environmental and facility services · page | focuses on complex, non-core customer operations...
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www.harriswilliams.de
Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main,Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative(Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
ENVIRONMENTAL AND FACILITY SERVICES
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INDUSTRY UPDATE │ MARCH 2016
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Focuses on complex, non-core customer operations providing
ability to expand services over time
Key verticals: manufacturing, high tech, petrochemical, bio-
pharma, nuclear, defense, and food & beverage
Serves ~20% of Fortune 500
$400 billion total market size
RECENT HW&CO. SPECIALTY OUTSOURCED SERVICES EXPERIENCE
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ENVIRONMENTAL AND FACILITY SERVICES
INDUSTRY UPDATE │ MARCH 2016
TREMENDOUS MOMENTUM IN THE OUTSOURCED SERVICES SECTOR
GCA is the nation’s premier provider of custodial services, facilities maintenance, grounds management, and outsourced workforce solutions to education, commercial, and rental car end markets
Recession resistant business model driven by ability to save customers money with higher quality service through the outsourcing of non-core services
Clear market leader and pioneer in outsourced janitorial services to the education market with tremendous whitespace opportunity
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
has been acquired byhas been acquired by
majority owned by
affiliates of
a portfolio company of
has been acquired by
a portfolio company of
has been acquired by
a portfolio company of
a portfolio company of
has been acquired by
COMMERCIAL DIVISION
EDUCATION DIVISION
K-12 school districts and higher education institutions
Custodial, facilities operations and maintenance (FOM), and
grounds management
Serves 20% of the 20 largest K-12 school districts and 9 out of the
100 largest higher education institutions
$25 billion total market size
Key Stats
~35,000 employees
~960 customers (4,000+ individual sites)
95%+ customer revenue retention
20% Organic EBITDA CAGR since 2006March 1, 2016
Representative Education
Customers
Representative Commercial
Customers
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www.harriswilliams.de
Stock Price % Change TEV / EBITDA P/E
1 Month 12 Month Mar-15 Sep-15 Current 2016E 2017P Current 2016E
Engineering, Construction, and Consulting 12.6% (4.5%) 9.9x 9.3x 9.6x 8.2x 7.6x 13.8x 12.9x
Facility Services 6.6% 3.4% 11.8x 11.5x 11.9x 10.3x 9.7x 23.3x 19.9x
Remediation, Cleaning, and Abatement (1.7%) (14.0%) 9.9x 8.8x 11.7x 8.7x 7.0x 23.9x 17.0x
Test, Measurement, and Control 10.1% (5.6%) 12.5x 11.2x 13.3x 11.1x 10.5x 22.6x 18.9x
Waste Management and Recycling 14.3% (9.7%) 9.2x 9.0x 9.3x 8.2x 7.1x 22.9x 19.3x
Water and Wastewater 3.3% 4.5% 10.9x 10.6x 10.5x 11.3x 10.9x 25.7x 20.9x
S&P 500 8.5% (1.5%) NM NM NM NM NM 22.9x 17.2x
Key Trading Statistics1
TEV / LTM EBITDA as of
SUMMARY
CONTENTS
NOTABLE M&A ACTIVITY
PUBLIC COMPARABLES
PUBLIC COMPARABLES INDEX
OUR PRACTICE
Harris Williams & Co. is a leading advisor to the environmental and facility services M&A market. Our environmental and facility services practice includes experience across a broad range of sectors, including services and products that meet exacting demands for a variety of end markets.
ENVIRONMENTAL AND FACILITYSERVICES SECTORS
Engineering, Construction,and Consulting (ECC)
Facility Services
Remediation, Cleaning,and Abatement
Test, Measurement,and Control
Waste Managementand Recycling
Water and Wastewater
CONTACTS
Bob BaltimoreManaging [email protected]+1 (804) 915-0129
Derek LewisManaging [email protected]+1 (804) 915-0118
Andrew SpitzerManaging [email protected]+1 (804) 915-0174
Brian LucasManaging [email protected]+1 (804) 932-1323
Matt WhiteManaging [email protected]+1 (804) 915-0131
Marshall CroftVice [email protected]+1 (804) 915-0161
M&A │ SELECT RECENT ACTIVITY
GCA Services Group, Inc., a leading national provider of janitorial services, facilitiesoperations and maintenance, grounds management and other outsourcedworkforce solutions to the education, commercial, and rental car end markets, hasbeen acquired by Thomas H. Lee Partners, L.P. and the Merchant Banking Division ofGoldman Sachs in an HW&Co.-led process. “We are excited about our newpartnership with Thomas H. Lee Partners and Goldman Sachs, as well as thetremendous opportunities ahead to continue to grow our business in the attractivefacility services market,” said Bob Norton, Chairman and CEO of GCA. Read morehere.
The Budd Group, a leading Southeastern facilities services company, announced theacquisition of Cross Gate Services, Inc., a regional building service providerheadquartered in Nashville, TN. “This acquisition is a strategic opportunity to expandour market presence and enhance our service and technology offerings,” said JoeBudd, CEO of The Budd Group. Read more here.
Enercare Solutions, one of Canada's largest home and commercial servicescompanies, announced that it will acquire Service Experts, a leading provider ofheating and HVAC services, for $341 million. "Through Service Experts, we become aNorth American market leader in home services," said John Macdonald, Presidentand CEO of Enercare.” Read more here.
Red Hawk Fire & Security, a leader in fire, life safety and electronic security services,announced its first acquisition since becoming an independent company with thepurchase of Systems Sales Corporation. The purchase strengthens the company’sexisting fire and security services operations in New Jersey, Philadelphia andDelaware. Read more here.
Interstate Restoration LLC, a full service emergency restoration and reconstructionfirm helping businesses recover after a disaster, announced the acquisition of HawaiiDKI. Hawaii DKI is the leading emergency restoration service provider in Hawaii. Readmore here.
ENVIRONMENTAL AND FACILITY SERVICES
PUBLIC MARKETS │ KEY TRADING STATISTICS1
(1) As of March 13, 2016.
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INDUSTRY UPDATE │ MARCH 2016
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5-Year Minimum 5-Year Median 3-Year Median Current 5-Year Maximum
Engineering, Construction, and Consulting (30.5%) (2.7%) 2.8% (19.1%) 27.1%
Facility Services (6.0%) 51.2% 77.4% 93.2% 96.4%
Remediation, Cleaning, and Abatement (12.9%) 67.3% 88.0% 85.4% 107.5%
Test, Measurement, and Control (16.5%) 36.6% 49.8% 50.1% 60.2%
Waste Management and Recycling (23.7%) 6.1% 12.2% 15.7% 21.9%
Water and Wastewater (23.3%) 7.2% 21.9% 26.5% 30.8%
S&P 500 (15.2%) 30.5% 49.7% 54.3% 64.4%
(50%)
(25%)
0%
25%
50%
75%
100%
125%
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
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 7.0x 9.4x 10.3x 9.6x 12.6x
Facility Services 7.6x 10.6x 11.6x 11.9x 13.0x
Remediation, Cleaning, and Abatement 7.8x 12.0x 12.4x 11.7x 14.0x
Test, Measurement, and Control 9.4x 12.5x 13.1x 13.3x 14.2x
Waste Management and Recycling 6.6x 8.7x 8.9x 9.3x 9.8x
Water and Wastewater 7.4x 9.5x 9.8x 10.5x 10.7x
S&P 500 7.3x 9.3x 10.0x 10.5x 11.0x
4x
6x
8x
10x
12x
14x
16x
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
S&P 500 Index ECC Remediation, Cleaning, and Abatement Test, Measurement, & Control
Waste Management & Recycling Water & Wastewater Facility Services
PUBLIC COMPARABLES – MARKET PERFORMANCE
INDUSTRY UPDATE │ MARCH 2016
PUBLIC COMPARABLES 5-YEAR PRICE INDEX (’11 – ’16)1
PUBLIC COMPARABLES TEV/LTM EBITDA (’11 – ’16)1
ENVIRONMENTAL AND FACILITY SERVICES
(1) As of March 13, 2016.
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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.
PUBLIC COMPARABLES – INDEX
INDUSTRY UPDATE │ MARCH 2016
ENVIRONMENTAL AND FACILITY SERVICES
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Energy, Power & Infrastructure
IndustrialsHealthcare & Life Sciences
Transportation & Logistics
Aerospace, Defense & Government
Services
Business Services
Building Products & Materials
Technology, Media & Telecom
Specialty Distribution
Consumer
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HARRIS WILLIAMS & CO. OFFICE LOCATIONS
UNITED STATES EUROPE
BostonTwo International Place24th FloorBoston, Massachusetts 02110Phone: +1 (617) 482-7501
Cleveland1900 East 9th Street20th FloorCleveland, Ohio 44114Phone: +1 (216) 689-2400
Minneapolis222 South 9th StreetSuite 3350Minneapolis, Minnesota 55402Phone: +1 (612) 359-2700
Richmond (Headquarters)1001 Haxall Point9th FloorRichmond, Virginia 23219Phone: +1 (804) 648-0072
San Francisco575 Market Street31st FloorSan Francisco, California 94105Phone: +1 (415) 288-4260
FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone: +49 069 3650638 00
London63 Brook StreetLondon W1K 4HS, EnglandPhone: +44 (0) 20 7518 8900
NETWORK OFFICES
Beijing
Hong Kong
Mumbai
New Delhi
Shanghai
Business Services
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website.
OUR FIRM
ENVIRONMENTAL AND FACILITY SERVICES
INDUSTRY UPDATE │ MARCH 2016
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HARRIS WILLIAMS & CO.
INDUSTRY UPDATE │ MARCH 2016
SOURCES
Harris Williams & Co. (www.harriswilliams.com and www.harriswilliams.de) is a preeminent middle market investment bank focused on the advisoryneeds of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. HarrisWilliams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisoryservices.
Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court(Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35,60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
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© 2016 Harris Williams & Co., all rights reserved.
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ENVIRONMENTAL AND FACILITY SERVICES
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