SEP 2018


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Page 18 of 91 17 CW: What is your assessment of current M&A activity in the composites industry? How has the last year looked? How does the future look? MDP: Some of the same themes from an end- market standpoint continue to be there. There's an ever-increasing need for light weight and fuel efficiency, which drives a lot of the production efforts in strategic initiatives at some of the big OEMs, whether that's automotive or aerospace or something else. ... As it relates to what we're seeing from an activity standpoint, this market is as hot as people in my industry have ever seen, and that's specific within composites and advanced materials, but it's specific to the broader market. I think that we, on the advisory side, look at it and say, "Gosh, we have been in an up-cycle market going on nine years. It's been wonderful and we're working our tails off. But at some point it's going to have to cool off, or start going in the other direction." I don't think any of us has that crystal ball to say when ... but, what we can see is that the valuations have climbed and climbed and climbed to a bit of a plateau over the last 18 months. It does feel like we're at the top. ... I think the takeaway is that if you're thinking of doing anything in the next few years, it's probably not going to get much better than it is right now. CW: You see a lot composites industry businesses, good and bad. What kinds of things do investors look for when they evaluate a target? MDP: No one strategy is absolutely right for every- body. It's a mix of personality, culture, market posi- tion, capability, technology, and based on any one of those variables, the ultimate recipe about creating what we call enterprise value can be a bit different. But my message to folks is you should always be thinking about how am I creating enterprise value for my business. ... Never lose sight of building the busi- ness from the inside out. That incorporates practices that are universal, not limited to composites. ... Don't forget that a good financial person or a good CFO can make all the difference in the world when you're trying to create value for yourself as an owner, as an investor in a business. What I tell people is to have a plan in mind for where you ultimately want to be. For some people that's time-based, for some people that's monetarily based, but if and when you decide you want to do something ... the more chance we have to help make sure the house is in order before going to market — there's a direct correlation between those upfront efforts and the success of the outcome. M&A Q&A INTERNATIONAL INC. EUROPE Sarl ASIA LTD ADVANCED MATERIALS LTD Video available online Ultra High Temperature Vacuum Bagging Materials For thermoplastic molding processes up to 799°F (426°C) Bagging Film • Thermalimide Breathers • Airweave ® UHT 800 • Airweave ® UHT 300PGL NEW • Airweave ® UHT 450PGL NEW Release Film • Thermalimide RCBS NEW Peel Plies • Bleeder Lease ® E • Bleeder Lease ® C Sealant Tapes • A-800-3G • GS-43MR • Fast Tack HT NEW Pressure Sensitive Tape • Airkap 1 Connectors & Hoses • Vacuum Valve 409 SS HTR • AHTC-1000 QTD Quick Turn Disconnect • BBH 1080 / Airflow 800 Hose NEW

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