September 2018

Investment Banking
Trends Driving Increased
M&A Activity in Specialty
Distribution

In This Report
Amazon B2B 3.0: Assessing the threat
Specialty Distribution to industrial distributors

Consolidation accelerates in a
fragmented industry

Pressure rises to embrace technology

How industry leaders are navigating a

rapidly changing landscape
CONTENTS

1 Executive Summary

3 Market Update and Analysis

5 William Blair Specialty Distribution Investment Banking Franchise

7 Sector and Transaction Data

EXECUTIVE SUMMARY
Trends Driving Increased M&A Activity in Specialty Distribution
A strong economic backdrop
and the need to respond to
the threat posed by Amazon
and other digital disrupters
have led to increased M&A
activity among specialty
distributors.
As industrial activity stabilized and
prospects for a demand recovery
emerged, particularly after elections in
2016, the distribution industry
rebounded, with sales for U.S.
wholesale distributors growing 7.6%
to $5.7 trillion last year, according to
Modern Distribution Management.
Thanks to the tailwinds of tax reform
and steadily increasing industrial
activity, this momentum has
continued into 2018.
Against this backdrop, the highly
fragmented distribution industry has
seen an uptick in consolidation
activity since mid-2017, as companies
are increasingly using M&A to expand
their geographic reach, adapt their
product and service offerings in
response to evolving customer
demands, and strengthen their digital
capabilities. As a result, distribution
industry has become a decidedly
seller’s market, with buyers
aggressively pursuing targets for both
offensive and defensive reasons.
We examine three trends that are
driving acquisition activity in the
specialty distribution industry and
look at how companies can maximize
their strategic value in today’s deal
making landscape.
Amazon B2B 3.0: Assessing the
Threat to Industrial Distributors
Amazon Business, launched in 2015 to
replace AmazonSupply, represents the
third iteration of Amazon’s efforts to
expand its B2B capabilities. As
Amazon Business grows, many
assume that it is only a matter of time
until Amazon completely disrupts the
B2B industry like it did with business-
to-consumer (B2C) commerce.
While this may, in fact, be the case
over the long term, there are many
important nuances of both the original
equipment manufacturer (OEM) and
the maintenance, repair, and overhaul
(MRO) markets that will make it more
difficult for Amazon to penetrate parts
of these markets using its single-
channel, non-relationship selling
model. One of the biggest headwinds
is that many OEM and MRO purchases
involve mission-critical machinery,
components, or supplies that are
technically complex or require specific
value-added services. As a result,
buyers look to distributors’ account
representatives for a level of technical
expertise that Amazon cannot match.
The challenge is breaking these strong
distributor relationships built on
service, trust, and dependability.
While these factors limit the threat
Amazon poses to traditional industrial
distributors in the near term,
Amazon’s unmatched supply chain
expertise, resources, and influence
suggest that the threat will grow over
time. Some steps that distributors can
take to protect against losing share to
Amazon include developing dominant
positions in niche products or end-
markets, enhancing their technical
expertise, providing high-touch sales
relationships, offering vendor-
managed inventory, and/or selling
products that require specialized
delivery capabilities in terms of speed,
size, technical know-how, or safety;
and collectively help to shift the
customer conversation to total cost of
ownership versus purely product
pricing. M&A will play an important
role in facilitating the development of
these capabilities.
Amazon is already forcing distributors
to adjust their pricing strategies to be
more competitive and transparent. In
2017, share prices of traditional
industrial distributors fell amid
growing fears of internet price
transparency, made top of mind by
Amazon Business and easy price
discoverability. Grainger, which
previously had been able to command
premium prices due to its customer
value proposition, was hit the hardest,
as its stock price dropped nearly 40%
from January 2017 to August 2017. In
response, Grainger strategically
reduced prices across its SKU
assortment in 2017, ultimately leading
to volume gains over time that have
offset the diminished margins. The
resulting earnings-per-share gains
caused Grainger’s stock to surge
approximately 130% over the next
12 months.
EXECUTIVE SUMMARY
Price Cuts in Response to Internet Transparency Spur
Grainger Rebound
Grainger’s response to Amazon Business and the era of internet price
discoverability highlights the need for distributors to protect their market share
by offering improved price transparency along with the dedicated service and
technical expertise that many B2B customers demand.
Grainger Stock Price Chart
400
Grainger first implemented
350
strategic price cuts across its
SKU assortment
300
250
200
150
Jul-16 Nov-16 Mar-17 Aug-17
Source: Capital IQ
Consolidation Accelerates in a
Fragmented Industry
The industrial MRO distribution space
is highly fragmented, with the five
largest companies accounting for less
than 20% of the market. One of the
main factors that is pushing the
industry toward more consolidation is
evolving customer preferences.
Historically, specialty distributors
differentiated themselves by focusing
on specific regions, products, or
services. Today, however, customers
are looking for one-stop shopping to
streamline their procurement efforts
and lower their total cost of
ownership, and, as a result,
distributors are looking to make
acquisitions to expand into new
regions, access new channels, and add
key service or technical capabilities.
Distributors are also using M&A to
respond to the digital disruption
catalyzed by Amazon and other non-
traditional online platforms. As data
analytics and omnichannel
engagement become more important
factors in distribution, companies are
looking to acquire companies that
Dec-17 Apr-18 Sep-18
have shown leadership in these areas.
Conversely, smaller companies that
lack the resources to develop digital
capabilities internally are increasingly
looking to be acquired as their
competitive position erodes. This shift
toward buying capabilities versus
building them internally is one of the
main drivers of the ongoing
consolidation in the
distribution industry.
Pressure Rises to
Embrace Technology
Historically, technology has been
considered a cost of doing business in
the specialty distribution industry.
Today, it is a source of unique
competitive advantage with the
plethora of marketing channels and
product options available to
customers. In addition to the need to
provide integrated online-offline
experiences for customers, specialty
distributors also must look for ways to
use technology to optimize their
internal operations. Warehouse
management software, which creates
a linked ecosystem of people,
processes, and equipment, enables
more efficient fulfillment and drives
speed throughout the distribution
network. Falling technology costs and
rising labor costs are accelerating the
adoption of self-driving lifts, robots,
and other forms of automation.
Specialty distributors must improve
their analytics and reporting
capabilities to manage immense
amounts of data generated within
their warehouses and to identify
opportunities to better
serve customers.
Watsco is a great example of how
distributors are using technology to
strengthen their market positions.
Watsco is the dominant distributor in
the HVAC market, with nearly three
times more in sales than its nearest
competitor. But if you were to ask
Watsco’s management team, it would
tell you that Watsco is “a technology
company that happens to sell heating
and air conditioning.” Watsco has
made significant investments in e-
commerce capabilities, warehouse
management, and data analytics—all
of which are designed to gain market
share by making contractors’ lives
easier and enhancing their
productivity. As Watsco looks to
accelerate its M&A efforts, the
company believes that these
technology platforms will be scalable
to future acquisitions.
To learn more about these and other
trends that are shaping the
dealmaking landscape in specialty
distribution, please don’t hesitate to
contact us.
MARKET UPDATE AND ANALYSIS

Specialty Distribution Stocks vs. S&P 500

Certain specilaty distribution end-markets such as industrial, broadline
consumer, foodservices, and building products & construction have
outperformed the overall market over the past 12 months.

LTM Growth

53.2% Industrial

36.9% Broadline Consumer

34.1% Food Services

27.7% Building Products & Construction

19.5% Transportation & Heavy Equipment

17.2% S&P 500

10.9% Specialty Chemicals & Gases

Specialty
7.1% Technology
Distribution
Market Analysis
(4.8%) Energy / Oil &Gas

Source: Capital IQ

We look behind the numbers

to examine the market
dynamics that are driving
trends in the dealmaking
and capital-raising landscape
in the specialty distribution
industry.
Industrial Distribution Spotlight – Key Economic Indicators
Strengthening industrial activity during the current economic expansion has
provided a favorable backdrop for distribution companies. Lower corporate tax
rates and regulatory reforms implemented by the Trump administration have
provided additional tailwinds for increased demand from industrial purchasers.
PMI 58.1

> 50: Expansive

Jul-07 Jun-08 Jun-09 Jun-10 Jul-11 Jun-12 Jun-13 Jun-14 Jul-15 Jun-16 Jun-17 Jun-18

Industrial Production Index

108.0
105.0 106.0
104.0 104.0
102.0 101.0 102.0
100.0
97.0
95.0 10-Yr Average:101.0

88.0

Jul-07 Jun-08 Jun-09 Jun-10 Jul-11 Jun-12 Jun-13 Jun-14 Jul-15 Jun-16 Jun-17 Jun-18

Sources: PMI® and Institute for Supply Management®(ismrob.org); Federal Reserve Board
MARKET UPDATE AND ANALYSIS

Analyzing the Amazon Threat

History of Amazon’s B2B Efforts
Amazon’s initial entry to the maintenance, repairs, and operations (MRO) market involved selling business supplies and parts
on its main website using its traditional marketplace strategy. Then, in 2012, Amazon shifted its strategy by launching
AmazonSupply, a separate site that offered industry-specific products, credit terms, and dedicated customer service teams.
Knowing that business customers require dedicated stock, fast delivery, and 100% reliability, AmazonSupply de-emphasized
third-party sellers. But in 2015, after AmazonSupply struggled to gain traction, Amazon launched Amazon Business, which is
similar in many ways to Amazon’s original B2B efforts, including emphasizing third-party sellers.

Amazon AmazonSupply Amazon Business

(2005-2012) (2012-2015) (2015-Present)
 Business supplies sold through  Separate URL and website for  Return to marketplace strategy
Amazon.com B2B supplies  Focus on:
 Marketplace strategy involving  De-emphasized third-party sellers to ─ Smaller industrial buyers
third-party sellers focus on fast delivery ─ More commoditized, easily
 Industry-specific products, credit transported products
terms, dedicated customer service, ─ Products bought on a
365-day return policy regular schedule

Overview of At-Risk Customers – Near Term

In the near-term, Amazon’s threat to traditional distributors is greatest for smaller accounts and customers conducting random internet-
based searches where price is the primary criteria. Over the longer term, however, the threat could expand to larger accounts with more
complicated service needs as Amazon uses its unmatched supply chain expertise and resources to solve some of the challenges that
currently limit its B2B penetration.

Customer/Service Currently at Risk? Reason

National accounts No Demand value-added services
Government No Demand detailed contracts and value-added services
Contractors No Demand same-day service
OEM No Demand on-site inventory management and local availability
Serviced locally No Amazon does not offer same-day service
Inventory management No Requires investment in on-site people and technology
Small accounts Maybe Low price is more compelling
Random search Yes Low price is the primary purchase criteria
Source: William Blair
WILLIAM BLAIR SPECIALTY DISTRIBUTION INVESTMENT BANKING FRANCHISE

Drawing on our deep sector expertise and the strength of William Blair
by the Numbers*
our relationships with buyers around the world, William
Blair has built a leading specialty distribution banking
franchise. Business owners turn to us for outstanding
execution for their M&A and capital raising objectives. 300+
bankers globally with local
Selected Specialty Distribution Transactions Include: cultural knowledge

1,150+
completed advisory and financing
transactions since 2013

$260 billion+
in transaction value for our clients

* In the past five years as of

August 31, 2018
WILLIAM BLAIR SPECIALTY DISTRIBUTION INVESTMENT BANKING FRANCHISE

William Blair Spotlight on Recent Transactions Specialty Distribution

 HALO Branded Solutions is a leading promotional Investment Banking
products distributor and provider of comprehensive Jeff Burtelow
solutions that help companies promote their brands +1 312 364 8651
and engage employees, including promotional jburtelow@williamblair.com
products and employee recognition programs
Rashmi Singh
 High-touch outreach and early buyer education
+1 312 801 7860
focused on the highest priority buyers
rsingh@williamblair.com
 Highly efficient, pre-emptive process drove an
exceptional outcome for shareholders and Jack Blomfield
management +44 20 7868 4525
jblomfield@williamblair.com

 3Wire Group, a subsidiary of the Marmon Group, is a

leading national specialty distributor of genuine OEM
commercial kitchen replacement repair parts and
accessories
 William Blair ran a highly targeted and efficient
process focused on the most relevant strategic buyers
 Completed the transaction within four weeks of initial
outreach at a highly attractive valuation

 QC Supply is a category-leading specialty distributor

and solutions provider, offering consumable products,
equipment, and turnkey services for the $4.6 billion
swine and poultry markets
 Investor feedback and attendee interest from the
William Blair Private Equity Conference developed
unique insights to gauge interest levels, position the
company to maximize value, and mitigate potential
concerns
 Thorough upfront preparation and thoughtful
positioning of organic growth strategies as well as
actionable add-on acquisition opportunities fueled a
highly efficient, pre-emptive process at a premium
valuation
 Specialty Distribution

Sector and
Transaction Data
SECTOR AND TRANSACTION DATA

Notable Specialty Distribution Transactions

($ in millions)

EV / LTM
Announced Target Acquirer Target Business Description EV EBITDA
Sep-18 Distributes chemicals and plastic products globally $1,873 9.4x

Sep-18 Distributes cutting tools, abrasives and industrial MRO products used in ND ND
manufacturing, aerospace & defense, energy, auto aftermarket, construction,
general industrial, medical and agriculture applications

June-18 Distributes promotional products to customers in the United States and ND ND

internationally

May-18 Distributes restaurant equipment, commercial kitchen, and foodservice parts ND ND

and provides equipment management solutions

May-18 Distributes consumer electronic accessories for high street retail, online, ND ND
(A Division of DCC mass merchant, and B2C channels worldwide
plc)

Feb- 18 Manufactures and distributes packaging solutions in the United States ND ND

Jan-18 Distributes process flow control solutions and products to various process $768 ND
industries in the United States

Jan-18 Distributes and sells construction supplies for residential, commercial, $380 ND
industrial, and heavy and highway construction markets

Nov-17 Manufactures and distributes valves, tubes, pipes, and fittings ND ND

Sep-17 Distributes technology products and provides services for network security ~$800 ~9.0x
and data centers mostly in the United States

Sep-17 Designs, manufactures, and markets specialized equipment; and provides $710 ND
aftermarket parts and services to the oil and gas and other industries in the
United States and internationally

Jun-17 Distributes products used to build, repair and maintain water and $2,500 ~10.0x
wastewater transmission systems
(Waterworks Group)

Jun-17 Distributes chemicals, foodservice disposables, janitorial supplies and $385 ~13.0x
equipment

May-17 Distributes stone cutting and fabrication tools, blades, and consumables to ND ND
end-users

Apr-17 Distributes aerospace fasteners and other c-class components to commercial ND ND

and defense aircraft manufacturers

Feb-17 Distributes foodservice equipment and supplies to restaurants, national ND ND

chains, the hospitality sector, country clubs, schools and universities,
government institutions, and the foodservice management sector worldwide
represents William Blair deals
Source: Capital IQ
SECTOR AND TRANSACTION DATA

Notable Specialty Distribution Transactions

($ in millions)

EV / LTM
Announced Target Acquirer Target Business Description EV EBITDA
Dec-16 ®
Specialty distributor and solutions provider, offering consumable products, ND ND
equipment, and turnkey services primarily for the $4.6 billion swine and
poultry markets

Nov-16 Supplies plastic and glass containers, closures, dispensers and tubes with ND ND
over 40 locations in North America and internationally

Nov-16 Produces and distributes industrial gases $44,802 10.3x

Nov-16 Distributes industrial maintenance, repair and overhaul products in Europe $515 9.8x
as we as provides inventory management, and logistical services

Aug-16 Distributes gypsum wallboards and building materials $670 ND

Aug-16 Distributes industrial products and provides servicing and repair services ND ND
such as remanufacturing and supply chain management

Aug-16 Supplies promotional products operating on five continents and selling to ND ND

over 100 countries around the globe

Jul-16 Distributes technology products and solutions for electronic system design, $1,144 13.6x
maintenance, and repair in the Americas, the United Kingdom, rest of Europe,
and the Asia Pacific

Jul-16 Distributes lubricants, fuels, diesel exhaust fluids, filtration, and chemical and ND ND
cleaning products

Apr-16 Designs, creates, and supplies sustainable contract textiles ND ND

Mar-16 Distributes plastic sheets, rods, tubes, films, and tapes in the United States ND ND
and serves a number of industries including defense, life sciences, marine,
mechanical engineering, and transportation industries

Mar-16 Distributes products used in a broad cross-section of industries including $1,646 12.6x
chemical manufacturing, oil and gas, coatings, automotive, health and
personal care globally

Feb-16 Distributes information technology (IT) products; and provides supply chain $7,254 13.0x
and mobile device lifecycle services worldwide

Feb-16 Provides supply chain solutions for the healthcare distributors and ND ND
manufacturers in North America

Feb-16 Designs and distributes high-end wallcoverings, textiles, and specialty paint ND ND
to the expanding commercial and institutional construction and renovation
markets

Dec-15 Distributes specialty chemicals in the US and Canada including coatings, ND ND

adhesives, sealants and elastomers, construction, personal/healthcare,
lubricants/metalworking, agriculture, pharma and urethanes end markets
represents William Blair deals
Source: Capital IQ
SECTOR AND TRANSACTION DATA

Historical Distribution M&A Data

M&A Deal Volume

1,565 Median: 1,257

1,324 1,331 1,282

1,257 1,269 1,224 1,196

1,004 1,041 1,073

486

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H 2018

M&A Deal Value (Aggregate Transaction Size)

($ in billions)

Median: $140
$295 $287
$256

$208
$196

$151
$135 $124 $140

$88 $107 $93

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H 2018

M&A Multiples

Median: 11.0x
13.1x 13.0x
12.3x
11.7x
11.1x 11.1x
10.8x 10.8x
9.8x 10.1x 10.0x
9.1x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H 2018
SECTOR AND TRANSACTION DATA

Public Comparables by Sector

Industrial Distribution

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
Applied Industrial
NYSE:AIT $76.90 $57.10 $78.90 $2,977.7 $3,887.2 $3,073.3 $284.4 $261.2 9.3% 8.5% 13.7x 14.9x 11.7x 10.5x 18.4x 15.6x
Technologies, Inc.

DXP Enterprises, Inc. NasdaqGS:DXPE $46.90 $24.89 $49.50 $815.5 $1,054.8 $1,114.7 $73.4 $66.2 6.6% 5.9% 14.4x 15.9x 12.2x 10.5x 29.3x 22.3x

Fastenal Company NasdaqGS:FAST $59.09 $40.76 $61.14 $16,955.8 $17,245.3 $4,675.0 $1,067.4 $944.3 22.8% 20.2% 16.2x 18.3x 15.5x 14.4x 22.8x 21.3x

Grainger NYSE:GWW $355.62 $159.24 $372.06 $19,962.3 $22,100.7 $10,895.1 $1,552.1 $1,342.9 14.2% 12.3% 14.2x 16.5x 13.8x 12.7x 22.9x 19.9x

Kaman Corporation NYSE:KAMN $64.92 $48.24 $75.08 $1,817.5 $2,114.1 $1,852.4 $168.9 $140.7 9.1% 7.6% 12.5x 15.0x 12.4x 11.0x 21.3x 18.0x

Lawson Products Inc. NasdaqGS:LAWS $36.70 $21.00 $36.80 $327.3 $343.2 $331.1 $15.3 $13.2 4.6% 4.0% 22.4x 26.1x 13.8x 12.2x 35.8x 26.5x

MRC Global Inc. NYSE:MRC $19.62 $14.01 $22.98 $1,772.1 $2,804.1 $3,954.0 $175.0 $150.0 4.4% 3.8% 16.0x 18.7x 9.7x 8.6x 27.7x 16.9x

MSC Industrial Direct

NYSE:MSM $87.58 $67.93 $99.94 $4,952.6 $5,448.1 $3,119.7 $496.7 $457.3 15.9% 14.7% 11.0x 11.9x 11.0x 9.9x 14.3x 14.2x
Co. Inc.
National Oilwell Varco,
NYSE:NOV $46.26 $31.42 $49.08 $17,700.0 $19,346.0 $7,705.0 $629.0 $420.0 8.2% 5.5% NMF NMF 21.1x 14.9x NMF NMF
Inc.

Vallourec SA ENXTPA:VK $5.56 $4.78 $6.85 $2,547.1 $5,401.8 $4,624.8 $39.2 ($111.3) 0.8% (2.5%) NMF NMF 29.8x 10.7x NMF NMF

Veritiv Corporation NYSE:VRTV $46.90 $20.35 $51.00 $743.2 $1,662.3 $8,614.1 $101.8 $69.1 1.2% 0.8% 16.3x 24.1x 9.0x 8.5x 12.7x 10.0x

Mean $76.91 $44.52 $82.12 $6,415.5 $7,400.7 $4,541.7 $418.5 $341.2 8.8% 7.3% 15.2x 17.9x 14.5x 11.3x 22.8x 18.3x

Median $46.90 $31.42 $51.00 $2,547.1 $3,887.2 $3,954.0 $175.0 $150.0 8.2% 5.9% 14.4x 16.5x 12.4x 10.7x 22.8x 18.0x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

160.0% Ind Dist 53.2% S&P 500 17.2% 190.0% Ind Dist (-10%) S&P 500 74.5%

140.0%
140.0%
120.0%
90.0%
100.0%

80.0% 40.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 12.7x
13.7x 15.2x
13.4x 13.5x
11.1x 13.2x 13.0x 12.3x
12.4x
10.2x 9.9x
7.6x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Building Products & Construction Distribution

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
Beacon Roofing Supply,
NasdaqGS:BECN $38.35 $35.04 $66.48 $2,612.1 $5,996.2 $5,772.4 $408.8 $365.9 7.1% 6.3% 14.7x 16.4x 10.4x 9.3x 43.4x 18.5x
Inc.
Builders FirstSource,
NasdaqGS:BLDR $15.98 $15.26 $23.28 $1,833.3 $3,788.3 $7,448.2 $410.2 $322.4 5.5% 4.3% 9.2x 11.7x 7.6x 6.8x 9.3x 7.3x
Inc.

Ferguson plc LSE:FERG $80.26 $60.88 $81.33 $18,506.6 $19,793.0 $22,268.1 $1,714.9 $1,433.6 7.7% 6.4% 11.5x 13.8x 11.5x 10.5x 16.5x 15.0x

Foundation Building
NYSE:FBM $13.99 $12.09 $16.40 $600.1 $1,226.2 $2,193.5 $145.6 $112.9 6.6% 5.1% 8.4x 10.9x 7.2x 6.3x NMF 15.1x
Materials, Inc.
HD Supply Holdings,
NasdaqGS:HDS $44.18 $32.23 $46.29 $8,119.3 $10,076.3 $5,542.0 $756.0 $658.0 13.6% 11.9% 13.3x 15.3x 11.9x 10.9x 18.5x 15.7x
Inc.
Houston Wire & Cable
NasdaqGS:HWCC $8.00 $4.70 $9.32 $132.2 $213.7 $342.2 $14.9 $13.6 4.3% 4.0% 14.4x 15.7x NA NA NA NA
Company

Pool Corporation NasdaqGS:POOL $167.53 $101.00 $168.96 $6,764.0 $7,375.9 $2,897.3 $321.4 $291.9 11.1% 10.1% 22.9x 25.3x 21.4x 19.3x 30.2x 27.3x

SiteOne Landscape
NYSE:SITE $89.98 $50.91 $95.49 $3,760.9 $4,319.4 $1,898.1 $141.3 $0.0 7.4% 0.0% 30.6x NA 23.4x 19.4x NMF 39.5x
Supply, Inc.

Watsco, Inc. NYSE:WSO $176.09 $145.26 $192.94 $6,043.4 $6,376.8 $4,453.3 $381.2 $364.8 8.6% 8.2% 16.7x 17.5x 15.5x 14.5x 26.3x 24.2x

WESCO International,
NYSE:WCC $60.40 $49.35 $69.35 $2,844.8 $4,055.3 $8,094.7 $390.2 $362.1 4.8% 4.5% 10.4x 11.2x 9.6x 8.8x 12.7x 11.2x
Inc.

Mean $69.48 $50.67 $76.98 $5,121.7 $6,322.1 $6,091.0 $468.4 $392.5 7.7% 6.1% 15.2x 15.3x 13.2x 11.8x 22.4x 19.3x

Median $52.29 $42.20 $67.91 $3,302.9 $5,157.8 $4,997.6 $385.7 $342.2 7.3% 5.7% 13.9x 15.3x 11.5x 10.5x 18.5x 15.7x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

140.0% Build & Cons Dist 27.7% S&P 500 17.2% 200.0% Build & Cons Dist 77.6% S&P 500 74.5%

130.0%
170.0%
120.0%
140.0%
110.0%
110.0%
100.0%

90.0% 80.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 11.5x
15.2x
13.2x 12.9x 12.8x
11.6x 12.1x 11.4x
11.0x
8.6x 9.3x
7.2x
5.1x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Specialty Chemicals Distribution

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
Aceto Corporation NasdaqGS:ACET $3.29 $2.22 $11.98 $101.3 $355.6 $737.1 $55.1 $49.9 7.5% 6.8% 6.5x 7.1x 12.0x NA NMF NA

L'Air Liquide S.A. ENXTPA:AI $122.63 $107.47 $127.75 $52,279.5 $69,330.1 $24,113.4 $5,703.8 $3,032.7 23.7% 12.9% 12.5x 22.8x 11.4x 10.4x 20.5x 18.4x

Air Products and

NYSE:APD $165.39 $143.79 $175.17 $36,265.5 $37,477.1 $8,834.4 $2,813.0 $1,422.0 31.8% 16.1% 13.3x 26.4x 11.5x 10.7x 21.2x 19.6x
Chemicals, Inc.

AmeriGas Partners, L.P. NYSE:APU $39.55 $39.12 $48.37 $3,677.2 $6,471.7 $2,801.2 $634.5 $538.0 22.7% 19.2% 10.2x 12.0x 10.2x 9.8x 36.1x 14.4x

Brenntag AG XTRA:BNR $60.46 $49.96 $62.17 $9,340.7 $11,592.0 $14,262.2 $913.2 $690.9 6.4% 5.0% 13.0x 16.8x 11.2x 10.5x 17.7x 16.4x

Ferrellgas Partners, L.P. NYSE:FGP $3.04 $2.87 $5.75 $295.3 $2,316.7 $2,159.0 $231.2 $157.2 10.7% 7.3% 10.0x 14.7x 9.5x 9.5x NA NA

Hawkins, Inc. NasdaqGS:HWKN $40.50 $30.55 $42.85 $433.9 $529.3 $520.2 $52.7 $37.2 10.1% 7.1% 10.1x 14.2x NA NA NA NA

Innophos Holdings, Inc. NasdaqGS:IPHS $43.99 $38.66 $51.34 $862.5 $1,180.2 $789.1 $111.7 $57.3 14.2% 7.3% 10.6x 20.6x 8.4x 7.8x 18.1x 14.3x

Linde
DB:LIN $202.42 $184.65 $223.82 $37,576.0 $46,613.5 $20,057.3 $4,558.2 $2,478.2 22.7% 12.7% 10.5x 18.8x 9.3x 8.4x 20.4x 18.8x
Aktiengesellschaft

Praxair, Inc. NYSE:PX $156.14 $130.73 $168.54 $44,902.1 $53,397.1 $11,935.0 $3,903.0 $2,568.0 32.7% 21.5% 13.7x 20.8x 13.2x 12.4x 23.5x 21.3x

Univar Inc. NYSE:UNVR $28.19 $25.54 $31.95 $3,986.0 $6,522.6 $8,538.5 $619.0 $529.8 7.2% 6.2% 10.5x 12.3x 9.8x 8.8x 17.6x 13.7x

Mean $78.69 $68.69 $86.34 $17,247.3 $21,435.1 $8,613.4 $1,781.4 $1,051.0 17.2% 11.1% 11.0x 17.0x 10.7x 9.8x 21.9x 17.1x

Median $43.99 $39.12 $51.34 $3,986.0 $6,522.6 $8,538.5 $634.5 $538.0 14.2% 7.3% 10.5x 16.8x 10.7x 9.8x 20.5x 17.4x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

130.0% Spec Dist 10.9% S&P 500 17.2% 180.0% Spec Dist 20.3% S&P 500 74.5%

160.0%
120.0%
140.0%
110.0%
120.0%
100.0%
100.0%

90.0% 80.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 10.8x
13.0x
11.2x 11.5x
9.8x 11.4x 11.2x 11.0x
10.6x 9.0x 10.5x 10.2x

6.8x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Transportation & Heavy Equipment Distribution

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
AAR Corp. NYSE:AIR $46.00 $34.25 $49.05 $1,580.4 $1,726.5 $1,748.3 $126.5 $104.5 7.2% 6.0% 13.6x 16.5x 10.9x 8.9x 23.4x 15.8x

Finning International
TSX:FTT $23.07 $20.55 $28.10 $3,881.4 $4,826.5 $5,259.4 $478.8 $339.5 9.1% 6.7% 10.5x 14.2x 9.4x 8.2x 16.9x 13.6x
Inc.

HEICO Corporation NYSE:HEI $92.35 $53.82 $93.63 $12,272.6 $11,739.0 $1,722.1 $433.5 $392.1 25.2% 22.8% 27.1x 29.9x 25.2x 23.3x 49.6x 42.8x

LKQ Corporation NasdaqGS:LKQ $34.01 $29.60 $43.86 $10,818.0 $15,021.0 $10,687.2 $1,141.3 $938.3 10.7% 8.8% 13.2x 16.0x 11.7x 10.2x 17.2x 14.5x

Titan Machinery Inc. NasdaqGS:TITN $17.93 $11.97 $25.09 $388.6 $773.4 $1,215.5 $49.3 $35.1 4.1% 2.9% 15.7x 22.0x 15.4x 13.4x 33.5x 20.6x

Triumph Group, Inc. NYSE:TGI $20.40 $17.75 $34.58 $1,016.2 $2,503.5 $3,250.2 $185.9 $143.7 5.7% 4.4% 13.5x 17.4x 10.6x 8.8x NMF 8.9x

Wesco Aircraft
NYSE:WAIR $11.35 $6.05 $14.23 $1,129.3 $1,965.4 $1,525.2 $136.5 $130.4 9.0% 8.6% 14.4x 15.1x 11.4x 9.9x 19.7x 13.0x
Holdings, Inc.

Mean $35.02 $24.86 $41.22 $4,440.9 $5,507.9 $3,629.7 $364.5 $297.7 10.1% 8.6% 15.4x 18.7x 13.5x 11.8x 26.7x 18.5x

Median $23.07 $20.55 $34.58 $1,580.4 $2,503.5 $1,748.3 $185.9 $143.7 9.0% 6.7% 13.6x 16.5x 11.4x 9.9x 21.5x 14.5x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

130.0% Transport & Equip 19.5% S&P 500 17.2% 200.0% Transport & Equip 28.8% S&P 500 74.5%

120.0%
150.0%

110.0%

100.0%
100.0%

90.0% 50.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 11.2x
15.4x 15.4x
14.1x
11.8x 12.2x 11.7x
10.5x 9.8x 9.6x 10.7x
8.7x
5.9x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Technology Distribution

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
Anixter International
NYSE:AXE $70.50 $56.25 $88.85 $2,359.2 $3,584.4 $8,132.3 $385.7 $340.9 4.7% 4.2% 9.3x 10.5x 8.8x 7.8x 14.7x 11.3x
Inc.

Arrow Electronics, Inc. NYSE:ARW $76.58 $70.52 $87.26 $6,692.2 $10,216.2 $28,921.6 $1,301.4 $1,132.8 4.5% 3.9% 7.9x 9.0x 7.3x 7.1x 9.6x 8.7x

Avnet, Inc. NasdaqGS:AVT $47.99 $36.46 $49.41 $5,555.4 $6,588.9 $19,036.9 $727.0 $571.1 3.8% 3.0% 9.1x 11.5x 7.6x 7.0x NMF 12.3x

Black Box Corporation NasdaqGS:BBOX $1.19 $0.75 $4.15 $18.1 $155.2 $773.8 ($8.1) ($12.0) (1.0%) (1.5%) NMF NMF NA NA NA NA

Insight Enterprises, Inc. NasdaqGS:NSIT $54.03 $32.10 $56.86 $1,916.3 $2,133.7 $7,141.9 $260.1 $240.5 3.6% 3.4% 8.2x 8.9x 7.5x 7.1x 12.0x 11.2x

ScanSource, Inc. NasdaqGS:SCSC $40.85 $31.40 $45.35 $1,045.5 $1,267.8 $3,846.3 $139.8 $131.7 3.6% 3.4% 9.1x 9.6x 8.7x 8.2x 17.5x 13.2x

Tech Data Corporation NasdaqGS:TECD $71.51 $71.25 $108.62 $2,740.4 $3,466.7 $39,093.5 $636.5 $636.5 1.6% 1.6% 5.4x 5.4x 4.5x 4.3x 9.6x 8.3x

Mean $51.81 $42.68 $62.93 $2,903.9 $3,916.1 $15,278.0 $491.8 $434.5 3.0% 2.6% 8.2x 9.2x 7.4x 6.9x 12.7x 10.8x

Median $54.03 $36.46 $56.86 $2,359.2 $3,466.7 $8,132.3 $385.7 $340.9 3.6% 3.4% 8.6x 9.3x 7.6x 7.1x 12.0x 11.2x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

130.0% Tech Dist 7.1% S&P 500 17.2% 180.0% Tech Dist 34.5% S&P 500 74.5%

160.0%
120.0%
140.0%
110.0%
120.0%
100.0%
100.0%

90.0% 80.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 7.7x

8.4x 8.7x
8.1x
7.7x 7.9x 8.2x
7.1x 7.6x 6.8x
5.6x 5.8x
4.3x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Energy / Oil & Gas Distribution

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
DCP Midstream, LP NYSE:DCP $41.21 $31.09 $46.67 $5,905.8 $11,520.8 $9,049.0 $561.0 $77.0 6.2% 0.9% 20.5x NMF 10.3x 8.8x 32.3x 16.8x

Enbridge Inc. TSX:ENB $34.59 $28.31 $40.51 $59,343.1 $123,065.5 $35,897.3 $7,930.4 $1,866.4 22.1% 5.4% 16.1x NMF 12.8x 12.6x 22.0x 18.4x

Energy Transfer
NYSE:ETP $22.79 $15.06 $24.38 $26,582.3 $68,491.3 $33,273.0 $6,220.0 ($2,682.0) 18.7% (8.1%) 11.0x NMF 8.3x 7.9x 20.3x 15.2x
Partners, L.P.

Global Partners LP NYSE:GLP $18.50 $15.17 $21.05 $622.6 $1,911.3 $10,489.7 $224.5 $166.8 2.1% 1.6% 8.5x 11.5x 8.3x 8.5x 8.8x 30.0x

Martin Midstream
NasdaqGS:MMLP $11.33 $10.99 $17.30 $442.3 $1,280.2 $999.6 $139.4 $95.8 13.9% 9.6% 9.2x 13.4x 8.6x 8.4x 32.4x 18.0x
Partners L.P.
Suburban Propane
NYSE:SPH $22.70 $21.85 $27.05 $1,393.9 $2,652.6 $1,348.6 $286.6 $254.6 21.3% 18.9% 9.3x 10.4x 9.2x 9.1x 16.6x 16.7x
Partners, L.P.

Mean $25.19 $20.41 $29.49 $15,715.0 $34,820.3 $15,176.2 $2,560.3 ($36.9) 14.1% 4.7% 12.4x 11.7x 9.6x 9.2x 22.1x 19.2x

Median $22.75 $18.51 $25.72 $3,649.9 $7,086.7 $9,769.4 $423.8 $131.3 16.3% 3.5% 10.1x 11.5x 8.9x 8.7x 21.1x 17.4x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

130.0% Energy Oil & Gas (-4.8%) S&P 500 17.2% 200.0% Energy Oil & Gas (-16.6%) S&P 500 74.5%

110.0% 150.0%

90.0% 100.0%

70.0% 50.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 15.4x
20.1x
19.1x
17.8x
16.3x 16.0x 15.5x 15.3x
13.2x 13.2x 14.6x

11.0x 12.4x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Broadline

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
AutoZone, Inc. NYSE:AIT $772.43 $533.00 $797.89 $20,420.0 $25,129.5 $11,174.9 $2,460.6 $1,937.5 22.0% 17.3% 10.2x 13.0x 10.2x 10.0x 14.3x 13.1x

Bunzl plc NasdaqGS:DXPE $30.80 $24.72 $31.23 $10,357.6 $12,308.0 $11,849.3 $840.7 $773.0 7.1% 6.8% 15.2x 15.9x 14.8x 14.2x 22.8x 20.6x

Dorman Products, Inc. NasdaqGS:FAST $81.35 $56.36 $81.96 $2,687.6 $2,612.8 $917.7 $197.6 $173.7 21.5% 18.9% 13.2x 15.0x 12.9x 11.8x 20.1x 17.9x

Essendant Inc. NYSE:GWW $14.37 $7.20 $17.09 $541.9 $1,034.9 $5,001.7 $85.6 $44.6 1.7% 0.9% 12.1x 23.2x 9.8x 7.0x 37.8x 12.0x

Genuine Parts Company NYSE:KAMN $101.11 $84.02 $107.75 $14,838.2 $17,710.3 $17,711.3 $1,300.0 $1,132.2 7.3% 6.4% 13.6x 15.6x 12.3x 11.7x 18.2x 17.0x

O'Reilly Automotive,
NasdaqGS:LAWS $340.86 $190.00 $346.35 $27,460.7 $30,677.4 $9,269.4 $2,016.5 $1,553.9 21.8% 16.8% 15.2x 19.7x 14.8x 14.1x 21.4x 19.3x
Inc.

Uni-Select Inc. NYSE:MRC $15.97 $14.00 $22.05 $674.0 $1,122.6 $1,694.5 $121.6 $105.1 7.2% 6.2% 9.2x 10.7x 8.9x 8.4x 12.9x 11.8x

Mean $193.84 $129.90 $200.62 $10,997.1 $12,942.2 $8,231.3 $1,003.2 $817.2 12.7% 10.5% 12.7x 16.2x 11.9x 11.0x 21.1x 15.9x

Median $81.35 $56.36 $81.96 $10,357.6 $12,308.0 $9,269.4 $840.7 $773.0 7.3% 6.8% 13.2x 15.6x 12.3x 11.7x 20.1x 17.0x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

150.0% Broadline 36.9% S&P 500 17.2% 200.0% Broadline 84.4% S&P 500 74.5%

130.0% 160.0%

110.0% 120.0%

90.0% 80.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 10.5x

12.6x 12.6x 12.7x 12.7x

11.5x
11.3x
8.7x 8.4x 9.6x 9.6x 9.3x
7.8x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Food Services

Select Comparable Public Company Metrics

($ in millions, except share price data) 52-Week LTM
Current CY2018 CY2019
Exchange Stock Equity Enterprise EBITDA OCF EV/ EV/ EV/ EV/ CY2018 CY2019
Company Ticker Price Low High Value Value (EV) Revenue EBITDA OCF Margin Margin EBITDA OCF EBITDA EBITDA P/E P/E
Core-Mark Holding
NasdaqGS:CORE $36.59 $17.10 $36.78 $1,680.7 $2,056.2 $12,850.4 $103.6 $77.0 0.8% 0.6% 19.8x 26.7x 12.8x 11.6x 38.8x 30.9x
Company, Inc.

SpartanNash Company NasdaqGS:SPTN $21.24 $16.32 $27.72 $763.2 $1,458.0 $8,199.2 $202.6 $134.9 2.5% 1.6% 7.2x 10.8x 6.7x 6.5x 11.3x 10.0x

Sysco Corporation NYSE:SYY $75.00 $52.18 $75.98 $38,983.1 $46,845.5 $58,727.3 $3,260.1 $2,572.3 5.6% 4.4% 14.4x 18.2x 13.6x 12.7x 23.6x 21.2x

United Natural Foods,

NasdaqGS:UNFI $34.48 $31.84 $52.69 $1,739.8 $2,200.2 $9,975.5 $341.4 $295.6 3.4% 3.0% 6.4x 7.4x 6.3x 6.0x 10.4x 9.8x
Inc.

US Foods Holding Corp. NYSE:USFD $32.20 $25.43 $40.92 $6,987.8 $10,479.4 $24,181.1 $1,006.5 $775.8 4.2% 3.2% 10.4x 13.5x 9.4x 8.5x 16.9x 15.1x

Mean $39.90 $28.57 $46.82 $10,030.9 $12,607.9 $22,786.7 $982.8 $771.1 3.3% 2.6% 11.7x 15.3x 9.7x 9.1x 20.2x 17.4x

Median $34.48 $25.43 $40.92 $1,739.8 $2,200.2 $12,850.4 $341.4 $295.6 3.4% 3.0% 10.4x 13.5x 9.4x 8.5x 16.9x 15.1x

Source: CapIQ as of September 5, 2018

(1) OCF (Operating Cash Flow) represents EBITDA less Capital Expenditures

Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

150.0% Food Services 34.1% S&P 500 17.2% 230.0% Food Services 105.6% S&P 500 74.5%

130.0% 180.0%

110.0% 130.0%

90.0% 80.0%
Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Sep-13 Jul-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18
Source: Capital IQ as of September 5, 2018 Source: Capital IQ as of September 5, 2018

Valuation Multiples – LTM EBITDA

Median: 10.0x
12.2x 12.2x
11.5x 11.7x
9.8x 10.2x 10.6x
8.2x 8.5x 8.4x
7.9x
6.8x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of September 5, 2018 and William Blair market analysis

SECTOR AND TRANSACTION DATA

Stock Price Performance – LTM

170 .0 % Indu strial 5 3.2% Building Products & Construc tion 27.7% Specialty Chemic als & Gases 10.9%

Transportation & Heavy Equipment 1 9.5% Techn ology 7 .1 % En ergy / Oil &Gas (4.8%)
160 .0 % Broadlin e Con sumer 36.9% Food Servic es 34 .1 % S&P 5 00 17.2%

53.2%
150 .0 %

140 .0 %
36.9%
34.1%
130 .0 %
27.7%

120 .0 % 19.5%
17.2%
10.9%
110 .0 %
7.1%

100 .0 %
(4.8%)
90.0%

80.0%

70.0%
Sep-1 7 Oct-1 7 Nov-17 Jan -18 Feb-18 Mar-18 May-18 Jun-18 Jul-18 Sep-1 8

Source: Capital IQ

Stock Price Performance – Last Five Years

220 .0 % Indu strial (10.0% ) Building Products & Construc tion 77.7% Specialty Chemic als & Gases 21.5%

Transportation & Heavy Equipment 2 9.3% Techn ology 3 6.2% En ergy / Oil &Gas (17.6%)
105.6%
200 .0 % Broadlin e Con sumer 82.7% Food Servic es 10 5.6% S&P 5 00 75.3%

82.7%
180 .0 % 77.7%
75.3%

160 .0 %

140 .0 %
36.2%
29.3%
120 .0 % 21.5%

100 .0 %
(10.0%)

80.0% (17.6%)

60.0%

40.0%
Sep-1 3 Jan -14 May-14 Sep-1 4 Jan -15 May-15 Sep-1 5 Jan -16 May-16 Sep-1 6 Jan -17 May-17 Sep-1 7 Jan -18 May-18 Sep-1 8
Source: FactSet
SECTOR AND TRANSACTION DATA

Relevant Distribution Research Coverage

Ryan Merkel, CFA

Focus: Specialty Distribution
Joined William Blair: 2005

Ticker Company
AYI Acuity Brands, Inc.
BECN Beacon Roofing Supply, Inc.
FAST Fastenal Company
FBM Foundation Building Materials, Inc.
HDS HD Supply Holdings, Inc.
HCCI Heritage-Crystal Clean, Inc.
HDSN Hudson Technologies, Inc.
LII Lennox International, Inc.
LKQ LKQ Corporation
MSM MSC Industrial Direct Co., Inc.
POOL Pool Corporation
SITE SiteOne Landscape Supply, Inc.
SYX Systemax Inc.
GWW W.W. Grainer, Inc.
WSO Watsco, Inc.
WCC WESCO International, Inc.
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document is directed should rely on it or its contents or use it as the basis to make an investment decision.

William Blair’s investment banking group enables corporations, financial sponsors, and
owner/entrepreneurs around the world to achieve their growth, liquidity, and financing
objectives.

Drawing on the collective intellectual capital and deep sector expertise of a global team
that reaches across more than 15 cities on four continents, the investment banking group
brings a rigorous and innovative approach to corporate board advisory projects, mergers
and acquisitions, and equity and debt financing. From 2013 to 2017, the team advised on
About William Blair more than $265 billion in completed transaction volume.
Investment Banking