Select acquisition opportunities industrial manufacturing by Sutherland Global Services

Discussion Materials

4  The Market is Poised for Rapid Growth • The overall manufacturing industry remains only a third outsourced, leaving ample room for growth and a near doubling in the market’s size, assuming OEMs eventually outsource ~60% of their COGS

 Industrial Infrastructure Indicators Suggest a Rebound in 2013 Key Gl obal Indus tri a l Infras tructu re Indi cato rs Economic

2010

2011

-12.2%

-1.2%

4.2%

5.5%

0.2%

2.8%

1.8%

2.2%

Euro Zone Real GDP

-2.1%

2.0%

1.5%

0.7%

China Real GDP

10.7%

9.8%

9.2%

8.0%

India Real GDP

7.0%

8.7%

8.3%

7.0%

Brazil Real GDP

5.0%

3.0%

4.0%

-29.0%

-1.0%

-5.0%

2.0%

G7 Global Fixed Investment US Real GDP

2012

2013E

Construction

US Residential Construction SF Housing Starts US Commercial Construction Architectural Billings Index (Average)

554

587

590

600

-8.0%

-14.0%

-3.0%

5.0%

41.3

47.9

48.5

46.3

57.3

55.4

55.0

Industrial ISM – Manufacturing PMI (Average) Industrial Production NAFTAClass & Retail Sales (K) US Auto Sales – SAAR

85.5

90.1

93.4

94.0

126.9

153.1

242.0

280.0

11.1

12.5

12.8

13.5

Source: Bloomberg

Sutherland Proprietary Information

 Despite the Rapid Growth of Offshore Manufacturing and Decline of the US’s Share of Global Manufacturing, US Manufacturing Will See Growth in Certain Areas

• Complex new production introduction and low-volume, high-mix programs should play a major role in the US Manufacturing growth

o These projects require substantial engineering support • Proximity to OEMs and OEMs’ customers will become increasingly important, especially in certain endmarkets

o OEMs are demanding shorter lead times  OEMs Are Becoming Increasingly Focused on Low Pricing, Which Has and Will Continue to Enable Them to Gain Market Share

• Focused on making sure manufacturing partners provide low-cost production and the greatest flexibility • Majority of cost is in materials, not labor o Ability to effectively source and manage material consumption is critical to providing cost advantages over in-sourcing and offshore manufacturing

o Designing products for manufacturability drives down overall raw material cost and improves profitability

 Skilled, Low-Cost Workforce Provides Distinct Advantages

Sutherland Proprietary Information

 Contract Manufacturers with the Highest IP Will Win Market Share • Technology and manufacturing know-how are key points of differentiation • Technical design and manufacturing feasibility will become increasingly critical  Generally, High Switching Costs Are Charged to the Clients of Highly Scaled Vendors like TargetCo  Minimal CapEx, R&D and Marketing Spend Combined with No Need for Inventory and Aftermarket Presence Result in a Highly Efficient Business Model with Significant Return on Invested Capital

 The Industry is Highly Fragmented with Many Sub-scale and Under-capitalized Mom-and-Pop Players, And Hence Ripe for Consolidation

 Acquirers Focused on Expanding Geographic Footprint, Expanding Capacity and Rounding Out Product Lines

• Looking to add 5-10% earnings growth • Scale plays are scarce; those of scale will command a premium

Sutherland Proprietary Information

 Recognized Industry Leader in High-value, Turnkey Engineering Project Management, Custom Manufacturing and High Quality, Flexible, Cost-efficient Production Solutions

 Proprietary Technology Solutions Differentiate TargetCo from its Competition and Make it Less Susceptible to In-sourcing

 Highly Attractive Financial Model: Strong Growth, High Profitability, Attractive Margins and Robust Cash Flow

 Operating at 40% Capacity – Rapid Growth Opportunity With Current Infrastructure  Long-term Sole Supplier to its Customers  Deep Manufacturing Know-how and Technical Design Expertise  Highly Skilled Workforce

Sutherland Proprietary Information

 Trusted Strategic Partner that Grows with its Clients Over Time  Highly Differentiated Full-life Cycle Business Model Creates Strategic Partner Relationships with OEM Customers

 Industry Mix Includes End-Markets that are at all Points of the Cyclicality Spectrum  Well-positioned to Benefit From Major Industry Trends  Under-penetrated in Current End-markets  Strong Platform for Additional Growth  Unique Strategic Asset with Numerous Future Exit Opportunities

Sutherland Proprietary Information

10 Large, Attractive Market Opportunity

 Multi-billion market  Global opportunity spans many geographies, including the US, Europe and Asia

 Highly fragmented industry

Outstanding Growth and Financial Performance

 One of the fastest-growing companies in the industry  Attractive margins driven by high operating leverage  Strong cash flow generation

Proven, Scalable Business Model

TargetCo

sales risk  Business model scales well  Excellent cost position vs. competitors

 Outsourcing of complex, custom manufacturing to continue

 Alternative energy a large and rapid growth segment

 Many opportunities in the Oil & Gas Sector

Excellent Platform for Future Growth

inorganic and organic growth  The company is scratching the surface of the market despite its success  Large amounts of “runway” lie ahead for additional expansion  Competitive acquirer can leverage TargetCo solution to significantly improve profitability of its existing revenue stream

 Blue-chip client base  “Sticky” customer base  Turnkey solutions provider

Highly Favorable Industry Trends

 Highly and consistently profitable model  Capital-efficient, with no inventory or aftermarket

 TargetCo is an attractive platform for both

Diverse and High-Quality Client Base

Excellent Management Team

 World-class management team headed by    

founder who started and grew business Over 64 years of industry experience Recognized as leaders and visionaries in the industry Adapted and implemented ISO 9001 processes Proven ability to integrate and leverage acquisitions

Sutherland Proprietary Information

Proprietary State-of-The-Art Technology

 Technology is a key differentiator for TargetCo  Represents a generational leap ahead of competitors

 Platforms are robust, scalable, and adaptable for future growth

 Capabilities in manufacturing feasibility, technical

design and business and quality systems differentiate the company from a typical “Job Shop”  World-class manufacturing facility with the state-of-the-art technology

12 Financial Sponsors

Strategic Rationale

 Scarce asset  Platform for    

consolidation Strong free cash flow and operating leverage Recurring nature of revenues Scalable Many likely to deploy significant amounts of capital

Industrial Manufacturing Services

Metal Processing and Engineering Services

 Benefit from new

product offerings in adjacent categories  Industry reputation, relationships and expertise in current end-markets  Cost synergy potential  Sales force synergies

 Scarce asset  Expand product    

offerings Expand footprint with existing customer base Opportunity to sell into new customer base Most have contract manufacturing services Accretive

Commercial & Aerospace and Defense Manufacturing

Engineered Products

 New avenue for

   



growth that mitigates inventory and aftermarket sales risk Tangential to current product offerings Scarce asset Penetrate, new large customers Leverage manufacturing capabilities for internal products Accretive

Sutherland Proprietary Information

 New avenue for     

growth – diversify exposure to A&D Expand sub-prime relationships Tangential to current product offerings Most have contract manufacturing services Accretive Scarce asset

Diversified Industrials

 New avenue for growth

 Deepen penetration

at existing customers

 Exposure to new industries

 Scarce asset  Penetrate, new large customers

 Leverage

manufacturing capabilities for internal products  Accretive

13 Private Equity Investors â&#x20AC;&#x201C; North East Current Portfolio Name

Location

Fund Size

Partner

Potential Platform Companies

New York, NY

$800M

Peter Zimmerman

Boston, MA

$1.5B

Adam Abramson

New York, NY

$1.2B

Daniel Haynes

New York, NY

$1.7B

Damon Ball

Cambridge, MA

$600M

Travis Metz

Providence, RI

$800M

Michael Joe

Simonds International; Precision Engineered Products

New York, NY

$750M

John Becker

Central Industrial Supply

Engineered Products Engineered Controls, Chromalox

Consolidated Precision Products

A&A Manufacturing

ARNCO Corporation, Chromalox

MK Systemy

Eemax, L-Com, Lumen Dynamics, UltraVolt

BOA Holding

Industrial Controls Aavid Thermalloy

Source: Company Website, CapitalIQ

ÂŠ 2015 Sutherland Global Services

Outsourced Manufacturing

Sutherland Proprietary Information

Fleetwood Motorhomes

Mark Andy, Micro-Poise Measurement Systems

14 Private Equity Investors – South East Current Portfolio Name

Location

Fund Size

Partner

Boca Raton, FL

$700M

Ari Zur

Miami, FL

$1B

Brett Wiener

Potential Platform Companies

Outsourced Manufacturing

Engineered Products

GED Integrated Solutions

Private Equity Investors – International Current Portfolio

Name

Location

Fund Size

Partner

Potential Platform Companies

Euromezzanine Conseil

Paris, France

$900M

Bruno Froideval

AFE

London, UK

$7.2B

Ken Beaty

Dubai, UAE

$1B

David Smoot

Doncasters Group

Source: Company Website, CapitalIQ

Sutherland Proprietary Information

Outsourced Manufacturing

Engineered Products

15 Industry Presence

Aerospace

Defense

Energy

Industrial

Engineering and Manufacturing Services

Company

Acquisition History

Source: CapitalIQ 1). Revenue reporting subsidiaries

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

# of Holding Companies(1)

# of Acquisitions since 2008

Total $ Value

Avg. Deal Size

613M

$153M

180M

$60M

583M

$97M

$9M

35M

$35M

1,051M

$150M

61M

$20M

25M

$25M

1,252M

$626M

16 Industry Presence

Aerospace

Defense

Energy

Industrial

Aerospace & Defense Manufacturing

Engineered Products

Company

Source: CapitalIQ 1). Revenue reporting subsidiaries

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

# of Holding Companies(1)

Acquisition History

# of Acquisitions since 2008

Total $ Value

Avg. Deal Size

283M

$57M

355M

$22M

623M

$158M

2,200M

$440M

344M

$57M

59M

$15M

800M

$200M

1,265M

$126M

383M

$192M

1,100M

$220M

932M

$104M

10M

$10M

2,313M

$231M

2,299M

$575M

17 Industry Presence

Aerospace

Defense

Energy

Industrial

Diversified Industrials

Company

Acquisition History

# of Holding Companies(1) 127

Source: CapitalIQ 1). Revenue reporting subsidiaries

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

# of Acquisitions since 2008 40

Total $ Value 4,475M

Avg. Deal Size $447M

238

3,291M

$299M

266

9,9491M

$1,055M

133

1,289M

$322M

128

22M

$22M

304

4,932M

$986M

101

5,255M

$1,05M

573

21,993M

$1,158M

191

2,924M

$487M

287

246M

$25M

470M

$118M

262

3,299M

$330M

618

1,920M

$274M

561M

$187M

127

7,515M

$751M

12M

$6M

209

3,164M

$288M

CY+1E

CY+2E

CY+1E

CY+2E

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

Gross Margin CY+1E

3Yr CY+1E

3Yr

5Yr EBITDA

CY+1E

CY+2E

CY+1E

CY+2E

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

Gross Margin CY+1E

3Yr CY+1E

3Yr

5Yr EBITDA

21 EV/CY Revenue

CY-1 CY

Market Val ue/CY N et Income

CY-1 CY

EV/CY EBITDA

CY-1 CY

Source: Company filings, CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

CY-1 CY

CY+1E

CY+2E

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

CY+1E

CY+2E

CY+1E

CY+2E

CY+1E

CY+2E

CY+1E

CY+2E

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

CY+1E

CY+2E

CY+1E

CY+2E

CY+1E

CY+2E

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information

Source: CapitalIQ

ÂŠ 2015 Sutherland Global Services

Sutherland Proprietary Information