Transportation & Logistics Industry Update March 2014

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Transportation & Logistics Industry Update March 2014 Greetings from the HW&Co. Transportation & Logistics Team

Welcome to the March edition of the Harris Williams & Co. Transportation & Logistics (T&L) newsletter. We use this forum to keep you (investors, senior managers, entrepreneurs, and others focused on the T&L sector) up to speed on what we are seeing in our sector, apprised of industry news and events, and connected to the T&L companies that we are fortunate to work with everyday. We will continue to bring you transcripts of relevant discussions we have with senior industry professionals, like this month’s discussion with Rick Webb, Chief Executive Officer of the Watco Companies. We also want to keep you apprised of the transactions we are executing in our various sub-sectors, including non-asset and asset-based logistics, air, rail, marine products and services, and infrastructure. We hope you enjoy reviewing this edition and please continue to email and call us with your thoughts and opinions. We want to ensure that this newsletter is informative and helpful as you focus on the transportation and logistics space. Regards,

Contacts

Boston

Frank F. Mountcastle, III

Jason D. Bass

Managing Director

Managing Director

Managing Director

[email protected]

[email protected]

[email protected]

+1 (804) 915-0124

+1 (804) 915-0132

+1 (804) 915-0151

Cle ve land

Frankfurt

London

Joseph H. Conner, III

Minne apolis Philade lphia

Richmond

P: +1 (617) 482-7501

P: +1 (216) 222-9870 P: +49 069 3650638 00 P: +44 20 7518 8900

P: +1 (612) 359-2700 P: +1 (267) 675-5900

P: +1 (804) 648-0072

P: +1 (415) 288-4260

F: +1 (617) 482-7503

F: +1 (216) 222-0158 F: +49 069 3650638 01 F: +44 20 7526 2187

F: +1 (612) 359-2701

F: +1 (804) 648-0073

F: +1 (415) 288-4269

1

F: +1 (267) 675-5901

San Francisco

Transportation & Logistics Industry Update March 2014 Spotlight: Recent HW&Co. 3PL Transaction

HW&Co. Advises the Special Committee of the Innotrac Corporation Board of Directors in its Recapitalization Led By Sterling Partners. Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the recapitalization of Innotrac Corporation (NASDAQ: INOC; Innotrac), a provider of eCommerce, fulfillment and logistics services, led by Sterling Partners (Sterling). Harris Williams & Co. acted as the exclusive advisor to the Special Committee of the Board of Directors of Innotrac and also provided a fairness opinion. The transaction closed on January 6, 2014 and was led by Jason Bass, Frank Mountcastle, Jeff Burkett and Mike Williams.

has been recapitalized by

Innotrac, founded in 1984 and based near Atlanta, GA, is a best-in-class eCommerce provider integrating digital technology, fulfillment, contact center and business intelligence solutions to support global brands. The company’s fulfillment, order management and contact center solutions are integrated with all major web platforms, and seamlessly integrate with any required partner technologies. Innotrac employs sophisticated order processing and warehouse management technology and operates eight fulfillment centers and one call center spanning the continental United States. Innotrac Europe GmbH also has a network of fulfillment centers, call centers and returns processing facilities with operations in the United Kingdom, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland, Ireland, Spain and the Netherlands. Sterling, founded in 1983, is a growth-oriented, private equity firm. Sterling manages more than $5 billion in institutional capital. The firm’s investment approach is centered on INSPIRED GROWTH™, a philosophy of buying differentiated businesses and growing them in inspired ways. Sterling focuses on investing growth capital in small and middle market companies in industries with positive long-term trends, including education, healthcare and business services. The firm provides valuable support to the management teams of the companies in which it invests through a deep and dedicated team of operations and functional experts based in the firm’s offices in Chicago, IL, Baltimore, MD and Miami, FL. Other Recent HW&Co. 3PL Transactions a portfolio company of

has been acquired by

Date: March 14, 2014 Description: Unitrans offers its customers international ocean and air transportation management, customs house brokerage, and domestic logistics solutions, with a focus on complex, cold chain, and high value shipments. 2

a portfolio company of

has been acquired by

Date: March 6, 2014 Description: PLG is a leading provider of gateway logistics services, including value-added warehousing and distribution, transloading and cross-docking, vendor consolidation and national transportation.

Transportation & Logistics Industry Update March 2014 Spotlight: Recent HW&Co. Surface Transportation Transaction

HW&Co. Advises RTL-Westcan Group of Companies on its Sale to Kenan Advantage Group Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the sale of RTL-Westcan Group of Companies (RTL-Westcan), a provider of specialized bulk transportation and logistics services, to strategic buyer Kenan Advantage Group (KAG). Harris Williams & Co. acted as an advisor to RTL-Westcan, a portfolio company of TriWest Capital Partners (TriWest). The transaction closed on November 15, 2013 and was led by Frank Mountcastle, Jason Bass, Joe Conner, Jershon Jones and Jeff Kidd from Harris Williams & Co.’s Transportation & Logistics (T&L) Group.

a portfolio company of

has been acquired by a portfolio company of &

“RTL-Westcan has built an impressive platform for bulk hauling in Western Canada. The geographic areas served by the company represent some of the fastest growing regions in North America,” said Frank Mountcastle, a managing director in Harris Williams & Co.’s T&L Group. “This partnership will enable RTL-Westcan to continue to execute its growth strategy while also providing KAG with a strategic platform to continue its expansion into new geographies and new markets in North America. This transaction is a great outcome for all parties involved.” Founded in 1964, RTL-Westcan specializes in hauling liquid and dry bulk commodities, freight hauling and construction services. The company has expanded from a single product service offering to a highly diversified bulk hauling platform serving the energy, mining, agriculture and infrastructure end markets. RTL-Westcan is headquartered in Edmonton, Canada and operates out of 14 locations throughout Alberta, British Columbia, Saskatchewan and the Northwest Territories. TriWest, founded in 1998 and based in Calgary, Alberta, is one of Canada’s leading private equity firms. TriWest has raised more than $775 million in committed capital through four funds and invested in 27 companies to date. These investments have involved the acquisition of marketleading companies through management buyouts, growth financings, corporate divestitures and other special situations. KAG is North America’s largest tank truck transporter and logistics provider to the petroleum, specialty products and merchant gas industries. It operates nationwide through its four groups consisting of the Fuels Delivery Group, Specialty Products Group, Merchant Gas Group and the Logistics Group. KAG also provides specialized supply chain logistics services through KAG Logistics and KAG Ethanol Logistics.

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Transportation & Logistics Industry Update March 2014 Spotlight: Recent HW&Co. Rail Services Transaction

HW&Co. Advises A&B Rail Services Ltd. on the Sale of a Majority Interest to a Group of Investors led by TorQuest Partners Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the sale of a majority interest of A&B Rail Services Ltd. (A&B Rail), a provider of rail maintenance, construction and related services, to a group of investors led by TorQuest Partners (TorQuest), a leading Canadian-based manager of private equity funds. Harris Williams & Co. acted as the exclusive advisor to A&B Rail, a portfolio company of Fulcrum Capital Partners (Fulcrum). The transaction closed on December 12, 2013 and was led by Jason Bass, Joe Conner, and Jeff Burkett from Harris Williams & Co.’s Transportation & Logistics (T&L) Group.

a portfolio company of

has been acquired by

“Over the past 48 years, A&B Rail has developed into the leading provider of critical railway infrastructure services in Canada. In partnership with Fulcrum, Paul Brum (President of A&B Rail) has built the best management team, employee base and service platform in the industry and A&B Rail has become the go-to-provider of critical services in one of the fastest growing, most dynamic rail markets in the world,” said Joe Conner, a managing director in Harris Williams & Co.’s T&L Group. “We appreciate having had the opportunity to help Paul and his team, who remain significant shareholders of the business, find the right partners to continue to build their business and deliver outstanding service to the market.” “The sale of A&B Rail represents another marquee transaction for our practice in the rail sector, one of our core focus areas, and is evidence of continued interest across the rail industry and, specifically, outsourced rail maintenance services,” added Jason Bass, a managing director and cohead of the firm’s T&L Group. “Favorable market trends, including steady carload growth through increased truck-to-rail conversions, environmental considerations and increased outsourced maintenance, make the rail sector an attractive industry for investors.” Based in Edmonton, Canada, A&B Rail is a full service railroad company specializing in track construction, railway maintenance, light rail transit and signals and communication. The company was founded in 1965 and has offices across Canada. Fulcrum is a leading private investment management firm providing flexible private equity and mezzanine financing to Canadian middle market companies. The firm manages two private equity funds with $350 million in committed capital and a mezzanine finance business in excess of $400 million in committed capital.

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Transportation & Logistics Industry Update March 2014 Rail Renaissance with Rick Webb, CEO Watco Companies

Watco Companies provides transportation, mechanical, port, and compliance solutions to customers in North America and Australia. It offers rail equipment leasing, sales, services and repair. In addition to providing rail equipment solutions, Watco Companies provide rail logistics services, including train planning and scheduling, tracing, maintenance, and inventory control. The Company also offers warehousing and distribution services. Watco Companies, LLC was founded in 1983 and is headquartered in Pittsburgh, Kansas. Biography Chief Executive Officer since 1998, Rick’s primary responsibility has been the growth and strategic direction of Watco. Prior to becoming CEO, Rick learned the business by working alongside his father Dick Webb, founder of Watco. Rick held various management and leadership positions within Watco, including operations, purchasing, marketing, accounting and financial management. An active participant in efforts to improve rail transportation for customers, Rick serves on the Board of Directors for both the Association of American Railroads and National Industrial Transportation League. Rick is also a vigorous supporter of his community and advocates for Pittsburg State University and many local schools and community organizations. He is member of the Pittsburg State University Foundation Board of Trustees, Community National Bank (CNB) Advisory Board of Directors and U.S. Bank’s Market Board of Directors. Rick earned a Bachelor of Science Degree in Physics from Pittsburg State University. HW&Co. – Watco has a highly diversified service offering that includes a network of short line railroads as well as other services such as switching, railcar repair, terminal and mechanical services, and others. What have been the main drivers of the Company’s service expansion and what services do you view as having the greatest opportunity for growth over the next few years? Rick Webb (RW) – Our customers’ supply chain needs are always the key drivers of our service offerings. We start by listening to the customer to gain a better understanding of their transportation needs. Then we craft a service plan that must improve the efficiencies of their supply chain in order to earn the right to grow with them. By taking this holistic approach to our customers’ needs we can’t predict with any degree of accuracy where the growth opportunities may arise. We have to stay close enough to the customer to be where they need us. HW&Co. – Are there any additional service offerings on your priority list? (RW) – Yes, we are looking at starting an “asset light” supply chain service that some people would call a logistics type service. We believe there are opportunities in this space that will complement our “asset heavy” rail transportation services.

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Transportation & Logistics Industry Update March 2014 Rail Renaissance with Rick Webb, CEO The Watco Companies

HW&Co. – There’s no question that rail (operators and service providers) remains among the hottest sectors from an M&A perspective – both strategic and private equity interest abounds. What are your thoughts on what is creating such great interest in the sector? (RW) – Rail is uniquely positioned to capture a bigger portion of the transportation market as our economy grows. The trucking industry is facing some challenges that include congestion, driver shortages, and fuel costs that may make it difficult for them to continue to hold their current market share let alone capture additional market share into the future. The marine shipping industry has excess capacity but is limited in what markets it can serve. Because of this unique position in the surface transportation industry, rail looks very attractive long term. HW&Co. – Do you foresee any changes in the way the sector is viewed from an M&A perspective? (RW) – Not at this time, but one thing is constant in our business – change. My opinions are just that, and provide no guarantee of accuracy. HW&Co. – The sharp increase in U.S. crude oil production and correlated rail transportation of that crude has clearly been a boon for the railroads. In 2013, railroads moved more crude oil than ever before (nearly twice as much as in 2012 – the previous high watermark). Given Watco’s service offering and network, we imagine you have been a benefactor of this trend. How do you think about the crude-by-rail trend playing out into the future? (RW) – We believe rail’s service offering to the oil and gas industry has a bright future, provided we do three things. First, we must work to improve our railroad operations to minimize the potential for future accidents. Second, we must work with our customers to reduce the product risk by ensuring the commodity being shipped is loaded into the right type of rail car. And third, we must improve the design of the tank car – not because it has caused any of the accidents of late, but to better protect the commodity and reduce any negative effects that might come from an accident. The rail industry and its customers need to come together with the right solution so we can gain the support of our government regulators. We believe this will get done. HW&Co. – With a number of those accidents you alluded to above occurring over the last year or two, railroad safety is a renewed topic of conversation among industry constituents – operators, service providers, municipalities, and regulators. What are you hearing in the industry regarding safety and how is it shaping, or reshaping, Watco’s safety practices? (RW) – As I mentioned earlier, improving railroad operations, especially in light of the additional crude oil that is moving by rail, is important to our industry, our customers, and the communities where we operate. I wouldn’t say we are reshaping our safety practices. Instead, I would say we are using this situation to improve awareness of the risks associated in our business and reemphasizing the importance of safety. Our customers and communities expect us to be safe, and we are working hard every day to satisfy that important expectation.

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Transportation & Logistics Industry Update March 2014 Rail Renaissance with Rick Webb, CEO The Watco Companies

HW&Co. – Given the size of the Class I railroads, which presents a significant hurdle in effecting a change of control transaction (save for Warren Buffet and Berkshire Hathaway of course), there has been tremendous investment in short line and regional rails over the prior several years – Genesee & Wyoming’s purchase of Rail America, the purchase of MM&A Railway by Fortress, among others. In your estimation, what are the key drivers of value of a short line, or any rail related asset for that matter? (RW) – The most important value driver is cash flow return on invested capital. We use that key metric in all of our acquisition decisions. I don’t think this will be much of a surprise due to the asset intensive nature of our industry. The other key value driver we focus on is the longevity of the customer base we are serving with a new or existing rail asset. After all, we are just service providers that happen to use some pretty cool assets to take care of our customers. If we have a good customer base and provide the kind of value creating service they are seeking, while using the right amount of assets, we will win in the long term. HW&Co. – Lastly, which team, in your expert baseball opinion, is likely to have a better year in 2014 – the Royals or the Cardinals? (RW) – It was great to see the improvement we saw last year from the Royals, but there is only one true answer to your question, Go Redbirds!!

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Transportation & Logistics Industry Update March 2014 What We’re Reading

Select Recent Transportation & Logistics M&A

 Congress moving towards mileage tax, rather than additional fuel tax, to fund infrastructure construction and repair – the Commercial Carrier Journal reports the Chairman of the House’s Transportation and Infrastructure Committee, Bill Shuster, has proposed a tax based on mileage to fund improvement in U.S. infrastructure. Trucking groups, including the ATA, have supported a fuel tax, believing the administration of a mileage tax would create privacy issues and increased costs.  Crude by barge continues to surge as sea and inland operations supplement rail and pipelines through the oil boom – The Wall Street Journal reports growth in the North American oil and energy market is leading energy companies to the barge industry for support in transporting increased volumes. Oil transport by barge along the Mississippi this year is roughly 13 times that of 2010. Kirby President David Grzebinski expects transport on the east and west coasts of the country to follow similar trends.  Despite serving an estimated 80% of Fortune 500 companies, third party logistics operations still have room for significant growth – a recent article in the Journal of Commerce suggests 3PLs continue to transform from singular service providers to comprehensive suite providers, coordinating clients’ entire supply chain. As supply chains grow increasingly complex, clients are trusting their 3PLs to consult on all aspects of supply chain management.  Strong growth in intermodal volume in Q4 caps an impressive year – Progressive Railroading reports 9.4% growth in domestic container volume, leading to a notable 4.6% year-over-year growth in intermodal shipments in 2013. The best improvement in intermodal traffic in years is largely attributable to the continued transition away from “over-the-road-transport. ” Date 3/14/14

Acquirer Roadrunner Transportation

Target Unitrans

S ector Logistics

3/12/14

Lineage Logistics, LLC

M illard Refrigerated Services

Logistics

3/6/14

Endeavour Capital

Port Logistics Group

Logistics

3/6/14

Wind Point Partners

Dicom Express

Logistics

2/24/14

Roadrunner Transportation

Rich Logistics

Trucking

2/12/14

Polar Speed, Inc.

Logistics

1/8/14

The Halifax Group

1/6/14

XPO Logistics

Odyssey Logistics & Technology Corporation Central States Trucking and Logistics Golden State Overnight Delivery Service Inc. Pacer International

Logistics

1/23/14

United Parcel Service of America, Inc.` Goldman Sachs Private Equity Forward Air Corp.

1/6/14

Sterling Partners

Innotrac Corp.

Logistics

1/2/14

Genessee & Wyoming, Inc.

12/13/13

United Road Services Inc.

12/12/13

Sumitomo M itsui

Dakota, M innesota, & Eastern Railroad, West End Ops The Waggoners Trucking, Auto Transport Division Flagship Rail

12/12/13

Littlejohn & Co.

Newgistics, Inc.

12/12/13

TorQuest Partners

A & B Rail Services Ltd.

Provides parcel and freight transportation solutions to a variety of end market customers. Rail and Rail Services Provides railway construction services in western Canada.

12/11/13

NLM

XPO Logistics

Logistics

Provides transportation and logistics services.

12/2/13

Ingram M icro

Shipwire, Inc.

Logistics

11/15/13

Kenan Advantage Group

Trucking

11/11/13

Heartland Express, Inc.

RTL Westcan Group of Companies Gordon Trucking, Inc.

Provides cloud-based logistics services, shipping software solutions, and outsourced solutions. Provides dry and liquid bulk transportation services.

2/11/14

Target Description Provides specialized freight forwarding services for pharmaceutical, energy, and other specialized end markets. Provides refrigeration and logistic services to food manufacturing, retail, and food distribution companies. Provides gateway logistics services. Provides door-to-door overnight package and less than truck load services to various destinations in Canada. Operates as a trucking company that provides logistics services.

Logistics

Provides temperature controlled distribution services to the pharmaceutical industry in Europe. Provides logistics management services in the United States and internationally. Offers supply-chain trucking and warehousing services.

Logistics

Provides ground and priority overnight delivery services.

Logistics

Provides asset-light transportation and logistics services worldwide.

Provides order processing, order fulfillment, and customer support contact center services. Rail and Rail Services Operates regional railroads in United States. Trucking

Provides transportation auto transportation services to automobile manufacturers. Rail and Rail Services Operates as a rolling stock lessor that provides rail leasing solutions Logistics

Trucking

8

Provides truckload transportation services in the United States and Canada.

Transportation & Logistics Industry Update March 2014 Stock Performance Overview

Trailing Three Year Stock Price Performance 80.0%

40.0%

0.0%

(40.0%)

(80.0%)

Logistics Providers

Marine

Rail and Rail Services

Transportation Equipment

Trucking

S&P 500 Index

Key Trading Statistics Stock Price % Change 1 Month 12 Month

TEV / LTM EBITDA as of Mar-13 Sep-13 Current

TEV / EBITDA 2014E

P/E 2014E

Category Logistics Providers Marine Rail and Rail Services Trucking Providers Transportation Equipment

0.5% 0.4% 3.5% 6.9% 2.5%

14.7% 15.4% 25.1% 49.8% 16.4%

10.6x 11.0x 8.1x 6.1x 10.6x

10.5x 11.9x 9.1x 7.4x 11.1x

10.9x 11.3x 10.2x 8.7x 12.5x

9.4x 10.1x 8.7x 6.6x 8.9x

18.3x 13.6x 16.5x 18.6x 18.3x

Current Valuations Versus Historical Three-Year Average 160% 140%

(Current TEV/LTM EBITDA multiple as a % of Three-Year Average) 138% 124% 116%

120%

115% 99%

100% 80% 60% 40% 20% 0% Marine

Trucking Providers

Transportation Equipment

Source: Capital IQ

9

Rail and Rail Services

Logistics Providers

Transportation & Logistics Industry Update March 2014 Trading Statistics Detail

($ in millions, except per share data)

Ticker

Price at

52 Week

As a % of

52 Week

As a % of

Market

3/13/14

High

52-wk High

Low

52-wk Low

Cap

Cash &

Net

Equiv.

Debt

EV

Debt

EV/

EV/

Price/

LTM EBITDA 2014E EBITDA 2014E EPS

LTM EBITDA Margin

Total Debt/

Net Debt/

LTM EBITDA LTM EBITDA

Logistics Providers Agility Public Warehousing Company KSC Air Transport Services Group, Inc. Atlas Air Worldwide Holdings Inc. CH Robinson Worldwide Inc. Deutsche Post AG DSV A/S Echo Global Logistics, Inc. Expeditors International of Washington Inc. FedEx Corporation Forward Air Corp. Hub Group Inc. JB Hunt Transport Services Inc. Kuehne + Nagel International AG Landstar System Inc. Pacer International, Inc. Panalpina World Transport Holding Ltd. Roadrunner Transportation Systems, Inc. Ryder System, Inc. TransForce Inc. United Parcel Service, Inc. Universal Truckload Services Inc. UTi Worldwide Inc. World Fuel Services Corp.

KWSE:AGLTY Nasdaq:ATSG Nasdaq:AAWW Nasdaq:CHRW XTRA:DPW CPSE:DSV Nasdaq:ECHO Nasdaq:EXPD NYSE:FDX Nasdaq:FWRD Nasdaq:HUBG Nasdaq:JBHT SWX:KNIN Nasdaq:LSTR Nasdaq:PACR SWX:PWTN NYSE:RRTS NYSE:R TSX:TFI NYSE:UPS Nasdaq:UACL Nasdaq:UTIW NYSE:INT

$2.35 7.41 31.97 52.08 34.49 31.33 17.26 39.78 136.68 44.77 40.87 71.90 138.13 60.23 8.96 158.88 24.75 76.54 21.16 97.10 28.39 11.72 43.82

$2.64 8.20 50.98 62.46 37.91 34.85 22.65 46.90 144.39 46.66 43.09 79.89 146.96 61.92 9.23 178.25 30.98 78.78 23.40 105.37 34.07 17.70 45.89

88.8% 90.4% 62.7% 83.4% 91.0% 89.9% 76.2% 84.8% 94.7% 95.9% 94.8% 90.0% 94.0% 97.3% 97.1% 89.1% 79.9% 97.2% 90.4% 92.2% 83.3% 66.2% 95.5%

$1.83 5.23 29.81 51.32 23.80 24.59 15.54 34.83 90.61 35.93 34.50 67.97 112.91 50.39 4.55 94.00 21.17 52.58 16.50 81.95 19.30 9.34 34.57

128.3% 141.7% 107.2% 101.5% 144.9% 127.4% 111.1% 114.2% 150.8% 124.6% 118.5% 105.8% 122.3% 119.5% 197.1% 169.0% 116.9% 145.6% 128.2% 118.5% 147.1% 125.5% 126.8%

Arkansas Best Corporation Celadon Group Inc. Con-way Inc. Covenant Transportation Group, Inc. Heartland Express, Inc. Knight Transportation Inc. Marten Transport Ltd. Old Dominion Freight Line Inc. P.A.M. Transportation Services, Inc. Quality Distribution Inc. Saia, Inc. Swift Transportation Company Universal Truckload Services Inc. USA Truck Inc. Vitran Corp Inc. Werner Enterprises Inc. YRC Worldwide Inc.

NasdaqGS:ABFS NYSE:CGI NYSE:CNW NasdaqGS:CVTI NasdaqGS:HTLD NYSE:KNX NasdaqGS:MRTN NasdaqGS:ODFL NasdaqGM:PTSI NasdaqGM:QLTY NasdaqGS:SAIA NYSE:SWFT NasdaqGS:UACL NasdaqGS:USAK TSX:VTN NasdaqGS:WERN NasdaqGS:YRCW

$35.59 23.91 39.84 11.01 21.92 22.61 20.28 55.92 22.19 13.18 38.80 25.30 28.39 14.83 6.56 25.74 22.39

$37.61 24.67 46.52 12.29 22.42 22.73 21.47 57.00 23.00 15.07 40.68 26.71 34.07 16.38 6.56 26.87 36.99

94.6% 96.9% 85.6% 89.6% 97.8% 99.5% 94.5% 98.1% 96.5% 87.5% 95.4% 94.7% 83.3% 90.5% 100.0% 95.8% 60.5%

$9.62 16.29 31.18 4.85 12.99 15.02 12.33 35.17 8.85 7.01 21.91 12.75 19.30 4.37 3.61 21.80 6.69

369.9% 146.8% 127.8% 227.0% 168.7% 150.5% 164.4% 159.0% 250.7% 188.0% 177.1% 198.4% 147.1% 339.4% 181.7% 118.1% 334.7%

American Railcar Industries, Inc. Canadian National Railway Company Canadian Pacific Railway Limited CSX Corp. FreightCar America Inc. Genesee & Wyoming Inc. The Greenbrier Companies, Inc. Kansas City Southern Norfolk Southern Corporation Trinity Industries Inc. Union Pacific Corporation Wabtec Corporation

NasdaqGS:ARII TSX:CNR TSX:CP NYSE:CSX NasdaqGS:RAIL NYSE:GWR NYSE:GBX NYSE:KSU NYSE:NSC NYSE:TRN NYSE:UNP NYSE:WAB

$70.77 56.56 154.77 28.46 23.81 97.32 45.89 97.91 95.24 71.65 185.86 80.40

$77.5 57.59 159.80 29.25 27.09 102.20 47.15 125.96 96.90 74.66 189.46 81.70

91.3% 98.2% 96.9% 97.3% 87.9% 95.2% 97.3% 77.7% 98.3% 96.0% 98.1% 98.4%

$29.9 43.34 106.93 22.40 16.53 79.22 20.05 88.56 70.27 34.57 135.75 48.04

237.0% 130.5% 144.7% 127.1% 144.0% 122.8% 228.9% 110.6% 135.5% 207.3% 136.9% 167.4%

Aegean Marine Petroleum Network Inc. Costamare Inc. Diana Shipping Inc. Kirby Corporation Matson, Inc. Neptune Orient Lines Ltd. Nordic American Tankers Limited Rand Logistics, Inc. SEACOR Holdings Inc. Wilh. Wilhelmsen ASA

NYSE:ANW NYSE:CMRE NYSE:DSX NYSE:KEX NYSE:MATX SGX:N03 NYSE:NAT NasdaqCM:RLOG NYSE:CKH OB:WWASA

9.91 20.49 12.46 102.39 24.76 0.79 9.96 7.35 83.01 9.56

12.72 21.66 13.93 106.93 29.47 0.96 12.61 7.49 99.00 10.27

77.9% 94.6% 89.4% 95.8% 84.0% 81.6% 79.0% 98.1% 83.8% 93.0%

5.74 13.01 8.38 71.44 21.51 0.74 7.00 4.66 69.78 7.23

172.6% 157.5% 148.7% 143.3% 115.1% 105.9% 142.3% 157.7% 119.0% 132.3%

Accuride Corp. Dana Holding Corporation Gentherm Incorporated Spartan Motors Inc. Wabash National Corp.

NYSE:ACW NYSE:DAN NasdaqGS:THRM NasdaqGS:SPAR NYSE:WNC

$4.74 21.42 32.40 5.37 13.42

$6.88 23.46 33.21 7.18 14.06

68.9% 91.3% 97.6% 74.8% 95.4%

$3.10 15.51 13.63 4.90 8.19

$2,447 479 800 7,732 41,694 5,477 406 8,061 42,675 1,375 1,531 8,430 16,567 2,740 317 3,768 930 4,061 1,976 89,614 854 1,228 3,150

$256 387 1,697 875 8,180 1,229 0 0 2,990 0 29 708 51 129 0 4 194 4,189 738 10,980 242 461 464

$501 17 333 162 3,118 131 53 1,274 3,935 127 69 6 1,112 215 46 373 5 62 0 6,664 22 171 292

($245) 370 1,364 713 5,062 1,098 (53) (1,274) (945) (127) (40) 703 (1,062) (86) (46) (369) 188 4,128 738 4,316 220 289 172

$2,203 849 2,164 8,445 46,756 6,575 353 6,787 41,730 1,248 1,492 9,133 15,505 2,654 271 3,399 1,118 8,189 2,714 93,930 1,074 1,517 3,322 Mean Median

7.2x 5.4x 7.0x 11.6x 9.9x 12.1x 12.8x 11.3x 7.1x 11.6x 10.8x 11.0x 14.5x 13.2x 11.1x NM 10.1x 5.6x 8.6x 10.6x 10.2x 15.6x 11.0x 10.4x 10.9x

6.0x 4.9x 7.4x 11.3x 7.6x 11.4x 9.4x 9.8x 6.7x 9.1x 10.9x 9.7x 13.1x 11.4x 8.6x 14.5x 9.0x 5.2x 7.1x 9.6x 8.7x 12.0x 9.9x 9.3x 9.4x

11.3x 10.4x 10.0x 18.7x 16.3x 16.1x 23.7x 20.0x 18.9x 20.1x 18.9x 21.6x 22.2x 20.9x 22.3x NM 15.2x 13.5x 12.7x 18.3x 13.7x NM 14.5x 17.1x 18.3x

6.1% 27.2% 18.6% 5.7% 6.2% 6.4% 3.1% 9.9% 13.1% 16.4% 4.1% 14.9% 5.5% 7.5% 2.5% 2.1% 8.2% 22.8% 10.8% 16.0% 10.2% 2.2% 0.7% 9.6% 7.5%

0.8x 2.5x 5.5x 1.2x 1.7x 2.3x 0.0x 0.0x 0.5x 0.0x 0.2x 0.9x 0.0x 0.6x 0.0x 0.0x 1.7x 2.9x 2.3x 1.2x 2.3x 4.7x 1.5x 1.4x 1.2x

0.0x 2.3x 4.4x 1.0x 1.1x 2.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.8x 0.0x 0.0x 0.0x 0.0x 1.7x 2.8x 2.3x 0.5x 2.1x 3.0x 0.6x 1.1x 0.6x

$126 355 757 197 75 38 0 191 107 383 77 1,615 242 142 49 40 1,363

$141 15 0 11 18 1 14 30 20 2 0 59 22 0 26 24 171

($15) 340 757 187 57 37 (14) 161 87 381 77 1,555 220 142 23 16 1,193

$906 897 3,024 350 1,980 1,860 662 4,980 264 742 1,019 5,120 1,074 299 131 1,891 1,840 Mean Median

8.7x 8.6x 7.1x 5.5x 13.3x 9.7x 6.0x 10.8x 5.3x 10.2x 8.1x 8.9x 10.2x 7.4x NM 6.4x 9.0x 8.5x 8.7x

5.3x 8.2x 6.0x 4.8x 8.2x 8.5x 5.1x 9.3x 4.8x 7.6x 6.6x 7.7x 8.7x 5.8x 12.1x 5.5x 6.2x 7.1x 6.6x

16.7x 20.8x 17.4x 20.9x 20.9x 22.3x 17.6x 19.3x 19.9x 14.2x 16.0x 17.9x 13.7x NM NM 19.6x NM 18.4x 18.6x

4.5% 15.3% 7.8% 9.3% 25.5% 19.9% 16.8% 19.7% 12.4% 7.8% 11.1% 14.0% 10.2% 7.2% NM 14.6% 4.2% 12.5% 11.7%

1.2x 3.4x 1.8x 3.1x 0.5x 0.2x 0.0x 0.4x 2.1x 5.3x 0.6x 2.8x 2.3x 3.5x NM 0.1x 6.7x 2.1x 2.0x

0.0x 3.3x 1.8x 2.9x 0.4x 0.2x 0.0x 0.4x 1.7x 5.3x 0.6x 2.7x 2.1x 3.5x 0.0x 0.1x 5.8x 1.8x 1.7x

$195 7,380 4,590 9,555 0 1,627 411 2,189 9,581 3,014 9,577 451

$97 201 448 1,079 184 63 81 430 1,561 578 1,432 286

$98 7,178 4,142 8,476 (184) 1,564 330 1,759 8,020 2,435 8,145 165

$1,609 54,119 31,332 37,152 102 6,780 1,613 12,563 37,517 7,987 92,722 7,883 Mean Median

9.0x 11.8x 14.3x 8.1x NM 12.7x 10.2x 13.1x 9.0x 8.3x 10.1x 16.1x 11.2x 10.2x

8.0x 11.1x 11.7x 7.8x 4.2x 11.1x 7.3x 11.6x 8.2x 6.4x 9.1x 13.8x 9.2x 8.7x

13.6x 17.7x 20.2x 14.3x NM 21.5x 14.9x 20.2x 14.0x 10.0x 16.5x 22.8x 16.9x 16.5x

23.8% 45.9% 37.9% 38.1% NM 34.0% 8.6% 40.6% 37.1% 22.1% 42.0% 19.0% 31.7% 37.1%

1.1x 1.6x 2.1x 2.1x 0.0x 3.1x 2.6x 2.3x 2.3x 3.1x 1.0x 0.9x 1.9x 2.1x

0.5x 1.6x 1.9x 1.9x NM 2.9x 2.1x 1.8x 1.9x 2.5x 0.9x 0.3x 1.7x 1.9x

784 1,971 448 749 286 4,931 250 143 881 1,502

72 93 241 6 115 1,005 66 5 363 411

711 1,877 207 743 172 3,927 184 138 518 1,091

1,180 3,410 1,239 6,572 1,235 5,959 933 270 2,210 3,194 Mean Median

14.1x 13.2x NM 11.3x 7.2x NM NM 9.8x 11.2x NM 11.1x 11.3x

10.3x 10.1x 19.7x 10.2x 6.3x 11.5x 17.1x 8.6x 7.7x 6.4x 10.8x 10.1x

10.3x 11.2x NM 20.6x 15.9x NM NM NM 16.5x 8.2x 13.8x 13.6x

1.3% 62.4% 31.7% 25.9% 10.5% 1.4% NM 17.6% 15.8% 47.4% 23.8% 17.6%

9.4x 7.6x 8.6x 1.3x 1.7x 41.2x NM 5.2x 4.5x 9.8x 9.9x 7.6x

8.5x 7.3x 4.0x 1.3x 1.0x NM 0.0x 5.0x 2.6x 7.1x 4.1x 4.0x

$28 1,366 36 31 113

$312 258 64 (25) 257

$537 3,429 1,203 158 1,177 Mean Median

12.5x 4.9x 14.5x 25.4x 8.3x 13.1x 12.5x

8.9x 4.5x 13.2x 9.6x 7.0x 8.6x 8.9x

NM 11.1x 21.8x NM 14.9x 15.9x 14.9x

6.7% 10.3% 12.6% 1.3% 8.7% 7.9% 8.7%

7.9x 2.3x 1.2x 0.9x 2.6x 3.0x 2.3x

7.2x 0.4x 0.8x 0.0x 1.8x 2.0x 0.8x

Trucking $921 557 2,268 164 1,922 1,823 676 4,818 177 361 942 3,565 854 156 108 1,875 647

Rail and Rail Services $1,511 46,941 27,191 28,676 287 5,216 1,283 10,803 29,497 5,552 84,577 7,718

Marine 468 1,533 1,032 5,829 1,063 2,032 749 132 1,692 2,103

Transportation Equipment 152.9% 138.1% 237.7% 109.6% 164.0%

$225 3,171 1,140 184 920

10

$340 1,624 100 5 371

Transportation & Logistics Industry Update March 2014 Recent HW&Co. T&L Transactions a portfolio company of

a portfolio company of a portfolio company of

has been acquired by

has been acquired by

a portfolio company of

and

a portfolio company of has been recapitalized by has been acquired by

portfolio companies of a portfolio company of

has been acquired by

a portfolio company of

a portfolio company of

have completed a merger with

portfolio companies of have been acquired by

has been acquired by

has been acquired by

has been acquired by a portfolio company of

&

Our professionals have deep expertise across the spectrum of Transportation & Logistics sectors Third-Party Logistics

Surface Transportation

Rail

Aviation

Marine

Transportation Equipment

Automotive Companies above represent select experience of Harris Williams & Co. professionals.

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Transportation & Logistics Industry Update March 2014

Contact Us Frank F. Mountcastle Managing Director [email protected]

Harris Williams & Co.’s Transportation & Logistics Group has industry-leading experience in a broad range of attractive niches, including third party logistics, surface transportation, airport and aviation services, marine transportation, automotive and heavy duty vehicles, transportation equipment, and transportation infrastructure. Our middle market leadership and sell-side execution excellence deliver unmatched results for our clients. For more information, contact one of our professionals.

+1 (804) 915-0124

Jason D. Bass Managing Director [email protected]

+1 (804) 915-0132

Joseph H. Conner Managing Director [email protected]

+1 (804) 915-0151

Jeff Burkett Vice President [email protected]

+1 804-932-1334

Jershon Jones Vice President [email protected]

Sources: •Capital IQ •Thomson Financial •S&P •Reuters

+1 804-932-1356

Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBER. The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

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