Janes Capital Partners – Aerospace and Defense …...Specialty Defense Systems and Services...

Aerospace & DefenseQuarterly Report

Q1 2020Not affiliated with Jane’s Information Group

Quarterly UpdateQ1 2020

Aerospace & Defense

1 Executive Summary

2 About Janes Capital Partners

3 Top 5 M&A Deals

4 M&A Deal Volume

5 A&D Transaction Multiples

6-7 Public Valuation Summary

8 Deal Spotlight

9 Buyer Spotlight

10 Platform Overview

11-17 All M&A Transactions

There were 99 A&D deals announced in Q1 2020, which was adecrease from the number of deals announced during Q4 2019.

Year-over-year quarterly transaction volume decreased by 16.1%compared to the 118 deals announced during Q1 2019.

Average disclosed deal size during the quarter increased to $480million compared to $340 million during Q4 2019.

The most active segments in terms of number of M&A deals were:

– Government Services, IT Services and Software (23 deals)

– MRO & Logistics (21 deals)

– Machined & Cast Parts (12 deals)

– Components & Subsystems (9 deals)

– Defense Electronics (8 deals)

The top 3 segments in terms of disclosed transaction values were:

– Defense Electronics ($2,315 million)

– Cybersecurity, Intelligence Services and Homeland Defense($2,214 million)

– Government Services, IT Services and Software ($1,558 million)

Number of Deals by Quarter

In this issue EXECUTIVE SUMMARY

1

Note: Disclosed deals shown include transactions that disclose price, multiple or both

31 2942

2840

30 3553

31 35 28 3521

5981 63

78 6364

74

82

87 74 79 73

78

90

110105 106 103

94

109

135

118109 107 108

99

0

20

40

60

80

100

120

140

160

17-1Q 17-3Q 18-1Q 18-3Q 19-1Q 19-3Q 20-1Q

Num

ber

of D

eals

Disclosed Not Disclosed


Aerospace & Defense

Contact Information

19200 Von Karman Avenue, Suite 340, Irvine, California 92612T: (949) 769-3323 F: (949) 769-3327 www.janescapital.com

Janes Capital Partners gathers its data from sources it considers reliable; however, it does not guarantee the accuracy orcompleteness of the information provided within this publication. The material presented reflects information known to theauthors at the time this presentation was prepared, and this information is subject to change. Janes Capital Partners makesno representations or warranties, expressed or implied, regarding the accuracy of this material.

Securities offered through JCP Securities, Inc., a Registered Broker/Dealer and Registered Investment Advisor; MemberFINRA and SIPC. Janes Capital Partners, Inc. and JCP securities, Inc. are affiliated companies.

No portion of this report may be reproduced in any form without the express written permission of Janes Capital Partners.Janes Capital Partners is a federally registered U.S. trademark.

Copyright 2020, Janes Capital Partners, Inc. All rights reserved.

Janes Capital Partners specializes in Mergers & Acquisitions (M&A) for middle market Aerospace& Defense companies. Our clients are Aerospace & Defense companies with enterprise valuesbetween $25 million and $500 million. The team at Janes Capital Partners has completed over 75transactions within the Aerospace & Defense industry. Through this M&A experience, we provideour clients with unparalleled access to potential acquirers in the aerospace and defense industryalong with in-depth knowledge of the industry and its dynamics. Our clients receive high touchservice from accomplished professionals with extensive A&D transaction and industryexperience.

Janes Capital Partners is a member of Oaklins, the world's most experienced mid-market M&Aadvisor, with 800 professionals globally and dedicated industry teams in 40 countries worldwide.

Oaklins is a global advisory firm providing M&A, growth equity and ECM, debt advisory andcorporate finance advisory services. Janes Capital Partners serves as Oaklins' Global Aerospace& Defense Industry Group Practice Leader.

Recent Transactions

About Janes Capital Partners

Stephen Perry Managing Director & CEOOffice: (949) 769-3323 Ext. 6901Mobile: (949) [email protected]

Jason KimballVice PresidentOffice: (949) 769-3323 Ext. 6903Mobile: (949) [email protected]

Ken FukumotoVice PresidentOffice: (949) 769-3323 Ext. 6904Mobile: (831) [email protected]

Chris ReineckeAssociateOffice: (949) 769-3323 Ext. 6905Mobile: (714) [email protected]

Acted as Financial Advisor to

on its sale to


on its sale to

2


on its sale to


on its sale to


on its sale to

on its acquisition of


Acted as Financial Advisor toActed as Financial Advisor toActed as Financial Advisor to


Aerospace & Defense

Valuation Metrics

Target Target Description AcquirorAnnounced

DateImplied TEV

($M)TEV/

RevenueTEV/

EBITDADeal Type(s)

PS PB

PU I

PS

PU

PU

na na

CAM designs and manufactures innovative, highly engineeredhardware and fastener solutions for demanding aerospace

applications worldwide. The company's products include fasteners,fittings, couplings, latches, quick release pins, tubing subassembliesand other complex components and assembled products. Thecompany was founded in 2012 and has consolidated eight

businesses that each carry strong brands, industry leading technicalexpertise, deep customer relationships and over 40 years of historyin providing industry-leading service.

01/20/20 $1,925.0 5.4x

RSA Security develops and provides intelligence driven securitysolutions. It offers threat detection and response solutions as well

as fraud intelligence services including integrated risk management,audit management, business resiliency, enterprise and operationalrisk management, IT and security risk management, regulatory andcorporate compliance and public sector solutions, among others.

More than 12,500 customers rely on RSA to enable their digitaltransformation, address increasingly advanced cyber threats andadapt to more complex digital regulations.

02/18/20 $2,075.0

15.2x

Collins Aerospace's Military Global Positioning System business is aprovider of mission critical military GPS receiver solutions and is a

key provider on the two highest volume weapons programs for theU.S. Air Force. Revenue breakdown is as follows: Weapons (58% ofrevenue) - Applications on guided bombs, missiles, and artillery androckets; Ground (32% of revenue) - Dismounted, mounted, and small

UAS applications; Airborne (9% of revenue) - Transport,strike/attack, and large UAS applications; Other (1% of revenue) -Includes Service and Supply agreements.

01/29/20 $1,300.0 3.5x 16.3x

2.0x 13.3x

13.0x

L3Harris Security & Detection Systems is a provider of checked and

carry-on baggage scanning, checkpoint security and cargo screeningproducts and systems. Products include advanced personnelscreening systems, aviation checkpoint screening systems,explosives detection systems, explosives and drug trace detection

systems, metal detectors, products for military and firstresponders, x-ray screening systems and ports & borders screeningsystems.

02/04/20

$1,200.0 1.7x

Unisys operates as an information technology company that

operates in two segments, Services and Technology. The Servicessegment offers cloud and infrastructure services, applicationservices and business process outsourcing services. The Technology segment designs and develops software, and hardware and other

related products. The company serves customers in thegovernment, financial services and commercial markets throughdirect sales force, distributors, resellers and alliance partners.

02/06/20

$1,000.0

Top 5 M&A Deals this Quarter

Source(s): CapIQ, Dacis, company reports, press releases

Private Equity SellerPS Private Equity BuyerPBPublic SellerPU Private SellerPR International DealI

3

Military Global Positioning System Business

Security & Detection Systems Businesses


Aerospace & Defense

M&A Deal Volume

Average Size of Disclosed Deals and Total Disclosed Volume(last 13 quarters)

Number of Deals by Segment(Q1 2020)

Average deal size increased over last quarter from $340M to $480M

– Total disclosed deal volume totaled $10.1B, a decrease of more than

$1.8B from Q4 2019

There were 99 A&D deals announced in Q1 2020, which was a decrease

from the 108 deals announced during Q4 2019 and a year-over-year

increase of 16.1% from Q1 2019

The most active segments ranked by total number of deals were:

– Government Services, IT Services and Software

– MRO & Logistics

– Machined & Cast Parts

– Components & Subsystems

Volume of Deals by Segment(Q1 2020)


Number of Deals by Quarter (last 13 quarters)

4

31 2942

2840

30 3553

31 35 28 3521

5981 63

78 6364

74

82

87 74 79 73

78

90

110105 106 103

94

109

135

118109 107 108

99

0

20

40

60

80

100

120

140

160

17-1Q 17-3Q 18-1Q 18-3Q 19-1Q 19-3Q 20-1Q

Num

ber

of D

eals

Disclosed Not Disclosed

$54

4

$15

0

$1,

184

$36

6

$97

5

$54

6

$23

8

$1,

278

$54

0

$5

54

$54

4

$34

0

$48

0

$0

$10

$20

$30

$40

$50

$60

$70

$80

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

17-1Q 17-3Q 18-1Q 18-3Q 19-1Q 19-3Q 20-1Q

Tota

l Dis

clos

ed V

olum

e ($

BN

)

Ave

rage

Dea

l Siz

e ($

M)

Average Deal Size Total Disclosed Value

–––––––

1 1 1 1 1 1 1 2 2 3

5 7 8 9

12 21

23

0 6 12 18 24 30

Simulation & Training Systems

Prime Defense Contractors

Navy/Maritime

Land Systems

Engines & Engine Systems

Connectors

Aircraft Interiors

Unmanned Vehicles

Test & Measurement

Sensors & C4ISR

Engineering and Project Management

Distribution

Controls & Systems

Aerostructures

Electronics Manufacturing (EMS) &…

Composites

Satellite, Satellite Services & Space…

Cybersecurity, Intelligence Services and…

Specialty Defense Systems and Services

Defense Electronics

Components & Subsystems

Machined & Cast Parts

MRO & Logistics

Government Services, IT Services and…

Number of Deals

--------------$71 $185 $350 $365 $510

$1,000 $1,514 $1,558

$2,214 $2,315

$0

Test & Measurement


Sensors & C4ISR


Navy/Maritime

Land Systems



Electronics Manufacturing (EMS) &…

Distribution

Controls & Systems

Connectors

Composites

Aircraft Interiors

MRO & Logistics

Aerostructures

Unmanned Vehicles


Satellite, Satellite Services & Space…



Government Services, IT Services and…

Cybersecurity, Intelligence Services and…

Defense Electronics

Total Disclosed Volume ($M)


Aerospace & Defense

TEV / EBITDA A&D Transaction Multiples by Quarter (last 13 quarters)

Quarterly TEV / EBITDA Transaction Multiples

The average TEV / EBITDA transaction multiple over the last 13 quarters across all A&D transactions was 11.0x

Of the over 1,300 deals tracked by Janes Capital Partners over this period, only 87 reported TEV / EBITDA multiples

As expected, multiples vary widely by segment with Cybersecurity, Intelligence Services and Homeland Defense (17.5x), Government Services, IT Services and Software (11.8x) and Engineering and Project Management (6.7x) comprising the highest, median and lowest segments

TEV / EBITDA Transaction Multiples by Segment(last 13 quarters)

Note: Excludes TEV / EBITDA transaction multiples over 30.0xSource(s): CapIQ, Dacis, company reports, press releases

5

12.5x

10.7x

9.5x

10.6x

11.9x

8.3x

9.7x

10.4x

8.8x

12.4x

12.8x

11.2x

12.5x

4

3

10

5

8

7

4

7

3

9

8

12

7

0x 4x 8x 12x 16x

17-1Q

17-2Q

17-3Q

17-4Q

18-1Q

18-2Q

18-3Q

18-4Q

19-1Q

19-2Q

19-3Q

19-4Q

20-1Q

TEV / EBITDANumber of Deals with Reported TEV / EBITDA MultiplesN

-

-

-

-

0.8x

6.4x

6.7x

8.5x

8.7x

9.1x

9.1x

9.5x

10.4x

10.6x

11.8x

11.9x

12.0x

12.2x

12.2x

12.3x

13.0x

13.7x

14.6x

17.5x

0

0

0

0

2

8

1

1

3

2

4

7

7

4

13

16

5

2

5

1

1

1

1

3

0x 5x 10x 15x 20x

Unmanned Vehicles

Land Systems


Aircraft Interiors

Navy/Maritime



Composites

Electronics Manufacturing (EMS) & Harnessing

Sensors & C4ISR

Controls & Systems

Satellite, Satellite Services & Space Systems


Aerostructures

Government Services, IT Services and Software


MRO & Logistics

Distribution

Defense Electronics

Test & Measurement



Connectors

Cybersecurity, Intelligence Services and HomelandDefense

TEV / EBITDA Number of Deals with Reported TEV / EBITDA MultiplesN


Aerospace & Defense

LTM LTM EBITDA Market % of TEV / LTM LTM LTM EBITDA Market % of TEV / LTM

($ in millions) Revenue Margin Cap 52-Wk Hi TEV EBITDA ($ in millions) Revenue Margin Cap 52-Wk Hi TEV EBITDA

Aerostructures Machined and Cast Parts

CPI Aerostructures $101 12.7% $27 26.0% $63 4.9x Arconic $7,277 9.2% $6,996 36.2% $7,317 10.9xDucommun 721 12.6% 289 43.0% 579 6.4x ATI 4,123 10.9% 1,076 30.9% 2,167 4.8xFACC 896 7.9% 392 51.3% 631 8.9x Barnes Group 1,491 24.0% 2,123 61.0% 2,897 8.1x

Hexcel 2,356 24.9% 3,100 42.7% 4,162 7.1x Lisi 1,941 15.9% 979 49.5% 1,363 4.4xKaman 762 14.3% 1,071 56.4% 806 7.4x Senior 1,471 11.5% 361 29.6% 665 3.9xLatécoère 800 6.5% 216 53.7% 374 7.2x SIFCO 110 NM 13 40.0% 54 NM

Magellan 783 13.9% 267 34.3% 308 2.8x Median 11.5% 4.8xSpirit AeroSystems 7,863 13.6% 2,507 25.3% 3,241 3.0x

Triumph 3,076 10.4% 351 23.0% 1,778 5.6x MROMedian 12.7% 6.4x AAR $2,218 7.4% $614 33.6% $863 5.2x

Signature Aviation 2,261 22.1% 1,699 40.4% 3,911 7.8x

Commercial Airframes HEICO 2,096 26.7% 9,185 50.4% 9,979 17.8xAirbus $79,091 5.6% $51,037 42.6% $48,378 11.0x MTU Aero Engines 5,194 18.6% 7,745 46.1% 9,004 9.3xBoeing 76,559 0.6% 84,149 37.4% 102,968 NM ST Engineering 5,850 13.3% 6,849 70.6% 8,450 10.9x

Bombardier 15,757 4.2% 830 15.6% 9,980 15.2x Median 18.6% 9.3xEmbraer 2,604 1.2% 1,356 35.4% 333 10.4x

Textron 13,564 12.1% 6,071 46.0% 8,981 5.5x Defense Electronics, Sensors & C4ISRMedian 4.2% 10.7x AeroVironment $320 13.6% $1,449 83.9% $1,179 NM

Cubic 1,520 8.8% 1,293 54.9% 1,869 14.0x

Components & Subsystems Elbit 4,508 12.2% 5,764 78.9% 6,787 12.3xAmetek $5,159 27.7% $16,506 70.4% $19,068 13.3x FLIR 1,887 22.9% 4,288 53.7% 4,720 10.9xCIRCOR 964 14.0% 232 24.3% 813 6.0x Kongsberg Gruppen 2,739 9.1% 2,244 74.9% 2,323 9.3x

Crane 3,283 18.8% 2,911 53.9% 3,627 5.9x Kratos 718 10.5% 1,480 55.2% 1,704 22.7xMeggitt 3,015 22.5% 2,799 41.4% 4,004 5.9x KVH Industries 158 NM 169 81.0% 129 NM

RBC Bearings 724 26.4% 2,771 60.9% 2,763 14.5x L3Harris Technologies 18,526 19.2% 39,067 78.0% 46,264 13.0xTeledyne 3,164 20.3% 10,893 74.5% 11,683 18.2x Mercury Systems 723 19.3% 3,966 79.8% 3,846 NMTimken 3,790 19.5% 2,452 55.0% 4,133 5.6x OSI Systems 1,209 13.4% 1,262 58.8% 1,548 9.6x

TransDigm 5,695 43.7% 17,190 47.5% 31,673 12.7x QinetiQ 1,202 17.3% 2,252 81.6% 2,042 9.8xWoodward 2,968 17.2% 3,698 46.1% 4,688 9.2x Smiths 3,423 20.2% 6,047 68.9% 7,776 11.2x

Median 20.3% 9.2x Thales 20,650 14.0% 17,858 67.9% 21,885 7.6xUltra 1,093 16.9% 1,768 85.6% 1,973 10.7x

Controls & Systems Median 14.0% 10.9x

Astronics $773 11.6% $281 20.7% $468 5.2xCurtiss-Wright 2,488 22.7% 3,929 61.6% 4,483 7.9x Prime Defense ContractorsEaton 21,390 18.5% 31,965 73.4% 40,270 10.2x BAE $24,243 12.9% $20,833 77.6% $23,913 7.6x

Heroux-Devtek 466 15.3% 269 48.4% 465 6.5x General Dynamics 39,350 15.0% 38,311 68.3% 51,196 8.7xHoneywell 36,709 24.3% 94,628 72.7% 101,138 11.4x Huntington Ingalls 8,899 12.1% 7,420 65.1% 8,830 8.2x

ISSC 18 11.6% 54 44.9% 32 15.3x Leonardo 15,469 13.3% 3,837 51.1% 7,286 3.6xMoog 2,980 12.5% 1,714 51.3% 2,637 7.1x Lockheed Martin 59,812 15.3% 95,487 76.6% 107,776 11.8xParker-Hannifin 14,201 18.7% 16,653 60.1% 25,472 9.6x Northrop Grumman 33,841 13.0% 50,719 78.6% 63,922 14.6x

Median 16.9% 8.8x Raytheon Technologies 77,046 19.2% 80,960 59.5% 122,470 8.3xMedian 13.3% 8.3x


General Electric $87,487 15.2% $69,406 59.9% $150,488 11.3xRolls Royce 21,968 1.8% 8,135 36.0% 9,774 NM

Safran 28,165 21.2% 37,400 52.6% 42,883 7.2xMedian 15.2% 9.2x

Aerospace & Defense Public Valuations

Note: Trading metrics as of 3.31.20. Valuation multiples based on LTM financial data converted at the historical exchange rate as of each fiscal period end date, and excludes multiples above 25.0x and under 0.0x.Source(s): CapIQ

Public Valuations by A&D Segment

6


Aerospace & Defense

Top 10 Bottom 10

NasdaqGS:K

TOS22.7x TSX:MAL 2.8x

NYSE:TDY 18.2x NYSE:SPR 3.0x

NYSE:HEI 17.8x BIT:LDO 3.6x

NasdaqGS:I

SSC15.3x LSE:SNR 3.9x

TSX:BBD.B 15.2x NYSE:VEC 4.4x

NYSE:NOC 14.6x ENXTPA:FII 4.4x

NasdaqGS:R

OLL14.5x NYSE:ATI 4.8x

NYSE:BAH 14.2x AMEX:CVU 4.9x

NYSE:BLL 14.2xNasdaqGS:V

SEC5.1x

NYSE:CUB 14.0xNasdaqGS:A

TRO5.2x

LTM LTM EBITDA Market % of TEV / LTM LTM LTM EBITDA Market % of TEV / LTM

($ in millions) Revenue Margin Cap 52-Wk Hi TEV EBITDA ($ in millions) Revenue Margin Cap 52-Wk Hi TEV EBITDA

Satell ites, Satel lite Services and Space Systems Engineering and Construction

Aerojet Rocketdyne $1,982 15.2% $3,285 73.0% $3,041 10.1x AECOM $20,053 5.2% $4,735 57.0% $8,584 8.3x

Ball Corporation 11,474 16.8% 21,065 78.1% 27,393 14.2x Babcock 5,430 15.2% 2,411 58.1% 4,859 5.9x

Comtech 679 12.6% 329 35.0% 476 5.6x Fluor 18,520 0.2% 969 16.5% 1,201 NM

Gilat Satellite 263 14.8% 393 65.9% 332 8.5x Jacobs Engineering 13,014 7.5% 10,547 76.2% 12,025 12.3x

Intelsat 2,061 70.5% 216 5.6% 14,231 9.8x Median 6.3% 8.3x

Maxar Technologies 1,666 24.4% 642 49.8% 3,807 9.4x

ViaSat 2,275 16.5% 2,232 36.9% 4,108 10.9x Government, IT Services & Software

Median 16.5% 9.8x Booz Allen $7,274 11.0% $9,624 83.7% $11,367 14.2x

CACI 5,398 10.2% 5,294 73.2% 7,229 13.1x

Specialty Systems and Services CGI Group 9,408 17.8% 14,423 66.5% 16,598 9.9x

American Outdoor $620 14.4% $457 75.9% $662 7.4x ICF 1,479 11.4% 1,295 72.1% 1,606 9.5x

Axon Enterprise 531 2.1% 4,213 78.5% 3,873 NM KBR 5,639 9.8% 2,935 64.8% 3,717 6.8x

CAE 2,828 21.2% 3,339 42.4% 5,182 8.6x Leidos 11,094 11.5% 13,000 72.8% 15,855 12.4x

Chemring 433 18.0% 701 69.6% 799 10.2x ManTech 2,223 10.7% 2,920 77.3% 3,080 13.0x

MSA Safety 1,402 22.3% 3,932 71.1% 4,141 13.3x MAXIMUS 3,040 13.4% 3,722 71.0% 3,786 9.3x

SAAB 3,793 11.3% 2,555 55.4% 2,907 6.8x SAIC 6,379 10.0% 4,317 77.1% 6,358 10.0x

Median 16.2% 8.6x Serco Group 4,302 7.2% 1,865 72.7% 2,642 8.5x

Vectrus 1,383 8.7% 480 69.9% 530 4.4x

VSE 753 12.4% 180 39.8% 476 5.1x

Median 10.8% 9.7x

Market Performance Summary

Aerospace & Defense Public Valuations (continued)

TEV / EBITDA Valuation Trend by Sector(last 5 years)

Performance Dashboard(by TEV / EBITDA Valuation)

Note: Trading metrics as of 3.31.20. Valuation multiples based on LTM financial data converted at the historical exchange rate as of each fiscal period end date, and excludes multiples above 25.0x and under 0.0x.Source(s): CapIQ

Public Valuations by A&D Segment (continued)

11%

11%

11%

7

8.5x

10.3x

9.5x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

Mar

-15

Jul-

15

Nov

-15

Mar

-16

Jul-

16

Nov

-16

Mar

-17

Jul-

17

Nov

-17

Mar

-18

Jul-

18

Nov

-18

Mar

-19

Jul-

19

Nov

-19

Mar

-20

TEV

/ E

BIT

DA

Commercial Aerospace Defense Government & IT


Aerospace & Defense

General IndustrialAutomotive

47%53%

Engineered Components

Fasteners

4%

87%

6%CommercialAerospace

Industrial

Defense

Commentary from the CEOsPeter George, CEO of CAM, stated: "We specialize in collaborating with our customers to develop application-based solutions that satisfy their specific needs. We have enjoyed tremendous support under the ownershipof Tinicum, during which we invested heavily in upgrading the equipment and facilities of the businesses weintegrated, in addition to strengthening our engineering and management resources. The CAM managementteam is grateful for the Tinicum partnership that was a central part of the company's growth. We areextremely pleased to be taking this next step of joining Stanley Black & Decker. Being part of such a capableindustrial company will enable us to further expand our company's resources globally, including acceleratingthe development of new products and pursuing acquisitions, allowing us to better serve the needs of ourcustomers.“ John Wyatt, president of Stanley's Industrial segment, stated: "Our team is excited about theprospect of welcoming CAM to the Stanley Black & Decker family to further diversify our Industrial businesssegment. With its well-recognized brands, proven business model and experienced management team, CAMwill play a significant role in the growth of our Industrial business and company overall."

Transaction SummaryOn January 29th, 2020, Stanley Black & Decker Inc. (NYSE:SWK), entered into adefinitive agreement to acquire Consolidated Aerospace Manufacturing, LLC (CAM)from Tinicum Incorporated for $1.5 billion subject to regulatory approvals and othercustomary closing conditions. Under the terms of the agreement, the transaction iscontingent on the Boeing 737 MAX returning to service and on the aerospace giantmeeting certain production goals. CAM makes specialty fasteners and other partsfor the aerospace and defense markets and generated revenue of $375 million in thelast 12 months. The deal is expected to boost EPS by 30 to 40 cents by the third yearCAM will become a important piece of Stanley Black & Decker’s industrial portfos

Deal Spotlight

Headquarters Fullerton, CA

Employees 1,085

2020 Revenue $375

Est. Adjusted EBITDA $80

CEO Peter George

Stanley Black & Decker to Acquire CAM

CAM Overview

Structure All-Stock

Total Enterprise Value $1,300

Revenue Multiple 3.5x

EBITDA Multiple 16.3x

Announced Date January 29, 2020

Expected Close Date Undetermined

Deal Summary ($M)

CAM Key Figures ($M)

Strategic Rationale for Acquisition

8

Industry Leading Manufacturer Of Specialty Fasteners & Components For The Aerospace &

Defense End Market (~$375M LTM Revenue)

Increases Scale In High Growth, High Margin Aerospace & Defense Segment And Creates A

Pathway For Profitable Growth

Purchase Price Up To $1.5B | $0.2B Contingent On Certification & Production Levels Of 737 MAX

Adjusted For ~$185M Of Expected Cash Tax Benefits, Net Transaction Value Is ~$1.1B to $1.3B

Year 3 EPS Accretion ~$0.30 - $0.40 and a Year 5 CFROI ~12%

after closing. CAM will become a important piece of Stanley Black & Decker’s industrial portfoliotransformation in which the Company envisions a $3B to $4B leader of highly engineered, application solutionswhere safety, reliability and productivity are critical. No planned closing date for the transaction was provided.

Sources: CapIQ, Dacis, company presentations and website

Stanley Black & Decker Portfolio Transformation

CAM Brands

Oil & GasAttachment tools Aerospace & Defense

52%27%

7%

14%

35%

23%

17%

15%

10%

2017 - $2B 2020 Pro Forma - $2.9B

Business Mix End Markets

CAM designs and manufactures innovative, highly engineered hardware and fastener solutions for demandingaerospace applications worldwide. The company's products include fasteners, fittings, couplings, latches,quick release pins, tubing subassemblies and other complex components and assembled products. Thecompany was founded in 2012 and has consolidated eight businesses that each carry strong brands, industryleading technical expertise, deep customer relationships and over 40 years of history.


Aerospace & Defense

DescriptionHeadquartered in Reston, VA and founded in1969, Leidos provides services and solutions inthe defense, intelligence, civil and health marketsin the United States and internationally, andoperates through three segments: DefenseSolutions, Civil, and Health. The U.S. governmentis by far the Company’s largest customer,accounting for over 87% of FY 2019 revenue.Within the U.S. government, the DoD and U.S.Intelligence community, in particular, are largeclients, accounting for 48% of FY 2019 revenue.Leidos was formerly known as ScienceApplications International Corporation (SAIC). InAugust 2012, SAIC announced the spin-off of the Government Technical Services and Enterprise IT Business,including systems engineering, technical assistance, financial analysis, and program office support, whichretained the SAIC name. The remaining business, which focused on technology for the national security, health,and engineering sectors, changed its name in September 2013 to Leidos.

Leidos Financial History

Notable A&D AcquisitionsDate Target TEV Description

Feb ‘20

L3Harris Security Detection

& Automation

$1.0B

Provides security detection systems and engineering, procurement, and construction services

Dec ‘19 Dynetics $1.7B

Provides technical solutions to security, cybersecurity, space, and critical infrastructure security sectors in the U.S.

Jun ’18Aranea

SolutionsND

Provides systems analysis, cybersecurity and other technical services and solutions to U.S. Army

Jan ’16

LockheedMartinIS & GS

Business

$4.1B

Information technology consulting and enterprise solutions to federal agencies and corporate clients

Headquarters Reston, VA

Founded 1969

Employees 34,000

Acquisitions(2) 6

Market Cap $13,254

Total Debt $3,519

Revenue $11,094

EBITDA $1,133

TEV / EBITDA 12.6x

(1) Market data as of 3.31.20; LTM financial data as of 1.3.2020(2) Since 2013

Sources: CapIQ, Dacis, company presentations and website

Share Price Performance

Leidos Highlights ($M)

Key Management

Buyer Spotlight Leidos (NYSE:LDOS)

Transaction Highlight

Leidos Acquires L3Harris Security Detection & Automation businessesOn February 4th, 2020, Leidos announced it had entered into a definitive agreement to acquire L3 Security &Detection Systems, Inc. and MacDonald Humfrey (Automation) Ltd. from L3Harris Technologies, Inc. (NYSE:LHX)for $1 billion. The businesses combine for annualized 2020E Revenues of ~$500 million & EBITDA of ~$75million, representing a 2.0x and 13.3x sales and EBITDA purchase price multiples, respectively. The deal isexpected to close by the end of Q2 2020. This a key strategic acquisition for Leidos, providing a global salesand service operation in the high-growth security market. The key products include airport and criticalinfrastructure screening products and services and automated tray return systems.

M&A Strategy

Roger Krone Chairman & CEO

James Reagan EVP & CFO

Christopher Cage SVP, CAO & Corporate Controller

9

M&A is clearly a growth focus for Leidos, whichrecently completed two strategic acquisitions ofprominent businesses just in the past few months,each representing over $1 billion of purchase price.The acquisition of the Security Detection andAutomation businesses from L3 Harris expandsLeidos’ presence in the high-growth securitymarket and captures international customers. Thepurchase of Dynetics provides Leidos withindustry-leading capabilities in high-technologymission-critical areas such as hypersonic weapons,directed energy and swarming drones.

($ in Millions) FY2015 FY 2016 FY 2017 FY 2018 FY 2019Revenue $5,140 $7,043 $10,170 $10,194 $11,094

EBITDA $434 $637 $1,021 $1,032 $1,133

EBITDA Margin 8.4% 9.0% 10.0% 10.1% 10.2%

TEV / LTM Revenue 0.9x 1.5x 1.2x 1.0x 1.5x

TEV / LTM EBITDA 10.5x 16.8x 12.3x 10.1x 15.0x

Cash & ST Investments $656 $376 $390 $327 $668

Leidos Business Overview

• Drive market share gains and revenue growth by meeting customers’ emerging needs, while maintaining Adjusted EBITDA margins at or above 10%

Revenue & EBITDA Growth

• Cultivate a portfolio which offers resiliency across the cycles through presence in diverse, yet complementary end-markets

Diverse & Resilient Business

• Operate an asset-light business with a high Return on Invested Capital while investing to improve competitive position

Strong Cash Generation

• Balance capital deployment to drive sustained value for all Stakeholders, leveraging inorganic investments to accelerate the strategy

Disciplined Capital

Deployment

Defense48%

Civil34%

Health18%

Diversified Markets Investment Thesis

$11.1B2019

Revenue

Note: Leidos' fiscal year ends on the Friday nearest the end of December. The Company's fiscal 2019 ended January 3, 2020. Fiscal 2019 included53 weeks and fiscal 2018 and 2017 each included 52 weeks.

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5

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25

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35

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$0

$25

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$75

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$125

Dec-18 Mar-19 Jun-19 Sep-19 Dec-19

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(in

mill

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)

Sha

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rice

Trad. Vol. LDOS S&P 500 (rebased)


Aerospace & Defense

Key Milestones

Type Business Jet

First Flight February 14th 2020

Expected First Delivery 2022

Top Speed Mach 0.90

Maximum Range 7,500 NM

Cabin Length 56 ft. 11 in

Cabin Height 6 ft. 3 in

Cabin Width 8 ft. 2 in

Overall Wingspan 103 ft.

DescriptionThe Gulfstream G700 is a twin-engine business jet produced by Gulfstream Aerospace. On the eve of theOctober 2019 NBAA Convention & Exhibition in Las Vegas, Gulfstream announced its new flagship, the G700,showing a video of the aircraft taxiing under its own power in Savannah. The new flag ship jet will fly 7,500nmi/13,890 km at Mach 0.85 or 6,400 nmi/11,853 km at Mach 0.90. Powering the aircraft are two Rolls-RoycePearl 700 engines, which are an improved version of the BR725, with one more low-pressure turbine stage, anoverall pressure ratio over 50:1 and a bypass ratio higher than 6.5:1 for a 3-5% better thrust specific fuelconsumption. With the newly designed longer cabin, the G700 can accommodate up to five areas and has 20windows. The newly stretched design and upgraded engines will allow the model to compete with Bombardier’sGlobal 7500 as the largest business jets offered in the world. The G700 is expected to share its fly-by-wirecockpit with the G500/G600 with active control sidesticks and Honeywell Primus Epic flight deck as well assynthetic and enhanced vision systems for a common type rating. G700 expected deliveries will begin in 2022.

Platform Overview Gulfstream G700

Initial Fleet OrdersUpon release of the G700 at NBAA in 2019, Gulfstream hit the ground running with initial fleet orders valued atalmost $2 billion for the new flagship aircraft. Orders came from two Gulfstream loyal customers includingQatar Executive and Flexjet. Qatar Executive (the charter arm of Qatar Airways) is taking 10 G700s worth$750 million at list price, with Qatar also having the honor of being the G700 launch customer. This order willsupplement the operator’s earlier orders for G500s and G650ERs. The company is currently operating sixG650ERs and five G500s. Flexjet will be the first North America G700 fleet customer with a firm order for 16G700s worth $1.2 billion at list price. The operator plans to make the G700 available for its Red Label service,which includes dedicated crews and other perks. The company already operates several Gulfstream models.

Sources: Gulfstream, Aero Analysis

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Overview

Weights

G700 Overview

Time Period News Release

February 2020G700 made its first flight, demonstrating the program’s maturity and officially launching the rigorous flight-test program

February 2020Announced the full-scale mock-up of the Gulfstream G700 cabin, including the award-winning Symmetry Flight Deck

October 2019Announced Flexjet as its first North American fleet customer for the new industry flagship G700

October 2019Announced Qatar Airways as the launch customer for Gulfstream’s G700, for its charter service, Qatar Executive

October 2019G700 is introduced as the new flagship andmost spacious, best-performing aircraft in the business-jet industry

The Largest Cabin in Business Aviation

Seats up to 19Sleeps up to 10

Jet ConeX Ka-Bank Wi-Fi System

100% Fresh Air Low Cabin Altitude

Ergonomic, Breathable Seats

Dual Head-Up Cockpit Displays

Symmetry Flight Deck With Active Control Sidesticks

Rolls-Royce Pearl 700 Turbofan Engines

20 G650 Style Panoramic Oval Windows

New, Advanced High-Speed WingletsFour Living Area Cabin

With Crew Rest

CompetitionOver the past few years, business aviation's two biggest business jet names have been battling it out in thelarge aircraft side of the market. In December 2018, Bombardier’s Global 7500 officially dethroned theGulfstream G650 to become the biggest business jet in the world. The 7500 enjoyed a successful run breakingrecords and impressing industry experts and customers alike, earning several awards. Gulfstream plans onanswering the 7500’s success with the release of the new G700. Comparing the two aircraft In terms of size,the G700 stretches roughly 109 feet and is a foot shorter than Bombardier’s Global 7500. However, the jet willhave a cabin two feet longer than its competitor and it will be slightly higher (6 foot 3 inches) and wider (8 feet2 inches). Since the release, the G700 has earned several key orders from loyal customers; however, the truesuccess of dethroning Bombardier’s Global 7500 will remain to be seen once deliveries officially begin in 2022.

Predictive Landing Performance System

Maximum Takeoff 107,600lb/48,807kg

Maximum Landing 83,500lb/37,875kg

Maximum Zero Fuel 62,750lb/28,463kg

Basic Operating 56,365lb/25,567kg

Maximum Payload 6,385lb/2,896kg

Maximum Payload/Full Fuel 2,235lb/1,014kg

Maximum Fuel 49,400lb/22,407kg


Aerospace & Defense


All Transactions – Value Disclosed


11

Note: Deals shown only include transactions with disclosed multiples

Valuation Metrics

Announced Date

Target AcquirorImplied TEV

($M)TEV/

RevenueTEV/

EBITDASegment Deal Type(s)

PU PB

PR

PU I

PU I

PR I

PR

PS I

PS

PU I

PR I

PR

PS

PU I

PR I

PU

PU I

PR

PU

01/07/20 Reading Alloys, Inc. Kymera International $250.0 1.6x na Machined & Cast Parts

01/13/20 Incentive Technology Group, LLC ICF Incorporated, L.L.C. $255.0 2.8x naGovernment Services, IT

Services and Software

01/20/20Military Global Positioning System

Business Of Collins AerospaceBAE Systems plc $1,925.0 5.4x 15.2x Defense Electronics

01/20/20Airborne Tactical Radios Business of

Raytheon CompanyBAE Systems plc $275.0 2.2x na Defense Electronics

01/20/20 TRS IrelandStandardAero Business Aviation

Services, LLC$49.9 na na MRO & Logistics

01/27/20 Blackstone Federal ECS Federal, LLC $85.0 1.9x naGovernment Services, IT Services and Software

01/28/20 Kopter Group AG Leonardo S.p.a. $185.0 na na Aerostructures

01/29/20Consolidated Aerospace Manufacturing, LLC

Stanley Black & Decker, Inc. $1,300.0 3.5x 16.3x Components & Subsystems

na Components & Subsystems

01/29/20 Gilat Satellite Networks Ltd. Comtech Telecommunications Corp. $510.4 1.9x

na Components & Subsystems

13.1xSatellite, Satellite Services &

Space Systems

01/29/20 CGC Technology Limited Comtech Telecommunications Corp. $23.7 na

01/29/20 Custom MMIC Design Services, Inc. Qorvo, Inc. $105.0 na

01/30/20 RSA Engineered Products, LLC TriMas Corporation $85.0 2.7x na Components & Subsystems

01/31/20 Prime Turbines, LLC PTB Group Limited $21.0 na na MRO & Logistics

02/04/20 Newman & Spurr Consultancy Limited QinetiQ Group plc $18.2 2.4x 10.8xGovernment Services, IT


02/04/20L3 Security & Detection Systems,

Inc./MacDonald Humfrey (Automation) Ltd.Leidos Holdings, Inc. $1,000.0 2.0x 13.3x

Specialty Defense Systems

and Services

02/04/20 Hydroid, Inc. Huntington Ingalls Industries, Inc. $350.0 na na Unmanned Vehicles

02/05/20 Intellipower, Inc. AMETEK, Inc. $115.0 2.9x na Defense Electronics

02/06/20 Unisys FederalScience Applications International

Corporation$1,200.0 1.7x 13.0x

Government Services, IT



Aerospace & Defense


All Transactions – Value Disclosed (Continued)


12

Note: Deals shown only include transactions with disclosed multiples

Valuation Metrics

Announced Date

Target AcquirorImplied TEV

($M)TEV/

RevenueTEV/

EBITDASegment Deal Type(s)

PU I

PS PB

PU I

02/07/20Société Anonyme Belge de Constructions Aéronautiques

Sabena Aerospace SA $114.9 0.5x 5.8x Machined & Cast Parts

02/18/20 RSA Security LLC STG Partners, LLC $2,075.0 na naCybersecurity, Intelligence

Services and Homeland Defense

03/06/20 Context Information Security Limited Accenture plc $139.4 na naCybersecurity, Intelligence

Services and Homeland Defense


Aerospace & Defense

All Transactions – Value Not Disclosed



13

Announced Date Target Acquiror Segment Deal Type(s)

PR PB

PR

PR

PR

PR I

PS PB I

PR PB I

PR PB

PR PB

PS PB

PR PB I

PR PB

PR

PR

PS

PR

PS PB

PR

Government Services, IT Services and

Software

01/14/20 JetSelect Aviation Western Air Charter, Inc. MRO & Logistics

01/14/20 Aircraft Performance Group, Inc. AFV Partners LLC

Composites

01/13/20 Bonham Technologies, Inc. Qualis Corporation MRO & Logistics

01/09/20 Fiber Materials, Inc. (FMI) Spirit AeroSystems, Inc.

01/08/20 Intro Corporation BJG Electronics, Inc. Distribution

01/07/20 NextGenID, Inc. Zeva Holdings GroupGovernment Services, IT Services and

Software

Icon Aerospace Technology Ltd Integrated Polymer Solutions Group


01/07/20 AeroRepair Corp. GenNx360 Capital Partners MRO & Logistics

01/07/20 California Amforge Corporation Premier Forge Group


Software

01/03/20 ECG, Inc. Quotient, Inc. Engineering and Project Management

01/02/20 Omnitec Solutions, Inc. Gryphon Technologies LC

Tailwind Technologies Inc.

Nimbus Ventures Machined & Cast Parts

01/06/20

Centrifugal Castings Division of Doncasters Group Limited

MRO & Logistics

01/06/20Aerospace Welding Minneapolis, Inc./Aerospace Manufacturing, Inc.

Tailwind Technologies Inc. MRO & Logistics

01/06/20 Quality Aircraft Accessories, Inc.


01/07/20 JHC Technology, Inc.

SEMCO Aerospace, LLC SK AeroSafety Group

MRO & Logistics

01/06/20

Premiair Aviation Maintenance Pty Ltd Textron Aviation Inc.

MRO & Logistics

01/07/20 Aero Parts Mart, Inc. Jet Parts Engineering, Inc. Machined & Cast Parts

01/06/20

Effectual Inc.Government Services, IT Services and

Software

01/07/20


Aerospace & Defense


All Transactions – Value Not Disclosed (continued)


14


PR PB

PR

PR PB

PS PB

PR

PR

PS PB

PR PB I

PR PB

PR

PS PB

PU I

PR PB

PU I

PS I

PR I

PR PB

PR PB


Software

02/03/20 Elliott Aviation, Inc. Spp Management Services, Llc MRO & Logistics

02/03/20 Kofile Audax Management Company, LLC

Defense Electronics

02/03/20 KRAUSS GmbH MTU Maintenance Coating Services GmbH MRO & Logistics

02/03/20 Power Distribution, Inc. Eaton Corporation plc


01/31/20Ultra Electronics Holdings plc, Ontario-based

ELINT/ESM Software and SystemsPrivate Investors


Software

01/28/20 Arundel Machine Tool Co. Inc. ARCH Global Precision LLC


01/28/20 Liberty Defense Holdings, Ltd. DrawDown Detection Inc.Specialty Defense Systems and

Services

01/27/20 EB Industries LLC MCM Capital Partners

Electronics Manufacturing (EMS) & Harnessing

01/22/20Assets and Business operations of Jaco Display

Solutions LLCVideo Display Corporation Defense Electronics

01/21/20 Trilogy Circuits, Inc. Zentech Manufacturing, Inc.

Specialty Defense Systems and

Services

01/21/20 World Aviation Corp. Precision Aviation Group, Inc. MRO & Logistics

01/16/20 ILC Dover, LP New Mountain Capital, LLC

MRO & Logistics

01/16/20 Spectranetix, Inc. Pacific Defense Defense Electronics

01/15/20 Chaparral Jet Center Inc. Lubbock Aero, Inc.

Cybersecurity, Intelligence Services and

Homeland Defense

01/15/20 Fidelis Cybersecurity, Inc. Skyview Capital, LLCCybersecurity, Intelligence Services and

Homeland Defense

01/15/20 DECISIVE ANALYTICS Corporation Whitney, Bradley and Brown, Inc.

Cybersecurity, Intelligence Services and

Homeland Defense

01/14/20 CatsClaw Americas, LLC Global GRAB Technologies, IncSpecialty Defense Systems and

Services

01/14/20 Star Lab Corporation Wind River Systems, Inc.


Aerospace & Defense




15


PR PB

PR PB

PR PB

PS PB

PR PB

PR I

PR

PR

PR I

PS I

PR PB

PR PB

PR I

PR PB

PR PB

PR

PR

PR PB

02/17/20 Aviator Airport Alliance Europe AB Avia Solutions Group AB MRO & Logistics

02/26/20 Flightcheck Commercial Aviation Services, LLC Lineage Capital, LLC MRO & Logistics

02/25/20 Marco Rubber & Plastics, LLC Align Capital Partners, LP Components & Subsystems


02/19/20 Flash Line Maintenance S.r.l. Jet Maintenance Solutions UAB MRO & Logistics

02/25/20 Segue Technologies Inc. Tetra Tech, Inc.Government Services, IT Services and

Software

02/24/20 FreeFlight Systems, Inc. ACR Electronics, Inc. Controls & Systems

02/25/20 Assets of Volo Aviation, Inc. Atlantic Aviation Corporation MRO & Logistics

02/18/20 Premier Processing, Inc. Cadence Aerospace, LLC Machined & Cast Parts

02/18/20 Fountain Plating Company, Inc. Valence Surface Technologies, LLC

02/12/20 FLS, Inc. CoreOnyx Inc. Machined & Cast Parts

02/12/20 Alsenam Ventana SAS Machined & Cast Parts


Software

02/06/20 Micross Components, Inc. Corfin Industries LLC Defense Electronics

02/11/20 NorthStar Systems ApS SOS International LLCGovernment Services, IT Services and

Software

02/03/20 Tube Bending, Incorporated Washington Equity Partners Machined & Cast Parts

02/04/20 IntelliWare Systems, Inc. Trowbridge & Trowbridge, LLCGovernment Services, IT Services and

Software

02/05/20 Certain Assets of International Aero PrimeFlight Aviation Services, Inc. MRO & Logistics

02/06/20 American Pacific Corporation AE Industrial Partners, LP Composites

02/12/20 Digital Age Experts, LLC Applied Insight, LLC


Aerospace & Defense




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PU

PS PB

PS PB

PR PB

PR PB

PR PB

PR

PR PB

PR PB I

PR PB

PR PB

PR I

PR PB

PR

PR

PU PB

PR

PR I

03/02/20 Adcole Maryland Aerospace, LLC AE Industrial Partners, LPSatellite, Satellite Services & Space

Systems

03/02/20 Eagle Ray, Inc. Preferred Systems Solutions, Inc.Government Services, IT Services and

Software

03/02/20 Kellstrom Defense Aerospace, Inc. Aero Precision Holdings LP MRO & Logistics

02/26/20Applied Kilovolts and Analytical Instrumentation

business of L3Harris Technologies, Inc.Adaptas Solutions, LLC

Specialty Defense Systems and

Services

03/02/20 Compuware Corporation BMC Software, Inc.Government Services, IT Services and

Software

03/03/20 G.S. Precision, Inc. AE Industrial Partners, LP Components & Subsystems

03/03/20 Neva Ridge Technologies, Inc. General Atomics Corp. Defense Electronics

03/09/20 AEVEX Aerospace, LLC Madison Dearborn Partners, LLC Sensors & C4ISR

03/11/20 RocketRoute Limited AFV Partners LLCGovernment Services, IT Services and

Software

03/13/20 CAMtek, Inc. Zentech Manufacturing, Inc.Electronics Manufacturing (EMS) &

Harnessing

03/16/20 AASKI Technology, Inc. MAG Aerospace, Inc.Government Services, IT Services and

Software

03/16/20 Sinclair Interplanetary Rocket Lab LtdSatellite, Satellite Services & Space

Systems

03/16/20 The Thaler Machine Company Cognitive Capital Partners, LLC Components & Subsystems

03/19/20 MAST Technology, Inc. UDC USA, Inc.Specialty Defense Systems and

Services

03/19/20 Geodata IT, LLC Freedom Consulting Group, Inc.Government Services, IT Services and

Software

03/25/20 TeraThink Corporation CGI Federal Inc.Government Services, IT Services and

Software

03/24/20 L-3 Communications EOTech, Inc. American Holoptics LLCSpecialty Defense Systems and

Services

03/24/20 Cyberyllium, LLC ShorePoint, Inc.Government Services, IT Services and

Software


Aerospace & Defense




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PR I

PR PB I

PS I

PR PB

PR

PR

03/25/20 Jet Engine Solutions, LLC Hong Kong Aircraft Engineering Company Limited MRO & Logistics

03/26/20 Armor Meca SA (nka:Armor Meca Développement) Unexo, SCR Machined & Cast Parts

03/26/20 Aviapartner NV Worldwide Flight Services, Inc. MRO & Logistics

03/31/20 Tavve Software Company Inc. Defiance VenturesGovernment Services, IT Services and

Software

03/31/20 Wineman Technology, Inc. CertTech, L.L.C. Test & Measurement

03/31/20 SecuriFense, Inc. Private InvestorsGovernment Services, IT Services and

Software

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