TRANSPORTATION & LOGISTICS

Transcription

1 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 Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry Monjauze, 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, Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.

2 OVERVIEW HARRIS WILLIAMS & CO. DEAL SPOTLIGHT Kadel s Auto Body Harris Williams & Co. advised Kadel s Auto Body, a portfolio company of KCB Management, on its sale to ABRA Auto Body & Glass, Hellman & Friedman. Kadel s is a leading provider of auto body repair services in the Pacific Northwest, and ABRA is a recognized leader in collision repair, paintless dent removal and auto glass repair and replacement. Press Release WHAT WE RE READING AUTOMOTIVE SPECIALTY EQUIPMENT MARKET REACHES $36B A new SEMA report shows that spending on automotive specialty equipment parts and accessories has increased for a fifth consecutive year, reaching $36 billion in Spending in this category grew 8% between 2013 and SEMA CEO Chris Kersting points to advanced manufacturing systems and social media as drivers of change within the industry. Aftermarket News AUTOMAKERS BACK TESTING GROUND FOR SELF-DRIVING VEHICLES Toyota Motor Corp along with other car manufacturers are backing a $10 Million testing ground for self-driving vehicles. The 32 acre facility called Mcity will be located at the University of Michigan and is hoped to enable Detroit to better compete in the emerging tech war. The facility will be one of the few open-source facilities in the world and will also be one of the few facilities that allows for testing of self-driving vehicles in cold climates. Wall Street Journal EUROPEAN CAR SALES SURGE 15% IN JUNE European auto sales surged 15% in June, the single largest month-on-month increase in over 5 years and the 22 nd consecutive month of growth. All major markets and all major carmakers, with the exception of Renault, posted double digit gains. HIS Automotive analyst Carlos da Silva attributes the gains to the extra sales days in June when compared to May and incentives offered by manufacturers to meet sales targets for the quarter. New York Times CONTENTS M&A TRANSACTIONS PUBLIC MARKETS OVERVIEW STOCK PRICE PERFORMANCE OUR GROUP CONTACTS UNITED STATES Frank Mountcastle Managing Director fmountcastle@harriswilliams.com +1 (804) Jason Bass Managing Director jbass@harriswilliams.com +1 (804) Joe Conner Managing Director jconner@harriswilliams.com +1 (804) Jershon Jones Director jjones@harriswilliams.com +1 (804) Jeff Burkett Director jburkett@harriswilliams.com +1 (804) Jeff Kidd Vice President jkidd@harriswilliams.com +1 (804) EUROPE Jeffery Perkins Managing Director jperkins@harriswilliams.com +49 (0) APPLE CANT IGNORE THE AUTO MARKET In an interview with Bloomberg TV, Morgan Stanley s lead auto analyst Adam Jonas stated that the auto industry is too big of an addressable market for Apple to ignore in response to a question about what Apple should do with its nearly $200 Billion in cash. He noted that they could also start from scratch rather than do an acquisition and focus more heavily on the self-driving car market. Business Insider PAGE 1

3 M&A TRANSACTIONS RECENT M&A TRANSACTIONS 1,2 Date Target Business Description Acquirer 7/17/2015 Covs Parts Pty Ltd Distributes auto parts, tools, equipment, and consumables to automotive, mining, truck and trailer and industrials in western Australia. GPC Asia Pacific Group Pty Ltd. 7/16/2015 Getrag Getriebe Manufacturers transmission systems for passenger cars and light commercial vehicles in Germany and internationally. Magna International Inc. 7/13/2015 Remy International, Inc. Designs, manufactures, remanufactures, markets and distributes rotating electrical components for automobiles, light trucks and heavy duty trucks. 7/13/2015 Identifix, Inc. Operates an auto repair hotline which provides technical assistance to shop owners and technicians seeking additional expertise. BorgWarner Inc. Claims Services Group, Inc. 7/9/2015 Coast Distribution System Inc. Supplies replacement parts for RVs to retail parts and supply stores, repair establishment, and dealers. Keystone Automotive Operations, Inc. 7/8/2015 Power Train Company Remanufactures and distributes heavy duty truck parts. TruckPro, LLC 7/8/2015 PartsChannel Inc. Distributes aftermarket replacement parts for the collision repair industry in the United States. LKQ Corp. 6/26/2015 Kadel's Auto Body, LLC Provides auto body repair services across the Unites States ABRA Auto Body & Glass LP 6/15/2015 Holding & Barnes Plc Provider of online salvage auction services to buy accident damaged, theft-recovered, and used vehicles in the United Kingdom. ADESA (UK) Limited 6/11/2015 IVC Industrial Coatings, Inc. Manufacturer and distributor of powder, liquid, and specialty coating products for commercial and consumer applications. PPG Industries, Inc. 6/2/2015 Harco Manufacturing Group, LLC Manufacturer and supplier of automotive aftermarket and defense products. Sunsong Holdings Inc. 6/1/2015 The Grease Spot, Inc. Operator of oil change centers in the Midwest. The Lube Stop, Inc. 5/27/2015 Quest Automotive Products and Quest Industrial Products Manufacturer of automotive refinish and industrial coatings. The Valspar Corporation 5/21/2015 OE+, Ltd. Supplier of remanufactured starters and alternators to the automotive aftermarket. Motorcar Parts of America, Inc. 5/19/2015 Thermotech, Inc. Contract manufacturer, specializing in precision injection molding and assembly of plastic products for the automotive industry. Plasman Inc. 5/15/2015 Bell Automotive Products Supplier of interior protection, tire safety and vehicle accessory products marketed under the Bell, Victor, and Monkey-Grip brands. Hopkins Manufacturing Corp. 5/13/2015 Time Automotive Distributors Distributor of performance and truck accessories. National Performance Warehouse 5/13/2015 RWA Holding Company, Inc. Automotive aftermarket provider of highly engineered components under the Yukon and USA Standard brands. Linsalata Capital Partners PAGE 2

4 PUBLIC MARKETS OVERVIEW TEV / LTM EBITDA TEV / 2015E EBITDA Dealerships and Services Providers 13.0x Dealerships and Services Providers 12.2x 12.0x 12.1x 10.9x 10.4x 7.5x 7.2x AVERAGE REVENUE GROWTH ( ) AVERAGE REVENUE GROWTH ( P) Dealerships and Services Providers 14.2% Dealerships and Services Providers 10.4% 7.6% 2.9% 2.8% 1.8% 3.7% 0.3% AVERAGE EBITDA GROWTH ( ) AVERAGE EBITDA GROWTH ( P) Dealerships and Services Providers 13.5% Dealerships and Services Providers 10.5% 9.3% 6.2% 7.5% 5.9% 4.4% 4.6% PAGE 3

5 STOCK PRICE PERFORMANCE MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) Distributors and Retailers 2.5% Distributors and Retailers 25.0% Dealerships and Service Providers 2.2% Dealerships and Service Providers 15.8% Vehicle Manufacturers (5.7%) (8.8%) (7.3%) Vehicle (17.8%) Manufacturers TRAILING TWELVE MONTHS (Indexed to July 19, 2014) 40% 30% 20% 10% 0% (10%) (20%) (30%) Jul Oct Jan Apr Jul Dealerships and Service Providers S&P 500 Index (^SPX) - Index Value PAGE 4

6 OUR GROUP Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & Logistics Group serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marine and air transportation, transportation equipment, and the automotive and heavy duty vehicle market. RECENTLY CLOSED T&L TRANSACTIONS RCL Services Group in partnership with and has sold to and DEEP EXPERIENCE ACROSS T&L SECTORS THIRD-PARTY LOGISTICS RAIL & RAIL SERVICES MARINE TRANSPORTATION TRANSPORTATION EQUIPMENT NICHE TRANSPORTATION AUTOMOTIVE & HEAVY DUTY VEHICLE AIR TRANSPORTATION PAGE 5

7 OUR FIRM 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. Aerospace, Defense & Government Services Building Products & Materials Business Services Consumer Energy & Power Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston Two International Place 24th Floor Boston, Massachusetts Phone: +1 (617) Fax: +1 (617) Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio Phone: +1 (216) Fax: +1 (216) Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota Phone: +1 (612) Fax: +1 (612) UNITED STATES Richmond (U.S. Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia Phone: +1 (804) Fax: +1 (804) San Francisco 575 Market Street 31st Floor San Francisco, California 94105, USA Phone: +1 (415) Fax: +1 (415) EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: Fax: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) Fax: +44 (0) Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 6

8 PUBLIC COMPARABLES Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA ($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Jul-14 Jan-15 Current E Automotive Aftermarket BorgWarner Inc. $12,636 $52.04 (13.8%) (20.2%) $ % 11.5x 8.7x 9.1x 9.0x 9.0x Cooper Tire & Rubber Co. 1, (5.4%) 10.9% % 5.5x 4.5x 3.6x 3.5x 4.5x Dorman Products, Inc. 1, (0.5%) 3.2% % 11.1x 10.5x 11.3x 11.1x 10.4x Federal-Mogul Holdings Corporation 4, (12.3%) (48.8%) % 8.1x 6.6x 7.9x 7.2x 7.2x The Goodyear Tire & Rubber Company 13, (3.7%) 7.7% % 6.1x 5.7x 5.7x 6.0x 5.4x Modine Manufacturing Company (4.0%) (31.3%) % 6.7x 6.1x 5.4x 5.0x 4.9x Motorcar Parts of America, Inc (7.5%) 17.8% % 10.9x 14.4x 15.0x 15.5x 8.2x Standard Motor Products Inc (7.1%) (18.2%) % 7.7x 6.8x 7.1x 6.8x 7.6x Tenneco Inc. 4, (17.5%) (26.3%) % 7.1x 5.7x 5.7x 5.6x 5.3x Visteon Corporation 5, (9.5%) 0.5% % 9.2x 8.3x 8.1x 8.3x NM Median (7.3%) (8.8%) 78.8% 7.9x 6.7x 7.5x 7.0x 7.2x Advance Auto Parts Inc. $13,831 $ % 29.3% $ % 10.8x 10.1x 11.0x 11.1x 10.7x AutoZone, Inc. 25, (0.8%) 29.9% % 10.2x 10.8x 11.6x 12.1x 11.3x Genuine Parts Company 14, (3.7%) 1.9% % 11.4x 12.2x 11.1x 11.1x 10.7x LKQ Corp. 11, % 20.8% % 13.1x 11.9x 13.7x 14.0x 13.0x O'Reilly Automotive Inc. 25, % 57.2% % 12.5x 13.4x 16.4x 17.1x 15.1x Pep Boys - Manny, Moe & Jack % 7.0% % 8.1x 9.0x 12.0x 8.7x 9.5x U.S. Auto Parts Network, Inc % (30.9%) % 16.3x 17.4x NM 16.6x 12.8x Uni-Select Inc. 1, (0.3%) 46.9% % 11.5x 10.1x 13.7x 13.4x 14.1x Median 2.5% 25.0% 96.7% 11.4x 11.4x 12.0x 12.7x 12.1x Dealerships and Service Providers Asbury Automotive Group, Inc. $4,074 $ % 34.3% $ % 11.7x 11.0x 12.8x 13.7x 12.4x AutoNation, Inc. 12, % 15.3% % 13.7x 12.3x 12.8x 13.7x 12.4x Boyd Group Income Fund % 15.8% % 12.1x 12.0x 14.0x 13.6x 11.8x CarMax Inc. 23, (1.6%) 30.7% % 19.4x NM NM NM NM Copart, Inc. 4, % 4.4% % 13.2x 11.0x 11.1x 11.7x 11.6x Group 1 Automotive Inc. 4, % 14.4% % 12.5x 11.0x 11.3x 12.1x 11.8x KAR Auction Services, Inc. 7, (0.5%) 23.9% % 13.8x 12.4x 13.1x 13.7x 12.0x Lithia Motors Inc. 4, % 28.2% % 14.5x 11.9x 14.7x 18.4x 13.5x Monro Muffler Brake Inc. 2, (0.0%) 19.4% % 13.9x 14.7x 15.0x 17.9x 15.9x Penske Automotive Group, Inc. 8, % 8.2% % 14.5x 13.7x 14.4x 15.5x 13.8x Sonic Automotive Inc. 3, % (8.3%) % 11.2x 10.6x 11.1x 10.8x 11.2x Median 2.2% 15.8% 97.7% 13.7x 11.9x 13.0x 13.7x 12.2x PAGE 7

9 PUBLIC COMPARABLES Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA ($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Jul-14 Jan-15 Current E Automotive Aftermarket Bayerische Motoren Werke Aktiengesellschaft $157,917 $ (5.7%) (17.9%) $ % 10.4x 9.9x 11.6x 10.8x 10.3x Daimler AG 192, (0.2%) 4.4% % 10.9x 10.8x 12.8x 12.2x 10.0x Ford Motor Co. 161, (3.6%) (17.8%) % 13.9x 13.8x 14.1x 14.4x 15.0x General Motors Company 75, (15.5%) (18.5%) % 8.3x 8.0x 7.4x 8.3x 5.0x Harley-Davidson, Inc. 16, (5.8%) (18.4%) % 12.7x 12.5x 12.0x 11.3x 11.1x Navistar International Corporation 5, (22.2%) (51.8%) % NM NM 16.5x NM 10.7x Oshkosh Corporation 4, (11.0%) (25.1%) % 8.8x 6.2x 6.9x 6.5x 6.6x PACCAR Inc. 28, % (1.6%) % 13.2x 11.5x 11.0x 11.7x 11.4x Toyota Motor Corporation 340, % 13.3% % 8.7x 9.8x 9.8x 9.9x 10.9x Volkswagen AG 195, (9.5%) (13.2%) % 7.9x 7.8x 8.5x 7.9x 6.5x Median (5.7%) (17.8%) 78.1% 10.4x 9.9x 11.3x 10.8x 10.5x PAGE 8

10 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) E 2016P '11-14 '14-16P E 2016P '11-14 '14-16P Automotive Aftermarket BorgWarner Inc. $7,115 $7,183 $7,437 $8,305 $8,169 $9, % 4.6% $1,073 $1,126 $1,224 $1,398 $1,389 $1, % 7.6% Cooper Tire & Rubber Co. 3,908 4,201 3,439 3,425 2,979 3,072 (4.3%) (5.3%) % (10.8%) Dorman Products, Inc % 9.8% % 11.8% Federal-Mogul Holdings Corporation 6,719 6,444 6,786 7,317 7,821 8, % 6.4% (0.6%) 9.2% The Goodyear Tire & Rubber Company 22,767 20,992 19,540 18,138 16,525 17,048 (7.3%) (3.1%) 1,893 1,819 2,105 2,251 2,475 2, % 8.3% Modine Manufacturing Company 1,448 1,577 1,376 1,478 1,513 1, % (0.5%) % 2.7% Motorcar Parts of America, Inc % 21.4% % NM Standard Motor Products Inc , % 2.7% % (0.5%) Tenneco Inc. 7,205 7,363 7,964 8,420 8,234 8, % 1.9% % 8.2% Visteon Corporation 7,532 5,715 6,371 7,509 3,014 3,197 (0.1%) (34.7%) % NM Total $58,243 $55,173 $54,774 $56,582 $50,370 $53, % 0.3% $5,319 $5,503 $6,023 $6,590 $6,373 $7, % 4.6% Advance Auto Parts Inc. $6,170 $6,205 $6,494 $9,844 $9,897 $10, % 1.9% $841 $847 $901 $1,243 $1,302 $1, % 7.6% AutoZone, Inc. 8,073 8,604 9,148 9,475 10,151 10, % 6.2% 1,691 1,841 2,002 2,089 2,229 2, % 6.7% Genuine Parts Company 12,459 13,014 14,078 15,342 15,603 16, % 2.9% 998 1,114 1,209 1,273 1,307 1, % 4.9% LKQ Corp. 3,270 4,123 5,063 6,740 7,320 7, % 8.5% % 11.3% O'Reilly Automotive Inc. 5,789 6,182 6,649 7,216 7,800 8, % 7.5% 1,030 1,159 1,291 1,468 1,677 1, % 11.1% Pep Boys - Manny, Moe & Jack 1,989 2,064 2,091 2,067 2,087 2, % 1.1% (11.3%) 4.2% U.S. Auto Parts Network, Inc (4.7%) 7.4% NM NM Uni-Select Inc. 1,781 1,798 1,788 1,784 1,349 1, % (21.1%) (1.8%) (4.2%) Total $39,857 $42,293 $45,565 $52,751 $54,510 $56, % 1.8% $5,250 $5,687 $6,232 $7,069 $7,563 $8, % 5.9% Dealerships and Service Providers Asbury Automotive Group, Inc. $4,004 $4,475 $5,128 $5,639 $6,555 $6, % 11.1% $171 $210 $259 $297 $329 $ % 9.2% AutoNation, Inc. 13,305 15,020 16,674 18,180 20,862 22, % 10.1% ,020 1, % 9.0% Boyd Group Income Fund % 13.9% NM 14.0% CarMax Inc. 8,976 10,004 10,963 12,574 14,269 15, % 11.3% ,077 1, % 13.5% Copart, Inc ,046 1,163 1,145 1, % 1.3% % 4.2% Group 1 Automotive Inc. 5,884 7,216 8,607 9,571 10,734 11, % 9.2% % 5.2% KAR Auction Services, Inc. 1,886 1,963 2,173 2,365 2,520 2, % 6.5% % 11.0% Lithia Motors Inc. 2,549 3,204 3,867 5,200 7,746 8, % 27.4% % 21.9% Monro Muffler Brake Inc % 8.0% % 15.3% Penske Automotive Group, Inc. 10,769 12,584 14,074 16,741 19,060 20, % 9.9% % 11.0% Sonic Automotive Inc. 7,312 8,115 8,571 8,897 9,538 9, % 5.5% % 1.2% Total $56,545 $64,628 $72,380 $81,877 $94,182 $100, % 10.4% $3,398 $3,824 $4,208 $4,823 $5,383 $5, % 10.5% PAGE 9

11 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) E 2016P '11-14 '14-16P E 2016P '11-14 '14-16P Automotive Aftermarket Bayerische Motoren Werke Aktiengesellschaft $66,659 $75,546 $77,374 $96,471 $95,109 $98, % 1.2% $13,439 $13,956 $14,458 $15,627 $15,212 $15, % 0.9% Daimler AG 122, , , , , , % 8.9% 14,066 14,309 14,947 15,784 18,959 20, % 15.0% Ford Motor Co. 128, , , , , , % 3.7% 12,163 11,464 12,370 11,211 10,745 12,460 (2.7%) 5.4% General Motors Company 148, , , , , , % 0.7% 12,648 10,914 12,356 9,084 14,547 15,149 (10.4%) NM Harley-Davidson, Inc. 4,662 4,943 5,258 5,568 5,588 5, % 2.8% 1,078 1,198 1,317 1,460 1,492 1, % 5.2% Navistar International Corporation 13,441 12,527 10,617 10,653 11,099 11,486 (7.5%) 3.8% 958 (468) (375) NM NM Oshkosh Corporation 7,539 8,141 7,665 6,808 6,381 6,499 (3.3%) (2.3%) (2.3%) 2.9% PACCAR Inc. 15,326 15,952 15,949 17,793 19,237 19, % 5.6% 1,807 1,927 2,047 2,446 2,445 2, % 1.6% Toyota Motor Corporation 215, , , , , , % (1.7%) 19,838 17,273 26,711 34,414 30,108 33, % (1.2%) Volkswagen AG 184, , , , , , % 5.6% 21,684 25,594 26,303 24,820 29,712 32, % 14.6% Total $907,026 $967,163 $1,013,833 $1,013,070 $1,037,249 $1,072, % 2.8% $98,348 $96,678 $110,773 $115,597 $124,387 $136, % 5.6% PAGE 10

12 SOURCES 1. Capital IQ. 2. MergerMarket. DISCLOSURES Harris Williams & Co. ( and 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. 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 Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry Monjauze, 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, 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 2015 Harris Williams & Co., all rights reserved. PAGE 11