Measurement, Control, and Connectivity Industry Update

Summer 2012
What Were Reading
Smart Devices Create Opportunities in Test and Measurement Industry
This article illustrates the attractive growth prospects within the wireless test equipment market. Accelerated growth could result in increasing M&A activity within the sector as companies look to capitalize on these growth opportunities.
Test & Measurement World 1/20/2012

CONTENTS
WHAT WERE READING ECONOMIC UPDATE M&A MARKET TRENDS PUBLIC MARKETS PUBLIC COMPARABLES NOTABLE M&A ACTIVITY

Rapid changes taking place in the wireless communications industry are driving growth in the wireless test equipment market. With the growing number of wireless subscribers, smartphones, wireless data services, mobile banking, and social-networking applications, there is a need for increased functionality in test and measurement tools. The wireless test equipment market consists of signal generators, spectrum analyzers, network analyzers, and telecom and datacom test equipment. The global wireless test equipment market generated revenues of $3.1 billion in 2011 and is expected to exceed $5.8 billion in 2017 with a CAGR (compound annual growth rate) of 11.0% from 2011 to 2017. Read the full article here.

GROUP OVERVIEW
Harris Williams & Co. is a leading advisor to the test and measurement, flow control, and power connectivity and control markets. Our significant experience covers a broad range of end markets, products, and technologies. This particular report focuses on trends and metrics in the following areas:

Power Demand Will Outstrip Infrastructure, Leading to Increasing Disturbances

Growing public awareness of the societal impact and cost of power outages has led to increased investments in both power integrity products and test and measurement devices. See the following link for HW&Co.s recent experience in this sector as the exclusive advisor to Avtron Loadbank in its sale to Emerson Electric.
The Data Center Journal 5/07/2012

Test and Measurement

Instrumentation Sensors Technology and Software Life Sciences and Laboratory Flow Control

Power-related issues are a growing predicament on a global scale. The global population and industrial development are growing more rapidly than existing power infrastructure can handle, having a detrimental effect on efficiencies worldwide. Over the next two decades, demand for electricity is forecasted to grow by 40 percent in the U.S. alone. Increased demand is most dramatic in Asia, averaging 4.7 percent per year until 2030. This exponential growth means increased stress on the grid, which in turn means more strain on individual electronic items, reducing lifespan, lowering reliability and affecting everyday life. Read the full article here.

Pumps and Filtration Valves and Fittings Power Connectivity and Control Power Integrity Electrical Protection and Connectivity Interconnect Components

Liquid Macrofiltration Market to Exceed $6.6 billion in 2013

The strong performance in the global filtration industry could lead to increasing investment in filtration and flow control manufacturers.
Flow Control Magazine 6/11/2012

CONTACTS
Bill Roman | Managing Director broman@harriswilliams.com +1(617) 654-2101
Julien Darmon | Managing Director jdarmon@harriswilliams.com +44 20 7518 8905 Jay Hernandez | Director jhernandez@harriswilliams.com +1(617) 654-2114 Matthew Volinsky | Vice President mvolinsky@harriswilliams.com +1(617) 654-2138

The market for sand filters, belt presses, bag filters, and other macrofiltration equipment used to separate particles from water and liquids will exceed $6.6 billion in 2013, according to McIlvaine Companys latest Liquid Filtration and Media World Market online report. The report finds the largest purchasing segment will be municipal water treatment plants. McIlvaine says one of the biggest new markets is ballast water treatment, noting that a 50-micron filter will be required on most of the 70,000 ships that will be subject to new international maritime rules. Read the full article here.

China Steel, Copper Output Softens on Weak Demand

This article provides further evidence of Chinas recent industrial slowdown, which may foreshadow falling commodity prices worldwide.
The Wall Street Journal 6/11/2012

Growth in China's production of industrial metals including bellwether crude steel mildly slowed in May from the previous month as broader macroeconomic demand weakened, National Bureau of Statistics data showed Monday. Output of key industrial commodities in the world's second-largest economy is a good gauge of producer confidence, and last month's declines were largely in line with market expectations. Lackluster downstream demand kept steel makers from fully running furnaces, after bellwether economic indicators in April, including industrial output and manufacturing indices pointed to a sharp slowdown. Read the full article here.

www.harriswilliams.com 1

Economic Update
Economic Outlook U.S. economic growth has slowed in the Spring of 2012, and this trend is most apparent in the labor market, where unemployment currently stands at 8.2%.

GDP

Real GDP was revised to 1.9% annualized growth in 1Q 2012, from its advanced estimate of 2.2%. Stuart Hoffman (Chief Economist at PNC) is forecasting 2.1% GDP growth in 2012 and 2.3% GDP growth in 2013, followed by more robust growth near 2.6% by 2014.

Industrial Markets

Factory activity continues to recover moderately and irregularly, with new orders for manufactured goods increasing 0.7% in May following two months of declining factory orders. Businesses, while remaining profitable and maintaining strong cash balances, are slowing investment activity due to uncertainty over sovereign issues in Europe, concern about U.S. fiscal policies, and upcoming U.S. elections. Concerns are resulting in Corporate America delaying investments, paying down debt, and building cash reserves. PNC economists forecast roughly 4 6% growth in non-residential fixed investments for the remainder of 2012.
Survey of Small and Middle-Market Business Owners

PNCs Spring survey shows significant improvements in optimism compared to Autumn 2011, and a return to positive levels unseen since 2007.

Owners Expectations for Their Business

Trending and for the Next Six Months

Sales
Expect Increase Expect to Remain Same
Expect Decrease 48% 40% 58%

Profits
37% 29% 43%

Hiring
24% 20% 28%

The improvements are evident across all industries, with manufacturing firms leading the way.
Findings bolster PNCs forecast that U.S. economy and jobs will continue a modest recovery in 20122013. 28% are optimistic about their own companys prospects during the next 6 months, the highest since Autumn 2007 (34%).

34% 38% 30%

37% 39% 36%

65% 65% 62%

13% 20% 10%

23% 31% 18% 4/11 10/11 4/12

7%

14% 7%

4/11 10/11 4/12

4/11 10/11 4/12

70% plan to spend on capital investments in the next six months, up from 60% in the Autumn and Spring surveys.

Owners outlooks for sales, profits, and hiring for the next six months are stronger than the Fall, with double-digit sales gains expected by 23%.
2

Note: Visit www.pnc.com/economicreports to view the full listing of economic reports published by PNCs economists.

Economic Update
A Snapshot of Key Economic Indicators
As of May 2012
50 80% 70%

PMI Index1
62

U.S. Manufacturing Capacity Utilization

100% 90%

53.5

56

77.6%

44

38

60% 50%

32

(1) A PMI Index figure greater than 50% indicates expansion.

ISM Index1
($ in billions)
75
70 65

Durable Goods New Orders

60.1
$250 $225 $200

$217.2

60
55 50

$175
$150 $125

45
40 35 30

25

$100

(1) An ISM Index figure greater than 50% indicates expansion.

Copper, Iron and Steel, and Metal Scrap Prices

Index (2004 = 100)
450

Conference Board Leading Indicators Index

Index (2004 = 100)
120 110 100 90 80

326.1 229.2

99.8

400
350 300 250

187.1

200
150 100

50
-

70 60
Copper Iron and Steel Metal Scrap

Overall M&A Market Trends

Key Indicators
M&A Activity and Relative Valuations

Status

Commentary

M&A activity remains solid and Harris Williams & Co. is experiencing activity that points to a strong 2H 2012. Valuations have rebounded to pre-downturn levels for quality companies.
Year-to-Date, Harris Williams & Co. has been regularly seeing 4.50x 5.25x total leverage. In the last 45 days pricing has increased by up to 100 bps, which is beginning to result in a modest softening of leverage multiples. Tepid organic growth continues to drive corporate M&A market activity, supported by cash reserves that have topped $2 trillion for S&P 500 companies.

Financing Market

Available Capital

Significant amounts of un-invested capital provide strong liquidity and pressure to invest from shareholders and LPs.

Recent Activity

Recent Large Cap M&A Activity1,2

For the Months May 2007 May 2012 ($ in billions)
$250 50

Recent Middle Market M&A Activity 1,2

For the Months May 2007 May 2012 ($ in billions)
$50 500

$200

40
# of Transactions

$40

400
# of Transactions

Deal Value

Deal Value

$150

30

$30

300

$100

20

$20

200

$50

10

$10

100

$0

$0

Deal Value ($ in billions)

# of Transactions

Deal Value ($ in billions)

# of Transactions

(1) Includes transactions over $1 billion with the target based in the United States or Canada. (2) Excludes minority purchases, acquisitions of remaining interest, self-tenders and repurchases.

(1) Includes transactions under $1 billion with the target based in the United States or Canada. (2) Excludes minority purchases, acquisitions of remaining interest, selftenders and repurchases.

Trading Values
Stock Prices
As of July 6, 2012

Trailing Twelve Months Stock Price Performance

120
110 100 90 80

70 Jul-11

Aug-11

Sep-11

Oct-11

Nov-11 Dec-11

Jan-12

Feb-12 Mar-12
Flow Control

Apr-12 May-12

Jun-12

Jul-12

S&P 500

Test & Measurement

Power Connectivity & Control

Key Trading Statistics

As of July 6, 2012
S ub-S ector Test and Measurement Instrumentation Sensors Technology and Software Life Sciences and Laboratory Flow Control Pumps and Filtration Valves and Fittings Power Connectivity and Control Power Integrity Electrical Protection and Connectivity Interconnect Components

Key Trading Statistics

S tock Price % Change 1 Month 12 Month TEV / LTM EBITDA Multiple as of Jul-11 Jan-12 Current TEV / EBITDA 2012E 2013E LTM Margins Gross EBITDA

(0.2%) (0.1%) (6.6%) (1.9%)

(4.2%) (9.4%) (12.5%) (14.6%)

11.6x 11.5x 14.7x 13.4x

10.8x 9.2x 13.8x 10.4x

12.2x 11.0x 12.6x 10.2x

12.5x 11.0x 13.5x 10.5x

9.8x 7.2x 10.6x 8.6x

43.7% 40.2% 54.7% 50.7%

15.5% 17.5% 19.7% 19.1%

(1.3%) (0.2%)

(16.9%) (15.7%)

11.4x 9.0x

9.2x 8.0x

9.1x 8.0x

9.2x 7.7x

8.4x 6.9x

31.4% 31.6%

14.6% 14.1%

(2.5%) 4.5% (2.6%)

(24.8%) (7.3%) (13.7%)

9.6x 8.4x 7.7x

7.7x 7.0x 6.2x

7.3x 7.7x 8.0x

7.5x 8.4x 7.8x

7.1x 7.0x 6.3x

32.4% 38.5% 28.1%

16.7% 21.9% 15.8%

EBITDA Multiples
As of July 6, 2012

Current Valuations Versus Historical Five-Year Median

110%
104% 101% 100% 90% 90% 80% 70% 97%

94%
90%

95%

85%
78%

60%
Instrumentation Sensors Technology & Life Sciences & Software Laboratory Pumps & Filtration Valves & Fittings Power Integrity Electrical Protection & Connectivity Interconnect Components

Test and Measurement

Flow Control

Power Connectivity and Control

Test and Measurement

Public Comparables
Key Trading Stats
As of July 6, 2012 ($ in millions, except per share amounts)
Instrumentation Roper Industries Inc. AMETEK, Inc. Teradyne Inc. Danaher Corp. Spectris plc Badger Meter Inc. Teledyne Technologies Inc. National Instruments Corporation Itron, Inc. ESCO Technologies Inc. Oxford Instruments plc

Test and Measurement Public Comparables

Stock Performance LTM Margins EBITDA Gross TEV Current Price 1-Month Change 1-Year Change % of LTM High R&D / Sales LTM TEV / EBITDA 2012E 2013E

29.0% 24.5% 24.1% 21.8% 19.5% 15.5% 15.0% 13.6% 12.7% 11.8% 13.3% Median 15.5% Mean 18.2%

54.4% 34.8% 50.3% 51.7% 58.6% 34.9% 33.6% 76.2% 30.3% 38.4% 43.7% 43.7% 46.1%

$10,088 $9,312 $2,095 $39,537 $3,341 $611 $2,593 $2,835 $1,997 $1,073 $1,061

$97.12 $33.91 $13.67 $51.37 $23.35 $38.17 $61.82 $26.54 $42.50 $36.43 $19.89

(3.0%) (1.9%) (4.9%) (0.3%) (1.9%) 6.1% (0.2%) 1.9% 17.5% 4.1% 7.1% (0.2%) 2.2%

16.1% 11.4% (8.3%) (5.8%) (11.5%) 1.0% 22.4% (13.0%) (13.2%) (4.2%) 26.1% (4.2%) 1.9%

93.8% 96.3% 75.9% 91.0% 78.3% 93.5% 93.3% 87.0% 84.4% 94.9% 97.8% 93.3% 89.7%

4.3% 4.4% 14.4% 6.3% 7.0% 2.9% 16.0% 20.0% 6.8% 4.8% 7.6% 6.8% 8.6%

12.6x 12.9x 5.7x 11.1x 10.0x 16.0x 8.9x 18.7x 6.2x 12.5x 20.4x 12.5x 12.3x

11.5x 11.1x 4.0x 9.8x 8.3x 11.3x 8.3x 13.2x 7.1x 8.3x 12.2x 9.8x 9.6x

Sensors FLIR Systems, Inc. Sensata Technologies Holding NV Meggitt plc MTS Systems Corp. Measurement Specialties Inc. Micronas Semiconductor Holding AG Honeywell International Inc. 27.5% 26.6% 23.0% 17.5% 16.7% 15.8% 10.0% Median 17.5% Mean Technology and Software Cognex Corporation Hexagon AB FARO Technologies Inc. Mistras Group, Inc. 29.4% 23.0% 16.4% 14.1% Median 19.7% Mean Life Sciences and Laboratory Mesa Laboratories Inc. Waters Corp. Agilent Technologies Inc. Thermo Fisher Scientific, Inc. Mettler-Toledo International, Inc. Sartorius AG Bruker Corporation PerkinElmer Inc. 38.0% 31.9% 20.9% 20.1% 18.1% 17.9% 13.4% 12.3% Median 19.1% Mean Overall Median Overall Mean 21.6% 18.0% 19.8% 59.3% 60.5% 53.1% 42.0% 52.6% 48.9% 46.0% 44.9% 50.7% 50.9% 45.4% 46.9% $146 $6,541 $11,478 $24,773 $5,269 $1,478 $2,314 $3,680 $45.90 $77.31 $37.97 $51.43 $157.18 $57.81 $13.36 $25.38 2.3% (1.9%) (4.1%) 1.1% (0.6%) (1.9%) (10.0%) (2.5%) (1.9%) (2.2%) (1.2%) (0.1%) 40.4% (21.6%) (24.4%) (20.6%) (8.6%) 15.4% (35.7%) (6.9%) (14.6%) (7.8%) (8.5%) (4.4%) 77.7% 77.8% 76.1% 78.8% 82.7% 94.8% 64.4% 89.9% 78.3% 80.3% 83.6% 83.2% 3.6% 5.1% 9.6% 3.0% 5.0% 5.9% 10.6% 6.2% 5.5% 6.1% 6.2% 7.4% 9.9x 11.0x 8.3x 10.6x 12.6x 9.3x 10.4x 15.7x 10.5x 11.0x 11.4x 11.4x 0.0x 10.4x 6.9x 9.1x 11.1x 8.4x 8.1x 8.9x 8.6x 7.9x 8.7x 8.7x 20.7% 75.8% 53.0% 56.4% 33.8% 54.7% 54.8% $1,163 $8,040 $573 $789 $31.84 $16.41 $42.00 $26.37 (7.2%) (5.9%) (9.9%) 19.2% (6.6%) (1.0%) (12.5%) (33.9%) (12.5%) 60.6% (12.5%) 0.4% 71.1% 72.6% 70.4% 97.7% 71.8% 78.0% 12.9% 8.1% 6.0% 0.6% 7.1% 6.9% 12.2x 12.8x 14.5x 14.3x 13.5x 13.4x 11.0x 10.5x 9.9x 10.7x 10.6x 10.5x 19.6% 53.7% 35.2% 42.3% 43.3% 40.2% 37.3% 21.9% 40.2% 39.1% $2,794.4 $6,443.0 $5,992.2 $546.6 $574.6 $114.1 $46,351.2 $19.42 $27.28 $6.18 $39.14 $32.93 $9.31 $54.89 (8.2%) (10.7%) 5.7% 3.9% (0.1%) 3.8% (2.0%) (0.1%) (1.1%) (43.2%) (29.1%) (0.8%) (10.4%) (9.4%) 8.4% (7.8%) (9.4%) (13.2%) 57.4% 71.3% 96.1% 71.4% 89.9% 82.6% 88.5% 82.6% 79.6% 9.6% 2.6% 7.0% 3.7% 6.4% 17.9% 4.8% 6.4% 7.4% 6.5x 13.1x 11.6x 6.1x 11.0x 4.4x 12.9x 11.0x 9.4x 6.4x 11.2x 8.1x 5.6x 8.6x 2.9x 7.2x 7.2x 7.2x

Test and Measurement

M&A Overview
Test and Measurement M&A Trends
($ in billions)
Transaction Volume

Number of Deals and Aggregate Deal Value

250 $25

Median LTM EBITDA Multiple

14.0x 12.5x 12.0x 11.4x 11.7x 10.9x 9.1x 6.8x 9.7x

200

$20

150

$15

EBITDA Multiple

10.0x 8.0x 6.0x 4.0x 2.0x

Aggregate Deal Value

100

$10

50

$5

0 2006 2007 2008 2009 2010 2011 2011 2012 YTD YTD Transaction Volume

$0

0.0x 2006 2007 2008 2009 2010 2011 2012 YTD

Aggregate Deal Value

Median LTM EBITDA Multiple

Announced M&A Transactions

($ in millions)

Notable Recent Transactions

Enterprise Date Pending Target LeCroy Corp. Target Description Manufactures oscilloscopes and communication protocol analyzers. Develops imaging sonar solutions. Manufactures communication, electric measuring, and information processing machines. Manufactures color solutions through measurement instrumentation systems. Manufactures gas measurement and testing systems. Manufactures ultrasonic sensors and systems. Designs and manufactures load banks. Manufactures power measurement, communication, and automation technologies. Manufactures electric, gas, and hydraulic concrete vibrators. Manufactures engineered tubing products. Manufactures sensing and switching products. Manufactures electromagnetic compatibility (EMC) generators. Manufactures diagnostic instruments and equipment. Provides wireless test solutions. Manufactures products for measurement and control of temperature, flow, and conductivity. Manufactures linear and rotary measurement transducers. Manufactures electronic and electro-mechanical sensor systems and subsystems. Provides multiparameter instruments and software solutions. Provides biomedical testing instrument systems, tests, and supplies. Manufactures measurement solutions for medical, industrial, and life sciences applications. Acquirer Teledyne Technologies Inc. Teledyne RD Instruments, Inc. IHI Corporation Mesa Laboratories Inc. Danaher Corp. MOCON Inc. Measurement Specialties Inc. Emerson Network Power, Inc. The Weir Group PLC Badger Meter Inc. AMETEK Inc. Measurement Specialties Inc. AMETEK Inc. AMETEK Inc. Teradyne Inc. Spectris plc Measurement Specialties Inc. Sensata Technologies, Inc. Measurement Specialties Inc. Danaher Corp. Roper Industries Inc. $ Value 291.4 NA 142.3 23.4 625.6 19.8 11.5 NA 180.0 46.6 175.0 12.8 94.2 150.0 580.0 475.0 35.0 325.0 4.3 6,852.8 207.4 EV/EBITDA Multiple 8.8x NA 7.4x NA 11.4x NA 5.8x NA NA 8.7x NA 9.8x NA NA 18.6x NA 5.8x NA 21.3x 8.6x NA

07/03/12 BlueView Technologies, Inc. 06/07/12 Meisei Electric Co., Ltd. 05/14/12 X-Rite, Incorporated 04/03/12 PBI-Dansensor A/S 04/02/12 Cosense, Inc. 03/15/12 Avtron LoadBank, Inc. 02/22/12 NovaTech LLC 01/31/12 Racine Federated, Inc. 01/26/12 OBCORP LLC 10/31/11 Gentech International Ltd. 10/25/11 EM TEST AG 10/17/11 Reichert, Inc. 10/05/11 LitePoint Corporation 10/03/11 OMEGA Engineering, Inc. 09/30/11 Celesco Transducer Products, Inc. 08/01/11 Sensor-Nite N.V. 07/08/11 Eureka Environmental Corporation 06/29/11 Beckman Coulter, Inc. 06/03/11 Northern Digital, Inc.

05/15/12 Bios International, Flow Calibrator Business Manufactures gas flow calibrators and gas flow calibration systems.

Top Acquirers
From 2006 Present ($ in millions)

Company Danaher Corp. Thermo Fisher Scientific, Inc. Agilent Technologies Inc. General Electric Company Illinois Tool Works Inc. Emerson Electric Co. AMETEK Inc. Measurement Specialties Inc. Bruker Corporation Spectris plc Schneider Electric S.A. Halma plc Roper Industries Inc. Teledyne Technologies Inc.

Number of Transactions 29 18 15 13 12 11 11 11 10 9 8 7 6 6

Aggregate Transaction Value (1) $10,977 14,462 1,579 3,204 48 1,086 578 207 405 600 308 61 451 86

(1) Transaction values only for transactions with disclosed terms.

Flow Control
Public Comparables
Key Trading Stats
As of July 6, 2012 ($ in millions, except per share amounts)
Pumps and Filtration IDEX Corporation Gardner Denver Inc. Xylem Inc. Flowserve Corp. Gorman-Rupp Co. Franklin Electric Co. Inc. ITT Corporation Pentair, Inc. Sulzer, Ltd. Eaton Corporation Colfax Corporation SPX Corporation Intermolecular, Inc. 22.5% 20.0% 16.3% 15.7% 15.6% 15.1% 14.6% 14.2% 13.8% 13.8% 11.9% 9.0% 8.2% Median 14.6% Mean Valves and Fittings The Weir Group PLC Cameron International Corporation Parker Hannifin Corporation Crane Co. Aalberts Industries NV Curtiss-Wright Corp. Watts Water Technologies, Inc. CIRCOR International, Inc. Mueller Water Products, Inc. Mueller Industries Inc. 19.4% 15.9% 15.0% 14.8% 14.2% 14.0% 12.7% 9.2% 7.0% 6.8% Median 14.1% Mean Overall Median Overall Mean 12.9% 14.2% 13.9% 34.8% 30.3% 24.2% 33.6% 59.1% 32.9% 35.6% 27.3% 17.6% 12.5% 31.6% 30.8% 31.4% 32.5% $6,130.7 $11,146.7 $12,465.1 $2,335.0 $2,380.7 $1,798.4 $1,386.8 $654.7 $1,208.3 $1,332.1 $24.10 $42.82 $75.74 $36.09 $14.64 $30.76 $33.39 $34.33 $3.51 $42.63 7.2% (6.9%) (6.8%) (5.7%) (12.3%) 2.0% (0.1%) 5.2% 0.3% (0.4%) (0.2%) (1.7%) (0.6%) (0.5%) (30.4%) (16.3%) (15.2%) (29.1%) (33.6%) (6.6%) (8.6%) (21.8%) (10.2%) (1.7%) (15.7%) (17.3%) (16.3%) (18.7%) 69.1% 73.2% 82.8% 68.9% 74.9% 73.4% 78.8% 76.4% 86.5% 85.5% 75.7% 76.9% 76.9% 76.7% 0.8% 0.8% 2.7% 2.5% NM 3.0% 1.4% 0.7% 0.7% NM 1.1% 1.6% 1.8% 3.3% 8.8x 10.0x 6.4x 6.2x 7.0x 6.1x 7.4x 8.6x 12.8x 8.0x 7.7x 8.1x 8.8x 12.7x 7.2x 8.3x 6.1x 5.7x 6.5x 5.8x 7.2x 7.9x 8.5x 6.7x 6.9x 7.0x 7.6x 8.2x 14.7% 41.0% 34.0% 38.7% 33.2% 24.6% 33.2% 30.5% 31.4% 30.6% 30.1% 31.1% 27.4% 53.6% 31.4% 33.8% $3,801 $2,839 $5,532 $6,692 $630 $1,278 $965 $5,368 $4,471 $16,305 $3,966 $5,035 $272 $38.96 $52.30 $25.20 $116.26 $30.55 $51.09 $18.09 $39.29 $121.78 $39.50 $27.39 $64.36 $7.70 (0.6%) (1.8%) (2.8%) 10.6% 7.6% 3.2% (10.4%) (1.3%) 2.6% (4.2%) (7.8%) (9.0%) 19.8% (1.3%) 0.5% (16.9%) (39.7%) NA 6.6% (11.0%) 2.9% (84.6%) (6.6%) (26.0%) (24.8%) 4.6% (24.4%) NA (16.9%) (20.0%) 83.0% 56.3% 87.3% 94.9% 86.3% 95.1% 15.4% 90.1% 86.3% 74.2% 72.8% 76.3% 76.9% 83.0% 76.5% 1.9% 1.6% 2.7% 0.8% NM 1.0% 3.1% 2.3% 2.0% 2.6% 0.4% 1.4% 33.8% 1.9% 4.5% 9.2x 6.0x 8.8x 9.3x 11.6x 10.3x 2.9x 10.7x 8.8x 7.4x 35.9x 9.2x 81.0x 9.2x 16.2x 8.4x 6.1x 8.5x 8.4x 9.3x 9.3x 3.3x 9.4x 7.6x 6.4x 7.6x 10.8x 24.3x 8.4x 9.2x

Flow Control Public Comparables

Stock Performance LTM Margins EBITDA Gross TEV Current Price 1-Month Change 1-Year Change % of LTM High R&D / Sales LTM TEV / EBITDA 2012E 2013E

Flow Control
M&A Overview
Flow Control M&A Trends
($ in billions)
Transaction Volume

Number of Deals and Aggregate Deal Value

125 $14

Median LTM EBITDA Multiple

14.0x
12.0x 12.0x 12.3x 10.3x 10.4x

100 $10 75 $6 50 $2 25

EBITDA Multiple

10.0x 8.5x 8.0x 6.0x 4.0x 2.0x 8.5x

Aggregate Deal Value

6.9x

0 2006 2007 2008 2009 2010 2011 2011 2012 YTD YTD Transaction Volume

-$2

0.0x 2006 2007 2008 2009 2010 2011 2012 YTD

Aggregate Deal Value

Median LTM EBITDA Multiple

Announced M&A Transactions

($ in millions)

Notable Recent Transactions

Enterprise Date Pending Pending Pending Pending Target Alesco Corporation Limited Olaer Group Limited Jeil Hydraulic Co., Ltd. Tyco International Ltd., Flow Control Business Target Description Provides water management products and services. Manufactures accumulators, oil coolers, and filters. Manufactures hydraulic pumps, motors, and valves. Manufactures valves and controls, thermal controls, and water systems. Manufactures hydraulic and industrial hose. Manufactures pressure technologies. Manufactures valves, components, and systems. Manufactures hydraulic cylinders and related components. Manufactures hydraulic and high-pressure valves and other components. Manufactures gear pumps, filtration systems, and pelletizers. Manufactures centrifugal pumps. Manufactures control valves. Manufactures communication and automation technologies. Manufactures valves. Manufactures flexible connectors for fire protection systems. Manufactures cutting and automation solutions. Manufactures pumps. Manufactures centrifugal pumps, vacuum pumps, and lobe blowers. Manufactures oil and gas pressure control equipment. Manufactures centrifugal and industrial pumps and pumping systems. Manufactures pumps and related equipment. Manufactures self-acting and actuated valves and backflow preventers. Acquirer DuluxGroup Limited Parker Hannifin Corporation Eaton Corporation Pentair, Inc. Eaton Corporation Madison Dearborn Partners, LLC GEA Group AG Pfingsten Partners, L.L.C. Parker Hannifin Corporation Pump Solutions Group Franklin Electric Co. Inc. Metso Corp. The Weir Group PLC IMI Severe Service Atkore International (NV) Inc. Colfax Corporation SPX Corporation Gardner Denver Inc. The Weir Group PLC Flowserve Corp. Sulzer, Ltd. Watts Industries Deutschland GmbH $ Value 280.7 NA 200.0 4,900.0 NA NA NA NA NA 285.0 76.7 NA 180.0 130.5 NA 2,744.0 1,164.0 207.2 678.0 89.6 935.9 175.7 EV/EBITDA Multiple 6.8x NA NA NA NA NA NA NA NA NA NA NA NA 12.5x NA 11.5x NA NA NA 11.2x 12.8x NA

06/01/12 Polimer Kaucuk Sanayi Ve Pazarlama A.S. 04/27/12 Schrader International, Inc. 04/25/12 Aseptomag AG 04/13/12 Bailey International LLC 04/02/12 Snap-Tite Inc. 03/13/12 MAAG Pump Systems Textron A.G. 03/07/12 Pioneer Pump Holdings Inc. 03/07/12 Valstone Control Inc. 02/22/12 NovaTech LLC 02/16/12 Remosa S.p.A. 02/15/12 FlexHead Industries, Inc. 01/13/12 Charter International plc 12/22/11 Clyde Pumps Ltd. 12/15/11 Robuschi & C. S.p.A. 12/14/11 Seaboard International, Inc. 10/28/11 Lawrence Pumps, Inc. 07/29/11 Cardo Flow Solutions 04/29/11 Danfoss Socla S.A.S.

Top Acquirers
From 2006 Present ($ in millions)

Company Parker Hannifin Corporation Pentair, Inc. The Weir Group plc Dover Corp. ITT Corporation Franklin Electric Co. Inc. Rotork plc SPX Corporation IMI plc IDEX Corporation Eaton Corporation Interpump Group SpA Flowserve Corp. Crane Co. Curtiss-Wright Corp. Colfax Corporation

Number of Transactions 11 8 8 8 8 8 7 6 6 6 5 5 4 4 4 2

Aggregate Transaction Value (1) -$6,085 1,335 702 596 318 60 2,065 671 360 872 100 348 135 59 2,766

(1) Transaction values only for transactions with disclosed terms.

Power Connectivity and Control

Public Comparables
Key Trading Stats
As of July 6, 2012 ($ in millions, except per share amounts)
Power Integrity Emerson Electric Co. Hubbell Inc. Schneider Electric S.A. ABB Ltd. Eaton Corporation 20.4% 17.3% 16.7% 14.9% 13.8% Median 16.7% Mean Electrical Protection and Connectivity Legrand Littelfuse Inc. Belden Inc. 23.0% 21.9% 11.8% Median 21.9% Mean Interconnect Components Amphenol Corporation Molex Inc. TE Connectivity Ltd. AVX Corp. Methode Electronics, Inc. CTS Corporation 22.0% 18.9% 17.1% 14.4% 5.9% 4.6% Median 15.8% Mean Overall Median Overall Mean 13.8% 16.9% 15.9% 31.4% 30.8% 30.7% 25.4% 17.9% 17.6% 28.1% 25.6% 30.8% 31.7% $9,337 $3,515 $14,537 $973 $277 $347 $53.52 $23.62 $31.38 $10.54 $8.50 $9.49 (2.4%) (2.7%) (3.4%) (5.5%) 9.3% 0.3% (2.6%) (0.7%) (2.5%) (0.4%) (1.3%) (10.6%) (16.8%) (31.7%) (22.9%) (5.1%) (13.7%) (14.7%) (18.7%) (15.5%) 86.5% 83.0% 81.7% 68.2% 75.6% 84.6% 82.4% 79.9% 81.7% 81.6% 2.2% 5.0% 5.3% 2.0% 4.2% 3.6% 3.9% 3.7% 3.0% 3.2% 10.6x 5.2x 5.9x 2.8x 9.8x 9.7x 7.8x 7.3x 7.6x 7.6x 10.0x 5.4x 5.8x 3.8x 7.9x 6.9x 6.3x 6.6x 7.0x 6.9x 18.9% 52.0% 38.5% 29.6% 38.5% 40.1% $10,141.3 $1,210.7 $1,726.8 $32.57 $56.53 $33.98 4.5% (5.7%) 6.5% 4.5% 1.8% (18.7%) (6.8%) (7.3%) (7.3%) (11.0%) 92.4% 87.0% 82.0% 87.0% 87.1% 4.7% 3.0% 2.8% 3.0% 3.5% 8.4x 8.4x 7.1x 8.4x 7.9x 8.1x 7.0x 6.4x 7.0x 7.2x 16.6% 39.4% 32.4% 37.7% 30.4% 30.1% 32.4% 34.0% $36,967 $4,814 $35,200 $36,271 $16,305 $45.16 $81.25 $52.69 $16.15 $39.50 (3.3%) 2.9% (2.5%) 0.2% (4.2%) (2.5%) (1.4%) (21.0%) 22.8% (33.6%) (38.5%) (24.8%) (24.8%) (19.0%) 79.5% 97.8% 77.4% 72.1% 74.2% 77.4% 80.2% 2.3% 1.3% 2.4% 3.7% 2.6% 2.4% 2.5% 7.5x 9.8x 7.6x 6.6x 7.4x 7.5x 7.8x 7.1x 8.8x 7.2x 6.1x 6.4x 7.1x 7.1x

Power Connectivity and Control Public Comparables

Stock Performance LTM Margins EBITDA Gross TEV Current Price 1-Month Change 1-Year Change % of LTM High R&D / Sales LTM TEV / EBITDA 2012E 2013E

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Power Connectivity and Control

M&A Overview
Power Connectivity and Control M&A Trends
($ in billions)

Number of Deals and Aggregate Deal Value

250 $18 $16 200 $14
Aggregate Deal Value

Median LTM EBITDA Multiple

14.0x 12.0x 12.0x 10.2x 10.1x 8.7x 7.9x 8.0x 6.0x 4.0x 7.1x 10.0x 9.0x

Transaction Volume

$12 150 $10 $8 $6 50 $4 $2 0 2006 2007 2008 2009 2010 2011 2011 2012 YTD YTD Transaction Volume Aggregate Deal Value $0

100

EBITDA Multiple

2.0x
0.0x 2006 2007 2008 2009 2010 2011 2012 YTD

Median LTM EBITDA Multiple

Announced M&A Transactions

($ in millions)

Notable Recent Transactions

Enterprise Date Pending Pending Pending Pending 06/04/12 06/01/12 05/29/12 05/21/12 05/16/12 05/15/12 05/01/12 04/03/12 03/15/12 03/12/12 02/23/12 12/21/11 12/02/11 Target Cooper Industries plc Steck Industria Eletrica Ltda. Miranda Technologies Inc. Micronetics Inc. Elo TouchSystems, Inc. Accel AB Numeric Power Systems Ltd., UPS Division Dunkermotoren GmbH Thomas & Betts Corp. Comverge, Inc. SmartSynch, Inc. Deutsch Engineered Connecting Devices, Inc. Avtron LoadBank, Inc. SoftSwitching Technologies Corporation Aegide B.V. Temp-Flex Cable, Inc. Tri-Star Electronics International, Inc. Target Description Distributes fiber and copper networking products. Manufactures electrical components and tools. Provides hardware and software solutions for television facilities. Manufactures radio frequency and microwave components and sub-assemblies. Develops, manufactures, and markets touchscreen products. Manufactures optical cables, copper communication cables, and special cables. Manufactures uninterruptible power supply systems. Manufactures engineered audio and multimedia systems. Manufactures structured cabling solutions for data centers. Distributes information technology products and consumer electronics. Manufactures thermal management solutions. Manufactures electrical connectors and fiber optic connectors. Designs and manufactures load banks. Manufactures measurement instruments and surface measurement systems. Provides industrial control and information solutions. Manufactures rotary optical encoders, and industrial photo-electronic sensors. Acquirer Eaton Corporation Schneider Electric S.A. Belden CDT (Canada) Inc. Mercury Computer Systems, Inc. The Gores Group LLC Littelfuse Inc. Indo Asian Electric Private Limited AMETEK Technical & Industrial Products, Inc. ABB Low Voltage Products & Systems Bayside Capital, Inc. Itron, Inc. TE Connectivity Ltd. Emerson Network Power, Inc. Rockwell Automation Inc. Legrand Nederland B.V. Molex Inc. Value $ 12,272 NA 321 71 380 NA 169 331 3,766 51 100 2,195 NA NA NA 24 284 EV/EBITDA Multiple 12.6 x NA 9.4x 10.0x NA NA NA NA 10.0x NA NA NA NA NA NA NA NA

Manufactures battery and electrical connectors, cables, and tools and related products. Carlisle Interconnect Technologies Inc.

Top Acquirers
From 2006 Present ($ in millions)

Company ABB Ltd. Schneider Electric S.A. Avnet Inc. Eaton Corporation Belden Inc. Teledyne Technologies Inc. Arrow Electronics, Inc. Legrand Nexans SA Murata Manufacturing Co. Ltd. Molex Inc. Hubbell Inc. Littelfuse Inc. Moog Inc. Carlisle Companies Inc.

Number of Transactions 16 15 9 8 8 7 7 7 6 6 6 6 5 4 3

Aggregate Transaction Value (1) $8,760 6,280 247 14,242 839 567 274 -937 374 282 87 101 110 521

(1) Transaction values only for transactions with disclosed terms.

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Representative Transactions

a portfolio company of a portfolio company of

a portfolio company of
a portfolio company of

has been acquired by

has been acquired by

has been acquired by

has been acquired by

a portfolio company of a portfolio company of

a portfolio company of

Kirtland Capital Partners

has been acquired by

has been acquired by has been acquired by

has been acquired by

a joint venture between

a portfolio company of

a portfolio company of

a portfolio company of

has been acquired by

has been acquired by

has been acquired by

has been acquired by

and a portfolio company of a portfolio company of divisions of

has been acquired by

has been acquired by

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Measurement, Control, and Connectivity

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Sources: The Wall Street Journal

Test & Measurement World

The Data Center Journal Flow Control Magazine

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The Financial Times

PNC Economic Outlook S&P Capital IQ Thomson Financial SDC Database
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