V104 IB Pitchbook Presentation

CONFIDENTIAL 1Proletariat Partners

Capital Markets

Discussion MaterialsOctober 24, 2016

Proletariat PartnersCapital Markets

“Working-Class Investment Bankers for High-Class Individuals”


Capital Markets

Table of Contents

Presentation Materials1. Overview of Proletariat Partners2. Preliminary Positioning Strategy3. Summary of Valuation4. Potential Buyers5. Timing and Process

Appendix1. Valuation Support


Capital Markets

Section 1

Overview of Proletariat Partners


Capital Markets

Full Suite of Independent Advisory Services We Think We Can Do

Our Performance• 3 ad-hoc

engagements for over 2 fictional clients

• 3 ad-hoc valuation advisory engagements for more than 3 clients

• Built 3 DCF Models in past 6 weeks

• Received financial modeling training from Adventis CG

Our Services

• Advise 0% of Fortune 100 companies

• Advise 0% of the largest private equity and hedge funds

• Advise over 0+ real middle-market companies

•Advise 3 real companies in fictional scenarios

Our Business

• Founded 6 weeks ago• Headquartered in

Chicago, Illinois• Since inception,

opened over 20 offices in North America

• 3 trusted employees

Proletariat Partners OverviewLeader in Financial Advisory and Investment Banking• Proletariat Partners is a leading provider of investment banking and independent financial advisory services

M&A Sell-Side Advisory Buy-Side Advisory Private Placements Strategic Alternatives Analysis Acquisition Financing Growth Capital Leveraged Buy-Outs

Financial Valuation Fairness and Solvency Opinions ESOP/ERISA Advisory Financial Due Diligence Tax Due Diligence Distressed Investments Advisory Working Capital Analysis

Restructuring Corporate Restructuring Distressed M&A and Special Situations Debt Advisory Formal Insolvency Appointments Out-of-Court Reorganizations

Financial Sponsor & Company Highlights

Ownership: Professor Martin EssenburgYear Founded: 2016Employees: 3Projected Revenue: Very GoodProjected Revenue CAGR: PositiveHistorical Revenue: NonexistentEnterprise Value: Possibly Negative

2017 2018 2019 2020 2021 20220

5

10

15

20

25

30

Proletariat Partners Revenue (Forecasted)

Motto: Working-Class Investment Bankers for High-Class Individuals


Capital Markets

Unparalleled Depth of Investment Banking Experience

Dedicated Team of ProfessionalsProletariat Partners Ranking

#1 Fictional U.S. Middle Market M&A Advisor (2016)

Recent Fictional Awards“Most Best College Students of 2015”

“Newest Firm of 2016”

• With a combined total of over five weeks of experience in the M&A world at Proletariat Partners, these professionals strive for optimal result

“Most Fictional M&A Advisors of 2016”

DePaul University

The M&A Advisor

The M&A Advisor

Denys Vasylechko• Fall Associate Intern• Over 50 hours of Investment

Banking experience• Watched the movie, Wall

Street twice• Read over 3+ articles on

equipment manufacturing industry

Lawrence Ong• Fall Analyst Intern• Over 50 hours of Investment

Banking experience• Read over 2+ Wall Street Oasis

articles• Did well in one of his math

classes (HS - Remedial Shapes)

Madison Maher• Managing Director Intern• Over 50 hours of Investment

Banking experience• First ever real project• Received above average grades

in Finance 101

Combined total of over 150 hours!

M&A Core Verticals We Think We Understand

Energy

Industrials

Healthcare

Food & Retail

Technology


Capital Markets

Executive Summary

Investment Considerations

[Warrior] International manufactures food processing equipment in both domestic and international markets with FY13F revenue of $45.1 million and FY13F EBITDA of $9.3 million. They manufacture products in the following four divisions:

• [Warrior]’s 8.2% Revenue CAGR (2013 – 2017) will be derived from two sources:» Domestically: acquiring market share» Internationally: strong customer growth within international developing markets, primarily within China and India

• Recurring Revenue: » [Warrior]’s Aftermarket Parts and Services division represents its largest, most profitable, and recurring business

• Expanding Margins: » Gross profit Margins are expected to expand by 170 bps over the next five years due to economies of scale

• Innovative Product Set: » [Warrior] has significantly expanded R&D expenditures from $0.1 million to $1.6 million and has 8 new product offerings

• New [Midwest] 102,000 square ft. Facility» consolidate operations and build new testing facility, expected $100 million revenue capacity and margin expansion through economies of scale

• Long-term Client Relationships:» 15+ year long-term relationships within the largest international food processors reflect [Warrior]’s strong reputation and product set

» Pumps / Portioners / Grinders / Extruders» Fillers / Slicers / Dicers / Shredders

» Cooking / Chilling

» Stainless Material Handling

After [Warrior] delivers the following equipment, it generates high-margin, recurring revenue from its Aftermarket Parts and Services division.


Capital Markets

Section 2

Preliminary Positioning Strategy


Capital Markets

[Warrior] International Overview

Description: [Warrior] is a leading provider of highly engineered food processing equipment and related aftermarket parts and services to leading and mid-sized food processors

Defensible Niche: The Company has established a defensible niche position in the food processing equipment industry, resulting in an installed base of over 1,700 units

High margin, Recurring Revenue: [Warrior] capitalizes on this installed base through the Company’s Aftermarket Parts and Services division, generating a highly profitable recurring revenue stream

Due to the highly engineered and proprietary design of its equipment, the Company is the dominant supplier of replacement parts for [Warrior] and [C-Brand] equipment

High Revenue Growth and Wide EBITDA Margins: For FY13F, the Company is expected to generate $45.0 million in revenue and $10.3 million in adjusted EBITDA, representing a margin of 22.9%

Ownership: [Private Equity Fund], management and certain outside investors Headquarters: [Midwest] Year Founded: 1950 Employees: 98 (non-union) FY13F Key Statistics ($ in millions):

» Revenue: $45.0 (14.9% three-year CAGR)» EBITDA $10.4 / Margin: 23%

[Warrior] has a strong presence with many leading and mid-size food processors Top 10 customer relationships average more than 20 years Installed base of over 1,700 units in over 580 plants Top 5 customers represent 35.4% of total combined revenue from FY10A-FY12A

35.40%

64.60%

Total Revenue

Top 5 Customers Other

Long Customer Relationships

Company HighlightsKey Company Information


Capital Markets

[Warrior] Products and ServicesPumps / Portioners Grinders / Extruders

Fillers / Slicers Dicers / Shredders Cooking / Chilling Stainless Material

Handling

Profile Profile Profile Profile

• FY13F Revenue: $7.2M• FY13F Gross Margin:

40-50%• Price Range: $100k-

350k• Installed base: 975+

Units


35-45%• Price Range: $30k-

600k• Installed base: 640+

Units

• FY13F Revenue: $11.1M

• FY13F Gross Margin: 20-30%

• Price Range: $150k-900k

• Installed base: 115+ Units


17-30%• Associated with other

segment equipment revenue

Equipment Equipment Equipment Equipment

Sales Mix

85%

3%8%

4%

Pumps GrindersPortioners Extruders

29%

4%63%

4%

Fillers ShreddersSlicers/Dicers Strippers

35%

65%

Blast Chill CellsThermal Ovens

• Vacuum Pumps• Extruder• Volumetric Portioners• TV Portioners• Grinders• Combovac Stuffer• Jet Knife

• Rotary Fillers• Dry Fillers• Slicers/Dicers• Shredders• Strippers• Log Portioners

• Thermal Ovens• Blast Chill Cells• Serpentine Cook Chill

System• Monorail Processing

Systems

• Conveyors• Racks• Custom Hoppers• Dumpers• Vats• Drains

$0$2$4$6$8

$10$12$14

Pumps / Portioners /Grinders / Extruders

Fillers / Slicers /Dicers / Shredders

Cooking / Chilling Stainless HandlingMaterial

Revenue Gross Profit

CONFIDENTIALProletariat Partners

Capital Markets10

Leading Market Position In Process Food Equipment

Exceptional History with Superior Brand Recognition & Investments in Future Growth

Attractive Aftermarket and Installed Base

Warrior and C-Brand have been iconic brands for over 50 years Customers value the Warrior and C-Brand brands for their reliability and output

consistency New Warrior CARE initiative provides highly technical value-added services to

customers over an equipment’s lifecycle Performs regular customer care visits to audit equipment and perform preventive

maintenance Sales and engineering teams work side-by-side with customers

Significant investments in engineering and R&D capabilities have resulted in a robust pipeline of eight new equipment offerings

− R&D spending rose from $0.1 million in FY10A to $1.6 million in FY12A

Ability to leverage strong brand awareness into rapid market acceptance of new equipment introductions and line expansions

Highly regarded food scientist on-staff“Always Pursuing the Perfect Customer Experience”

Installed base of over 1,700 units facilities recurring, predictable and highly profitable sale of aftermarket parts and services

Proactive support throughout the lifecycle of equipment to further entrench Warrior with customers In Q2012, created dedicated senior management position to head aftermarket efforts Substantial initiatives in place to boost after market sales

» Warrior CARE Program» Regular courtesy calls to customers

» Preventative maintenance services» Staff of dedicated personnel

Exceptional History Investments in Future Growth


Capital Markets11

Growth Opportunities Warrior’s identifiable growth opportunities include:

− Growth within existing customer base» Increased penetration of existing customers» Leverage strong brand awareness

− International expansion» 265 units already installed in international facilities» Tyson, Kraft, Nestle, FritoLay, and Smithfield

− Significant capacity within new facility» Consolidated all functional operations» Sustained economies of scale and greater flexibility» Operating leverage» $100+ million in annual revenue generation

− Expansion of current product and service offerings» Further product development initiatives» Value-added, high-margin categories » Improved revenue mix» Pet food manufacturing

» Expansion of Aftermarket division» [Warrior] CARE» Testing capabilities reduce warranty claim expense

2013E 2014E 2015E 2016E 2017E$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Revenue EBITDA


Capital Markets

End Market Stability in Developed Markets

Source: United States Department of Agriculture Source: United States Department of Agriculture


Capital Markets

End Market Growth in Developing Markets

Urbanization in Developing Markets

Growing Meat Consumption in Developing Markets

Meat Consumption Increasing as Countries Grow

Source: National Research Council, Committee on Population, 2005

Source: USDA , Economic Research Service using USDA Agricultural Projections to 2022 and supporting Data

Developing Regions expected to Outperform Developed Regions


Capital Markets14

Potential Risks & Mitigating Factors

Reputation Risk – Equipment Failure» Highly trained engineers » State-of-the-art Solutions Center» Testing capabilities» CARE program

Consumer Liability – Litigation » Testing capabilities» Insurance contracts

Innovation Risk – Technological Obsolescence » [Warrior] invests heavily in R&D ($1.6 million FY2012) » Leading market through its custom-engineered and inherently reliable products» Long-established customer relationships

Regulation Risk – Global and Dynamic Regulatory Requirements» [Warrior]’s top-of-the-line international relations staff anticipates and executes plans adhering to changing regulations within the

global environment

Revenue Concentration Risk – Top 5 Customers Represent 35.4% of Revenue» These relationships have been established for 20+ years» [Warrior] customers are lead market in packaged food distribution» Opportunities within their global presence

Price Risk – Steel Commodities and Foreign Currency Exposure» Manage risk through derivatives strategies


Capital Markets

Section 3

Summary of Valuation


Capital Markets

Financial Performance

Financial Summary

($ in thousands)

Proletariat Partners utilized the company’s audited and internally-prepared financial statements for historical results The projected periods were estimated based on Proletariat Partners’ assumptions for top line growth were based on industry

research reports:» Increase in revenue growth in years 1, 2 & 3 due to optimal performance, then approaching perpetuity growth rate» Gross profit margins expanded by 170 bps over 2012 to 2017 due to expected economies of scale» EBITDA margins are expected to remain strong at above 22% each year

Prior to going to market, Proletariat Partners would seek to have in-depth discussions with management & stakeholders to vet assumptions and help facilitate creating a detailed set of financial projections

Fiscal Year Ended2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E

Total Revenue $29,744 $33,912 $40,418 $45,066 $50,925 $55,508 $58,283 $60,032% Growth 1.4% 14.0% 19.2% 11.5% 13.0% 9.0% 5.0% 3.0%

Cost of Sales 15,606 17,842 21,655 24,110 26,990 29,197 30,424 31,096Gross Profit 14,138 16,070 18,763 20,956 23,935 26,311 27,859 28,935% Margin 47.5% 47.4% 46.4% 46.5% 47.0% 47.4% 47.8% 48.2%

EBITDA $4,350 $8,020 $9,262 $10,321 $11,585 $12,432 $12,946 $13,269EBITDA Margin 14.6% 23.6% 22.9% 22.9% 22.7% 22.4% 22.2% 22.1%


Capital Markets

Valuation Methodology Summary

Public ComparablesImplied multiple range: 8.2x – 9.2x Selected comparable companies trade at 11.7x to 13.2x based

on averages of 2014 and 2016 EV/EBITDA Multiples Applied a 30% discount due to relative size and illiquidity of a

private company

DCF AnalysisImplied multiple range: 9.1x – 10.3x WACC of 10.9%, given industry average capital structure

of 55% equity, 45% debt, Cost of Equity 18%, and After Tax Cost of Debt 2.4%

Using a perpetuity growth rate of 2%, Enterprise Value resulted in $83M

Using a 2017 EBITDA Exit Multiple of 8.0x, Enterprise Value resulted in $90M

LBO Analysis Total Debt of 4.5x EBITDA

» 3.0x senior debt at LIBOR + 5%» 1.5x sub debt at 11% and 2% PIK

Sponsor’s Equity of 3.55x EBITDA 19.2% IRR to equity holders 2.4x Cash-on-Cash return

79M 82M 85M 88M

Range: $79 - $88 Million

Shifts in valuation distribution can occur with an

effective marketing process

Based on projections and assumptions made by Proletariat Partners for 2013 and beyond:

» The majority of interested buyers will value the company between $79 million to $88 million

» Represents an implied 2013 EBITDA multiple of 8.5x to 9.5x


Capital Markets

Potential Comparable Companies UniverseT1

T2

as of 06/30/16 as of 06/30/16 as of 06/30/16 as of 06/30/16 as of 06/30/16

Revenue: 2,081M Revenue: 3,590M Revenue: 1,224M Revenue: 5,037M Revenue: 876M

EBITDA: 418M EBITDA: 353M EBITDA: 127M EBITDA: 603M EBITDA: 131M

EV/EBITDA: 17.9x EV/EBITDA: 9.0x EV/EBITDA: 16.2x EV/EBITDA: 13.7x EV/EBITDA: 12.2x

as of 06/30/16 as of 06/30/16 as of 06/30/16 as of 06/30/16 as of 06/30/16

Revenue: 3027M Revenue: 2,770M Revenue: 38,230M Revenue: 1,340M Revenue: 8,060M

EBITDA: 8,531M EBITDA: 305M EBITDA: 3,710M EBITDA: 3,422M EBITDA: 934M

EV/EBITDA: 13.89x EV/EBITDA: 5.72x EV/EBITDA: 8.77x EV/EBITDA: 11.12x EV/EBITDA: 6.77x

19Proletariat Partners

Capital Markets

CONFIDENTIAL

GEA Group is a large system provider for food & energy processes. Headquartered in Germany

The Middleby Corp. produces processing equipment for industrial and residential needs. Headquartered in Illinois, USA.

JBT Corp produces equipment for food processing and airport technologies. Headquartered in Illinois, USA.

Marel HF produces food processing equipment primarily for poultry, meat & fish. Headquartered in Iceland

Krones AG produces packaging & bottling machinery. Headquartered in Germany

Selected Comparable Companies


Capital Markets

Multiple Metrics & Capital Structure

FY2015 FY2014 FY2015 FY2014 FY2015 FY2014 FY2015 FY2014GEA 1.3x 1.6x 14.4x 13.3x 70.4% 71.7% 29.6% 28.3%JBT 1.5x 1.1x 14.3x 13.2x 64.2% 60.4% 35.8% 39.6%KRONES AG 0.7x 0.6x 6.8x 6.1x 79.8% 76.0% 20.2% 24.0%MAREL HF 1.0x 1.2x 6.4x 11.6x 74.6% 67.0% 25.4% 33.0%MIDDLEBY 3.3x 3.4x 16.6x 17.5x 77.8% 82.9% 22.2% 17.1%

Multiple Metric & Capital Structure Statistics

High 3.3x 3.4x 16.6x 17.5x 79.8% 82.9% 35.8% 39.6%Mean 1.6x 1.6x 11.7x 12.3x 73.4% 71.6% 26.6% 28.4%Median 1.3x 1.2x 14.3x 13.2x 74.6% 71.7% 25.4% 28.3%Low 0.7x 0.6x 6.4x 6.1x 64.2% 60.4% 20.2% 17.1%

Adjustment Due to Size @ 30%

FY2015 FY2014 FY2015 FY2014High 2.3x 2.4x 11.7x 12.2xMean 1.1x 1.1x 8.2x 8.6xMedian 0.9x 0.8x 10.0x 9.2xLow 0.7x 0.6x 6.4x 6.1x

EV / Revenue Percent Debt

EV / Revenue EV / EBITDADiscounted Multiple Ranges

EV / EBITDA Percent Equity

Selected Comparable Companies Analysis

Implied EV / EBITDA Multiple Range of:8.2x - 9.2x


Capital Markets

Warrior Compares Favorably to Much Larger Peers

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

WARR GEA JBT KRN MARL MIDD

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%


LTM EBITDA Margins LTM Gross Margins

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

WARR GEA JBT KRN MARL MIDD 0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x


EV/REVENUE EV/EBITDA


Capital Markets

Competition

Marel HF is an Icelandic company that produces equipment, systems & services for food processors. Marel HF primarily focuses on poultry, fish & meat. Revenue as of 2014 was 713M EUR.

John Bean Tech. Corp. is an American company that produces food processing machinery and airport equipment. Revenue as of 2015 was $1.1B.

Paul Mueller Company specializes in food processing equipment for dairy farms. In addition, they provide equipment for food, beverage, pharmaceutical and chemical facilities. Revenue as of 2015 was $2.1B

ANKO is a company based in Taiwan that provides food processing equipment for meat, seafood, baked goods, and fried foods.

GEA Group is based in Germany that provides equipment for food and energy processes. Segments include beverage, dairy, food, utilities, and transportation. Revenue for 2015 was 4.6B EUR

Middleby Corporation manufactures industrial and commercial food processing equipment. Headquartered in Illinois, USA. Revenue for 2015 was 2.081B.


Capital Markets

Section 4

Potential Buyers

Proletariat Partners

Capital Markets

Potential Buyer Universe

CONFIDENTIAL 24

T1

T2

Target Enterprise Value: 100M-1B Target Transaction Value: 20M-200M Target Enterprise Value: 50M-750M Target Enterprise Value: 20M-150M Target Transaction Value: 150-250M

Target Revenue: 100M-1B Target Revenue: 20M-300M Target Revenue: 25M-500M Target Revenue: 25M-300M Target Revenue: 30M+

Target EBITDA: 20M-120M Target EBITDA: 2M+ Target EBITDA: 5M-50M Target EBITDA: 5M-15M Target EBITDA: 5M+

Assets Under Management: 4B Assets Under Management: 900M Assets Under Management: 1.7B Assets Under Management: 232M Assets Under Management: 3.75B

Regional Focus: North America Regional Focus: North America Regional Focus: North America Regional Focus: North America Regional Focus: North America & Europe & EuropeTarget Industires: manufacturing, Target Industires: manufacturing, Target Industires: manufacturing, Target Industires: manufacturing, Target Industires: technology, distribution, packaging, industrial service prodviders, service sectors, distribution distribution, business service, consumer products, manufacturing,industrial equipment, and food audio products, consumer products, consumer products, transportation, telecommunicationsprocessing healthcare products & services, food products & processing

packaging

Target Enterprise: 20M-100M Target Enterprise Value: <150M Target Enterprise Value: 50M-150M Target Enterprise Value: 5M-75M Target Enterprise Value: 500M+

Target Revenue: 20M-100M Target Revenue: 15M-150M Target Revenue: Target Revenue: 10M-75M Target Revenue: 500M+

Target EBITDA: 3M-12M Target EBITDA: 3M-20M Target EBITDA: 20M+ Target EBITDA: 2M-10M Target EBITDA: 100M+

Assets Under Management: 250M Assets Under Management: 600M Assets Under Management: Assets Under Management: N/A Assets Under Management: 100B

Regional Focus: North America Regional Focus: North America Regional Focus: North America Regional Focus: North America Regional Focus: Americas, Europe,Asia, Africa

Target Industires: manufacturing, Target Industires: healthcare, Target Industires: food & beverage, Target Industires: manufacturing, Target Industires: manufacturing, distribution, business service, consumer and business services manufacturing, consumer products distribution, technology, telecommunications, food consumer products business service healthcare, oil refining, infrastructure,

packaging, construction, leisure,commodity chemicals, internet


Capital Markets

Downer’s Grove, IL

Naperville, IL

Vignola, Italy

Various Niche Manufacturing & Food Portfolio Companies

Selected Potential Buyers• Duravant is a leading, global manufacturer of engineered equipment serving the food

processing, packaging and material handling equipment industries. [Warrior] could act as an excellent add-on with Duravant by expanding its customer base, geographic presence, and enhancing Duravant’s technology

• Spring (U.S.A.) Corporation (“Spring”) is a leading designer and provider of foodservice equipment for the hospitality sector. Spring’s line of branded product includes buffet systems, induction cooking systems, mobile cooking stations, tableware, and cookware. [Warrior] could be an add-on acquisition that would expand Spring’s product set to a broader range of clients

• GHJ&M has an extensive experience in various manufacturing portfolio companies and food portfolio companies. Within food, GHJ&M has experience in coffee distribution, grocery, and food processing (Michael Foods). With its combined understanding of food processing and equipment manufacturing, [Warrior] could make an interesting acquisition as a platform company.

• Pacific Handy Cutter, Inc. “PHC” is a recognized leader in the industrial safety market as a manufacturer of highly specialized cutting tools and replacement blades. PHC’s products are sold directly to major retailers, grocery store chains, food service companies and through industrial products distributors.

• Brass Smith Innovations is the leading manufacturer of innovative food guards, counters, cold pans, heated merchandisers, floor troughs, and custom stainless products to the institutional food service sector. BSI was formed in 1989 and is headquartered in Denver, CO.

• Both companies reflect Levine’s expertise in food equipment manufacturing. In both companies, [Warrior] could be an excellent fit as an add-on acquisition

• Fabbri is a market leader in the design, manufacturing, sales, and distribution of wrapping machines, films, and related parts and service for the fresh food packaging sector, which includes meat, poultry, fish, fruits, and vegetables. Its products, focused on stretch overwrap and modified atmosphere packaging (“MAP”) technologies, are sold to food retailers, food processors, and distributors. [Warrior] could expand Fabbri’s US presence, product set, and client diversification as an add-on acquisition for Lincolnshire/Fabbri.

Irvine, CA Denver, CO


Capital Markets

Section 5

Timing and Process


Capital Markets

Market Preparation

Marketing Stage I

Marketing Stage II

Negotiation and Close

Process Timeline

• Business and accounting due

diligence• Review potential transaction

structures and process• Develop positioning strategy

“investment thesis”• Develop and finalize EBITDA

adjustments and financial projections

• Prepare and finalize potential buyers list

• Draft and complete Confidential Information Memorandum (“CIM”)

• Prepare teaser• Initiate discussions with select

strategic parties (e.g., international parties)

• Prepare a list of potential debt providers

• Select/invite parties to participate in Stage Two

• Coordinate visits and conduct management presentations

• Open online data room and facilitate due diligence

• Provide periodic status reports• Solicit final letter of intents• Evaluate letters and negotiate

with final bidders• Determine reasonable buyer

due diligence timeline• Select final candidate(s)• Partner debt providers with

private equity firms

• Acquirer confirmation due diligence – accounting, legal, environmental

• Negotiate definitive agreement• Obtain required regulatory

approvals• Closing

• Begin contacting all prospective acquirers

• Negotiate confidentiality agreements

• Distribute teaser and CIM• Field calls/screen questions• Provide periodic status reports• Prepare management

presentation• Compile data room documents• Lawyers will develop the

proposed purchase contract• Solicit/evaluate preliminary

indications of interest• Contact debt providers and

distribute CIM• Solicit feedback from debt

providers and share it with private equity firms

Weeks 1 – 6 Weeks 6 – 12 Weeks 12 – 20 Weeks 20 – 30


Capital Markets

Appendix

Valuation Support


Capital Markets

Historical & Projected Income Statement


Income Statement

Pumps / Portioners / Grinders / Extruders $5,708 $5,620 $8,524 $9,504 $10,740 $11,706 $12,292 $12,660Fillers / Slicers / Dicers / Shredders 4,257 5,619 3,912 4,362 4,929 5,373 5,641 5,810Cooking / Chilling / Stainless Material Handling 5,894 6,865 10,356 11,547 13,048 14,222 14,933 15,381Parts 12,412 13,881 14,609 16,289 18,407 20,063 21,066 21,698Lease Service and Other 1,430 1,644 1,723 1,921 2,171 2,366 2,485 2,559Outsourced Equipment 43 283 1,294 1,443 1,630 1,777 1,866 1,922

Total Revenue $29,744 $33,912 $40,418 $45,066 $50,925 $55,508 $58,283 $60,032% Growth 1.4% 14.0% 19.2% 11.5% 13.0% 9.0% 5.0% 3.0%

Cost of Sales 15,606 17,842 21,655 24,110 26,990 29,197 30,424 31,096 Gross Profit $14,138 $16,070 $18,763 $20,956 $23,935 $26,311 $27,859 $28,935% Margin 47.5% 47.4% 46.4% 46.5% 47.0% 47.4% 47.8% 48.2%

Operating Expenses 9,788 10,685 12,230 13,565 15,379 16,985 18,068 18,850 Operating Income $4,350 $5,385 $6,533 $7,391 $8,555 $9,325 $9,792 $10,085% Margin 14.6% 15.9% 16.2% 16.4% 16.8% 16.8% 16.8% 16.8%

Misc. Expense (Income) (incl. mgmt fees) - - - - - - - - - - - - - - - - Interest Expense $78.1 $55.0 $125.0 2,931 2,694 2,440 2,155 1,778Subordinated PIK Interest Expense - - - - - - 278 283 289 295 278

Total Other Expenses $78 $55 $125 $3,208 $2,977 $2,729 $2,450 $2,056

Earnings Before Taxes $4,272 $5,330 $6,408 $4,182 $5,578 $6,596 $7,342 $8,029

Corporate Taxes 1,687 2,105 2,531 1,652 2,203 2,606 2,900 3,172Net Earnings $2,584 $3,225 $3,877 $2,530 $3,375 $3,991 $4,442 $4,858% Margin 8.7% 9.5% 9.6% 5.6% 6.6% 7.2% 7.6% 8.1%


Capital Markets

Historical & Projected Balance Sheet

2010A 2011A 2012A Pre- Adj + Adj - Close 2013E 2014E 2015E 2016E 2017EBalance Sheet

Cash $34 $1,826 $1,826 $1,000 ($1,826) $1,000 $1,000 $1,000 $1,000 $1,000 $1,000Accounts Receivable 2,723 3,048 4,558 4,558 4,558 5,082 5,743 6,260 6,573 6,770Inventory 4,444 4,951 6,034 6,034 6,034 6,718 7,521 8,136 8,477 8,665Prepaid Expenses 292 493 549 549 549 612 692 754 792 815Other Current Assets 1,268 410 656 656 656 731 827 901 946 974

Total Current Assets $8,727 $8,936 $13,623 $13,623 $1,000 ($1,826) $12,797 $14,144 $15,782 $17,050 $17,788 $18,224

Net Property, Plant & and Equipment $2,807 $2,779 $2,649 $2,649 $2,649 $2,504 $2,340 $2,162 $1,974 $1,781Goodwill 5,679 5,679 5,679 5,679 32,157 37,836 37,836 37,836 37,836 37,836 37,836Intangibles 29,425 27,659 25,424 25,424 25,424 23,462 21,500 19,538 17,576 15,614Other Assets 541 176 366 366 366 366 366 366 366 366Deferred Financing Fees 1,259 1,259 1,007 755 503 252 - -

Total Assets $47,179 $45,229 $47,741 $47,741 $80,331 $79,319 $78,579 $77,455 $75,792 $73,822

Accounts Payable $1,540 $1,982 $2,656 $2,656 2,656 $2,957 $3,310 $3,581 $3,732 $3,814Customer Deposits 1,806 2,158 536 536 536 $598 $675 $736 $773 $796Accrued Expenses 914 1,139 1,763 1,763 1,763 $1,966 $2,221 $2,421 $2,542 $2,619

Total Current Liabilities $4,260 $5,279 $4,955 $4,955 $4,955 $5,521 $6,207 $6,738 $7,047 $7,229

New Revolver - - - - - - - - - - - - Bank Term Loan $15,622 $11,009 $25,000 $25,000 $27,786 ($25,000) 27,786 23,500 18,515 12,679 6,070 - - Subordinated Loan 13,893 13,893 14,171 14,454 14,743 15,038 14,198Deferred tax liability - - (99) (199) (298) (398) (497)Other long-term liability $1,513 $809 $847 $847 847 847 847 847 847 847

Total Liabilities $21,395 $17,097 $30,802 $30,802 $47,481 $43,939 $39,824 $34,710 $28,605 $21,777

Shareholders' Equity $25,784 $28,132 $16,939 $16,939 $32,850 ($16,939) $32,850 $35,380 $38,755 $42,745 $47,187 $52,045Total Liabilities and Equity $47,179 $45,229 $47,741 $47,741 80,331 $79,319 $78,579 $77,455 $75,792 $73,822

Closing Adjustments


Capital Markets

Discounted Cash Flow Analysis

• WACC: 10.9%• Perpetuity Method:

• Perpetuity Growth Rate: 2% • Total Enterprise Value: $83M

• EBITDA Exit Multiple Method:• EBITDA Multiple: 8.0x• Total Enterprise Value: $90M

$89,802 7.50x 7.75x 8.00x 8.25x 8.50x $89,802 6.00x 6.25x 6.50x 6.75x 7.00x High 10.3x10.5% 87,212 89,232 91,253 93,273 95,294 10.5% 9.4x 9.6x 9.9x 10.1x 10.3x Mean 9.7x10.8% 86,353 88,351 90,349 92,347 94,345 10.8% 9.3x 9.5x 9.8x 10.0x 10.2x Median 9.7x10.9% 85,834 87,818 89,802 91,787 93,771 10.9% 9.3x 9.5x 9.7x 9.9x 10.1x Low 9.1x11.3% 84,670 86,623 88,576 90,530 92,483 11.3% 9.1x 9.4x 9.6x 9.8x 10.0x11.5% 83,844 85,775 87,707 89,639 91,570 11.5% 9.1x 9.3x 9.5x 9.7x 9.9x

Enterprise Value using Terminal Exit MultipleExit Multiple

WA

CC

Implied Multiple Range using Terminal Exit MultipleEnterprise Value using Terminal Exit MultipleExit Multiple

WA

CC

$82,675 1.60% 1.80% 2.00% 2.20% 2.40% $82,675 1.60% 1.80% 2.00% 2.20% 2.40% High 9.7x10.5% 83,788 85,218 86,715 88,284 89,931 10.5% 9.0x 9.2x 9.4x 9.5x 9.7x Mean 8.9x10.8% 81,423 82,763 84,164 85,630 87,167 10.8% 8.8x 8.9x 9.1x 9.2x 9.4x Median 8.9x10.9% 80,040 81,329 82,675 84,084 85,558 10.9% 8.6x 8.8x 8.9x 9.1x 9.2x Low 8.1x11.3% 77,062 78,244 79,477 80,764 82,110 11.3% 8.3x 8.4x 8.6x 8.7x 8.9x11.5% 75,048 76,160 77,319 78,528 79,790 11.5% 8.1x 8.2x 8.3x 8.5x 8.6x

Implied Multiple Range using Perpetuity Methodology

WA

CC

Perpetuity Growth RateEnterprise Value using Perpetuity Methodology Implied Multiple Range using Perpetuity Methodology

Perpetuity Growth Rate

WA

CC


Unlevered Free Cash Flow $2,160 $6,261 $2,908 $6,049 $6,602 $7,297 $7,896 $8,254

Present Value @ a Discount Rate of: 10.9% $5,454 $5,368 $5,350 $5,220 $4,920Present Value of Projection Period $26,311

Perpetuity Method Terminal Exit Multiple Method

Present Value of Projection Period $26,311 Present Value of Projection Period $26,311

2017 Free Cash Flow $8,254 2017 EBITDA $13,315Perpetuity Growth Rate 2.0% EBITDA Multiple 8.00xTerminal Value 94,563 Terminal Value 106,520Years 5.0 Years 5.0Present Value of Terminal Value $56,365 Present Value of Terminal Value $63,492

Total Enterprise Value $82,675 Total Enterprise Value $89,802


Capital Markets

Leveraged Buyout Analysis

• Total Debt of 3.5x EBITDA• 2.50x senior debt at LIBOR + 5%• 0.76x sub debt at 11% and 2% PIK

• Sponsor’s Equity of 3.56x EBITDA• 19.2% IRR to equity holders• 2.4x Cash-on-Cash return

Transaction Value2012 EBITDA 9,2622012 EBITDA Multiple 8.00x

Transaction Value $72,270

Sources and UsesMaximum xEBITDA % Total Amount

Senior Debt 3.5x 3.00x 37.3% $27,786Subordinated Debt 1.5x 1.50x 18.6% 13,893Sponsor's Equity 3.55x 44.1% 32,850

Total Sources 8.05x 100.0% $74,529

Transaction Value $72,270Beginning Cash Balance 1,000Transaction Expenses 1,259

Total Uses $74,529

Debt / EBITDA 4.5x

Investor Returns2013E 2014E 2015E 2016E 2017E

Years of Investment 1.0 2.0 3.0 4.0 5.0

EBITDA $10,367 $11,631 $12,478 $12,992 $13,315x EBITDA Multiple 8.00x 8.00x 8.00x 8.00x 8.00x

Enterprise Value $82,938 $93,047 $99,827 $103,933 $106,520

Debt $39,675 $35,320 $30,196 $24,266 $17,653Cash (1,000) (1,000) (1,000) (1,000) (1,000)

Net Debt $38,675 $34,320 $29,196 $23,266 $16,653Management Option @ 10.0% 8,294 9,305 9,983 10,393 10,652

Equity Value $35,969 $49,422 $60,648 $70,274 $79,214

Internal Rate of Return 9.5% 22.7% 22.7% 20.9% 19.2%Cash-on-Cash Return 1.09x 1.50x 1.85x 2.14x 2.41x

19.2% 7.50x 7.75x 8.00x 8.25x 8.50x7.50x 21.0% 22.0% 22.9% 23.8% 24.7%7.75x 19.1% 20.1% 21.0% 21.9% 22.8%8.00x 17.4% 18.3% 19.2% 20.1% 21.0%8.25x 15.8% 16.7% 17.6% 18.5% 19.4%8.50x 14.3% 15.3% 16.1% 17.0% 17.9% E

ntry

Mult

iple

EBITDA Exit MultipleIRR (Entry vs. Exit EBITDA Multiple)

241.1% 7.50x 7.75x 8.00x 8.25x 8.50x7.50x 2.59x 2.70x 2.81x 2.91x 3.02x7.75x 2.40x 2.50x 2.59x 2.69x 2.79x8.00x 2.23x 2.32x 2.41x 2.50x 2.59x8.25x 2.08x 2.17x 2.25x 2.34x 2.42x8.50x 1.95x 2.03x 2.11x 2.19x 2.27x

Cash-on-Cash Return (Entry vs. Exit EBITDA Multiple)EBITDA Exit Multiple

Ent

ry M

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V104 IB Pitchbook Presentation

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Transcript of V104 IB Pitchbook Presentation