Member FINRA/SIPC · Energy & Power Industry Update ... Egypt, with oil futures reaching $97.88 per...
Transcript of Member FINRA/SIPC · Energy & Power Industry Update ... Egypt, with oil futures reaching $97.88 per...
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Energy & Power Industry UpdateMarch 2011
What We’ve Been Reading
page 1
• Bloomberg Businessweek provides an interesting comparison of the energy efficiency and
renewables sectors. An earlier E&P Industry Update highlighted the prediction that 2011 would be
the “year of energy efficiency,” which this article supports. As clean energy subsidies are cut to
meet government budget shortfalls, the investment payback disparity for alternative energy projects
versus “quick win” energy efficiency projects, already separated by years of payback, widens
substantially. As the graphic “Woes for Renewables” highlights, the market weighed in and the
FTSE EO Energy Efficiency Index significantly outperformed its FTSE EO Renewable and
Alternative Energy counterpart. Read the article here.
• The New York Times provides an update on the “nuclear renaissance” that the industry and its
observers are still waiting for. In 2009, the Energy Department cited four likely candidates for its
$36 billion loan guarantee program, but less than two years later only two of those projects are
moving forward. In the “U.S. Pushes, but Reactors Still Lagging,” Matthew Wald examines the
difficulty in kick starting new nuclear facilities in the U.S. despite increasingly stable government
and political support. Read the article here.
• For those concerned with nuclear safety issues, Outside Magazine features an in-depth exploration
of Chernobyl twenty-five years after the infamous meltdown. “The world beyond the apocalypse
may not be so great for humans, but for the other denizens of the planet it looks like a
bonanza…Out of the disaster comes a paradise of wildlife. The Garden of Eden is regenerating.”
Read the article here.
• The Wall Street Journal provides an update on political unrest in the Middle East and its effect on
global oil prices. The price per barrel has risen steadily following the turmoil in Tunisia, Libya, and
Egypt, with oil futures reaching $97.88 per barrel last week. As the future of many OPEC regimes
becomes increasingly uncertain, “geopolitical risk now is massive.” Read the story here.
• FERC released its Annual Assessment of Demand Response & Advanced Metering this past month
with a survey covering the 2009 time period (their last report analyzed data as of 2007). Of note
since the last report, Advanced Metering penetration increased to 8.7% from 4.7%, reaching as high
as 25% across electric cooperatives. Demand response programs also exhibited strong growth,
representing 58,000 MW of resource potential in 2009 versus 41,000 MW in 2007. Read the report
here.
• Last month, we noted the aggressive target set by President Obama in his State of the Union for the
U.S. to derive 80% of its energy from “clean” sources by 2035. The White House budget unveiled
this past month provided some detail as to how the administration intends to get there. The
proposed budget throws its weight behind renewables, energy efficiency, and nuclear, while ending
subsidies for oil, gas, and coal. A summary of the budget can be found here. The Oil & Gas
Journal provides a more detailed review of the planned subsidy cuts here.
Energy & Power Industry UpdateMarch 2011
LTM EBITDA Multiples1
Industry Observations
LTM Indexed Stock Performance1
Indexed LTM EBITDA Multiples1
• The Infrastructure and Industrial Services, Energy, and Power Stock Indices have exhibited
strong momentum following early 2010 lows.
• Many commodity prices have risen in recent months amid rising demand and social unrest in
the Middle East.
– Crude Oil is trading at its highest level in the last twelve months.
– The North American Rotary Rig Count, reaching 2,108 rigs in February, continued to
climb.
– Gasoline, at $2.91 per gallon, is trading over 30% higher than February 2010 levels.
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Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11
S&P 500 Energy Power Industrial & Infrastructure Services
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Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11
Energy Power Industrial & Infrastructure Services
page 2
Index
%
Change
S&P 19.67
Energy 34.99
Power 25.08
I & IS 33.40
Index
%
Change
Energy 0.09
Power (0.19)
I & IS (0.45)
Energy & Power Industry UpdateMarch 2011
Key Trading Statistics1
Current Valuations Versus Historical 5-Year Average1
Note: Based upon current EV / LTM EBITDA versus 5-year historical average. For Cleantech and Renewables, valuation is based upon EV /
LTM Sales.
5-Year
Average
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
200.0%
Refining Energy Services and
Equipment
Storage and
Transportation
Integrateds Exploration and
Production
Mid-Cap Power
Coal Producers
Engineering and
Construction
Electric Utilities
Diversified Power
Independent Power
Producers
Industrial & Infrastructure
Services
Cleantech Renewables
page 3
0.0%
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40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
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200.0%
Enegy Power Industrial & Infrastructure Services
Enegy Power Industrial & Infrastructure Services
Stock Price % Change TEV / 2011 P/E Ratio
Industry Segment 1 Month 12 Month 2/25/09 2/25/10 Current EBITDA Current 2009
Energy
Integrateds 6.9% 41.2% 2.8x 5.7x 5.3x 4.1x 13.1x 10.2x
Energy Services and Equipment 8.8% 45.8% 3.1x 8.9x 11.1x 6.9x 23.5x 14.9x
Exploration and Production 7.3% 19.8% 3.1x 9.5x 8.5x 5.9x 25.3x 15.6x
Coal Producers (3.5%) 37.7% 3.8x 8.4x 9.4x 4.9x 22.0x 10.0x
Refining 27.8% 99.5% 4.4x 9.3x 10.9x 5.9x NM 11.6x
Storage & Transportation 3.9% 30.0% 9.2x 12.4x 13.8x 10.4x 21.8x 17.7x
Power
Diversified Power 1.3% 34.8% 5.2x 10.6x 10.9x 8.3x 19.5x 13.4x
Mid-Cap Power 2.6% 46.0% 5.2x 9.7x 8.6x 6.4x 22.1x 13.7x
Independent Power Producers (4.6%) (11.1%) 5.5x 7.0x 5.9x 6.2x 10.5x 8.3x
Electric Utilities (2.4%) 6.8% 7.5x 8.1x 8.1x 7.4x 12.3x 12.3x
Renewables (0.8%) (20.5%) 1.9x 1.9x 1.4x 1.1x 16.5x 8.3x
Cleantech (7.8%) (6.6%) 1.4x 2.0x 1.2x 1.0x 22.1x 15.2x
Industrial & Infrastructure Services
Engineering & Construction 2.3% 52.7% 4.5x 6.5x 8.3x 7.2x 21.2x 15.4x
Industrial & Infrastructure Services 1.9% 37.5% 3.3x 7.0x 11.7x 7.0x 85.5x 16.2x
2011 Revenue
TEV /
TEV / LTM EBITDA Multiple as of
LTM Revenue
Energy & Power Industry UpdateMarch 2011
Gasoline and Ethanol1
Oil1 Natural Gas1
U.S. Rig Counts3
Electricity Prices1Coal1
0.00
20.00
40.00
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100.00
Feb
-10
Ma
r-1
0
Ap
r-1
0
Ma
y-1
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-10
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g-1
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-10
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v-1
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Dec-1
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Jan
-11
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-11
($ p
er b
bl)
0.00
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2.00
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4.00
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Feb
-10
Ma
r-1
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Ap
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Jan
-11
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-11
($ p
er M
MB
tu)
0.75
1.25
1.75
2.25
2.75
Feb
-10
Ma
r-1
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Ap
r-1
0
Ma
y-1
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Jun
-10
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Au
g-1
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Sep
-10
Oct-
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No
v-1
0
Dec-1
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Jan
-11
Feb
-11
($ p
er g
all
on
)
Gasoline Ethanol
800
1,300
1,800
2,300
2,800
Feb
-10
Ma
r-1
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Ap
r-1
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Ma
y-1
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Jun
-10
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g-1
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-10
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Jan
-11
Feb
-11
(# r
igs)
0.0
40.0
80.0
120.0
160.0
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20.0
40.0
60.0
80.0
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-10
Ma
r-1
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Dec-1
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Jan
-11
Feb
-11 ($
per t
on
-R
ott
erd
am
)
($ p
er t
on
-C
en
tra
l
Ap
pa
lach
ian
)
Central Appalachian Rotterdam
0.00
20.00
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100.00
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-10
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r-1
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g-1
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-10
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v-1
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Dec-1
0
Jan
-11
Feb
-11
($ p
er M
Wg
)
$97.88 per bbl
$44.48 per MWg
page 4
$4.01 per MMBtu
$2.54 per gallon
$2.91 per gallon
$66.72 per ton
$118.65 per ton
2,347 rigs
Energy & Power Industry UpdateMarch 2011
Quarterly United States E&P M&A Activity1
Select Recently Announced Energy & Power Transactions1,2
page 5
0
10
20
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Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
Nu
mb
er o
f T
ran
sact
ion
s
Date Target Business Description Acquirer
02/22/2011 CLEAResult Consulting, Inc US based provider of utility program design and
evaluation services in the United States
General Catalyst Partners
02/13/2011 John Wood Group Well Support
Division
US based provider of well support services General Electric Company
02/02/2011 Sun Well Services, Inc. US based provider of well servicing and work-over
solutions to the Oil & Gas industry
BNS Holding, Inc.
02/01/2011 Bahnson Holdings, Inc. US based mechanical contractor, fabricator, and
industrial general contractor
EMCOR Group, Inc.
01/28/2011 RTL, LLC US based provider of crane rental services TNT Crane & Rigging
01/27/2011 Building Knowledge Networks US based real-time building energy management
services provider
Advantage IQ, Inc.
01/26/2011 M2M Communications Corp. US based provider of wireless technology solutions for
energy management with a focus on agricultural DR
EnerNOC, Inc.
01/25/2011 Turbine Control Service Associates,
Inc.
US based provider of generator excitation control
systems for power plants
Emerson Electric Co.
01/18/2011 Energy Contractors, LLC US based provider of drilling and production services
to the Oil & Gas industry
Nabors Well Services
01/14/2011 International Oilfield Services US based provider of oilfield inspection services Calvert Street Capital Partners
01/13/2011 Lineage Power Corporation US based power conversion products manufacturer to
communications and data networking companies
General Electric Company
01/11/2011 Empire Holdings, Inc. US based provider of scaffold rental, erection and
dismantlement services
Ashtead Group PLC
01/11/2011 MicroSeismic. Inc. US based provider of microseismic monitoring and
imaging for the exploration of hydrocarbon resources
Madrone Capital Partners, TA
Associates
01/11/2011 Remote Energy Monitoring UK based energy monitoring company allowing
consumers and utilities to manage their energy usage
General Electric Company
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Energy
Integrateds
Exxon Mobil Corporation $439,648.6 $86.02 8.0% 32.1% 97.5% 4.0x 7.8x 6.6x 5.0x 13.8x 10.6x 0.2x
Chevron Corp. $201,627.1 $101.73 7.5% 41.1% 97.9% 2.8x 5.6x 5.3x 3.8x 10.8x 8.6x (0.1x)
ConocoPhillips $123,112.2 $77.18 11.5% 59.8% 97.0% 2.5x 5.8x 5.3x 4.0x 10.1x 9.8x 0.7x
Occidental Petroleum Corporation $83,254.5 $102.58 5.8% 29.8% 95.4% 2.9x 8.3x 7.4x 5.1x 18.1x 11.7x 0.1x
Marathon Oil Corporation $40,467.0 $48.23 6.3% 66.7% 95.4% 2.6x 4.9x 5.1x 3.7x 13.3x 9.1x 1.1x
Hess Corporation $31,501.7 $82.86 4.4% 41.3% 96.2% 2.8x 4.9x 4.1x 4.2x 12.9x 11.3x 0.9x
Median 6.9% 41.2% 96.6% 2.8x 5.7x 5.3x 4.1x 13.1x 10.2x 0.4x
Energy Services and EquipmentLarge Cap Diversified
Schlumberger Limited $125,360.1 $91.31 4.4% 50.2% 95.5% 5.1x 11.2x 17.2x 10.0x 26.5x 17.8x 0.5x
Halliburton Company $43,390.4 $46.57 7.3% 55.2% 95.4% 3.5x 9.7x 10.5x 6.8x 23.1x 13.3x 0.6x
Baker Hughes Incorporated $31,911.0 $70.58 7.0% 47.4% 98.2% 3.0x 9.8x 12.6x 6.5x 33.5x 14.8x 1.4x
National Oilwell Varco, Inc. $30,465.2 $78.51 9.8% 81.9% 95.8% 3.1x 5.6x 10.3x 8.3x 19.6x 15.7x (0.8x)
Weatherford International Ltd. $24,059.4 $23.89 4.1% 45.1% 91.0% 4.7x 11.7x 12.0x 7.1x NM 12.9x 3.9x
Median 7.0% 50.2% 95.5% 3.5x 9.8x 12.0x 7.1x 24.8x 14.8x 0.6x
Mid and Small Cap Equipment and Service ProvidersMid and Small Cap Equipment and Service Providers
Cameron International Corporation $13,449.2 $59.28 11.1% 45.6% 98.5% 3.6x 9.7x 12.7x 9.6x 25.4x 16.7x (0.6x)
Oil States International Inc. $4,406.4 $72.06 9.9% 74.8% 94.5% 2.0x 6.4x 11.4x 7.5x 22.1x 13.3x 2.5x
Exterran Holdings, Inc. $3,586.8 $22.08 (8.0%) (4.2%) 72.9% 5.5x 6.7x 8.2x 6.3x NM 56.3x 3.4x
Dril-Quip, Inc. $2,801.6 $77.66 3.4% 37.4% 92.7% 4.3x 12.7x 16.1x 14.6x 27.9x 24.9x (1.6x)
Complete Production Services, Inc. $2,665.0 $27.70 2.6% 99.1% 84.7% 2.2x 11.1x 7.1x 4.1x 25.2x 9.2x 3.5x
Key Energy Services Inc. $2,392.9 $15.60 22.2% 53.5% 103.4% 1.9x 14.5x 19.9x 5.7x NM 15.6x 3.1x
Median 6.6% 49.6% 93.6% 2.9x 10.4x 12.0x 6.9x 25.3x 16.2x 2.8x
page 6
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 2/25/11 Prior Month Prior Year LTM High 2/25/09 2/25/10 Current EBITDA Current 2011 2/25/2010
TEV / LTM EBITDA Multiple as of
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Construction and Equipment ContractorsConstruction and Equipment Contractors
Transocean Ltd. $33,568.3 $81.78 2.2% 3.2% 88.2% 4.9x 6.1x 8.2x 6.8x 10.5x 11.2x 1.3x
Noble Corp. $13,540.3 $43.55 15.0% 2.8% 97.4% 3.0x 4.5x 9.3x 6.7x 14.4x 10.9x 1.0x
Nabors Industries Ltd. $11,616.9 $28.12 20.2% 27.8% 97.7% 3.3x 7.2x 9.7x 5.7x 74.7x 12.4x 2.9x
Diamond Offshore Drilling Inc. $11,029.4 $76.63 3.6% (12.2%) 82.0% 3.9x 5.7x 6.2x 7.2x 11.1x 13.8x 0.2x
Technip $9,192.2 $97.57 2.9% 42.0% 93.0% 1.2x 4.5x 9.0x NA 18.6x NA (1.5x)
Pride International Inc. $8,520.3 $41.00 22.7% 44.5% 100.4% 3.9x 8.6x 18.5x 8.5x 29.4x 12.4x 2.2x
Subsea 7 SA $8,517.1 $25.05 5.4% 58.4% 90.9% 1.6x 5.9x 17.8x 7.3x 20.5x 15.0x (0.1x)
Helmerich & Payne Inc. $6,761.5 $63.73 23.0% 54.0% 100.0% 3.0x 6.5x 8.6x 6.3x 20.4x 14.7x 0.2x
Rowan Companies Inc. $5,818.8 $42.61 22.5% 66.3% 104.8% 2.0x 4.6x 10.1x 6.7x 16.9x 12.2x 1.1x
Patterson-UTI Energy Inc. $4,459.1 $27.25 27.7% 77.4% 100.1% 1.5x 9.4x 8.7x 4.6x 34.9x 13.4x 1.5x
Oceaneering International, Inc. $3,968.7 $79.60 7.4% 31.7% 95.2% 4.4x 7.9x 8.6x 7.5x 21.3x 17.5x (0.6x)
Hercules Offshore, Inc. $1,230.2 $4.89 50.0% 32.2% 100.6% 2.7x 8.6x 9.9x 7.9x NM (NM) 5.5x
Basic Energy Services, Inc. $1,180.5 $19.02 10.5% 91.5% 92.8% 2.4x 23.5x 10.4x 5.0x NM 25.1x 12.7x
Pioneer Drilling Co. $851.7 $11.37 33.7% 57.8% 98.6% 2.2x 8.2x 8.3x 4.2x NM 23.3x 3.3x
Cal Dive International Inc $781.9 $6.51 5.2% (10.6%) 81.7% 3.1x 4.6x 14.7x 6.1x NM 18.5x 0.9x
eServGlobal Ltd. $129.4 $0.64 1.3% 33.0% 88.7% 4.5x NM NM NA NM NA (0.2x)
Median 12.8% 37.5% 96.3% 3.0x 6.5x 9.3x 6.7x 20.4x 13.8x 1.1x
Exploration and ProductionLarge Cap
Apache Corp. $54,038.0 $122.15 0.0% 18.4% 95.6% 2.5x 6.4x 6.3x 4.3x 14.2x 9.9x 1.4x
Anadarko Petroleum Corporation $48,865.6 $80.50 4.8% 15.5% 97.1% 3.2x 16.1x 7.6x 5.4x 51.4x 21.9x 3.4x
Devon Energy Corporation $40,931.2 $89.69 4.6% 30.3% 99.5% 2.8x 8.7x 6.9x 5.6x 16.7x 11.3x 0.6x
Chesapeake Energy Corporation $35,000.0 $34.99 24.7% 30.9% 97.7% 3.4x 7.8x 8.1x 6.2x 22.9x 12.0x 3.2x
EOG Resources, Inc. $32,448.4 $111.37 8.9% 19.5% 96.7% 2.8x 11.2x 14.5x 5.6x 174.9x 19.8x 1.9x
Noble Energy, Inc. $16,501.8 $87.68 1.3% 23.0% 95.1% 3.0x 11.6x 8.5x 5.6x 21.2x 14.8x 1.1x
Murphy Oil Corporation $14,421.4 $73.52 0.4% 42.6% 95.8% 2.3x 4.7x 5.2x 4.0x 17.6x 10.4x 0.2x
Pioneer Natural Resources Co. $14,146.5 $101.95 11.6% 118.5% 100.3% 3.9x 11.1x 10.6x 6.9x 25.3x 21.9x 3.4x
Southwestern Energy Co. $14,135.5 $38.59 (3.1%) (10.2%) 85.2% 7.5x 11.6x 8.8x 7.1x 21.4x 16.9x 0.8x
Newfield Exploration Co. $11,545.3 $71.95 2.9% 43.5% 94.0% 2.3x 7.7x 7.3x 5.4x 17.7x 12.2x 2.0x
Ultra Petroleum Corp. $8,076.3 $44.70 (3.6%) (1.9%) 83.0% 6.8x 13.1x 8.0x 7.0x 14.7x 13.9x 2.3x
Quicksilver Resources Inc. $5,083.4 $15.64 4.3% 10.0% 96.8% 6.4x 8.7x 8.6x 10.5x 17.9x 46.3x 4.2x
Median 3.6% 21.2% 96.3% 3.1x 9.9x 8.1x 5.6x 19.5x 14.4x 2.0x
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 2/25/11 Prior Month Prior Year LTM High 2/25/09 2/25/10 Current EBITDA Current 2011 2/25/2010
TEV / LTM EBITDA Multiple as of
page 7
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Mid and Small Cap
Petrohawk Energy Corporation $8,781.2 $21.07 11.0% (1.4%) 88.5% 7.1x 13.1x 9.0x 5.0x 26.1x 14.0x 3.8x
Plains Exploration & Production Company $8,621.5 $37.92 9.5% 14.7% 94.7% 1.8x 11.9x 9.0x 6.1x 31.0x 16.7x 5.5x
SandRidge Energy, Inc. $6,637.9 $10.25 40.8% 22.0% 109.2% 3.5x 12.1x 17.8x 7.3x NM 29.5x 8.2x
Forest Oil Corp. $5,625.3 $35.96 (3.8%) 34.0% 89.4% 2.9x 7.6x 7.5x 6.3x 15.4x 14.7x 2.7x
Cabot Oil & Gas Corporation $5,577.0 $45.20 11.1% 11.8% 95.5% 5.2x 9.0x 10.6x 7.2x 45.0x 39.8x 1.7x
Swift Energy Co. $2,367.0 $45.83 13.5% 56.0% 95.1% 1.4x 7.0x 8.6x 5.2x 35.6x 17.5x 1.8x
Delta Petroleum Corp. $777.0 $0.87 16.5% (38.0%) 44.8% 39.4x NM 13.9x 26.4x NM (NM) (9.0x)
PetroQuest Energy Inc. $613.7 $8.44 6.7% 64.2% 91.3% 1.9x 3.0x 4.7x 4.2x NM 14.6x 0.6x
Median 11.0% 18.3% 93.0% 3.2x 9.0x 9.0x 6.2x 31.0x 16.7x 2.3x
Coal Producers
Peabody Energy Corp. $18,479.7 $64.59 2.3% 42.1% 96.5% 5.3x 10.8x 10.7x 6.1x 22.0x 10.1x 1.1x
CONSOL Energy Inc. $14,703.1 $48.78 (5.3%) (1.7%) 88.1% 5.8x 8.4x 11.7x 6.3x 30.5x 11.2x 3.0x
Massey Energy Co. $7,456.7 $63.67 15.2% 48.8% 94.8% 2.8x 8.4x 20.2x 6.4x NM 12.3x 1.9x
Arch Coal Inc. $6,805.6 $33.15 0.2% 49.7% 90.8% 4.3x 11.7x 10.0x 5.0x 33.5x 8.4x 3.3x
Alpha Natural Resources, Inc. $6,456.1 $54.33 (6.1%) 18.8% 79.8% 2.8x 10.2x 8.0x 4.3x 67.2x 8.8x (0.0x)
Alliance Resource Partners LP $2,857.0 $76.04 12.0% 85.5% 99.1% 3.4x 4.8x 5.7x 4.7x 8.6x 9.4x 1.1x
Patriot Coal Corporation $2,380.1 $23.39 (7.9%) 37.7% 80.1% 2.1x 4.7x NM 4.2x NM 9.9x 0.7x
James River Coal Co. $681.3 $21.58 (3.7%) 26.9% 79.7% NM 4.5x 4.7x 4.0x 12.1x 10.1x 0.6x
Farmacol SA $337.6 $12.83 (3.5%) (3.8%) 77.5% 5.9x 9.1x 8.9x NA 11.0x NA 1.0x
Median (3.5% ) 37.7% 88.1% 3.8x 8.4x 9.4x 4.9x 22.0x 10.0x 1.1x
Refining
Valero Energy Corp. $20,858.5 $28.00 10.7% 60.4% 92.0% 2.4x 9.1x 6.3x 4.6x 16.5x 8.5x 3.3x
Sunoco, Inc. $6,676.9 $41.98 (0.9%) 59.2% 94.5% 3.4x 9.6x 6.0x 6.6x 19.3x 15.1x 1.6x
Tesoro Corporation $4,802.1 $23.90 28.0% 99.5% 92.2% 4.4x 9.5x 8.6x 4.3x NM 9.5x 4.8x
Holly Corporation $3,950.7 $57.39 27.8% 121.2% 92.7% 6.7x 12.8x 10.5x 6.6x 79.5x 11.3x 3.1x
Frontier Oil Corp. $2,638.9 $27.68 46.5% 120.6% 94.6% 3.0x NM 16.0x 5.9x NM 12.9x 5.8x
Western Refining Inc. $2,373.3 $16.17 47.0% 272.6% 88.5% 5.5x 6.7x 12.2x 4.9x NM 11.9x 4.9x
CVR Energy, Inc. $1,908.9 $18.71 13.9% 129.6% 86.3% 2.1x 4.9x 11.3x 0.0x 72.0x 0.0x 1.5x
Alon USA Energy, Inc. $1,502.7 $11.22 57.6% 57.4% 98.2% 17.4x NM NM 8.6x NM (NM) 51.4x
Delek US Holdings Inc. $821.9 $10.70 26.3% 42.7% 87.6% 4.6x NM 30.1x 7.5x NM 44.2x (24.9x)
Median 27.8% 99.5% 92.2% 4.4x 9.3x 10.9x 5.9x NM 11.6x 3.3x
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 2/25/11 Prior Month Prior Year LTM High 2/25/09 2/25/10 Current EBITDA Current 2011 2/25/2010
TEV / LTM EBITDA Multiple as of
page 8
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 2/25/11 Prior Month Prior Year LTM High 2/25/09 2/25/10 Current EBITDA Current 2011 2/25/2010
TEV / LTM EBITDA Multiple as of
page 9
Storage & Transportation
Kinder Morgan Energy Partners LP $35,299.4 $72.93 0.1% 14.4% 99.8% 10.0x 13.0x 14.0x 9.9x 51.0x 32.3x 5.2x
El Paso Corp. $28,664.7 $18.30 26.7% 78.7% 98.8% 5.2x 7.3x 9.1x 8.5x 13.9x 15.1x 4.4x
Enbridge Energy Partners LP $14,126.9 $66.38 6.5% 29.4% 99.0% 8.5x 12.1x 31.5x 11.1x NM 20.3x 5.8x
Plains All American Pipeline, L.P. $13,907.2 $64.74 0.3% 17.9% 98.6% 9.8x 11.6x 13.6x 10.6x 26.7x 17.9x 4.6x
Magellan Midstream Partners LP $8,481.8 $59.76 8.2% 33.6% 99.8% 6.9x 16.4x 16.7x 13.6x 20.8x 17.4x 4.6x
Buckeye Partners LP $7,086.8 $64.18 (4.0%) 11.6% 89.5% 10.4x 12.7x 20.7x 12.5x 38.2x 16.8x 4.7x
Sunoco Logistics Partners L.P. $4,350.3 $88.32 1.2% 30.5% 98.9% 8.5x 9.5x 13.0x 9.8x 9.4x 14.8x 4.3x
Holly Energy Partners L.P $1,642.1 $58.82 13.1% 38.1% 100.2% 11.2x 13.0x 13.5x 10.3x 21.8x 21.1x 5.2x
Median 3.9% 30.0% 99.0% 9.2x 12.4x 13.8x 10.4x 21.8x 17.7x 4.7x
Power
Diversified Power
General Electric Co. $580,274.1 $20.60 3.4% 29.4% 95.1% 22.0x 36.2x 21.5x 17.1x 17.9x 12.7x 20.9x
Siemens AG $114,556.7 $129.53 0.2% 53.4% 95.4% 6.2x 6.5x 8.0x 6.4x 19.5x 11.7x 0.1x
ABB Ltd. $48,912.2 $24.01 0.2% 21.0% 92.6% 3.8x 8.3x 10.5x 7.5x 21.5x 14.2x (1.4x)
Emerson Electric Co. $48,478.2 $59.77 1.2% 25.3% 92.6% 5.2x 10.4x 10.9x 8.8x 22.1x 15.4x 0.9x
Schneider Electric S.A. $47,141.0 $161.38 1.4% 54.4% 97.8% 4.8x 8.7x 10.1x NA 17.9x NA 1.0x
Eaton Corporation $19,982.7 $106.86 2.2% 59.6% 94.6% 5.2x 10.8x 11.6x 7.8x 19.2x 12.0x 1.8x
Cooper Industries plc $10,693.1 $63.11 2.2% 40.2% 95.7% 4.3x 11.2x 12.7x 10.1x 23.7x 14.3x 0.5x
Areva SA $10,541.0 $47.58 (2.0%) 9.4% 86.5% 44.9x 16.0x NM NA NM NA 8.6x
Median 1.3% 34.8% 94.9% 5.2x 10.6x 10.9x 8.3x 19.5x 13.4x 1.0x
Mid-Cap Power
Ametek Inc. $7,622.2 $41.82 2.6% 61.7% 93.3% 7.3x 11.5x 13.8x 10.8x 23.4x 17.5x 2.3x
Thomas & Betts Corp. $2,972.3 $55.15 14.1% 53.5% 95.5% 4.0x 7.9x 9.6x 7.1x 20.8x 13.7x 0.5x
Littelfuse Inc. $1,075.2 $51.88 0.8% 46.0% 96.4% 5.0x 13.2x 7.7x 6.3x 14.5x 11.9x (0.6x)
Powell Industries, Inc. $324.8 $37.58 (2.7%) 29.6% 91.9% 5.5x 3.7x 5.6x 6.4x 24.6x 19.3x (1.5x)
Chapmans Ltd. $2.8 $0.02 16.7% 22.8% 80.0% NM NM NM 0.0x NM 0.0x (2.5x)
Median 2.6% 46.0% 93.3% 5.2x 9.7x 8.6x 6.4x 22.1x 13.7x (0.6x)
Independent Power Producers
NRG Energy, Inc. $12,690.5 $19.61 (6.9%) (11.1%) 77.8% 4.7x 3.8x 5.9x 6.5x 10.5x 16.5x 2.4x
Dynegy Inc. $4,813.0 $5.76 (2.2%) (24.2%) 71.6% 6.3x 10.2x 8.9x 10.6x NM (NM) 6.9x
GenOn Energy, Inc. $3,506.0 $3.91 (6.9%) NA 89.9% NA NA 4.0x 5.9x 1.9x NA 0.6x
Mirrabooka Investments Limited $244.1 $1.97 0.8% 19.4% 98.7% NM NM NM 0.0x 21.1x 0.0x NM
Median (4.6% ) (11.1% ) 83.9% 5.5x 7.0x 5.9x 6.2x 10.5x 8.3x 2.4x
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 2/25/11 Prior Month Prior Year LTM High 2/25/09 2/25/10 Current EBITDA Current 2011 2/25/2010
TEV / LTM EBITDA Multiple as of
page 10
Electric Utilities
Southern Company $51,707.5 $37.81 (0.9%) 18.1% 97.5% 8.3x 8.8x 9.2x 8.4x 15.9x 13.9x 3.7x
NextEra Energy, Inc. $43,146.0 $54.69 0.9% 16.7% 97.2% 8.0x 8.3x 8.1x 7.9x 11.5x 11.5x 4.5x
Duke Energy Corporation $40,438.8 $17.85 (1.4%) 9.0% 96.0% 7.3x 8.2x 8.3x 7.4x 17.8x 13.0x 3.7x
Exelon Corp. $38,574.8 $41.24 (4.2%) (5.9%) 90.1% 6.4x 5.8x 5.6x 7.4x 10.6x 13.6x 1.7x
American Electric Power Co., Inc. $34,413.5 $35.24 (3.2%) 4.6% 92.9% 6.9x 7.4x 7.3x 7.0x 13.2x 10.8x 3.9x
Progress Energy Inc. $25,357.0 $45.33 (0.0%) 17.8% 97.5% 8.1x 7.9x 8.1x 8.0x 15.3x 13.9x 4.1x
FirstEnergy Corp. $25,346.5 $38.25 (1.7%) (2.1%) 93.8% 7.7x 9.4x 8.2x 7.0x 14.8x 12.7x 5.0x
PPL Corporation $24,054.5 $24.71 (3.4%) (14.3%) 84.3% 7.8x 11.7x 9.1x 7.4x 11.2x 10.8x 7.6x
Entergy Corporation $23,486.3 $70.94 (3.0%) (7.3%) 84.1% 7.0x 7.4x 6.3x 6.9x 10.6x 11.5x 3.1x
Edison International $22,821.0 $36.18 (3.0%) 10.5% 91.9% 5.0x 5.5x 6.1x 5.7x 9.0x 11.9x 2.7x
Median (2.4% ) 6.8% 93.3% 7.5x 8.1x 8.1x 7.4x 12.3x 12.3x 3.8x
Renewables 2/25/09 2/25/10 Current
First Solar, Inc. $13,420.2 $156.39 3.0% 51.9% 89.1% 6.6x 4.0x 5.2x 2.8x 21.9x 15.1x (0.8x)
Vestas Wind Systems A/S $7,519.9 $33.13 (3.6%) (33.7%) 47.3% 0.9x 1.4x 0.8x NA 31.3x NA 1.3x
Suntech Power Holdings Co. Ltd. $2,649.2 $10.13 17.4% (22.5%) 65.1% 1.2x 1.9x 1.0x 0.8x NM 8.3x 3.2x
SunPower Corporation $2,011.0 $17.77 29.7% (4.3%) 80.1% 1.9x 1.3x 0.9x 0.6x 11.2x 7.8x 1.4x
GT Solar International, Inc. $1,149.0 $10.89 (4.4%) 80.2% 91.1% 1.0x 1.4x 1.4x 1.2x 10.0x 7.9x (1.7x)
Clean Energy Fuels Corp. $1,035.8 $14.29 11.2% (20.5%) 60.3% 2.2x 7.7x 6.1x 3.4x NM 81.3x 28.3x
Evergreen Solar Inc. $403.5 $2.08 (22.4%) (68.8%) 26.3% 3.7x 1.7x 1.2x 0.8x NM (NM) 82.3x
Rentech, Inc. $331.2 $1.27 (0.8%) 23.3% 85.8% 0.9x 1.5x 2.3x 1.5x NM (NM) 3.6x
Energy Conversion Devices, Inc. $299.0 $3.98 (7.2%) (45.3%) 45.2% 2.8x 2.0x 1.0x 0.8x NM (NM) (172.7x)
FuelCell Energy Inc. $236.2 $1.70 (11.0%) (41.4%) 50.0% 1.9x 3.2x 3.4x 1.5x NM (NM) 0.8x
Ballard Power Systems Inc. $107.4 $1.99 20.8% (10.1%) 59.6% 1.0x 3.1x 1.8x 1.0x NM (NM) 1.7x
Median (0.8% ) (20.5% ) 60.3% 1.9x 1.9x 1.4x 1.1x 16.5x 8.3x 1.4x
Cleantech
Itron, Inc. $2,730.5 $57.08 (3.8%) (14.7%) 69.7% 1.4x 2.0x 1.2x 1.2x 22.1x 13.3x 2.2x
ESCO Technologies Inc. $1,114.4 $38.16 5.1% 19.1% 88.4% 1.7x 1.7x 1.7x 1.5x 18.3x 15.3x 1.4x
Ameresco, Inc. $747.6 $14.27 (12.4%) NA 81.7% 0.0x 0.0x 1.2x 0.9x 20.6x 15.1x 4.8x
Echelon Corporation $331.0 $8.84 (7.8%) 7.8% 82.2% 1.4x 2.7x 3.0x 2.0x NM (NM) 1.6x
EnerNOC, Inc. $314.3 $18.99 (21.0%) (29.4%) 51.7% 1.7x 2.7x 1.1x 0.9x 50.7x 23.5x (25.5x)
PowerSecure International, Inc. $137.2 $7.45 0.0% 1.5% 63.1% 0.5x 1.2x 1.1x 1.0x 29.8x 15.2x (0.5x)
Comverge, Inc. $109.7 $5.13 (22.2%) (48.2%) 41.8% 0.9x 2.3x 0.9x 0.7x NM (NM) 6.7x
Median (7.8% ) (6.6% ) 69.7% 1.4x 2.0x 1.2x 1.0x 22.1x 15.2x 1.6x
Revenue
TEV / LTM Revenue Multiple as of TEV / 2011
Member FINRA/SIPC
Energy & Power Industry UpdateMarch 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 2/25/11 Prior Month Prior Year LTM High 2/25/09 2/25/10 Current EBITDA Current 2011 2/25/2010
TEV / LTM EBITDA Multiple as of
page 11
Industrial & Infrastructure Services
Engineering & Construction
Fluor Corporation $9,638.0 $68.78 (4.5%) 52.7% 90.8% 3.4x 4.5x 13.1x 7.2x 32.0x 17.6x (1.9x)
Jacobs Engineering Group Inc. $5,221.6 $49.43 (6.8%) 25.5% 88.7% 4.5x 6.1x 9.7x 7.5x 25.7x 16.0x (1.5x)
McDermott International Inc. $4,689.0 $22.72 11.1% (0.4%) 78.4% 2.8x 6.9x 6.4x 9.7x 11.8x 17.2x (0.9x)
URS Corporation $4,090.6 $46.28 4.2% (1.0%) 86.9% 6.7x 7.8x 6.7x 5.5x 14.2x 12.3x 0.4x
KBR, Inc. $4,090.6 $32.65 (0.1%) 60.5% 92.6% 1.8x 4.1x 6.1x 5.8x 15.9x 13.4x (1.2x)
Dresser-Rand Group Inc. $3,663.9 $49.77 10.4% 56.3% 100.0% 5.2x 6.9x 11.6x 8.2x 27.8x 15.4x (0.1x)
Chicago Bridge & Iron Company N.V. $3,003.8 $34.76 1.9% 60.5% 95.2% 8.2x 5.5x 8.3x 6.1x 16.6x 12.6x (1.1x)
Shaw Group Inc. $2,770.5 $40.03 4.6% 14.7% 96.3% 6.2x 6.5x 8.3x 6.3x 35.1x 14.9x (2.0x)
ENGlobal Corp. $139.2 $4.97 2.3% 70.8% 87.5% 3.1x 11.7x NM 7.4x NM 16.1x 1.6x
Median 2.3% 52.7% 90.8% 4.5x 6.5x 8.3x 7.2x 21.2x 15.4x (1.1x)
Industrial & Infrastructure Services
EMCOR Group Inc. $1,445.6 $30.96 2.4% 31.4% 95.1% 2.9x 3.2x 5.5x 4.6x NM 12.9x (1.7x)
Cape plc $920.5 $6.43 (8.6%) 93.0% 83.9% 2.8x 4.4x 6.6x NA NM NA 1.1x
Team Inc. $573.9 $26.44 1.5% 43.5% 92.1% 5.6x 10.4x 12.3x 8.5x 29.9x 17.6x 1.6x
Pike Electric Corporation $407.2 $9.64 10.0% 15.9% 87.2% 4.3x 6.5x 12.6x 7.0x NM 33.1x 1.5x
Matrix Service Co. $321.0 $14.01 24.5% 28.5% 97.8% 2.7x 7.6x 11.1x 5.7x 85.5x 13.5x NM
Furmanite Corporation $246.5 $7.06 (10.1%) 92.4% 87.4% 3.7x 17.5x 14.2x 7.9x 170.6x 16.2x (1.3x)
Median 1.9% 37.5% 89.7% 3.3x 7.0x 11.7x 7.0x 85.5x 16.2x 1.1x
Energy & Power Industry UpdateMarch 2011
page 12
Harris Williams & Co. is one of the largest mergers and
acquisitions firms focused exclusively on the middle market.
Experience
Focus
Market Intelligence
Stability
Global Reach
Exceptional Results
Middle market leader – closed nearly 200 transactions in the last four years.
Execution focus with unparalleled senior-level attention.
Over 10,000 conversations with buyers and lenders each year.
Unparalleled retention of senior professionals.
Approximately 20% of our transactions are cross-border.
Best-in-class execution produces unmatched closing rate.
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Energy & Power Industry UpdateMarch 2011
page 13
Harris Williams & Co.’s Energy & Power Group has a broad
range of experience including products, services, and
technologies that support or enhance the overall energy and
power infrastructure.
Key Niches:
• Cleantech, Energy Efficiency, and Renewables
• Power Products, Services, and Technologies
• Oil & Gas Products, Services, and Technologies
• Industrial & Infrastructure Services
• Engineering & Construction
For more information on Harris Williams & Co.’s Energy & Power Group as well as archived
copies of the Energy & Power Industry Update, please visit our website. Archived copies of the
Group’s industry whitepapers, including Transmission & Distribution Infrastructure and ESCOs
– Enabling Energy Efficiency, can also be found on the site.
Energy & Power Industry UpdateMarch 2011
page 14
Mr. Armstrong co-leads the Energy & Power Group and was Harris Williams & Co.’s second employee, joining the
firm in 1993. In 1999, Mr. Armstrong founded the San Francisco office and has over 19 years of transactional
experience focused in middle market mergers and acquisitions assignments. Having directed over 125 mergers and
acquisitions transactions during his career, Mr. Armstrong has worked across industries including energy and power,
consumer products, building products, business services, distribution, retailing, specialty chemicals, and technology.
As Co-Head of the Energy & Power Group, Mr. Armstrong specializes on the Power segment. Prior to joining Harris
Williams & Co., Mr. Armstrong was with Wheat First Butcher Singer (now Wells Fargo). He earned a B.S. with a
concentration in Finance from the University of Virginia's McIntire School of Commerce and is also a Chartered
Financial Analyst. Mr. Armstrong was past president and director of the San Francisco Chapter of ACG and is
currently a director of the Greater Richmond YMCA.
Mr. Spitzer founded and co-leads the Energy & Power Group at Harris Williams & Co. Over his investment banking
career, Mr. Spitzer has advised clients on a variety of merger and acquisition and strategic advisory assignments, as
well as corporate financings. Mr. Spitzer has advised a diverse range of manufacturing and service businesses in the
energy and power industries. Key niche focus areas have included demand response solutions, power quality
equipment, infrastructure and industrial services, and oilfield products and services. Prior to focusing on energy and
power companies, Mr. Spitzer developed experience in numerous industries including industrial manufacturing,
chemicals, automotive, aerospace and defense, business services, and consumer products. Prior to joining Harris
Williams & Co., Mr. Spitzer worked in the General Industrial Group at Banc of America Securities, LLC and in the
Investment Banking Group at Goldman Sachs & Co. Mr. Spitzer earned an M.B.A. with Honors from Columbia
Business School, where he served as the Caplan Fellow. Mr. Spitzer earned a B.A. in Economics from the University
of Virginia.
Mr. Lucas re-joined Harris Williams & Co. following the completion of an M.B.A. from The Wharton School at the
University of Pennsylvania. Prior to business school, Mr. Lucas served as an Associate with Harris Williams & Co.,
working on mergers and acquisitions transactions in a broad range of industries, including general industrial,
consumer products, plastics, and waste equipment/services. Before re-joining Harris Williams & Co., Mr. Lucas
worked as an Associate with Graham Partners, a private equity group in Philadelphia. Previous experience also
includes work as an Investment Banking Analyst with JP Morgan. Mr. Lucas earned a B.S. in Commerce, with a
concentration in Finance from The McIntire School of Commerce at the University of Virginia.
Prior to joining Harris Williams & Co., Mr. White worked as an Associate in the Equity Capital Markets Group at
SunTrust Robinson Humphrey. Previous experience also includes work in the Capital Finance Group at Wachovia
Securities (now Wells Fargo) where he focused on acquisition financing, growth capital, and workout situations. Mr.
White earned an M.B.A. from the Goizueta Business School at Emory University and a B.S. in Business
Administration from the University of North Carolina at Chapel Hill.
Tiff B. Armstrong
Managing [email protected]
(804) 648-0072
Andrew G. Spitzer
Managing [email protected]
(804) 915-0174
Brian S. Lucas
(804) 932-1323
Matthew G. White
Vice [email protected]
(804) 915-0131
Prior to joining Harris Williams & Co., Mr. Semple worked as a Global Banking Associate at Deutsche Bank. Within
energy and power, Mr. Semple has advised a diverse range of businesses, including providers of energy efficiency
and clean technology products and services, oilfield products and services, transmission distribution products and
services, and power generation equipment. He earned an M.B.A. from the Darden School of Business at the
University of Virginia and a B.A. from Trinity College in Hartford, Connecticut.
Luke R. Semple
Vice [email protected]
(804) 648-1158
Energy & Power Industry UpdateMarch 2011
page 15
Sources:
1. Capital IQ.
2. MergerMarket.
3. Baker Hughes.
Harris Williams & Co. (www.harriswilliams.com), a member of The PNC Financial Services Group, Inc.
(NYSE:PNC), is the premier middle market advisor with a two decade legacy of sell side excellence serving
clients worldwide. The firm is focused exclusively on the middle market providing sell side and acquisition
advisory, restructuring advisory, board advisory, private placements and capital markets advisory services.
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Energy & Power Industry UpdateMarch 2011
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page 16