energy equipment & services: industry insights & happenings

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August 2016

E n e r g y E q u i p m e n t & S e r v i c e s

Industry Insights and Happenings

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Report SummaryINDUSTRY COMMENTARY

Crude prices have strengthened after a month-long stretch of modest declines

– Prices boosted by weakening dollar and rumors of OPEC discussions on production cuts

Rig counts continue to improve

– For the week ended August 12, the US onshore market added 15 rigs, bringing the total rig count to 396

– This marks seven consecutive weeks of additions to the US rig count, although total rigs deployed are still down significantly from 672 at this time last year

– Streak of seven consecutive weeks marks the longest stretch of additions since April, 2014, when crude was above $100/bbl

Refining margins remain challenged due to elevated product inventories but showed modest week-on-week improvement

– Solid product demand trends and relatively low refinery utilization led to larger-than-expected draws on inventories for early August

On the power side, the recent heat wave led to record-setting demand for gas-fired peaking generation and a rare summer national net draw on gas inventories of 6 Bcf

TABLE OF CONTENTS:

• Recent Transactions

• Articles We Enjoyed

• Commodity Prices

• Rig Counts

• Public Comparables

CONTACTS:

Ted KinsmanManaging [email protected](303) 572-6013

Samuel L. Hill Managing Directorhill@headwatersmb. com214.457.4832

Tim McEuenSenior Vice [email protected](303) 962-5778

Luis Moya Senior Vice [email protected]

www.headwatersmb.com

% of High % of Low 6 Mos. Ago Current 2016E 2017P

Oilfield Services & EqupmentLarge-Cap 90% 134% 8.5x 14.3x 20.9x 14.1xMid-and Small-Cap 67% 178% 7.4x 6.8x 10.2x 12.5xOil & Gas Equipment 83% 139% 5.8x 12.0x 11.0x 18.8xLand Drillers 78% 178% 3.7x 7.7x 13.9x 10.9x

Power Services & EqupmentLarge-Cap 99% 135% 9.2x 11.2x 10.3x 9.8xMid- and Small-Cap 92% 141% 10.2x 11.8x 11.9x 10.7xClean Tech and Solar 69% 148% 15.2x 13.9x 8.7x 8.6x

Infrastructure & Industrial ServicesLarge-Cap Infrastructure 92% 135% 6.4x 6.6x 6.9x 6.9xMid- and Small-Cap Infrastructure 77% 168% 7.5x 8.6x 6.8x 5.7xUtility Services 93% 156% 8.6x 8.8x 6.9x 6.3xIndustrial Services 76% 130% 7.6x 8.7x 8.5x 8.7x

Forward MultiplesEV/EBITDA52-Week Perf.

LTM MultiplesEV/LTM EBITDA as of

Stock Performance

3

Industry UpdateRECENT TRANSACTIONS

Date Seller/Target Description AcquirerAug-16 NBR Sand LLC Single sand mine and plant serving the Haynesville and upper

Eagle Ford basinsU.S. Silica

Aug-16 TC Backhoe Drilling, powerline, and underground infrastructure installation and repair, serving the Canadian market

Quanta Services

Aug-16 RPM Services Equipment rental services in Arkansas, Louisiana, Oklahoma, Texas, and Missouri

Hugg & Hall EqupmentCompany

Jul-16 Managed Pressure Operations LLC

Provides managed pressure drilling and continuous circulating systems for onshore and offshore drilling markets

AFGlobal Corporation

Jul-16 Rotary Drilling Tools USA LP (via OFS Energy Fund)

Manufactures and markets oilfield drilling tubular tools, including drill pipes, drill collars, and drilling accessories

Vallourec Drilling Products USA

Jun-16 AchorPipeInternational Inc.

Provides pipeline anchoring solutions worldwide, both offshore and onshore

TorcSill Foundations LLC

May-16 Tercel Oilfield Products

Designs and manufactures products for E&P drilling, completion, and production operations

Rubicon Oilfield International Holdings

Mar-16 Five Companies Combined OFS, transportation, and environmental operations of five portfolio companies of CCNG Energy Partners LP

Guggenheim Capital Funding LLC

Jan-16 Trican Well Service Ltd

Provides pressure pumping and other general well and production services

Keane Group Holdings

Jan-16 CC American Oilfield LLC

Designs, manufactures, repairs and services oil and gas pressure vessels, as well as fuel scrubbers, filter separators, production skids and other wellsite equipment

CSE Global Ltd

Dec-15 Pioneer Energy Services

Three non-walking SCR drilling rigs and one walking SCR drilling rig Undisclosed buyer

Dec-15 New Source Energy Partners

Operates ~110 flowback tanks and 50 three-phase production units, and provides services in the areas of drill outs, coil tubing, production and flare jobs

Erick's Holdings LLC

Dec-15 EMAS Offshore Ltd Owns and operates three jack-up drilling rigs, FPSO Perisai Kameliaand MOPU Rubicone, three anchor handling tug supply vessels, three anchor handling tugs, three crew boats, and one derrick

Ezra Holdings Limited

Nov-15 Archer Limited Provides pressure pumping, directional drilling, pressure control and wireline services

Quintana Energy Services LP

Nov-15 Fluid Inclusion Technologies Inc

Specializes in laboratory analysis of trapped fluids in rock material, and advanced borehole gas analysis on drilling wells

Schlumberger Ltd

4

Fracking | Sand Market Upturn Could be Leading Indicator

“Since the beginning of the U.S. fracking revolution, oil pro-ducers have struggled with a vexing problem: after an initial burst, crude output from new shale wells falls much faster than from conventional wells. However, those well decline rates have been slowing across the United States over the past few years… The trend, if sustained, would help amelio-rate the industry’s most glaring weakness and cement its im-portance for worldwide production in years to come. It also helps explain shale drillers’ resilience throughout the oil mar-ket’s two-year slump.”

Reuters News | U.S. Shale Oil’s Achilles Heel Shows Signs of Mending

Solar Energy | Steady Growth Despite Commodity Prices

“But behind the scenes, renewable energy continues to steadi-ly move forward, with major companies investing in green energy. Global demand for solar power, driven by declining costs, changing regulations and an altered political and cul-tural atmosphere impacted by awareness of climate change, is likely to accelerate, despite the current glut of oil and nat-ural gas in the market. The EIA anticipates renewable energy to account for about 25 percent of global consumption by 2040. Solar… could provide 13 percent of world energy con-sumption by 2030, according to the International Renewable Energy Agency.”

OilPrice.com | Quiet Solar Revolution Unfolding in U.S. De-spite Low Oil Prices

Capital Markets | PE Capital Available for Distressed Assets

“Since the great crash of oil in mid-2014, more than $100 billion has been raised by buyout firms and distressed-debt funds eager to scoop up energy assets on the cheap. But as the months rolled by, few opportunities cropped up as cash-starved drillers limped along with the help of their bankers. Not any more. What started out as a trickle has now turned into something much more, with Blackstone Group LP, Apollo Global Management LLC, and WL Ross & Co. all jumping in this year to buy a grab bag of assets at discounted prices.”

Wall Street Journal | Range Resources Goes Old School

Oil Prices | Recent Declines Driven by OPEC Production

“The overall increase in global crude output has dragged oil prices down 20 percent since they broke above $50 in June. Friday’s survey found that Iraq increased oil output in July, as the national army made gains against the Islamic State’s oil production and supply network. The former Gulf country’s oil officials confirmed on Monday in increase in crude pro-duction from 3.175 million barrels in June to 3.2 million barrels in July. Nigeria – a country that has been inundated by sepa-ratist attacks on oil facilities by the Niger Delta Avengers and related groups – upped outputs despite militant efforts.”

OilPrice.com | Oil Prices Fall Below $40 as OPEC Ramps Up Output

Oil Services | Upcoming Debt Maturities an Issue

“The oil service companies that employ the bulk of Hous-ton's energy workers are heading for a $110 billion wall of debt and there’s little chance lenders will save them before they hit it… The debt is coming due over the next five years, with pay-ments ratcheting up sharply in 2018, said Moody’s Investors Service in a new report Tuesday. Unless both crude prices and oil explorers recover quickly from a tumultuous two-year downturn, many of the service companies could fail, and the ones that don’t could be weighed down by debt payments for years.”

Houston Chronicle | A $110 Billion Bill Looming for Oil Service Companies

ARTICLES WE ENJOYED

5

1 Year WTI and Henry Hub Prices

Source: Capital IQ

COMMENTARY: Crude has moved back to a mid-$40s range since its July slump into the $30s, supported by a mix of geopolitical and trading news

• Continued decline in U.S. production despite a rising rig count

• Reports of an informal gathering of OPEC members in September, with rumors of a coordinated production freeze to support prices

• A bullish IEA report calling for global stock draws beginning in 3Q16

• Aggressive short covering by investors

On the bearish side, crude and product inventories remain at elevated levels, and Saudi Arabia, Iran, and Iraq all boosted production in the second quarter

On the trading side, funds remain relatively bearish on both crude and gasoline but volatility has declined over the past month

• Hedge funds have been accelerating selling activity for more than two months – gross shorts for WTI have quadrupled since May

• USO traders, in contrast, have generated the largest inflow into the ETF ($325mm over two weeks) since February

COMMODITY PRICE UPDATE

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Crude (left) Natural Gas (right)

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U.S. Rig Count International Rig Count

U.S. Directional vs. VerticalU.S. Oil vs. Gas Rig Count

U.S. Rig Count by Play

Source: Baker Hughes

RIG COUNT UPDATE

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Other Permian Williston Marcellus-Utica Eagle Ford Haynesville

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Public ComparablesLARGE-CAP OILFIELD SERVICES

5-Year Trading vs. S&P 5001-Year Trading vs. S&P 500

Historical EV/LTM EBITDA

Source: Capital IQ

Market Data

Stock Performance LTM Multiple Evolution Forward Multiples

$000s Change From 52-Week Performance EV/LTM EBITDA as of EV/EBITDA

Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Large-Cap Oilfield Services

Schlumberger Limited $113,577 $124,043 3% (4%) 95% 136% 8.3x 8.2x 14.3x 18.6x 15.4x Halliburton Company $37,752 $47,502 (3%) 3% 94% 159% 6.2x 7.0x 13.8x 23.2x 14.4x Baker Hughes Incorporated $21,292 $20,408 10% (15%) 85% 132% 7.3x 8.8x 14.7x na 13.8x Weatherford International plc $4,938 $11,719 (6%) (48%) 48% 117% 7.0x 9.9x na na 12.7x

Min (6%) (48%) 48% 117% 6.2x 7.0x 13.8x 18.6x 12.7x Median (0%) (10%) 90% 134% 7.2x 8.5x 14.3x 20.9x 14.1x Max 10% 3% 95% 159% 8.3x 9.9x 14.7x 23.2x 15.4x

0%20%40%60%80%

100%120%

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Large-Cap Oilfield Services -12.8% S&P 500 +4.7%

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Large-Cap Oilfield Services -22.9% S&P 500 +82.9%

10-year avg: 10.0x

13.1x

10.6x 9.4x

6.4x

11.4x 10.8x

6.8x 8.1x

9.5x 7.6x

16.2x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x18.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

8

Market Data



Source: Capital IQ

MID-CAP OILFIELD SERVICES



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Mid-Cap Oilfield Services

Superior Energy Services, Inc. $2,544 $3,592 (7%) (3%) 85% 203% 4.1x 4.6x 15.1x na 12.3x TETRA Technologies, Inc. $573 $1,337 (2%) (16%) 65% 134% 12.1x 7.7x 6.8x 10.3x 6.8x Ensign Energy Services Inc. $1,105 $1,770 (3%) (31%) 68% 153% 4.5x 5.0x 6.6x 10.0x 8.4x Calfrac Well Services Ltd. $373 $1,188 (16%) (41%) 59% 305% 4.5x 7.2x na na 17.3x Basic Energy Services, Inc. $30 $948 (48%) (89%) 12% 115% 4.2x 8.4x na na 24.8x Trican Well Service Ltd. $415 $638 (10%) (7%) 77% 636% 6.5x 10.0x na na 12.8x

Min (48%) (89%) 12% 115% 4.1x 4.6x 6.6x 10.0x 6.8x Median (9%) (24%) 67% 178% 4.5x 7.4x 6.8x 10.2x 12.5x Max (2%) (3%) 85% 636% 12.1x 10.0x 15.1x 10.3x 24.8x

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Mid-Cap Oilfield Services -19.8% S&P 500 +4.7%

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Mid-Cap Oilfield Services -72.1% S&P 500 +82.9%

10-year avg: 9.1x

10.5x

7.2x 7.8x 5.7x

11.7x

8.1x 5.9x

8.2x 10.4x

6.5x

17.7x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x18.0x20.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

9



Source: Capital IQ

OIL & GAS EQUIPMENT

Market DataStock Performance LTM Multiple Evolution Forward Multiples


Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Oil & Gas Equipment

National Oilwell Varco, Inc. $12,771 $14,390 1% (18%) 79% 131% 4.7x 5.2x 11.3x na 23.9x FMC Corp. $6,376 $8,325 (1%) 1% 94% 148% 13.3x 9.8x 12.8x 11.9x 10.8x Oil States International Inc. $1,610 $1,642 (1%) 2% 85% 146% 5.2x 5.2x 12.8x na 21.0x Dril-Quip, Inc. $2,118 $1,626 (3%) (10%) 81% 115% 7.3x 6.3x 6.3x 10.2x 16.6x


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Oil & Gas Equipment -5.7% S&P 500 +4.7%

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Oil & Gas Equipment -20.1% S&P 500 +82.9%

10-year avg: 9.2x

11.5x

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

10



Source: Capital IQ

LAND DRILLERS



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Land Drillers

Nabors Industries Ltd. $2,712 $5,959 (2%) (22%) 78% 194% 4.5x 4.6x 8.7x 10.5x 9.0x Helmerich & Payne, Inc. $6,720 $6,296 (10%) (1%) 88% 155% 4.4x 3.7x 7.6x 14.4x 16.6x Patterson-UTI Energy Inc. $2,872 $3,489 (7%) 7% 88% 178% 3.7x 3.6x 7.7x 18.4x 13.6x Precision Drilling Corporation $1,701 $3,294 (10%) (16%) 75% 170% 6.1x 6.2x 12.8x 13.5x 10.3x Pioneer Energy Services Corp. $220 $593 (23%) (8%) 68% 359% 3.1x 3.0x 7.7x na 10.9x

Min (23%) (22%) 68% 155% 3.1x 3.0x 7.6x 10.5x 9.0x Median (10%) (8%) 78% 178% 4.4x 3.7x 7.7x 13.9x 10.9x Max (2%) 7% 88% 359% 6.1x 6.2x 12.8x 18.4x 16.6x

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Land Drillers +2.6% S&P 500 +4.7%

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Land Drillers -35.6% S&P 500 +82.9%

10-year avg: 5.9x

7.0x

4.7x 5.7x

4.2x

8.5x 7.5x

4.4x 5.3x

6.1x

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7.5x

0.0x1.0x2.0x3.0x4.0x5.0x6.0x7.0x8.0x9.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

11



Source: Capital IQ

LARGE-CAP POWER SERVICES & EQUIPMENT

Market Data



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Large-Cap Infrastructure Services

Chicago Bridge & Iron Company N.V. $3,478 $5,213 (11%) (37%) 64% 107% 5.5x 5.0x 4.8x 5.7x 5.7x Fluor Corporation $7,162 $7,123 (3%) 5% 92% 130% 5.5x 4.8x 6.8x 7.0x 6.7x Jacobs Engineering Group Inc. $6,555 $6,427 1% 21% 96% 154% 7.5x 6.7x 9.5x 9.6x 9.0x SNC-Lavalin Group Inc. $8,490 $7,888 (1%) 40% 96% 157% 11.0x 8.3x 11.1x 13.0x 10.7x

Min (11%) (37%) 64% 107% 5.5x 4.8x 4.8x 5.7x 5.7x Median (2%) 13% 94% 142% 6.5x 5.9x 8.1x 8.3x 7.8x Max 1% 40% 96% 157% 11.0x 8.3x 11.1x 13.0x 10.7x

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Large-Cap Infrastructure Services +4.3% S&P 500 +4.1%

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Large-Cap Infrastructure Services +25.2%

S&P 500 +93.9%

10-year avg: 11.2x

17.0x

19.9x 17.1x

7.9x 7.9x 10.0x

7.7x

10.8x 10.8x

6.9x 7.4x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

12



Source: Capital IQ

MID-CAP POWER SERVICES & EQUIPMENT



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Mid-Cap Infrastructure Services

Amec Foster Wheeler plc $2,040 $3,116 11% (37%) 62% 163% 12.4x 10.4x 8.9x 8.7x 8.9x Tutor Perini Corporation $1,167 $1,874 (5%) 33% 91% 232% 8.1x 10.9x 9.7x 6.7x 6.1x Granite Construction Incorporated $1,953 $1,769 0% 47% 96% 173% 10.5x 6.4x 10.6x 10.8x 8.0x Primoris Services Corporation $906 $1,059 (10%) (6%) 69% 110% 7.0x 8.0x 7.6x 7.7x 5.8x KBR, Inc. $2,228 $1,474 7% (17%) 78% 135% na 4.9x 4.3x 4.7x 5.0x Aecon Group Inc. $1,037 $1,224 (1%) 60% 95% 162% 6.0x 8.0x 8.0x 6.8x 6.1x Great Lakes Dredge & Dock Corporation $233 $587 (21%) (32%) 65% 129% 7.8x 8.5x 8.3x 7.1x 5.5x


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Mid-Cap Infrastructure Services +2.8% S&P 500 +4.1%

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10-year avg: 9.1x14.3x

12.6x

7.2x

4.8x 6.3x

8.6x 7.0x

9.1x 10.4x

12.1x

8.0x

0.0x

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4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

13



Source: Capital IQ

ENERGY EFFICIENCY & CLEANTECH



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Energy Efficiency & CleanTech

SolarCity Corporation $2,377 $5,631 (2%) (53%) 40% 145% na na na na na Itron, Inc. $1,844 $2,064 8% 44% 99% 173% 9.2x 11.5x 14.5x 10.6x 9.5x Silver Spring Networks, Inc. $703 $590 7% 0% 83% 140% na 18.9x 13.3x na 19.0x Ameresco, Inc. $229 $464 (4%) (25%) 69% 126% 12.2x 10.5x 10.4x 8.7x 7.6x Sunworks, Inc. $63 $56 18% (26%) 68% 151% na 22.3x 19.2x 8.0x 5.1x EnerNOC, Inc. $181 $199 (18%) (36%) 59% 198% 5.8x na na na na

Min (18%) (53%) 40% 126% 5.8x 10.5x 10.4x 8.0x 5.1x Median 2% (25%) 69% 148% 9.2x 15.2x 13.9x 8.7x 8.6x Max 18% 44% 99% 198% 12.2x 22.3x 19.2x 10.6x 19.0x

0%20%40%60%80%

100%120%

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Energy Efficiency & CleanTech +4.0% S&P 500 +4.7%

0%

50%

100%

150%

200%

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12Ap

r-13

Aug-

13

Dec-

13Ap

r-14

Aug-

14

Dec-

14Ap

r-15

Aug-

15

Dec-

15

Apr-

16

Energy Efficiency & CleanTech -24.9% S&P 500 +82.9%

10-year avg: 24.8x

13.9x

23.8x

16.3x

44.3x 40.7x

11.0x

19.0x

48.5x

12.3x

31.1x

12.0x

0.0x

10.0x

20.0x

30.0x

40.0x

50.0x

60.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

14



Source: Capital IQ

LARGE-CAP INFRASTRUCTURE SERVICES



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Large-Cap Infrastructure Services

Chicago Bridge & Iron Company N.V. $3,478 $5,213 (11%) (37%) 64% 107% 5.5x 4.9x 4.5x 5.1x 5.3x Fluor Corporation $7,162 $7,123 (3%) 5% 92% 130% 5.4x 4.4x 6.6x 6.9x 6.9x Jacobs Engineering Group Inc. $6,555 $6,427 1% 21% 96% 154% 7.2x 6.4x 9.4x 9.8x 9.0x SNC-Lavalin Group Inc. $8,490 $7,888 (1%) 40% 96% 157% 9.6x 12.2x 12.2x 13.1x 11.0x KBR, Inc. $2,228 $1,474 7% (17%) 78% 135% na 16.9x 4.2x 5.0x 5.3x


0%20%40%60%80%

100%120%

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Large-Cap Infrastructure Services -3.8% S&P 500 +4.7%

0%

50%

100%

150%

200%

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12Ap

r-13

Aug-

13

Dec-

13Ap

r-14

Aug-

14

Dec-

14Ap

r-15

Aug-

15

Dec-

15

Apr-

16

Large-Cap Infrastructure Services -2.0% S&P 500 +82.9%

10-year avg: 10.9x

16.5x 18.1x

15.0x

6.9x 7.2x 9.1x

7.3x

10.1x 10.8x 12.0x

7.0x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x18.0x20.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

15



Source: Capital IQ

MID-CAP INFRASTRUCTURE SERVICES



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Mid-Cap Infrastructure Services

Amec Foster Wheeler plc $2,040 $3,116 11% (37%) 62% 163% 13.9x 10.7x 8.6x 8.8x 9.0x Tutor Perini Corporation $1,167 $1,874 (5%) 33% 91% 232% 6.9x 8.0x 11.0x 6.7x 6.1x Granite Construction Incorporated $1,953 $1,769 0% 47% 96% 173% 9.3x 7.2x 11.2x 9.7x 7.8x Primoris Services Corporation $906 $1,059 (10%) (6%) 69% 110% 6.2x 8.3x 7.7x 6.0x 5.1x Aecon Group Inc. $1,037 $1,224 (1%) 60% 95% 162% 6.6x 7.4x 8.3x 7.0x 6.4x Great Lakes Dredge & Dock Corporation $233 $587 (21%) (32%) 65% 129% 9.4x 7.1x 6.9x 6.4x 5.2x Willbros Group Inc. $112 $154 (31%) 138% 52% 256% na na na 8.0x 5.1x Orion Group Holdings, Inc. $178 $288 11% (13%) 85% 198% 7.3x 7.5x 12.3x 5.4x 4.7x


0%

50%

100%

150%

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16


0%50%

100%150%200%250%

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12Ap

r-13

Aug-

13

Dec-

13Ap

r-14

Aug-

14

Dec-

14Ap

r-15

Aug-

15

Dec-

15

Apr-

16


10-year avg: 10.9x21.6x

19.0x

8.5x

5.2x 6.8x

9.4x 11.1x 10.4x 10.4x

9.0x 8.8x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

16



Source: Capital IQ

UTILITY SERVICES



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Utility Services

Quanta Services, Inc. $3,762 $4,006 (2%) (0%) 92% 148% 8.7x 8.8x 8.8x 6.9x 6.3x MasTec, Inc. $2,452 $3,512 22% 64% 98% 239% 6.7x 8.6x 15.4x 8.3x 7.5x MYR Group, Inc. $469 $490 8% (5%) 93% 156% 6.3x 5.6x 6.5x 6.6x 5.9x


0%

50%

100%

150%

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Utility Services +13.9% S&P 500 +4.7%

0%50%

100%150%200%250%

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12Ap

r-13

Aug-

13

Dec-

13Ap

r-14

Aug-

14

Dec-

14Ap

r-15

Aug-

15

Dec-

15

Apr-

16

Utility Services +48.2% S&P 500 +82.9%

10-year avg: 9.7x15.6x 15.6x

11.5x

9.0x 8.4x 9.1x 8.1x 7.6x 7.6x

6.8x 8.0x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x18.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

17



Source: Capital IQ

INDUSTRIAL SERVICES



Mkt. Cap EV 1 Month 1 Year % of High % of Low 1 Yr. Ago 6 Mos. Ago Current 2016E 2017P Industrial Services

EMCOR Group Inc. $3,481 $3,565 10% 19% 100% 139% 8.4x 7.8x 9.8x 9.6x 8.7x Bilfinger SE $1,323 $1,650 13% (25%) 66% 119% 8.5x 6.2x 7.2x 6.6x 8.8x Team, Inc. $940 $1,301 17% (30%) 69% 148% 10.3x 8.6x 18.1x 11.7x 9.0x Aegion Corporation $616 $891 (11%) (2%) 83% 116% 6.9x 6.2x 7.5x 7.5x 6.2x Mistras Group, Inc. $721 $805 (3%) 67% 94% 197% 11.1x 7.4x 11.3x 9.5x 9.1x Matrix Service Company $459 $390 (0%) (15%) 66% 122% 13.7x 13.3x 5.3x 6.2x 4.8x


0%20%40%60%80%

100%120%

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Industrial Services -1.8% S&P 500 +4.7%

0%

50%

100%

150%

200%

Aug-

11

Dec-

11

Apr-

12

Aug-

12

Dec-

12Ap

r-13

Aug-

13

Dec-

13Ap

r-14

Aug-

14

Dec-

14Ap

r-15

Aug-

15

Dec-

15

Apr-

16

Industrial Services +38.5% S&P 500 +82.9%

10-year avg: 9.3x12.8x

11.5x

9.5x

7.8x 7.3x 7.9x 8.0x

9.3x 10.0x 9.4x 9.0x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

18

Capabilities and Experience

M&A Capital Formation Project Finance

– Sell-side advisory– Buy-side advisory– Strategic alternatives

– Debt / Equity / Mezz– Recapitalization– Restructuring

– Infrastructure development– Construction/term finance

The professionals in Headwaters Energy & Services practice have collectively closed more than $10 billion intransactions across the upstream, midstream, downstream, services, and P&U sectors. This experience helps our teamunderstand market dynamics and consistently achieve outlier results for our clients.

Recent Successes

WE ACTED AS SOLE ADVISOR TO THE SELLER

HAS BEEN ACQUIRED BY

A PORTFOLIO COMPANY OF


A PORTFOLIO COMPANY OF

TO BE COMBINED WITH


WE ACTED AS SOLE ADVISOR TO THE COMPANY

HAS SECURED SENIOR TERM FINANCING

$6,300,000

Oilfield ServicesFuel Distribution

Transaction Type:Sale of SubsidiaryBuyer DescriptionPE-backed strategic

Oilfield ServicesWaste & Container Solutions

Transaction Type:Private saleBuyer DescriptionPE-backed strategic

Industrial/OFSIndustrial tools and lighting

Transaction Type:PE SaleBuyer DescriptionPrivate Equity

Oil & GasOffshore E&P

Transaction Type:Capital RaiseBuyer DescriptionInstitutional Investor



Energy Team

CJ HummelManaging Director

Sam HillManaging Director

Reed MacyManaging Director

Ted KinsmanManaging Director

John GaensbauerManaging Director

David CharlesManaging Director

Ian FayManaging Director

Tim McEuenSenior Vice President

Luis MoyaSenior Vice President

19

Disclosure: This newsletter is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisition activity. Information contained in this newsletter should not be construed as a recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this newsletter should not be construed as a recommendation to buy, sell or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. The newsletter is published solely for the general information of clients and friends of Headwaters MB, LLC. It does not take into account the particular investment objectives, financial situation or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this news-letter. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is available upon request. The companies mentioned in this newsletter may be clients of Headwaters MB, LLC. The decisionsto include any company in this newsletter is unrelat-ed in all respects to any service that Headwaters MB, LLC may provide to such company. This newsletter may not be copied or reproduced in any form, or redistributed without the prior written consent of Headwaters MB, LLC. The information contained herein should not be construed as legal advice.

About Headwaters MB:Headwaters MB is an independent, middle-market investment banking firm providing strategic merger and acquisition, corporate finance, and merchant banking services through proprietary sources of capital. Named “Investment Bank of the Year” by the M&A Advisor in 2014, Headwaters MB is headquartered in Denver, CO, with six regional offices across the United States and partnerships with 18 firms covering 30 countries. For more information, visit www.headwatersmb.com

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energy equipment & services: industry insights & happenings

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