TRANSPORTATION & LOGISTICS

Transcription

1 Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with 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. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan. 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 WHAT WE RE READING AUTO PARTS SUPPLIERS LOOK TO RAMP ONLINE SALES Most manufacturers of automotive aftermarket products items ranging from engines and fuel pumps to seat covers and roof racks aren t yet equipped to accept online orders from chains of repair service centers or individual shops, according to a report from the Automotive Aftermarket Association. But the key word is yet, because many plan to offer online ordering soon, the AASA says. There appears to be widespread interest in enhancing these transaction capabilities, the AASA says in a report it produced this past summer with business software company SAP SE, Business Capabilities in an Evolving Industry. B2B E-Commerce World THE ROAD TO A SAFER DRIVING FUTURE Seat belts, air bags and, more recently, driver-assist features such as lanedeparture warnings, collision-avoidance systems and rearview-mirror cameras have dramatically enhanced road safety. But there s still room for improvement. Innovation and technology are offering a solution and it s not that far into the future. Autonomous-driving technology offers the promise of greatly reducing the number of traffic crashes and saving countless lives, solving one of the greatest public health challenges of our lifetime. Today, 90% of accidents are caused by human error autonomous drive technology will help correct for that, providing for greater confidence, and lower insurance premiums. The Detroit News GLOBAL INDUSTRY ANALYSIS AND OPPORTUNITY ASSESSMENT, Automotive repairs and maintenance services is definitely a booming business at a global level. According to Yahoo s research, the global automotive repair and maintenance services market is anticipated to be valued at $441.3 billion by the year end and is projected to expand at a CAGR of 5.6% over the forecast period, to exceed $750 billion in the coming decade. Yahoo Finance GM CONFIRMS $1 BILLION U.S. INVESTMENT PLAN General Motors Co. confirmed it will invest an extra $1 billion in its U.S. manufacturing operations and will bring in house some production now being done by a supplier in Mexico, days after President-elect Donald Trump ramped up pressure on the nation s largest auto maker to follow rivals in committing to create U.S. jobs. GM said the investment would create or retain nearly 2,000 new manufacturing jobs. About 450 of those are needed as GM moves to make its own axles for the next generation of its full-size pickup truck, replacing a supplier that now makes them in Mexico. GM also said it would add about 5,000 new salaried jobs over the next few years, including new engineers working in advanced technologies and additions to its GM Financial captive-finance unit. Wall Street Journal AFTERMARKET ECU PLATFORM MAKES ANY VEHICLE A CONNECTED CAR 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) James O Malley Vice President jomalley@harriswilliams.com +1 (804) EUROPE Jeffery Perkins Managing Director jperkins@harriswilliams.com +49 (0) The Aftermarket Connected Automotive Platform supports connected applications and transforms any existing vehicle into a smart connected car, including those lacking pre-installed connectivity capabilities. The solution will be available to automotive OEMs, dealers, specialty automotive retailers, and mobile carriers. The ECU platform comprises a high-performance processor, security functions, and several communication interfaces to link the vehicle to the cloudbased Ignite Platform by Harman. The end-user can add smartphone-enabled applications including navigation, multimedia (for example AHA Radio), Wi-Fi hotspots, remote car controls, and car tracking capabilities. CAN Newsletter PAGE 1

3 M&A TRANSACTIONS RECENT M&A TRANSACTIONS 1,2,3 Date Target Business Description Acquirer 1/2/2017* Grupo Estampaciones Sabadell SL Manufactures metal components for the automotive industry Acek Desarrollo y Gestión Industrial SL 12/29/2016 American Driveline Systems, Inc. Offers automotive aftermarket franchising services through its subsidiaries American Axle & Manufacturing Holdings 12/27/2016 Adco Products, Inc. (California) Produces custom automotive accessory services Covercraft Industries, Inc. 12/22/2016* Pendaform Corp. Manufacturer of pick-up truck bedliners for both the OEM and automotive aftermarket Century Park Capital Partners, Inc. 12/22/2016 OBO Banden BV Manufactures and supplies off-road tires Magna Group BV 12/12/2016* Winner Suntex Sdn. Bhd. Manufactures and wholesales tires and inner tubes ecowise Holdings Ltd. 12/5/2016 KRA International LLC Manufacturers wire harnesses and associated assemblies for automotive aftermarket products Patrick Industries, Inc. 12/1/2016* CLARCOR, Inc. Manufacturers filtration products, filtration systems and services Parker-Hannifin Corp. 11/29/2016 Pacific Parts Ltd. Distributes automotive parts and accessories Uni-Sélect, Inc. 11/26/2016 Turisport SL Distributes tires, wheels, and other automobile products KIT Personalizacion Sport SL 11/8/2016 Grohmann Engineering GmbH Develops automated manufacturing systems for batteries and fuel cells Tesla Motors, Inc. 11/18/2016 Fender Gripper, Inc. Manufactures protective fender covers, trunk mats, and carpet underlayments for the automotive aftermarket Drake Automotive Group LLC 11/18/2016 Leffler Industrial Tire & Rubber Track, Inc. Manufacturers and supplies industrial tires and rubber tracks Huron Capital Partners LLC 11/3/2016* Metaldyne Performance Group, Inc. Provides transmission, engine, driveline, and safety critical applications in passenger, commercial, and industrial vehicles American Axle & Manufacturing Holdings 10/31/2016 Autoteile Jakobs GmbH & Co. KG Manufacturers automotive replacement parts, accessories, and industrial supplies Hess Holding GmbH & Co. KG 10/28/2016 JAC Products, Inc. Manufactures roof racks and other automotive body trim JAC Products, Inc. /Private Group/ 10/27/2016* Atwood Mobile Products LLC Designs and manufactures vehicles seating and chassis components Argonaut Private Equity LLC /Seating & Chassis Component Bus/ 10/12/2016 Transamerican Auto Parts Manufacturer and distributer of off-road Jeep and truck accessories HCP Management Co. LLC *Denotes pending transactions PAGE 2

4 PUBLIC MARKETS OVERVIEW TEV / LTM EBITDA TEV / 2017P EBITDA 12.0x Dealerships and Services Providers 11.3x Dealerships and Services Providers 11.8x 10.8x 9.0x 10.2x 7.4x 5.7x AVERAGE REVENUE GROWTH ( ) AVERAGE REVENUE GROWTH ( P) Dealerships and Services Providers 11.1% Dealerships and Services Providers 5.9% 6.5% 2.5% 0.4% (10.4%) (2.9%) (15.8%) AVERAGE EBITDA GROWTH ( ) AVERAGE EBITDA GROWTH ( P) 14.1% Dealerships and Services Providers 7.1% Dealerships and Services Providers 13.4% 5.9% 3.9% (7.5%) (3.0%) (12.6%) PAGE 3

5 STOCK PRICE PERFORMANCE MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) Dealerships and Service Providers 0.7% Dealerships and Service Providers 31.2% S&P % 29.6% Distributors and Retailers (1.6%) Vehicle Manufacturers 22.3% (3.1%) S&P % Vehicle Manufacturers (4.0%) Distributors and Retailers 16.5% TRAILING TWELVE MONTHS (Indexed to January 8th, 2016) 35% 25% 15% 5% (5%) (15%) (25%) Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Dealerships and Service Providers S&P 500 Index 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 has merged with is merging with an operating company of has merged with in a recapitalization by and has acquired 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 & Infrastructure Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston One International Place Suite 2620 Boston, Massachusetts Phone: +1 (617) Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio Phone: +1 (216) Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota Phone: +1 (612) UNITED STATES Richmond (Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia Phone: +1 (804) San Francisco 575 Market Street 31st Floor San Francisco, California Phone: +1 (415) Washington, D.C th St. NW 2nd Floor Washington, D.C Phone: Beijing Hong Kong Mumbai EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) 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 Jan-16 Jul-16 Current 2017P 2018P Automotive Aftermarket BorgWarner Inc. $10,903 $40.82 (2.5%) 11.5% $ % 7.8x 6.2x 7.5x 7.1x 6.8x Cooper Tire & Rubber Company 1, (4.7%) 12.6% % 3.2x 2.9x 3.0x 4.1x 3.9x Dorman Products, Inc. 2, (11.5%) 59.6% % 9.0x 10.7x 13.7x 11.6x 10.3x Federal-Mogul Holdings Corp 4, (0.4%) 83.6% % 6.8x 7.1x 7.3x 5.9x 5.6x Goodyear Tire & Rubber Company 13, (1.1%) 13.1% % 5.2x 5.3x 5.8x 5.1x 4.9x Modine Manufacturing Company (14.4%) 102.2% % 6.0x 4.7x 5.2x 4.2x 3.5x Motorcar Parts of America, Inc (3.6%) (12.3%) % 14.3x 11.9x 9.2x 5.6x NA Standard Motor Products, Inc. 1, (6.6%) 46.1% % 9.0x 9.4x 10.5x 9.7x NA Tenneco Inc. 4, (2.6%) 57.0% % 4.5x 4.8x 5.8x 5.3x 5.0x Visteon Corporation 2, (2.6%) (22.0%) % 8.6x 9.1x 8.2x 7.0x 6.4x Median (3.1%) 29.6% 91.4% 7.3x 6.7x 7.4x 5.7x 5.3x Advance Auto Parts, Inc. $13,445 $ (3.4%) 16.5% $ % 10.4x 11.5x 9.8x 10.8x 9.8x AutoZone, Inc. 28, (1.6%) 11.0% % 11.8x 12.7x 11.9x 11.3x 10.7x Genuine Parts Company 14, (2.6%) 22.3% % 9.8x 13.1x 12.0x 10.8x 10.3x LKQ Corporation 12, (9.0%) 15.0% % 11.5x 14.1x 12.6x 10.5x 10.0x O'Reilly Automotive, Inc. 28, % 19.1% % 14.4x 15.7x 15.1x 13.4x 12.4x U.S. Auto Parts Network, Inc % 26.3% % NA NA 13.9x 8.3x NA Uni-Select Inc. 1, % (4.6%) % 10.9x 12.7x 10.5x 9.3x 9.1x Median (1.6%) 16.5% 90.6% 11.2x 12.9x 12.0x 10.8x 10.1x Dealerships and Service Providers Asbury Automotive Group, Inc. $3,072 $62.25 (1.9%) 16.7% $ % 9.5x 9.3x 9.5x 9.3x 9.3x AutoNation, Inc. 11, % 3.5% % 11.6x 11.7x 11.5x 11.0x 10.7x Boyd Group Income Fund 1, % 46.8% % 10.4x 13.7x 14.4x 11.6x 10.3x CarMax, Inc. 23, % 39.3% % NM NM NM 18.4x 17.9x Copart, Inc. 7, % 61.1% % 11.5x 14.6x 15.3x 14.1x 13.0x Group 1 Automotive, Inc. 4, (3.7%) 31.2% % 10.2x 9.4x 10.4x 11.3x 10.6x KAR Auction Services, Inc. 8, % 34.4% % 10.1x 11.5x 11.7x 10.2x 9.7x Lithia Motors, Inc. Class A 4, (0.7%) 15.7% % 11.1x 10.1x 11.8x 10.9x 9.8x Monro Muffler Brake, Inc. 2, % (7.9%) % 15.2x 16.4x 14.6x 12.0x 10.6x Penske Automotive Group, Inc. 9, (7.5%) 47.8% % 12.1x 11.0x 14.2x 13.1x 13.2x Sonic Automotive, Inc. Class A 3, % 19.8% % 10.5x 10.3x 10.7x 10.9x 10.7x Median 0.7% 31.2% 94.4% 10.8x 11.2x 11.8x 11.3x 10.6x 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 Jan-16 Jul-16 Current 2017P 2018P Automotive Aftermarket Bayerische Motoren Werke AG $160,892 $ % 4.2% $ % 7.8x 7.3x 8.5x 10.2x 9.9x Daimler AG 182, % 2.2% % 6.6x 6.4x 6.8x 8.5x 8.5x Ford Motor Company 153, (4.1%) 0.7% % 9.5x 9.7x 11.4x 12.4x 11.6x General Motors Company 110, (4.4%) 21.9% % 5.6x 5.2x 5.5x 6.5x 6.5x Harley-Davidson, Inc. 16, (4.4%) 32.9% % 11.3x 11.5x 11.4x 12.4x 12.0x Navistar International Corporation 6, (6.9%) 276.4% % 8.6x 9.4x 11.6x 11.7x 9.3x Oshkosh Corp 5, (5.4%) 90.5% % 7.3x 9.4x 10.6x 9.9x 9.3x PACCAR Inc 28, (3.9%) 43.9% % 6.6x 7.4x 9.3x 14.6x 12.9x Toyota Motor Corp. 307, (2.1%) 2.1% % 8.4x 7.6x 8.6x 10.3x 9.6x Volkswagen AG Pref 207, % 22.6% % 7.1x 7.0x 6.4x 6.6x 6.1x Median (4.0%) 22.3% 95.2% 7.5x 7.5x 9.0x 10.2x 9.5x PAGE 8

10 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2018P '13-16 '16-18P P 2018P '13-16 '16-18P Automotive Aftermarket BorgWarner Inc. $7,435 $8,304 $8,025 $9,116 $9,270 $9, % 2.9% $1,224 $1,385 $1,330 $1,499 $1,537 $1, % 3.8% Cooper Tire & Rubber Company 3,439 3,421 2,959 2,912 3,022 3,042 (5.4%) 2.2% % (1.3%) Dorman Products, Inc , % 9.4% % 10.7% Federal-Mogul Holdings Corp 6,786 7,317 7,419 7,440 7,680 7, % 3.4% % 6.3% Goodyear Tire & Rubber Company 19,540 18,138 16,443 15,287 15,693 15,983 (7.9%) 2.3% 2,107 2,251 2,349 2,551 2,688 2, % 6.1% Modine Manufacturing Company 1,478 1,496 1,353 1,513 1,897 1, % 13.8% % 31.8% Motorcar Parts of America, Inc % (100.0%) NM (100.0%) Standard Motor Products, Inc ,062 1, % (100.0%) % (100.0%) Tenneco Inc. 7,964 8,420 8,209 8,539 8,893 9, % 4.5% % 7.7% Visteon Corporation 7,439 7,509 3,245 3,112 3,171 3,345 (25.2%) 3.7% (18.1%) 8.5% Total $55,988 $56,639 $49,796 $50,259 $52,152 $52, % (15.8%) $6,002 $6,475 $6,258 $6,983 $7,366 $7, % (12.6%) Advance Auto Parts, Inc. $6,494 $9,844 $9,737 $9,503 $9,664 $9, % 2.6% $901 $1,244 $1,147 $1,176 $1,238 $1, % 8.2% AutoZone, Inc. 9,148 9,475 10,187 10,636 10,636 11, % 4.5% 2,002 2,081 2,223 2,358 2,358 2, % 6.1% Genuine Parts Company 14,078 15,342 15,280 15,332 15,882 16, % 2.9% 1,117 1,273 1,266 1,249 1,354 1, % 8.4% LKQ Corporation 5,063 6,740 7,193 9,058 10,121 10, % 7.4% ,047 1,211 1, % 10.1% O'Reilly Automotive, Inc. 6,649 7,216 7,967 8,580 9,185 9, % 6.8% 1,287 1,465 1,743 1,909 2,102 2, % 9.3% U.S. Auto Parts Network, Inc % (100.0%) % (100.0%) Uni-Select Inc. 1,788 1,784 1,355 1,205 1,251 1,276 (12.3%) 2.9% % 5.5% Total $43,474 $50,685 $52,010 $54,617 $57,057 $59, % (10.4%) $6,031 $6,961 $7,331 $7,860 $8,392 $9, % (7.5%) Dealerships and Service Providers Asbury Automotive Group, Inc. $5,335 $5,868 $6,588 $6,468 $6,618 $6, % 2.7% $270 $313 $331 $320 $331 $ % 3.6% AutoNation, Inc. 17,518 19,109 20,862 21,700 22,590 22, % 2.7% ,007 1,043 1, % 3.5% Boyd Group Income Fund ,050 1,229 1, % 15.1% % 16.6% CarMax, Inc. 12,574 14,269 15,150 15,760 16,821 17, % 6.9% ,230 1,306 1, % 5.4% Copart, Inc. 1,046 1,163 1,146 1,268 1,268 1, % 8.7% % 10.8% Group 1 Automotive, Inc. 8,919 9,938 10,633 10,913 11,084 11, % 1.6% % 5.2% KAR Auction Services, Inc. 2,173 2,365 2,640 3,075 3,313 3, % 6.2% % 7.4% Lithia Motors, Inc. Class A 4,006 5,390 7,864 8,600 9,485 10, % 9.0% % 10.5% Monro Muffler Brake, Inc ,035 1,129 1, % 8.8% % 13.0% Penske Automotive Group, Inc. 14,705 17,177 19,285 20,184 20,793 20, % 0.8% % 1.3% Sonic Automotive, Inc. Class A 8,843 9,197 9,624 9,672 9,925 10, % 2.1% (0.8%) 1.3% Total $76,512 $86,134 $95,653 $99,726 $104,255 $107, % 5.9% $4,019 $4,617 $5,143 $5,760 $6,100 $6, % 7.1% PAGE 9

11 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2018P '13-16 '16-18P P 2018P '13-16 '16-18P Automotive Aftermarket Bayerische Motoren Werke AG $100,976 $106,648 $102,215 $100,158 $102,969 $105,766 (0.3%) 2.8% $19,443 $21,734 $19,303 $15,530 $15,597 $16,383 (7.2%) 2.7% Daimler AG 156, , , , , , % 2.4% 21,575 25,517 26,045 19,609 20,856 20,966 (3.1%) 3.4% Ford Motor Company 146, , , , , ,372 (1.4%) 1.0% 13,183 11,324 15,557 13,533 11,829 12, % (2.2%) General Motors Company 155, , , , , , % 0.7% 12,708 8,853 15,518 17,440 17,207 16, % (2.0%) Harley-Davidson, Inc. 5,900 6,229 5,995 5,316 5,442 5,705 (3.4%) 3.6% 1,324 1,452 1,328 1,269 1,344 1,406 (1.4%) 5.3% Navistar International Corporation 10,775 10,806 10,140 8,111 8,111 8,678 (9.0%) 3.4% (192) NM 21.1% Oshkosh Corp 7,665 6,808 6,098 6,279 6,279 6,786 (6.4%) 4.0% (7.0%) 6.2% PACCAR Inc 17,124 18,997 19,115 15,883 15,225 16,225 (2.5%) 1.1% 2,648 2,899 3,198 2,056 1,942 2,202 (8.1%) 3.5% Toyota Motor Corp. 256, , , , , ,992 (3.8%) 3.1% 35,160 38,164 36,457 25,367 29,107 32,168 (10.3%) 12.6% Volkswagen AG Pref 261, , , , , ,033 (4.9%) 3.1% 30,822 36,343 26,777 29,035 31,363 33,864 (2.0%) 8.0% Total $1,119,448 $1,138,291 $1,084,281 $1,054,751 $1,074,034 $1,103,557 (2.9%) 2.5% $137,315 $147,203 $145,274 $124,830 $130,237 $137,979 (3.0%) 5.9% PAGE 10

12 TRANSPORTATION & LOGISTICS SOURCES 1. FactSet. 2. MergerMarket. 3. Pitchbook. 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 authorised and regulated by the Financial Conduct Authority, incorporated under English law with 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. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan. 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. 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. 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 2017 Harris Williams & Co., all rights reserved. PAGE 11