April 2018

Investment Banking
Strategic Acquirers in Commercial
Services Continue to Stay Aggressive

In This Report
Prevalence of serial acquirers

Commercial Services Strategic buyers increasingly look

cross-border

Certain verticals focus on step-change

acquisitions

Buyers moving quickly and focusing

on acquisition platforms
CONTENTS

Executive Summary 1

Market Update and Analysis 3

William Blair Commercial Services Banking Franchise 5

Sector and Transaction Data 7

EXECUTIVE SUMMARY
Strategic Acquirers in Commercial Services
Continue to Stay Aggressive
Testing, inspection, and
certification companies
remain the most active,
while the engineering and
construction vertical has
seen several transformative
acquisitions.
The pace of M&A activity in the
commercial services industry has
remained at a healthy pace. For the
year, there were 1,009 completed
transactions totaling $89 billion,
generally higher than the levels seen
over the past five years.
A growing sense that the U.S. economy
is in the later innings of what has been
a relatively slow but steady expansion
phase has brought more attention to
commercial services from strategic
acquirers and financial sponsors
alike. Characterized by strong cash
flow, long-term contractual
relationships, high recurring revenue,
and services that are mission critical,
commercial services is viewed by
many investors and acquirers as a
recession-resistant industry.
Through our analysis of commercial
services M&A activity and based on
our ongoing conversations with
buyers and sellers throughout the
industry, we have identified several
distinct trends among strategic
acquisitions that are shaping the
dealmaking landscape. We examine
these trends, and look at the forces
that are driving the continued
1
aggressive behavior of financial These companies, which typically
sponsors in commercial services. complete 5 to 10 acquisitions per year,
have essentially “professionalized” the
Emergence of Serial Acquirers M&A function—becoming very
While companies throughout the efficient at evaluating, completing, and
commercial services industry have integrating acquisitions. As a result,
shown healthy appetites for strategic investors view these companies’
acquisitions, a handful of “serial” acquisition strategies as a consistent
acquirers are driving much of the and reliable source of growth, and in
activity. We analyzed the transactions some cases, investors are valuing the
made by 55 public commercial company’s inorganic growth just as
services companies and found that the highly as organic growth. This positive
five most active acquirers in 2017 investor feedback is motivating
accounted for 40% of the overall M&A companies to continue pursuing
volume in terms of number of deals. acquisitions aggressively.
Cross-Border M&A in Commercial Services
As more commercial services companies have started to approach saturation
points in domestic markets, they are using M&A to expand into new geographies,
as was the case with Eurofins Scientific’s acquisition of EAG Laboratories
in September.
100%
90%
26% 26% 27% 29% 31% 28%
80%
70%
60%
50%
40%
74% 74% 73% 69% 72%
71%
30%
20%
10%
0%
2012 2013 2014 2015 2016 2017
Cross Border Domestic
Sources: Dealogic and Capital IQ
This serial acquisition activity is found
most commonly in the test, inspection,
and certification (TIC) vertical. The
three most acquisitive commercial
services companies in 2017 all
specialized in TIC, and despite
representing approximately 15% of
the number of companies in our
analysis, TIC accounted for 36% of the
total M&A volume in 2017. Given TIC
companies’ need to be on-site or lab-
based at a large number of locations,
much of this activity is being driven by
efforts to fill out geographic gaps in
the acquirer’s portfolio.
Strategic Buyers Increasingly
Look Cross-Border
Cross-border transactions have been
an important part of companies’
strategic road maps in recent years.
Cross-border transactions have
represented a major portion of
M&A activity in the commercial
services sector, representing 26%
and 28% of transactions in 2013 and
2017, respectively.
This increase is largely attributable to
companies rolling up their domestic
markets and looking to expand their
successful strategies abroad. One
prominent example of this was
Eurofins Scientific’s acquisition of San
Diego-based EAG Laboratories for
$780 million at the end of 2017.
Having already consolidated much of
the European TIC market, Eurofins is
looking to expand to new regions, and
EAG’s strong presence in North
America made it a natural and highly
valuable target.
Certain Verticals Focus on
Step-Change Acquisitions
While TIC acquisition activity is
largely defined by numerous,
incremental additions, other verticals
tend to focus on larger, transformative
acquisitions. This is certainly the case
in engineering and construction
(E&C), which has seen a steady stream
of multi-billion dollar transactions in
recent years.
In August 2017, Jacobs Engineering
Group announced that it was
acquiring CH2M HILL Companies for
$3.3 billion. The acquisition
strengthens Jacobs’s position in
higher-growth, higher-margin
segments, including water,
transportation, nuclear, and
environmental. In December 2017,
McDermott International and CB&I
announced that they were merging
through a transaction with an
estimated value of $6 billion.
Other companies, such as Cintas, are
pursuing two-pronged strategies,
which combine occasional step-change
acquisitions with ongoing bolt-on
transactions. For example, Cintas
completed its $2.2 billion acquisition
of G&K Services, a deal that
significantly strengthened Cintas’s
leading position in the uniform rental
business. Meanwhile, Cintas has
continued to pursue smaller, bolt-on
acquisitions that provide scale
benefits and improve route-density,
such as the acquisition of ZEE Medical
from McKesson Corporation, which
was represented by William Blair.
Buyers Moving Quickly and
Focusing on Acquisition Platforms
Both strategic acquirers and financial
sponsors are increasingly conducting
more of their diligence work prior to a
formal deal process launch. In such a
competitive environment, buyers
realize that if they haven’t done work
up-front to determine whether they
have an edge, their chances of
winning are materially lower. As a
result, buyers who choose to bid in
processes today are very serious and
ready to move aggressively to win
the transaction.
Given the high prices that acquirers
now pay, it has become increasingly
important that the target company
serve as a platform for future
acquisitions. The ability to make
accretive add-on acquisitions, which
allow the buyer to effectively lower
the overall acquisition multiple and
improve the return on capital, has
gone from a nice-to-have feature to a
mandatory component for many
buyers. As a result, evaluating whether
a target company has a valid and
viable acquisition platform has
become an essential part of the due
diligence process.
We expect the increased levels of pre-
process diligence and heightened
emphasis on acquisition platforms to
continue shaping buyer behavior in
2018. To learn more about these and
other trends that are affecting
dealmaking in commercial services,
please do not hesitate to contact us.
William Blair 2
MARKET UPDATE AND ANALYSIS

U.S. Private Equity Overhang

Private equity dry power continues to accumulate with approximately $566
billion of funds waiting to be invested. This level of ‘‘use it or lose it’’ capital is
driving funds to be aggressive in putting money to work.

($ in billions)
$566

2017
$453
2016

2015
$302
2014

2013
$170
2012
Overhang by
$89
Commercial $4 $10
$39
Vintage 2011

Services 2010

Market Analysis 2010 2011 2012 2013 2014 2015 2016 2017

Sources: Pitchbook and William Blair analysis

We look behind the numbers

to examine the market M&A Volume --- Number of Transactions
dynamics that are driving The level of M&A activity in commercial services has remained at a healthy,
steady pace over the past five years. Strategic acquirers and financial sponsors
trends in the commercial
are looking to put capital to work in industries that, like commercial services,
services deal-making are characterized by strong cash flow and recurring revenue.
landscape.

1,135 1,149

991 994 1,009

917

2012 2013 2014 2015 2016 2017

Source: Dealogic

3
M&A Volume by Vertical

Percentage of 2017 Volume (# of deals) Despite composing only 15% of the number of
companies in our analysis, the testing,
inspection, and certification (TIC) vertical
Testing, Inspection, and Certification accounted for 34% of the commercial services
34% transactions in 2017. Conversely, engineering
Engineering and Construction
and construction composed 16% of the
companies in the list but only 7% of the
59%
number of transactions.
7% Other Commercial Services

Sources: Dealogic and Capital IQ

Data set based on the 55 public commercial services companies outlined on pages 10-22
of this report

Cash Balances

Commercial services companies have ($ in billions)

maintained steady levels of cash on their
balance sheets over the past five years, $30.2 $29.8 $30.7
suggesting that as they continue to
generate healthy amounts of cash, they $24.4 $24.6
are looking to deploy this capital at a
moderate pace.

2013 2014 2015 2016 2017

Source: Capital IQ
Data set based on the 55 public commercial services companies outlined on pages 10-22
of this report

William Blair 4
WILLIAM BLAIR COMMERCIAL SERVICES INVESTMENT BANKING FRANCHISE

Drawing on our deep sector expertise and the strength of

our relationships with buyers around the world, William
Blair has built a leading commercial services banking
franchise. Business owners across an array of subverticals
turn to us for outstanding execution for their M&A and
capital-raising objectives.

5
William Blair Spotlight on Recent Transactions William Blair
• Convergint Technologies is a leading, independent, global Commercial Services Team
provider of security systems integration with capabilities in
fire and life safety, building automation, communication, and Commercial Services
other systems. With over 80 locations worldwide, Convergint
partners with the world’s leading technology companies to Andy Miller
provide best-of-breed solutions and services to meet each Co-Head of Commercial Services
customer’s unique requirements +1 312 364 5158
• Long-standing, institutional relationship was built through amiller@williamblair.com
the prior sale process and participation at William Blair’s
Private Joe Niemiec
Equity Conference Co-Head of Commercial Services
• High-touch outreach and early engagement focused on +1 312 364 5315
highest priority buyers with the best cultural fit; highly jniemiec@williamblair.com
efficient, pre-emptive process drove an exceptional outcome
for shareholders and management Aparna Dang
+1 312 364 5349
adang@williamblair.com
• Smarte Carte is the premier global provider of a
comprehensive suite of services addressing core consumer Drew Janes
travel and leisure needs including vended baggage carts, self- +1 312 364 8049
storage lockers, strollers, and massage chairs djanes@williamblair.com
• William Blair ran a tightly coordinated process that allowed
motivated parties to move at an accelerated pace, resulting in Walker Dales
multiple competitive, revised indications with full due +44 20 7868 4472
diligence and financing wdales@williamblair.com
• Signed approximately four weeks after initial indications at
an attractive valuation with seller friendly purchase
agreement terms

• Wind River Environmental is the leading provider of

collection, processing, disposal, inspection, installation, and
maintenance of non-hazardous liquid environmental waste
solutions in the United States. Based in Marlborough,
Massachusetts, the company serves a range of commercial,
residential and municipal customers with geographic
coverage across the
Eastern Seaboard
• High-touch, direct communication with management
established through William Blair’s Private Equity
Conference and early look meetings allowed for a targeted
marketing effort, ultimately saving time and
increasing efficiency
• Competitive process dynamics and positioning of proven
acquisition platform resulted in potential buyers giving full
credit for in-process tuck-in acquisitions (five acquisitions
signed and three acquisitions closed during the
marketing period)

William Blair 6
 Commercial Services
Investment Banking
Sector Report

Sector and
Transaction Data
SECTOR AND TRANSACTION DATA

Recent Select Commercial Services M&A Transactions

($ in millions)
Announced EV / LTM
Date Target Name Business Description Buyer Name EV EBITDA
3/1/2018 EMG Corporation Engineering and environmental assessment services Bureau Veritas SA ND ND

2/8/2018 Geostructures Engineering, design-build and construction services for Terratest (Platinum ND ND
ground improvement and slope stability applications Equity)
2/1/2018 Kanne Group Investment Cafe, shopping mall, and other real estate property services Compass Group PLC ND ND

1/2/2018 Cascade Water Services Full suite of water treatment and environmental services Ecolab Inc. ND ND

12/24/2017 Convergint Technologies Security systems integration services with capabilities in fire Ares Management ND ND
and life safety, building automation, and communication
12/21/2017 PrimeLine Utility Services Construction, maintenance and design solutions for the VINCI Energies ND ND
electric, gas, and telecommunication industries
12/20/2017 Liquid Environmental Non-hazardous liquid waste management and disposal Audax Group ND ND
Solutions services
12/18/2017 Chicago Bridge & Iron Conceptual design, engineering, procurement, fabrication, McDermott International $3,807 NMF
Company N.V. construction, and commissioning services
12/14/2017 Lakeshore Recycling Recycling, diversion and non-hazardous, solid waste Goldman Sachs PCI ND ND
Systems management services
12/12/2017 New Acton Mobile Modular space rental services to construction, commercial, WillScot Corporation $235 ND
Industries industrial, education, an d healthcare markets
12/11/2017 IO Data Centers Colocation data center services Iron Mountain $1,340 ND
Incorporated
12/4/2017 NAPEC Construction and maintenance services to the public utility Oaktree Capital $250 9.9x
and heavy industrial markets
11/15/2017 Centerplate Event venue catering and hospitality services Sodexo $675 ND

11/3/2017 Rent-A-Center Household durable goods leasing services Vintage Capital Group $1,272 12.4x

10/30/2017 Guckenheimer On-site corporate restaurant management and ISS Group ND ND

catering services
10/26/2017 AECON Group Construction and infrastructure development services CCCC International $1,383 10.7x
Holding
10/16/2017 AmeriPride Services Uniform rental, linen supply, and garment Aramark $1,000 ND
management services
10/16/2017 Smarte Carte Consumer travel & leisure services, including baggage carts, 3i Group $385 ND
storage lockers, strollers, and massage chairs
10/11/2017 Ecolab (Equipment Care Commercial cooking, refrigeration, and ware washing Audax Group ND ND
Business) equipment services
10/11/2017 HydroChem Industrial cleaning services PSC Industrials ND ND

9/18/2017 EAG Inc. Material science testing services Eurofins Scientific SE $780 ND

9/5/2017 Geostrada (Pty) Construction material and geotechnical testing services SGS SA ND ND

9/5/2017 Summit Fire Protection Fire protection and mechanical contracting services CI Capital Partners ND ND

8/28/2017 BHI Energy Specialty maintenance, radiation protection, and professional AE Industrial Partners ND ND
technical staff augmentation services

7
($ in millions)
Announced EV / LTM
Date Target Name Business Description Buyer Name EV EBITDA
8/24/2017 United States Underground utility locating services Partners Group ND ND
Infrastructure Corporation
8/17/2017 Varsity Contractors Integrated janitorial, building maintenance, and construction Kellermeyer Bergensons ND ND
management services
8/14/2017 Neff Corp Equipment rental services United Rentals $1,238 6.4x

8/9/2017 Airgas-Refrigerants, Inc. a Reclaimed and virgin refrigerants, and industrial gases, as well Hudson Technologies $220 ND
division of Air Liquide S.A. as refrigerant management services
8/2/2017 CH2M Hill Cos Engineering, construction, consulting, design, procurement, Jacobs Engineering Group $3,270 ND
maintenance, and program management
7/31/2017 Service Logic Maintenance and replacement services for HVAC equipment, Warburg Pincus ND ND
chilled water systems, and building automation
7/25/2017 Northwest Exterminating Pest control, termite, and wildlife services Rollins $120 ND

7/24/2017 United Site Services Portable restrooms, temporary fence and related on-site Platinum Equity LLC ND ND
services
7/19/2017 CRS Contractors Rental Construction equipment rental services Sunbelt Rentals (Ashtead $234 ND
Supply Group)
7/13/2017 Maco Transportadora De Cash-in-transit and money processing services The Brink's Company $209 8.7x
Caudales
7/12/2017 GCA Services Group Facility services for education and commercial companies ABM Industries $1,237 12.4x

7/6/2017 Shimmick Construction General engineering contractor services AECOM $175 ND

Company
6/22/2017 EnerNOC Demand response and energy services for utility, commercial, Enel Green Power $294 ND
institutional and industrial customers
6/1/2017 CIBTvisas Mobility solutions including expedited visa, work permit, Kohlberg & Company ND ND
immigration, and passport services
5/12/2017 Oracle Elevator Elevator maintenance, repair, and modernization services L Squared Capital ND ND

4/5/2017 First Response Emergency response, industrial services, remediation, and TRADEBE Environmental ND ND
nonhazardous waste treatment services
4/3/2017 WS Atkins Consulting design, engineering and project management SNC-Lavalin Group $2,704 9.7x
services
3/31/2017 TRC Companies Engineering, environmental consulting, and construction- New Mountain Capital $681 14.0x
management services
3/13/2017 AMEC Foster Wheeler Project, engineering, and technical services to energy and John Wood Group plc $4,032 10.1x
industrial markets
3/10/2017 Total Safety US Integrated safety and compliance services Littlejohn & Co. ND ND

2/23/2017 BCH Holdings, Inc. Mechanical contracting projects and services Comfort Systems USA, Inc. $121 ND

Sources: Dealogic and Capital IQ

William Blair 8
SECTOR AND TRANSACTION DATA

Global Commercial Services M&A Activity

Annual M&A Trends

M&A deal volume increased by approximately 10% in 2017, driven by increased deal flow as companies try to take advantage
of higher valuation multiples. In 2017, the median EBITDA multiple for commercial services transactions was 9.8x (above the
long-term median). This trend continues into 2018 with valuations remain be above the long-term average.
Commercial Services Transaction Volume & Value

1,179 1,150 1,182 1,135 1,149

1,002 991 994 1,009
896 917

$94.1 $89.0
$78.4 $72.1 $67.0
$57.6
$48.1 $47.2 $46.8
$38.7
$23.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
No. of Transactions Deal Value ($ billions)
Sources: Dealogic, Capital IQ, and William Blair market analysis

Median EBITDA Multiples

9.8x 9.7x 9.8x

9.4x 9.6x
8.7x 8.5x 8.0x
7.3x 7.0x
6.2x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Note: Data represents global transactions announced publicly

Note: Transactions with multiples that are not meaningful are categorized as undisclosed
Sources: Dealogic, Capital IQ , and William Blair market analysis

9
Commercial Services Public Comparable Performance & Trends
The following charts index all commercial services firms profiled on pages 11-22.
Indexed Stock Performance – Last 12 Month Indexed Stock Performance – Last 5 Years

140.0% Commercial Services 117.2% S&P 500 111.8% 200% Commercial Services 130.2% S&P 500 168.3%
130.0% 180%
160%
120.0%
140%
110.0%
120%
100.0% 100%
90.0% 80%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Commercial Services – EV/LTM Revenue

Median: 1.03x

1.03x 1.05x 1.08x 1.08x

1.01x 0.99x 0.92x 1.02x 0.93x 0.98x
0.78x

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

Commercial Services – EV/LTM EBITDA

Median: 9.3x
11.3x
10.7x
9.3x 9.8x 9.7x 9.7x
9.1x 8.2x 8.5x 8.5x
7.1x

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 10
SECTOR AND TRANSACTION DATA

Engineering and Construction

($ in millions) LTM Financials LTM Margins Valuation
Stock Price Historical
Change Since Gross OCF(1) Revenue Enterprise EV/LTM EV/LTM Net Debt/
Company 03/29/17 Revenue EBITDA Profit EBITDA Margin 3-Yr CAGR Value Revenue EBITDA EBITDA

AECOM 0.1% $18,756 $1,046 3.6% 5.6% 5.1% (3.2%) $8,989 0.48x 8.6x 3.0x

ARCADIS NV 24.1% $4,093 $267 17.2% 6.5% 5.3% 9.8% $2,338 0.57x 8.7x 2.4x

Balfour Beatty plc 11.3% $9,714 $32 4.1% 0.3% 0.0% (2.6%) $2,984 0.31x NMF 10.1x

Bilfinger SE 18.3% $5,225 $100 9.7% 1.9% 0.3% (17.5%) $1,729 0.33x 17.3x N/A

Chicago Bridge & Iron

(53.2%) $7,068 ($161) 0.2% (2.3%) (2.9%) (1.3%) $3,369 0.48x NMF (10.8x)
Company N.V.

Fluor Corporation 8.7% $19,037 $924 4.2% 4.9% 3.4% (12.8%) $7,833 0.41x 8.5x N/A

Hill International, Inc. 37.3% $413 $5 37.5% 1.2% 0.9% (5.4%) $304 0.74x NMF N/A

Jacobs Engineering
7.0% $15,230 $1,075 18.2% 7.1% 6.3% (4.1%) $10,011 0.66x 9.3x 1.4x
Group Inc.
McDermott
(9.8%) $2,636 $320 14.7% 12.1% 7.6% (0.3%) $1,944 0.74x 6.1x 0.4x
International, Inc.

Mean 4.9% $9,130 $401 12.1% 4.1% 2.9% (4.1%) $4,389 0.52x 9.7x 1.1x

Median 8.7% $7,068 $267 9.7% 4.9% 3.4% (3.2%) $2,984 0.48x 8.7x 1.9x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures
Source: Capital IQ as of March 29, 2018

11
Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)

130% Engineering & Construction 102.6% S&P 500 111.8% 200% Engineering & Construction 67.4% S&P 500 168.3%

120% 150%
110%
100%
100%
50%
90%

80% 0%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Engineering and Construction – EV/LTM EBITDA

Median: 8.3x
10.7x
9.8x
8.8x 8.9x 8.7x
8.3x 8.3x
6.9x 6.7x 6.9x
5.7x

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 12
SECTOR AND TRANSACTION DATA

Facility Services
($ in millions) LTM Financials LTM Margins Valuation
Stock Price Historical
Change Since OCF(1) Revenue Enterprise EV/LTM EV/LTM Net Debt/
Company 03/29/17 Revenue EBITDA Gross Profit EBITDA Margin 3-Yr CAGR Value Revenue EBITDA EBITDA
ABM Industries
(23.2%) $6,302 $258 10.5% 4.1% 3.2% 1.9% $3,345 0.53x 13.0x 4.3x
Incorporated

Chemed Corporation 49.4% $1,667 $255 31.0% 15.3% 11.5% 3.7% $4,729 2.84x 18.5x 0.4x

Cintas Corporation 34.8% $6,337 $1,333 44.7% 21.0% 17.1% 3.9% $21,537 3.40x 16.2x 1.9x

Comfort Systems USA,

12.6% $1,788 $144 20.5% 8.1% 6.1% 6.4% $1,573 0.88x 10.9x 0.2x
Inc.

Compass Group PLC 4.1% $31,665 $3,097 25.9% 9.8% 8.1% 5.7% $37,378 1.18x 12.1x 1.6x

Ecolab Inc. 9.4% $13,838 $3,044 46.8% 22.0% 16.3% (0.3%) $47,278 3.42x 15.5x 2.3x

EMCOR Group, Inc. 23.8% $7,687 $488 14.9% 6.4% 5.9% 6.0% $4,437 0.58x 9.1x N/A

G4S plc (8.7%) $10,983 $878 17.8% 8.0% 6.6% 2.4% $7,535 0.69x 8.6x 2.4x

HomeServe plc 46.3% $1,174 $240 67.6% 20.4% 19.4% 9.3% $3,722 3.17x 15.5x 1.0x

Interserve plc (59.4%) $4,478 $205 12.8% 4.6% 3.7% 11.9% $809 0.18x 3.9x 3.0x

Mitie Group plc (19.7%) $3,035 $161 11.0% 5.3% 4.7% (0.0%) $1,115 0.37x 6.9x 1.9x

Prosegur Compañía
27.2% $5,312 $648 24.0% 12.2% 7.9% 1.9% $5,049 0.95x 7.8x 0.6x
de Seguridad, S.A.

Rentokil Initial plc 23.4% $3,385 $670 82.7% 19.8% 12.6% 7.7% $8,324 2.46x 12.4x 1.9x

Rollins, Inc. 37.4% $1,674 $363 51.0% 21.7% 20.2% 5.6% $11,131 NMF NMF N/A

Securitas AB 8.1% $11,018 $722 17.6% 6.5% 6.5% 10.3% $7,740 0.70x 10.7x 2.2x

Sodexo S.A. (14.6%) $25,453 $2,011 15.4% 7.9% 6.4% 3.4% $16,911 0.66x 8.4x 0.9x

United Technologies
12.1% $60,222 $10,042 27.2% 16.7% 13.3% 0.4% $122,763 2.04x 12.2x 1.8x
Corporation

Mean 9.6% $11,531 $1,445 30.7% 12.3% 10.0% 4.7% $17,963 1.50x 11.4x 1.8x

Median 12.1% $6,302 $648 24.0% 9.8% 7.9% 3.9% $7,535 0.92x 11.5x 1.9x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures
Source: Capital IQ as of March 29, 2018

13
Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)
130% Facility Services 119.4% S&P 500 111.8% 240% Facility Services 200.8% S&P 500 168.3%

120% 200%

110% 160%

100% 120%

90% 80%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Facility Services – EV/LTM EBITDA

Median: 9.3x
12.9x
11.6x 11.5x
10.9x
9.3x 9.7x
8.1x 7.8x 8.2x 8.5x 8.5x

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 14
SECTOR AND TRANSACTION DATA

Infrastructure and Industrial Services

($ in millions) LTM Financials LTM Margins Valuation
Stock Price Historical
Change Since Gross OCF(1) Revenue Enterprise EV/LTM EV/LTM Net Debt/
Company 03/29/17 Revenue EBITDA Profit EBITDA Margin 3-Yr CAGR Value Revenue EBITDA EBITDA

Aegion Corporation 0.0% $1,222 $120 21.0% 9.8% 7.3% 3.9% $1,030 0.84x 8.6x 2.2x

Dycom Industries Inc. 15.8% $3,067 $444 21.6% 14.5% 8.7% 17.5% $4,242 1.38x 9.6x 1.6x

EMCOR Group Inc. 23.8% $7,687 $488 14.9% 6.4% 5.9% 6.0% $4,437 0.58x 9.1x N/A

MasTec, Inc. 17.5% $5,135 $459 13.5% 8.9% 6.5% 5.9% $5,138 1.00x 11.2x 2.7x

Matrix Service
(17.0%) $1,096 $27 6.9% 2.4% 1.4% 9.8% $345 0.31x 12.9x N/A
Company

MYR Group, Inc. (24.8%) $1,142 $82 11.8% 7.1% 4.4% 8.2% $592 0.52x 7.3x 1.0x

Primoris Services
7.6% $2,413 $157 10.1% 6.5% 3.2% 0.9% $1,382 0.57x 8.8x 0.6x
Corporation

Quanta Services, Inc. (7.4%) $9,441 $731 13.3% 7.7% 5.1% 0.2% $6,082 0.64x 8.3x 0.9x

Mean 1.9% $3,900 $313 14.1% 7.9% 5.3% 6.6% $2,906 0.73x 9.5x 1.5x

Median 3.8% $2,740 $300 13.4% 7.4% 5.5% 6.0% $2,812 0.61x 8.9x 1.3x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures
Source: Capital IQ as of March 29, 2018

15
Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)
130% Infrastructure & Industrial Services 108.0% 240% Infrastructure & Industrial Services 175.7%
S&P 500 111.8% S&P 500 168.3%
120%
180%
110%

100%
120%
90%

80% 60%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Infrastructure and Industrial Services – EV/LTM EBITDA

Median: 8.6x
9.5x 9.4x
8.6x 8.9x 8.7x 8.9x
7.5x
7.0x 6.5x
5.7x 6.2x

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 16
SECTOR AND TRANSACTION DATA

Rental Services
($ in millions) LTM Financials LTM Margins Valuation
Stock Price Historical
Change Since Gross OCF(1) Revenue Enterprise EV/LTM EV/LTM Net Debt/
Company 03/29/17 Revenue EBITDA Profit EBITDA Margin 3-Yr CAGR Value Revenue EBITDA EBITDA

Aggreko plc (6.9%) $2,126 $744 56.2% 35.0% 17.0% (1.2%) $3,567 1.68x 4.8x 1.3x

Ashtead Group plc 31.5% $4,959 $2,366 96.2% 47.7% 44.1% 23.7% $17,545 3.54x 7.4x 1.7x

Brambles Limited 7.1% $5,200 $1,514 34.1% 29.1% 8.4% (3.2%) $14,748 2.84x 9.7x 1.7x

Cramo Oyj (8.8%) $897 $270 67.0% 30.1% 2.4% 3.5% $1,402 1.56x 5.2x 1.7x

H&E Equipment
57.0% $978 $300 34.3% 30.7% 14.3% 1.5% $2,320 2.37x 7.7x 3.2x
Services Inc.

McGrath Rentcorp 59.9% $424 $164 43.4% 38.6% 21.9% 3.8% $1,665 3.93x 10.2x 2.0x

Mobile Mini, Inc. 42.6% $534 $186 34.9% 34.9% 21.6% 0.5% $2,885 NMF 15.5x 4.9x

Ramirent Oyj 2.0% $890 $257 65.3% 28.9% 6.0% 0.9% $1,306 1.47x 5.1x 1.6x

United Rentals, Inc. 38.1% $7,034 $3,346 42.9% 47.6% 28.5% 5.3% $23,836 3.39x 7.1x 2.7x

Mean 24.7% $2,560 $1,016 52.7% 35.8% 18.2% 3.9% $7,697 2.60x 8.1x 2.3x

Median 31.5% $978 $300 43.4% 34.9% 17.0% 1.5% $2,885 2.60x 7.4x 1.7x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures
Source: Capital IQ as of March 29, 2018

17
Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)
160% Rental Services 136.2% S&P 500 111.8% 220% Rental Services 187.7% S&P 500 168.3%

140% 180%

120% 140%

100% 100%

80% 60%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Rental Services – EV/LTM EBITDA

Median: 9.1x
10.0x 10.3x 10.2x 9.8x
9.1x 9.0x 8.0x 9.1x

6.6x 7.4x
6.3x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 18
SECTOR AND TRANSACTION DATA

Route-Based Services
($ in millions) LTM Financials LTM Margins Valuation
Stock Price Historical
Change Since Gross OCF(1) Revenue Enterprise EV/LTM EV/LTM Net Debt/
Company 03/29/17 Revenue EBITDA Profit EBITDA Margin 3-Yr CAGR Value Revenue EBITDA EBITDA

Cintas Corporation 34.8% $6,337 $1,333 44.7% 21.0% 17.1% 3.9% $21,537 3.40x 16.2x 1.9x

Heritage-Crystal
71.9% $348 $41 23.5% 11.7% 7.6% (8.5%) $535 1.54x 13.1x N/A
Clean, Inc
Iron Mountain
(7.9%) $3,511 $1,122 55.7% 32.0% 22.2% (1.7%) $18,266 NMF 16.3x 7.9x
Incorporated

Sysco Corporation 15.5% $57,007 $3,165 18.9% 5.6% 4.4% 5.3% $39,499 0.69x 12.5x 2.5x

The Brink's Company 33.5% $3,470 $462 22.1% 13.3% 8.3% (5.4%) $4,356 1.26x 9.4x 1.3x

UniFirst Corp. 14.3% $1,648 $286 37.8% 17.3% 9.9% 2.6% $3,077 1.87x 10.8x N/A

Mean 27.0% $12,054 $1,068 33.8% 16.8% 11.6% (0.6%) $14,545 1.75x 13.0x 3.4x

Median 24.5% $3,491 $792 30.7% 15.3% 9.1% 0.5% $11,311 1.54x 12.8x 2.2x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures
Source: Capital IQ as of March 29, 2018

19
Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)
140% Route Based Services 123.3% S&P 500 111.8% 240% Route Based Services 208.4% S&P 500 168.3%
130% 210%

120% 180%

110% 150%

100% 120%

90% 90%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Route-Based Services – EV/LTM EBITDA

Median: 9.1

12.4x 12.8x
11.6x 11.9x
10.5x
7.8x 7.8x 8.3x 8.2x 9.1x
6.8x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 20
SECTOR AND TRANSACTION DATA

Testing and Inspection

($ in millions) LTM Financials LTM Margins Valuation
Stock Price Historical
Change Since Gross OCF(1) Revenue Enterprise EV/LTM EV/LTM Net Debt/
Company 03/29/17 Revenue EBITDA Profit EBITDA Margin 3-Yr CAGR Value Revenue EBITDA EBITDA

ALS Limited 21.7% $1,079 $209 19.2% 19.3% 14.4% N/A $3,217 2.97x 15.4x 1.7x

Applus Services, S.A. 8.2% $1,951 $223 33.4% 11.4% 7.7% 0.1% $2,464 1.28x 11.2x 2.6x

Bureau Veritas SA 23.0% $5,594 $1,079 70.5% 19.3% 16.2% 5.0% $14,051 2.52x 13.1x 2.5x

Eurofins Scientific SE 21.2% $3,119 $590 18.9% 18.9% 11.0% 20.6% $11,436 3.68x 19.5x 3.2x

Intertek Group plc 32.8% $3,602 $722 56.1% 20.0% 15.6% 5.8% $11,513 3.21x 16.0x 1.4x

Mistras Group, Inc. (11.4%) $685 $75 28.4% 10.9% 8.1% 6.3% $655 0.96x 8.7x 1.2x

SGS SA 15.3% $6,633 $1,323 43.8% 19.9% 15.2% 0.9% $20,749 3.13x 15.7x 0.6x

Team, Inc. (49.2%) $1,197 $87 27.5% 7.3% 4.2% 3.2% $762 0.64x 8.7x 3.9x

Mean 7.7% $2,982 $538 37.2% 15.9% 11.6% 6.0% $8,106 2.30x 13.5x 2.1x

Median 18.2% $2,535 $406 30.9% 19.1% 12.7% 5.0% $7,326 2.75x 14.2x 2.1x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures
Source: Capital IQ as of March 29, 2018

21
Indexed Stock Performance – Last 12 Months Indexed Stock Performance – Last 5 Years
(Indexed Price) (Indexed Price)
140% Testing & Inspection 115.9% S&P 500 111.8% 210% Testing & Inspection 110.6% S&P 500 168.3%
130%
160%
120%

110%
110%
100%

90% 60%

Source: Capital IQ as of March 29, 2018 Source: Capital IQ as of March 29, 2018

Testing and Inspection Based Services – EV/LTM EBITDA

Median: 12.4x

14.6x 15.8x
14.2x
11.4x 12.5x 12.9x
12.4x 10.5x 11.8x 11.6x
9.1x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Current

Source: Capital IQ as of March 29, 2018 and William Blair market analysis

William Blair 22
SECTOR AND TRANSACTION DATA

Commercial Services Research Coverage

Ticker Company Analyst

ABB ABB Ltd Nicholas Heymann

CTAS Cintas Corporation Tim Mulrooney

ETN Eaton Corporation plc Nicholas Heymann

ECL Ecolab Inc. Tim Mulrooney

EMR Emerson Electric Co. Nicholas Heymann

GE General Electric Company Nicholas Heymann

HCCI Heritage-Crystal Clean, Inc. Ryan Merkel

HON Honeywell International Inc. Nicholas Heymann

HDSN Hudson Technologies, Inc. Ryan Merkel

IR Ingersoll-Rand Plc Nicholas Heymann

INWK InnerWorkings, Inc. Tim Mulrooney

JCI Johnson Controls International plc Nicholas Heymann

RBA Ritchie Bros. Auctioneers Inc. Lawrence De Maria

ROL Rollings, Inc. Tim Mulrooney

SERV ServiceMaster Global Holdings, Inc. Tim Mulrooney

SP SP Plus Corporation Tim Mulrooney

UNF UniFirst Corporation Tim Mulrooney

UTX United Technologies Corporation Nicholas Heymann

23
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