4% 19.9% 19.1% 18.4%
Weatherford International Ltd. 10,221 12,988 15,215 15,538 16,726 22.0% 4.8% 1,809 2,443 2,445 2,841 3,436 17.7% 18.8% 16.1% 18.3% 20.5% 17.5% 18.3%
Total $69,280 $94,607 $107,228 $112,605 $123,485 23.8% 6.8% $15,812 $22,629 $23,375 $25,259 $30,115 22.8% 23.9% 21.8% 22.4% 24.4% 21.6% 21.5%
Equipment
National Oilwell Varco, Inc. $12,156 $14,658 $20,041 $22,465 $24,576 28.4% 10.7% $2,954 $3,492 $4,185 $4,134 $4,734 24.3% 23.8% 20.9% 18.4% 19.3% 23.0% 19.5%
Cameron International Corporation 6,135 6,959 8,502 9,665 10,903 17.7% 13.2% 1,060 1,119 1,317 1,441 1,664 17.3% 16.1% 15.5% 14.9% 15.3% 16.3% 15.2%
FMC Technologies, Inc. 4,126 5,099 6,151 6,958 7,780 22.1% 12.5% 653 670 794 928 1,212 15.8% 13.1% 12.9% 13.3% 15.6% 14.0% 13.9%
Dresser-Rand Group Inc. 1,954 2,312 2,736 3,406 3,503 18.4% 13.1% 315 365 427 497 560 16.1% 15.8% 15.6% 14.6% 16.0% 15.8% 15.4%
Oil States International Inc. 2,412 3,479 4,413 3,491 2,883 35.3% (19.2%) 381 697 916 828 850 15.8% 20.0% 20.8% 23.7% 29.5% 18.9% 24.6%
Dril-Quip, Inc. 566 601 733 872 1,032 13.8% 18.6% 174 157 188 253 329 30.8% 26.2% 25.6% 29.0% 31.9% 27.5% 28.8%
Forum Energy Technologies, Inc. 747 1,128 1,415 1,533 1,720 37.6% 10.3% 106 216 290 285 369 14.2% 19.2% 20.5% 18.6% 21.5% 17.9% 20.2%
Oceaneering International, Inc. 1,917 2,193 2,783 3,218 3,691 20.5% 15.2% 463 486 605 746 876 24.2% 22.2% 21.7% 23.2% 23.7% 22.7% 22.9%
Total $30,013 $36,429 $46,775 $51,608 $56,088 24.2% 9.3% $6,106 $7,203 $8,721 $9,112 $10,594 20.3% 19.8% 18.6% 17.7% 18.9% 19.5% 20.1%
Mid and Small-Cap Service
Superior Energy Services, Inc. $1,563 $1,964 $4,568 $4,643 $4,990 71.0% 4.5% $417 $546 $1,245 $1,116 $1,216 26.7% 27.8% 27.2% 24.0% 24.4% 27.2% 25.2%
Trican Well Service Ltd. 1,486 2,272 2,221 1,945 2,217 22.2% (0.1%) 335 606 243 189 340 22.5% 26.7% 10.9% 9.7% 15.3% 20.1% 12.0%
Ensign Energy Services Inc. 1,363 1,860 2,204 2,000 2,221 27.2% 0.4% 315 483 566 474 536 23.1% 26.0% 25.7% 23.7% 24.1% 24.9% 24.5%
Key Energy Services Inc. 1,063 1,729 1,960 1,598 1,721 35.8% (6.3%) 130 420 421 271 371 12.2% 24.3% 21.5% 16.9% 21.6% 19.3% 20.0%
Calfrac Well Services Ltd. 941 1,512 1,600 1,437 1,817 30.4% 6.6% 186 406 258 179 310 19.8% 26.9% 16.1% 12.4% 17.1% 20.9% 15.2%
U.S. Silica Holdings, Inc. 245 296 442 545 670 34.3% 23.1% 66 80 141 165 216 27.0% 27.0% 32.0% 30.2% 32.2% 28.6% 31.5%
TETRA Technologies, Inc. 873 845 881 921 1,060 0.5% 9.7% 153 87 114 166 218 17.5% 10.3% 13.0% 18.0% 20.5% 13.6% 17.2%
C&J Energy Services, Inc. 244 758 1,112 1,070 1,179 113.4% 3.0% 83 285 336 195 236 33.8% 37.6% 30.2% 18.2% 20.0% 33.9% 22.8%
Basic Energy Services, Inc. 728 1,243 1,375 1,256 1,336 37.4% (1.4%) 114 335 299 228 281 15.6% 26.9% 21.7% 18.2% 21.0% 21.4% 20.3%
CARBO Ceramics Inc. 473 626 646 664 737 16.8% 6.9% 149 235 204 168 206 31.5% 37.6% 31.6% 25.4% 28.0% 33.6% 28.3%
Total $8,979 $13,106 $17,008 $16,079 $17,948 38.9% 4.6% $1,946 $3,483 $3,828 $3,150 $3,929 21.7% 26.6% 22.5% 19.6% 21.9% 24.4% 21.7%
OCTG
Tenaris SA $7,712 $9,972 $10,834 $10,685 $11,597 18.5% 3.5% $1,952 $2,363 $2,874 $2,788 $3,087 25.3% 23.7% 26.5% 26.1% 26.6% 25.2% 26.4%
Vallourec SA 6,022 6,880 7,022 $7,497 $8,212 8.0% 8.1% 1,240 1,222 1,029 1,244 1,439 20.6% 17.8% 14.7% 16.6% 17.5% 17.7% 16.3%
OAO TMK 5,579 6,754 6,688 $6,628 $6,944 9.5% 1.9% 904 1,017 1,010 981 1,121 16.2% 15.1% 15.1% 14.8% 16.1% 15.5% 15.3%
Total $19,313 $23,606 $24,544 $24,810 $26,753 12.0% 4.5% $4,096 $4,602 $4,914 $5,013 $5,646 21.2% 19.5% 20.0% 20.2% 21.1% 19.4% 19.3%
Distribution
MRC Global Inc. $3,846 $4,832 $5,571 $5,224 $5,591 20.4% 0.2% $138 $263 $475 $398 $456 3.6% 5.4% 8.5% 7.6% 8.2% 5.9% 8.1%
Total $3,846 $4,832 $5,571 $5,224 $5,591 20.4% 0.2% $138 $263 $475 $398 $456 3.6% 5.4% 8.5% 7.6% 8.2% 5.9% 8.1%
Page | 15
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Stock Performance
Stock Price Change from 52-Week TEV / EBITDA EBITDA
TEV Jan-14 Dec-13 Prior Month Prior Year High % of High Jan-13 Aug-13 Current 2013E 2014E
Energy Services and Equipment
Logistics
Tidewater Inc. $3,950 $51.85 $59.27 (12.5%) 5.5% $63.22 82.0% 9.8x 11.5x 10.6x 8.7x 6.9x
Hornbeck Offshore Services, Inc. 2,053 42.71 49.23 (13.2%) 16.0% 59.93 71.3% 8.4x 11.4x 8.1x 7.6x 5.3x
Gulfmark Offshore, Inc. 1,592 42.56 47.13 (9.7%) 22.4% 53.89 79.0% 11.3x 17.2x 12.8x 10.0x 7.0x
ATCO Ltd. 12,573 44.79 41.91 6.9% 19.1% 46.79 95.7% 7.4x 7.8x 8.0x 8.0x 7.5x
Bristow Group, Inc. 3,155 71.79 75.06 (4.4%) 26.0% 85.70 83.8% 8.3x 10.6x 10.3x 8.9x 7.8x
Median (9.7% ) 19.1% 82.0% 8.4x 11.4x 10.3x 8.7x 7.0x
Offshore Drillers
Transocean Ltd. $22,760 $43.28 $49.42 (12.4%) (23.7%) 59.50 72.7% 10.3x 9.0x 8.1x 6.5x 5.5x
Diamond Offshore Drilling, Inc. 7,006 48.54 56.92 (14.7%) (35.4%) 76.85 63.2% 7.8x 7.1x 5.6x 5.7x 4.9x
Rowan Companies plc 4,897 31.37 35.36 (11.3%) (9.0%) 38.65 81.2% 10.3x 9.4x 8.2x 8.2x 6.1x
Hercules Offshore, Inc. 1,655 4.98 6.52 (23.6%) (24.4%) 7.96 62.6% 9.7x 8.3x 6.1x 5.6x 3.5x
Atwood Oceanics, Inc. 4,227 47.40 53.39 (11.2%) (10.2%) 59.49 79.7% 10.7x 9.2x 7.7x 6.6x 5.0x
Noble Corp. 14,032 31.03 37.47 (17.2%) (23.4%) 42.34 73.3% 10.0x 9.6x 7.1x 5.8x 4.9x
Ensco plc 16,241 50.37 57.18 (11.9%) (20.8%) 65.82 76.5% 9.3x 8.0x 7.2x 6.8x 6.3x
Median (12.4% ) (23.4% ) 73.3% 10.0x 9.0x 7.2x 6.5x 5.0x
Land Drillers
Nabors Industries Ltd. $8,678 $17.08 $16.99 0.5% 2.5% 18.33 93.2% 4.5x 4.8x 5.2x 5.4x 4.9x
Helmerich & Payne, Inc. 9,243 88.04 84.08 4.7% 36.8% 88.58 99.4% 5.2x 4.9x 4.9x 6.1x 5.8x
Patterson-UTI Energy Inc. 4,156 25.69 25.32 1.5% 26.3% 26.09 98.5% 3.6x 3.9x 4.4x 4.8x 4.7x
Precision Drilling Corporation 3,549 8.96 8.93 0.3% 9.1% 10.36 86.5% 7.4x 9.5x 9.3x 6.3x 5.3x
Pioneer Energy Services Corp. 1,036 8.38 8.01 4.6% 10.6% 9.91 84.6% 3.9x 4.0x 4.3x 4.5x 4.5x
Median 1.5% 10.6% 93.2% 4.5x 4.8x 4.9x 5.4x 4.9x
Engineering & Construction
Technip $9,617 $85.37 $94.30 (9.5%) (20.8%) 124.84 68.4% 8.6x 9.0x 6.6x 6.6x 6.3x
Saipem SpA 17,298 23.49 21.00 11.8% (16.7%) 33.57 70.0% 6.2x 12.1x 16.4x 17.8x 8.0x
Subsea 7 SA 6,238 17.18 18.50 (7.1%) (18.5%) 22.95 74.9% 7.0x 7.7x 8.1x 5.9x 4.1x
Petrofac Limited 6,889 19.00 20.14 (5.6%) (29.5%) 27.75 68.5% 10.0x 8.3x 8.2x 6.8x 6.0x
McDermott International Inc. 1,849 8.34 9.16 (9.0%) (31.5%) 13.48 61.9% 5.6x 10.8x NM NM NM
Median (7.1% ) (20.8% ) 68.5% 7.0x 9.0x 8.1x 6.7x 6.2x
TEV / LTM EBITDA as of
Page | 16
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Revenue Revenue Growth EBITDA EBITDA Margin Avg. Margin
2010 2011 2012 2013E 2014E '10-12 '12-14E 2010 2011 2012 2013E 2014E 2010 2011 2012 2013E 2014E '10-12 '12-14E
Energy Services and Equipment
Logistics
Tidewater Inc. $1,138 $1,051 $1,060 $1,231 $1,457 (3.5%) 17.2% $358 $271 $265 $339 $454 31.5% 25.8% 25.0% 27.5% 31.2% 27.4% 27.9%
Hornbeck Offshore Services, Inc. 421 382 513 581 763 10.4% 22.0% 187 135 209 275 394 44.5% 35.4% 40.7% 47.4% 51.6% 40.2% 46.6%
Gulfmark Offshore, Inc. 360 382 389 453 552 4.0% 19.1% 123 138 103 160 233 34.2% 36.1% 26.5% 35.4% 42.3% 32.3% 34.7%
ATCO Ltd. 3,505 3,926 4,376 4,266 4,416 11.7% 0.4% 1,288 1,495 1,652 1,665 1,774 36.7% 38.1% 37.8% 39.0% 40.2% 37.5% 39.0%
Bristow Group, Inc. 1,061 1,115 1,199 1,501 1,676 6.3% 18.2% 222 247 261 314 343 21.0% 22.1% 21.8% 20.9% 20.4% 21.6% 21.0%
Total $6,485 $6,855 $7,538 $8,032 $8,864 5.8% 15.4% $2,179 $2,286 $2,490 $2,753 $3,198 33.6% 33.3% 33.0% 34.3% 36.1% 31.8% 33.8%
Offshore Drillers
Transocean Ltd. $7,698 $7,407 $8,773 $9,526 $10,093 6.8% 7.3% $3,386 $2,537 $2,766 $3,497 $4,206 44.0% 34.3% 31.5% 36.7% 41.7% 36.6% 36.6%
Diamond Offshore Drilling, Inc. 3,230 3,254 2,936 2,925 3,465 (4.7%) 8.6% 1,784 1,649 1,337 1,202 1,527 55.2% 50.7% 45.5% 41.1% 44.1% 50.5% 43.6%
Rowan Companies plc 1,018 939 1,393 1,577 1,940 17.0% 18.0% 522 343 519 599 825 51.3% 36.5% 37.3% 38.0% 42.5% 41.7% 39.3%
Hercules Offshore, Inc. 625 655 710 876 1,134 6.6% 26.4% 151 142 171 298 483 24.2% 21.6% 24.1% 34.0% 42.6% 23.3% 33.6%
Atwood Oceanics, Inc. 651 637 756 1,061 1,275 7.8% 29.9% 358 377 390 543 657 55.0% 59.2% 51.6% 51.2% 51.5% 55.3% 51.4%
Noble Corp. 2,728 2,616 3,431 4,227 5,230 12.2% 23.5% 1,456 1,128 1,530 1,959 2,563 53.4% 43.1% 44.6% 46.3% 49.0% 47.0% 46.6%
Ensco plc 1,674 2,798 4,301 4,950 5,479 60.3% 12.9% 878 1,174 2,097 2,404 2,715 52.4% 42.0% 48.8% 48.6% 49.6% 47.7% 49.0%
Total $17,623 $18,307 $22,299 $25,143 $28,616 15.1% 18.1% $8,535 $7,350 $8,809 $10,502 $12,976 48.4% 40.2% 39.5% 41.8% 45.3% 43.2% 42.9%
Land Drillers
Nabors Industries Ltd. $4,134 $6,060 $6,990 $6,165 $6,471 30.0% (3.8%) $1,428 $1,842 $1,976 $1,596 $1,761 34.5% 30.4% 28.3% 25.9% 27.2% 31.1% 27.1%
Helmerich & Payne, Inc. 1,862 2,529 3,138 3,373 3,499 29.8% 5.6% 709 1,004 1,278 1,393 1,462 38.1% 39.7% 40.7% 41.3% 41.8% 39.5% 41.3%
Patterson-UTI Energy Inc. 1,463 2,566 2,723 2,652 2,772 36.4% 0.9% 514 958 990 842 888 35.1% 37.3% 36.4% 31.8% 32.0% 36.3% 33.4%
Precision Drilling Corporation 1,437 1,919 2,047 1,896 2,136 19.3% 2.1% 437 569 478 584 708 30.4% 29.7% 23.4% 30.8% 33.2% 27.8% 29.1%
Pioneer Energy Services Corp. 487 716 919 950 951 37.4% 1.7% 102 191 248 231 230 21.0% 26.6% 26.9% 24.3% 24.2% 24.9% 25.2%
Total $9,384 $13,790 $15,817 $15,036 $15,828 30.6% 1.3% $3,191 $4,564 $4,970 $4,646 $5,050 34.0% 33.1% 31.4% 30.9% 31.9% 31.9% 31.2%
Engineering & Construction
Technip $8,155 $8,851 $10,817 $12,863 $14,007 15.2% 13.8% $1,041 $1,101 $1,326 $1,470 $1,538 12.8% 12.4% 12.3% 11.4% 11.0% 12.5% 11.6%
Saipem SpA 14,965 16,360 17,627 17,071 16,909 8.5% (2.1%) 2,449 2,766 2,902 987 2,246 16.4% 16.9% 16.5% 5.8% 13.3% 16.6% 11.8%
Subsea 7 SA 2,369 5,055 6,297 6,417 7,212 63.0% 7.0% 478 825 1,044 1,039 1,504 20.2% 16.3% 16.6% 16.2% 20.9% 17.7% 17.9%
Petrofac Limited 4,354 5,801 6,324 6,532 6,840 20.5% 4.0% 635 759 849 1,011 1,130 14.6% 13.1% 13.4% 15.5% 16.5% 13.7% 15.1%
McDermott International Inc. 2,404 3,445 3,642 2,961 3,218 23.1% (6.0%) 421 335 422 NM NM 17.5% 9.7% 11.6% NM NM 12.9% 11.6%
Total $32,247 $39,512 $44,706 $45,843 $48,186 26.1% 3.4% $5,023 $5,786 $6,543 $4,507 $6,418 15.6% 14.6% 14.6% 9.8% 13.3% 14.7% 13.6%
Page | 17
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Stock Performance
Stock Price Change from 52-Week TEV / EBITDA EBITDA
TEV Jan-14 Dec-13 Prior Month Prior Year High % of High Jan-13 Aug-13 Current 2013E 2014E
Power Services and Equipment
Large Cap Equipment and Services
General Electric Company $629,449 $25.13 $28.03 (10.3%) 12.8% $28.09 89.5% 22.1x 21.7x 22.3x 23.0x 21.8x
Siemens Aktiengesellschaft 118,946 126.48 134.30 (5.8%) 16.1% 136.65 92.6% 8.1x 9.9x 11.3x 8.5x 7.7x
ABB Ltd. 61,330 24.99 25.94 (3.7%) 15.9% 27.40 91.2% 10.3x 10.2x 10.7x 10.0x 9.0x
Schneider Electric S.A. 53,368 80.84 85.58 (5.5%) 6.8% 90.42 89.4% 9.3x 10.0x 10.1x NA NA
Honeywell International Inc. 72,489 91.23 91.37 (0.2%) 33.7% 92.15 99.0% 11.0x 13.0x 11.2x 9.6x 8.8x
Emerson Electric Co. 48,995 65.94 70.18 (6.0%) 15.2% 70.66 93.3% 9.0x 9.9x 10.1x 9.5x 8.9x
Eaton Corporation plc 43,122 73.09 76.12 (4.0%) 28.3% 78.19 93.5% 13.8x 15.3x 14.8x 13.1x 11.4x
Alstom SA 13,778 28.41 35.74 (20.5%) (35.6%) 48.30 58.8% 7.0x 5.8x 5.6x NA NA
Median (5.7% ) 15.5% 91.9% 9.8x 10.1x 10.9x 9.8x 9.0x
Mid and Small-Cap Equipment and Services
Ametek Inc. $13,216 $49.42 $52.67 (6.2%) 20.6% $62.05 79.6% 13.2x 14.4x 14.2x 13.1x 12.2x
Hubbell Inc. 6,681 116.73 108.90 7.2% 28.2% 119.81 97.4% 9.9x 11.8x 11.6x 10.7x 9.9x
Valmont Industries, Inc. 3,921 146.38 149.12 (1.8%) 0.5% 164.93 88.8% 8.9x 7.3x 7.0x 6.9x 6.9x
Littelfuse Inc. 1,932 89.50 92.93 (3.7%) 39.8% 94.83 94.4% 9.9x 12.2x 12.7x 11.6x 10.1x
AZZ incorporated 1,453 41.81 48.86 (14.4%) (2.3%) 49.64 84.2% 10.1x 10.1x 9.9x 9.9x 8.6x
ESCO Technologies Inc. 1,054 34.90 34.26 1.9% (15.2%) 42.31 82.5% 14.1x 11.8x 14.4x 12.1x 11.2x
Thermon Group Holdings, Inc. 930 27.08 27.33 (0.9%) 11.9% 29.06 93.2% 11.5x 10.3x 13.8x 12.6x 11.4x
Badger Meter Inc. 793 50.94 54.50 (6.5%) 2.9% 56.36 90.4% 13.7x 15.0x 15.6x 16.1x 14.2x
Powell Industries, Inc. 632 61.41 66.99 (8.3%) 35.7% 69.33 88.6% 6.3x 8.1x 10.0x 8.6x 7.1x
Global Power Equipment Group Inc. 311 17.81 19.57 (9.0%) 8.5% 20.98 84.9% 8.6x 9.6x 11.3x 17.5x 8.7x
Median (3.7% ) 11.9% 88.8% 10.1x 11.8x 12.7x 11.6x 10.1x
Energy Efficiency and Clean Technology
SolarCity Corporation $6,498 $74.09 $56.82 30.4% NA $79.86 92.8% NM NM NM NM NM
Itron, Inc. 1,880 40.38 41.43 (2.5%) (13.0%) 48.42 83.4% 8.2x 10.0x 11.1x 11.8x 8.1x
Silver Spring Networks, Inc. 662 17.05 21.00 (18.8%) NA 33.82 50.4% NM NM NM NM 26.0x
Ameresco, Inc. 604 9.86 9.66 2.1% 0.2% 10.88 90.6% 13.5x 18.0x 19.3x 14.9x 13.8x
EnerNOC, Inc. 507 22.40 17.21 30.2% 45.0% 23.45 95.5% NM NM 10.1x 7.2x NM
PowerSecure International, Inc. 392 19.30 17.17 12.4% 122.1% 20.57 93.8% 15.1x 18.2x 18.9x 19.1x 10.5x
Echelon Corporation 139 4.06 2.15 88.8% 67.8% 4.18 97.1% NM NM NM NM NM
Median 12.4% 45.0% 92.8% 13.5x 18.0x 15.0x 13.4x 12.1x
TEV / LTM EBITDA as of
Page | 18
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Revenue Revenue Growth EBITDA EBITDA Margin Avg. Margin
2010 2011 2012 2013E 2014E '10-12 '12-14E 2010 2011 2012 2013E 2014E 2010 2011 2012 2013E 2014E '10-12 '12-14E
Power Services and Equipment
Large Cap Equipment and Services
General Electric Company $100,436 $94,523 $100,149 $146,086 $149,625 (0.1%) 22.2% $26,438 $28,349 $28,846 $28,528 $29,287 26.3% 30.0% 28.8% 19.5% 19.6% 28.4% 22.6%
Siemens Aktiengesellschaft 92,904 97,896 104,468 103,388 104,025 6.0% (0.2%) 13,085 13,456 12,042 11,247 14,246 14.1% 13.7% 11.5% 10.9% 13.7% 13.1% 12.0%
ABB Ltd. 31,589 37,990 39,336 41,886 42,985 11.6% 4.5% 4,573 5,551 5,224 6,182 6,827 14.5% 14.6% 13.3% 14.8% 15.9% 14.1% 14.6%
Schneider Electric S.A. 26,429 30,161 32,322 31,952 35,431 10.6% 4.7% 4,687 4,915 5,356 5,176 5,799 17.7% 16.3% 16.6% 16.2% 16.4% 16.9% 16.4%
Honeywell International Inc. 32,350 36,529 37,665 38,848 40,834 7.9% 4.1% 3,998 3,531 5,082 7,177 7,510 12.4% 9.7% 13.5% 18.5% 18.4% 11.8% 16.8%
Emerson Electric Co. 21,039 24,222 24,412 24,607 24,786 7.7% 0.8% 3,965 4,797 4,828 4,786 5,086 18.8% 19.8% 19.8% 19.4% 20.5% 19.5% 19.9%
Eaton Corporation plc 13,715 16,049 16,311 22,058 23,247 9.1% 19.4% 1,722 2,189 2,140 3,310 3,786 12.6% 13.6% 13.1% 15.0% 16.3% 13.1% 14.8%
Alstom SA 26,524 28,242 26,907 27,806 27,138 0.7% 0.4% 2,805 2,864 2,566 2,671 2,421 10.6% 10.1% 9.5% -- -- 10.1% 9.5%
Total $344,986 $365,612 $381,570 $436,631 $448,070 6.7% 7.0% $61,272 $65,652 $66,084 $69,077 $74,961 17.8% 18.0% 17.3% 15.8% 16.7% 15.9% 15.8%
Mid and Small-Cap Equipment and Services
Ametek Inc. $2,471 $2,990 $3,334 $3,561 $3,906 16.2% 8.2% $555 $722 $851 $931 $1,031 22.5% 24.2% 25.5% 26.1% 26.4% 24.1% 26.0%
Hubbell Inc. 2,541 2,872 3,044 3,194 3,372 9.5% 5.2% 432 487 535 580 622 17.0% 17.0% 17.6% 18.1% 18.4% 17.2% 18.1%
Valmont Industries, Inc. 1,976 2,661 3,030 3,315 3,386 23.8% 5.7% 251 340 451 566 561 12.7% 12.8% 14.9% 17.1% 16.6% 13.5% 16.2%
Littelfuse Inc. 608 665 668 749 822 4.8% 10.9% 143 153 140 167 190 23.4% 23.0% 20.9% 22.3% 23.1% 22.4% 22.1%
AZZ incorporated 357 381 469 573 763 14.6% 27.5% 84 85 99 129 147 23.4% 22.3% 21.1% 22.5% 19.3% 22.3% 20.9%
ESCO Technologies Inc. 607 451 479 562 530 (11.2%) 5.2% 94 62 65 69 85 15.5% 13.8% 13.5% 12.3% 16.1% 14.3% 14.0%
Thermon Group Holdings, Inc. 193 241 272 287 299 18.9% 4.8% 46 53 58 75 75 23.9% 21.9% 21.4% 26.2% 24.9% 22.4% 24.2%
Badger Meter Inc. 277 263 320 334 356 7.5% 5.6% 53 38 57 49 56 19.0% 14.5% 17.7% 14.8% 15.7% 17.1% 16.1%
Powell Industries, Inc. 551 562 717 662 730 14.1% 0.9% 69 28 61 54 74 12.6% 5.0% 8.6% 8.1% 10.1% 8.7% 8.9%
Global Power Equipment Group Inc. 482 457 463 480 556 (2.1%) 9.6% 43 29 29 18 37 8.9% 6.3% 6.2% 3.8% 6.7% 7.1% 5.5%
Total $10,063 $11,543 $12,796 $13,718 $14,720 9.6% 8.4% $1,770 $1,997 $2,346 $2,637 $2,877 17.6% 17.3% 18.3% 19.2% 19.5% 16.9% 17.2%
Energy Efficiency and Clean Technology
SolarCity Corporation $32 $60 $129 $160 $257 99.2% 41.4% ($34) ($49) ($48) ($80) ($59) NM NM NM NM NM NM NM
Itron, Inc. 2,259 2,434 2,178 1,952 2,090 (1.8%) (2.1%) 315 315 265 158 237 14.0% 12.9% 12.2% 8.1% 11.3% 13.0% 10.5%
Silver Spring Networks, Inc. 70 237 197 343 374 67.4% 37.9% (141) (87) (82) 4 23 NM NM NM 1.2% 6.3% NM 3.7%
Ameresco, Inc. 618 728 631 570 600 1.0% (2.5%) 57 66 49 40 44 9.3% 9.0% 7.8% 7.1% 7.3% 8.7% 7.4%
EnerNOC, Inc. 280 287 278 384 449 (0.4%) 27.1% 26 10 3 70 82 9.2% 3.6% 1.0% 18.3% 18.2% 4.6% 12.5%
PowerSecure International, Inc. 96 130 162 264 318 29.8% 40.1% 2 2 9 21 39 2.3% 1.8% 5.8% 7.8% 12.2% 3.3% 8.6%
Echelon Corporation 111 156 134 86 86 9.9% (19.8%) (22) (5) (3) (13) (9) NM NM NM NM NM NM NM
Total $3,468 $4,032 $3,709 $3,759 $4,174 29.3% 17.4% $205 $251 $194 $201 $357 5.9% 6.2% 5.2% 5.3% 8.6% 7.4% 8.6%
Page | 19
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Stock Performance
Stock Price Change from 52-Week TEV / EBITDA EBITDA
TEV Jan-14 Dec-13 Prior Month Prior Year High % of High Jan-13 Aug-13 Current 2013E 2014E
Infrastructure Services
Large Cap Infrastructure Services
Fluor Corporation $10,385 $75.96 $80.29 (5.4%) 17.2% $83.93 90.5% 9.4x 8.9x 9.6x 7.7x 7.4x
Chicago Bridge & Iron Company N.V. 9,586 74.99 83.14 (9.8%) 47.6% 83.42 89.9% 8.4x 11.4x 11.8x 10.5x 8.4x
Jacobs Engineering Group Inc. 8,129 60.71 62.99 (3.6%) 26.2% 66.88 90.8% 7.8x 9.6x 10.6x 9.1x 8.0x
URS Corporation 5,589 50.20 52.99 (5.3%) 21.0% 55.79 90.0% 6.3x 6.7x 6.8x 6.6x 6.5x
KBR, Inc. 3,788 31.30 31.89 (1.9%) 0.3% 36.70 85.3% 10.6x 10.8x 9.9x 5.9x 5.4x
Median (5.3% ) 21.0% 90.0% 8.4x 9.6x 9.9x 7.7x 7.4x
Mid and Small-Cap Infrastructure Services
The Babcock & Wilcox Company $3,556 $34.28 $34.19 0.3% 28.7% $35.40 96.8% 8.1x 9.6x 10.7x 8.6x 7.8x
Foster Wheeler AG 2,626 29.98 33.00 (9.2%) 14.8% 33.08 90.6% 7.9x 6.8x 9.9x 9.1x 8.1x
Tutor Perini Corporation 1,735 22.60 26.30 (14.1%) 36.2% 26.44 85.5% 6.1x 6.8x 7.0x 7.3x 5.9x
Primoris Services Corporation 1,684 31.77 31.13 2.1% 65.6% 33.42 95.1% 7.3x 7.6x 10.3x 10.1x 8.7x
Granite Construction Incorporated 1,183 33.29 34.98 (4.8%) (8.4%) 37.74 88.2% 11.1x 11.2x 21.1x 16.5x 6.1x
Great Lakes Dredge & Dock Corporation 704 7.53 9.20 (18.2%) (19.7%) 10.07 74.8% 14.1x 17.4x 13.9x 10.4x 6.5x
Willbros Group Inc. 708 8.35 9.42 (11.4%) 27.7% 10.45 79.9% 7.4x 7.2x 8.5x 9.1x 5.7x
Orion Marine Group, Inc 285 11.20 12.03 (6.9%) 43.6% 13.77 81.3% 23.4x 11.0x 12.3x 16.0x 8.9x
Median (8.0% ) 28.2% 86.8% 8.0x 8.6x 10.5x 9.6x 7.1x
Utility Services
Quanta Services, Inc. $6,349 $31.17 $31.56 (1.2%) 7.6% $32.22 96.7% 9.9x 8.3x 9.1x 9.2x 7.9x
MasTec, Inc. 3,611 35.94 32.72 9.8% 27.0% 36.58 98.3% 7.8x 9.2x 8.8x 8.1x 6.9x
Dycom Industries Inc. 1,409 27.83 27.79 0.1% 32.7% 31.75 87.7% 5.8x 7.5x 7.1x 6.9x 6.2x
Aegion Corporation 1,059 20.52 21.89 (6.3%) (12.8%) 26.10 78.6% 9.8x 10.1x 10.2x 9.2x 6.8x
Pike Corporation 552 10.54 10.57 (0.3%) 1.3% 15.95 66.1% 5.4x 5.0x 5.6x 8.0x 6.5x
MYR Group, Inc. 468 25.07 25.08 (0.0%) 11.7% 27.30 91.8% 5.6x 5.2x 5.5x 5.6x 5.3x
Median (0.2% ) 9.6% 89.7% 6.8x 7.9x 8.0x 8.1x 6.7x
Industrial Services
Bilfinger SE $5,380 $115.47 $110.05 4.9% 14.3% $119.43 96.7% 7.7x 9.3x 11.6x 7.5x 6.8x
EMCOR Group Inc. 2,828 42.51 42.44 0.2% 17.0% 44.88 94.7% 6.9x 8.4x 9.6x 9.2x 7.8x
Team, Inc. 921 42.33 42.34 (0.0%) (3.4%) 48.09 88.0% 11.8x 11.8x 13.3x 10.8x 9.1x
Mistras Group, Inc. 743 23.36 20.88 11.9% 6.1% 25.23 92.6% 10.5x 9.4x 12.2x 9.5x 8.4x
Matrix Service Company 611 26.28 24.43 7.6% 84.0% 27.89 94.2% 8.5x 7.5x 11.2x 9.3x 7.4x
Furmanite Corporation 472 11.68 10.62 10.0% 120.0% 12.70 92.0% 9.4x 9.6x 12.3x 11.4x 9.0x
Median 6.3% 15.7% 93.4% 8.9x 9.3x 11.9x 9.4x 8.1x
Engineering Services
AECOM Technology Corporation $3,463 $28.67 $29.43 (2.6%) 12.1% $35.24 81.4% 7.4x 9.1x 7.6x 7.3x 6.7x
AMEC plc 5,007 16.94 17.90 (5.3%) (4.7%) 19.91 85.1% 8.9x 9.2x 8.9x 8.6x 7.8x
Stantec Inc. 2,973 60.88 59.16 2.9% 65.9% 64.98 93.7% 9.6x 10.6x 13.0x 12.4x 11.3x
Tetra Tech Inc. 1,997 29.51 27.98 5.5% 3.0% 31.49 93.7% 8.8x 13.3x 14.1x 8.2x 7.4x
Aecon Group Inc. 1,229 13.90 14.45 (3.8%) 30.3% 14.73 94.4% 8.4x 7.6x 8.9x 7.6x 6.0x
Median (2.6% ) 12.1% 93.7% 8.8x 9.2x 8.9x 8.2x 7.4x
TEV / LTM EBITDA as of
Page | 20
Harris Williams & Co. Energy & Power Industry Update | February 2014
PUBLIC COMPARABLES (continued)
Revenue Revenue Growth EBITDA EBITDA Margin Avg. Margin
2010 2011 2012 2013E 2014E '10-12 '12-14E 2010 2011 2012 2013E 2014E 2010 2011 2012 2013E 2014E '10-12 '12-14E
Infrastructure Services
Large Cap Infrastructure Services
Fluor Corporation $20,849 $23,381 $27,577 $27,848 $27,991 15.0% 0.7% $740 $1,187 $946 $1,378 $1,389 3.5% 5.1% 3.4% 4.9% 5.0% 4.0% 4.4%
Chicago Bridge & Iron Company N.V. 3,642 4,551 5,485 11,172 12,963 22.7% 53.7% 372 429 517 910 1,136 10.2% 9.4% 9.4% 8.1% 8.8% 9.7% 8.8%
Jacobs Engineering Group Inc. 9,916 10,382 10,894 11,805 13,621 4.8% 11.8% 541 628 701 770 891 5.5% 6.1% 6.4% 6.5% 6.5% 6.0% 6.5%
URS Corporation 9,177 9,545 10,973 11,146 11,487 9.3% 2.3% 630 619 828 839 859 6.9% 6.5% 7.5% 7.5% 7.5% 7.0% 7.5%
KBR, Inc. 9,962 9,103 7,770 7,576 8,035 (11.7%) 1.7% 539 497 361 686 708 5.4% 5.5% 4.6% 9.1% 8.8% 5.2% 7.5%
Total $53,546 $56,962 $62,699 $69,546 $74,097 8.0% 14.1% $2,821 $3,362 $3,354 $4,583 $4,983 5.3% 5.9% 5.3% 6.6% 6.7% 6.4% 6.9%
Mid and Small-Cap Infrastructure Services
The Babcock & Wilcox Company $2,689 $2,952 $3,291 $3,288 $3,305 10.6% 0.2% $246 $87 $351 $421 $448 9.2% 2.9% 10.7% 12.8% 13.6% 7.6% 12.3%
Foster Wheeler AG 4,068 4,481 3,415 3,313 3,891 (8.4%) 6.7% 321 237 286 291 322 7.9% 5.3% 8.4% 8.8% 8.3% 7.2% 8.5%
Tutor Perini Corporation 3,199 3,716 4,111 4,259 4,652 13.4% 6.4% 202 214 214 239 297 6.3% 5.7% 5.2% 5.6% 6.4% 5.8% 5.7%
Primoris Services Corporation 942 1,460 1,542 1,958 2,161 27.9% 18.4% 82 133 136 167 192 8.7% 9.1% 8.8% 8.5% 8.9% 8.9% 8.7%
Granite Construction Incorporated 1,763 2,010 2,083 2,269 2,780 8.7% 15.5% 61 146 110 75 191 3.4% 7.3% 5.3% 3.3% 6.9% 5.3% 5.1%
Great Lakes Dredge & Dock Corporation 687 627 688 742 806 0.0% 8.2% 103 83 55 68 103 15.0% 13.3% 8.0% 9.2% 12.8% 12.1% 10.0%
Willbros Group Inc. 1,077 1,450 2,004 2,024 2,184 36.4% 4.4% 57 51 76 80 129 5.3% 3.5% 3.8% 3.9% 5.9% 4.2% 4.5%
Orion Marine Group, Inc 353 260 292 339 385 (9.1%) 14.8% 53 3 7 17 33 15.1% 1.1% 2.5% 4.9% 8.5% 6.2% 5.3%
Total $14,778 $16,956 $17,426 $18,191 $20,163 10.0% 9.3% $1,125 $954 $1,235 $1,358 $1,714 7.6% 5.6% 7.1% 7.5% 8.5% 7.2% 7.5%
Utility Services
Quanta Services, Inc. $3,629 $4,194 $5,920 $6,406 $7,104 27.7% 9.5% $383 $334 $623 $691 $809 10.6% 8.0% 10.5% 10.8% 11.4% 9.7% 10.9%
MasTec, Inc. 2,143 2,831 3,727 4,256 4,663 31.9% 11.9% 202 241 331 447 523 9.4% 8.5% 8.9% 10.5% 11.2% 8.9% 10.2%
Dycom Industries Inc. 989 1,036 1,201 1,595 1,894 10.2% 25.6% 82 105 129 171 208 8.3% 10.2% 10.8% 10.7% 11.0% 9.8% 10.8%
Aegion Corporation 915 939 1,028 1,097 1,298 6.0% 12.4% 116 87 110 114 157 12.7% 9.3% 10.7% 10.4% 12.1% 10.9% 11.1%
Pike Corporation 504 594 685 928 823 16.6% 9.6% 31 48 64 116 69 6.2% 8.1% 9.4% 12.5% 8.3% 7.9% 10.1%
MYR Group, Inc. 597 780 999 877 920 29.3% (4.1%) 40 48 80 84 87 6.8% 6.1% 8.0% 9.6% 9.5% 7.0% 9.0%
Total $8,777 $10,374 $13,560 $15,159 $16,702 20.3% 10.8% $854 $863 $1,338 $1,623 $1,853 9.7% 8.3% 9.9% 10.7% 11.1% 9.0% 10.3%
Industrial Services
Bilfinger SE $10,665 $10,664 $11,219 $11,777 $12,264 2.6% 4.6% $374 $455 $548 $732 $820 3.5% 4.3% 4.9% 6.2% 6.7% 4.2% 5.9%
EMCOR Group Inc. 4,852 5,613 6,347 6,447 6,713 14.4% 2.8% 263 272 305 310 363 5.4% 4.8% 4.8% 4.8% 5.4% 5.0% 5.0%
Team, Inc. 454 508 624 712 780 17.2% 11.8% 40 57 74 76 84 8.9% 11.2% 11.8% 10.6% 10.7% 10.6% 11.1%
Mistras Group, Inc. 272 339 437 529 591 26.7% 16.3% 35 48 60 68 76 13.0% 14.2% 13.7% 12.9% 12.9% 13.6% 13.2%
Matrix Service Company 551 627 739 884 1,000 15.8% 16.3% 35 42 43 50 64 6.3% 6.7% 5.8% 5.6% 6.4% 6.3% 6.0%
Furmanite Corporation 286 316 326 429 555 6.9% 30.4% 26 30 22 42 53 9.2% 9.5% 6.7% 9.7% 9.5% 8.5% 8.6%
Total $17,080 $18,067 $19,692 $20,778 $21,903 13.9% 13.7% $774 $904 $1,051 $1,277 $1,460 4.5% 5.0% 5.3% 6.1% 6.7% 8.0% 8.3%
Engineering Services
AECOM Technology Corporation $6,546 $8,037 $8,218 $8,131 $8,105 12.0% (0.7%) $393 $480 $438 $479 $467 6.0% 6.0% 5.3% 5.9% 5.8% 5.8% 5.7%
AMEC plc 4,608 5,076 6,758 6,690 7,094 21.1% 2.5% 408 455 533 573 629 8.8% 9.0% 7.9% 8.6% 8.9% 8.6% 8.4%
Stantec Inc. 1,233 1,356 1,561 1,733 1,913 12.5% 10.7% 181 196 224 250 277 14.6% 14.4% 14.3% 14.4% 14.5% 14.5% 14.4%
Tetra Tech Inc. 1,460 1,792 2,022 2,014 2,131 17.7% 2.7% 158 200 208 138 240 10.8% 11.2% 10.3% 6.8% 11.2% 10.8% 9.5%
Aecon Group Inc. 2,765 2,849 2,956 2,882 2,950 3.4% (0.1%) 46 133 158 169 212 1.7% 4.7% 5.4% 5.9% 7.2% 3.9% 6.1%
Total $16,611 $19,110 $21,516 $21,450 $22,192 13.4% 3.0% $1,185 $1,463 $1,561 $1,608 $1,825 7.1% 7.7% 7.3% 7.5% 8.2% 8.7% 8.8%
Page | 21
Harris Williams & Co. Energy & Power Industry Update | February 2014
SOURCES
1. Capital IQ.
2. MergerMarket.
3. Baker Hughes.
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients
worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris
Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets
advisory services.
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris
Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under
which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS
OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS
ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE
SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT
HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY
FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR
ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY
SUCH THIRD PARTIES, PLEASE CONTACT US AT +1 804-648-0072.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report,
as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an
offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The
information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or
completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to,
have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek
to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers,
directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies
discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without
notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment
decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment
objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any
form or by any means, or redistributed, without Harris Williams’ prior written consent.
Copyright © 2014 Harris Williams & Co., all rights reserved.
top related