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Panel Discussion: Private Equity as a Partner May 8, 2019 Discussion Topics Brady Ware Capital Overview M&A Market Overview Private Equity Overview Trends in the Industry Private Equity Benefits & Challenges


  1. Panel Discussion: Private Equity as a Partner May 8, 2019

  2. Discussion Topics  Brady Ware Capital Overview  M&A Market Overview  Private Equity Overview  Trends in the Industry  Private Equity Benefits & Challenges  Panel Discussion

  3. Brady Ware Capital Overview

  4. Brady Ware Capital, LLC – Investment Banking Advisory Brady Ware Capital Team Overview Cliff Bishop President Office: Dayton P: (937) 913-2538 E: cbishop@bradyware.com Roger Furrer Director Office: Dayton P: (937) 913-2565 E: rfurrer@bradyware.com Stephen Ford Director 22 Years 150+ Office: Columbus P: (614) 384-8423 BWC Founded in Combined Years E: sford@bradyware.com 1997 of Experience Keith Warner Manager Invaluable Connections Broad Industry Experience Office: Dayton   Industrial Affiliate of Brady Ware & P: (937) 913-2539  Business Services Company, a regional accounting E: kwarner@bradyware.com  Technology firm with 145+ employees and 4  Manufacturing locations Grant Kramer  Consumer Products  Associate Strategic Relationship with Duff &  Financial Services Phelps, LLC, an international Office: Dayton  Healthcare investment banking firm with over P: (937) 913-2516  Retail 70 offices and 3,300 employees E: gkramer@bradyware.com Brady Ware Capital, LLC 4

  5. Brady Ware Capital Additions Brady Ware Capital continues to grow with two additions to the team in 2019. Stephen Ford Grant Kramer Director Associate Columbus, OH Dayton, OH Mergers & Acquisitions Mergers & Acquisitions Capital Raising Valuation Services Brady Ware Capital, LLC 5

  6. Brady Ware Capital Services ▪ Brady Ware Capital has extensive experience working with middle-market companies to support an array of corporate objectives through our services and solutions listed below: Financial Advisory Services Investment Banking Corporate Finance Transaction Services  In conjunction with Brady Ware & Company,  Sell-side and buy-side M&A  Consulting services and business analysis provide a variety of services relating to a including:  Specialty focus on lower-middle-market, transaction including: privately-owned companies  Cash Flow  Tax due diligence and structuring  Minority and majority recapitalizations of  Debt Service Capacity debt and equity  Due diligence, accounting-related work,  Divisional/Customer Profitability and Quality of Earnings reports  Strategic advisory and valuation services  Return on Equity Brady Ware Capital, LLC 6

  7. Brady Ware Capital, LLC – Selected Transactions Sell Side Advisor Sell Side Advisor Sell Side Advisor Sell Side Advisor Buy Side Advisor Sell Side Advisor has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by Financial advisor to Financial advisor to Financial advisor to Ferco Financial advisor to Absocold The Retirement Plan Financial advisor to Vistech Financial advisor to Remington Steel, Inc. Aerospace Group Corporation Company, LLC Manufacturing Solutions C.H. Ellis Sell Side Advisor Sell Side Advisor Sell Side Advisor Sell Side Advisor Sell Side Advisor Senior Debt Advisor has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by Provided financial advisory Financial advisor to Financial advisor to Quest Financial advisor to Financial advisor to Strategic Financial advisor to services to One10 regarding Qualitronics, Inc. Information Systems Cardboard Heroes Marketing, Inc. Composite Advantage senior debt providers Senior Debt Advisor Buy Side Advisor Sell Side Advisor Sell Side Advisor Sell Side Advisor Sell Side Advisor has been acquired by has been acquired by has been acquired by has been acquired by has acquired Provided financial advisory services to Russell Cellular Financial advisor to 3 Sigma Financial advisor to Power Financial advisor to Invotec Financial advisor to regarding senior debt Financial advisor to Physician Corporation Services, LLC Engineering, Inc Russell Cellular providers Technology Partners Brady Ware Capital, LLC 7

  8. Duff & Phelps Overview Corporate Finance Overview We are the largest  M&A Advisory We Perform:  independent global Financial Sponsors Group  Over 10,000 engagements annually for over 5,000  Fairness and Solvency Opinions investment banking and clients  Restructuring Advisory valuation services firm  Over 6,000 valuation advisory engagements for more  Private Placement of Debt and than 1,700 clients Equity  Portfolio valuation advisory services for 70% of top-tier 3,300+ Employees  Transaction Advisory Services private equity firms Serving clients globally through Valuation  Over 1,000 transaction opinions for $2 trillion in deal  value since 2005 70+ Offices and Affiliates Financial Reporting Valuation  Tax Services  Nearly 400 M&A transactions over the last five years In North America, Latin America, Europe, and Asia  Transfer Pricing  Fixed Asset Management and Insurance Solutions Strong Global Presence and Capabilities  Real Estate Services North America  Alternate Asset Advisory  1,500+ Total Professionals  200+ Corporate Finance DLMC Professionals  Disputes and Investigations Europe  Legal Management Consulting  1,500+ Total Professionals  250+ Corporate Finance Compliance and Regulatory Consulting Professionals Asia  Compliance Consulting  250+ Total Professionals  Regulatory Consulting  10+ Corporate Finance Professionals  Risk Consulting and Infrastructure  Regulatory Tax Advisory  Business Services Worldwide reach bolstered by globally focused ownership group 8 Brady Ware Capital, LLC 8

  9. M&A Market Overview

  10. BWC Market Observations Healthy Economic Backdrop Driving Strong Potential Turning Points in the Market Appetite for Acquisitions  Strong pressure to deploy  More sellers coming to market abundant capital for the right  Rising interest rates and stock deals (more buyers than sellers) market volatility  S&P 500 companies are  2020 election holding approximately $2  Strong economic expansion trillion in cash entering 10th year  Private equity firms are holding  Unknown events, e.g. tariffs, over $850 billion in committed geopolitical risks, etc. capital  Competitive and complex markets require companies to look for acquisitions to stay ahead  Low interest rate environment  Level of due diligence is high  Private equity is available to lower middle market companies  Many entrepreneurs remain “stuck”  Solid valuations that reflect business fundamentals Brady Ware Capital, LLC 10

  11. Lower Middle Market Deal Statistics Source : Pitchbook Source : Pitchbook Brady Ware Capital, LLC 11

  12. Private Equity Overview

  13. Private Equity Overview- A Snapshot Source: Prequin Differentiating Factors Sources of Capital Size Public and Private Pension Funds Specialties Qualified Individuals Endowment Funds Services Insurance Companies Experience Investment Advisors & Money Management Firms Preferred Transaction Structures Sovereign Wealth Funds Industries of Interest Charitable Foundations Locations of Interest Fund of Funds Brady Ware Capital, LLC 13

  14. Private Equity Overview- Acquisition Objectives Goals & Objectives • Encourage owners and management to re-invest in the business to align long-term interests • Grow through strategic initiatives:  Add employees to facilitate expansion  Improve and increase service and product offerings  Increase market share through organic growth and acquisitions  Enter new markets • Increase efficiencies and optimize operations • Sell the business when strategically optimal Brady Ware Capital, LLC 14

  15. Trends in the Industry

  16. Private Equity Committed Capital Significant Private Equity Capital Remains Available Approximately $855 billion of private equity capital remained unallocated at the end of the fourth quarter in 2018. $855 $450 $900 Cumulative Overhang $400 $800 Capital Raised ($ $350 $700 $300 $600 ($billions) billions) $250 $500 $200 $400 $150 $300 $100 $182 $106 $150 $158 $285 $281 $255 $312 $326 $346 $200 $50 $100 $0 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Dry Powder Capital Raised Source : Pitchbook Brady Ware Capital, LLC 16

  17. Private Equity Deal Statistics Private Equity Deal Value and Count Continue to Increase The number of deals and total deal value continue to rise at a robust pace. Source : Pitchbook Brady Ware Capital, LLC 17

  18. Private Equity Deal Statistics Cont. Private Equity Exit Activity Remains Moderate Increasing average hold times for portfolio companies is decreasing the amount of sales per year. Source : Pitchbook Brady Ware Capital, LLC 18

  19. Private Equity Add-on Acquisitions Add-On Acquisitions Continue to Rise Acquisitions to expand current portfolio companies continue to increase as a percentage of total buyout activity. Source : Pitchbook Brady Ware Capital, LLC 19

  20. Private Equity Benefits & Challenges

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