3

LEADING SECURITY SOLUTIONS COMPANIES POSITION THEMSELVES FOR LONG-TERM GROWTH SECURITY SOLUTIONS INDUSTRY | DECEMBER 2020

0x4x8x

12x16x20x

11/19 01/20 03/20 05/20 07/20 09/20 11/20

EV/E

BITD

A

Alarm Monitoring Diversified IT Services & IntegrationS&P 500 Video SurveillanceAccess Control

CONTACTS

Todd McMahonHead of Investment Banking 617-619-3334tmcmahon@capstoneheadwaters.com

Tom McConnell Managing Director 303-951-7125tmcconnell@capstoneheadwaters.com

Merger and acquisition (M&A) volume across the broader economyexperienced a significant rebound in Q3, rising 28.1% quarter-over-quarter,indicative of a recovering deal environment. Despite a positive recovery in Q3activity, near-term challenges remain with concerns about a resurgence inCOVID-19 infections. However, robust vaccine efficacy rates and theseasonality of the virus have driven estimates that indicate herd immunityoccurring in the second half of 2021, according to McKinsey.1 As vaccine andpolitical uncertainties ease, Capstone Headwaters believes 2021 will yield awindow of opportunity for sellers, as private equity buyers remain flush withcapital and strategic buyers become less concerned with their own liquidity.

The Security Solutions industry has displayed defensibility in Residentialmarkets, while experiencing softness in Commercial applications as enterprisesdelayed new security projects in Q2. However, commercial activity modestlyrebounded in Q3. In addition, emphasis on public and employee safety,accelerated by the pandemic, has promoted demand for advanced systemsthat allow real-time visibility across facilities. “Smart” technologies haveadvanced security applications as end users demand automated, real-timesurveillance and access control. As a result, leading players have continued toinvest organically and inorganically to capitalize on long-term growth trends.

Resilience in the industry has been manifested within each segment,rebounding and within 20% of their 52-week high EBITDA multiples. Asdemand pressures ease, the industry is poised to continue its upwardtrajectory. As of November 10th, the Diversified IT Services & Integration(+91.6%), Access Control (+49.5%), Alarm Monitoring (+33.1%), and VideoSurveillance (+16.4%) segments have seen robust growth from March lows.

TABLE OF CONTENTS

M&A Outlook Trends & Drivers M&A Overview Notable Transactions Select Transactions Public Company Highlights Public Company Data Report Contributors Firm Track Record

M&A OUTLOOK

2

Security SolutionsLeading Companies Position Themselves for Long-term Growth

Public Company EBITDA Mutliples

Indexes includes: ASCN, BEAT, BNFT, CSLT, CERN, CHNG, EVH, HSTM, INOV, MDRX, OMCL, ONEM, PINC, TDOC, VCRA, IQV

Source: Capital IQ and Capstone Research

March 11: World Health Organization declares COVID-19 a pandemic

TRENDS & DRIVERS

COVID-19 Impacts: The virus has significantly disruptedcommercial security demand, as enterprises delayedprojects to eliminate new costs and preserve capital.However, ADT (NYSE:ADT) is beginning to see an uptick incommercial sales which have experienced a modestsequential increase compared to Q2, according to itsrecent earnings call.2 Meanwhile, residential installers,service, and equipment providers have outperformedpeers, especially for those with service and monitoringcontracts that generate defensible recurring monthlyrevenue (RMR). Lockdown measures and socialdistancing guidance have forced a significant increase intime spent at home. As a result, many residential usershave placed heightened emphasis on home securitysystems, evidenced by Allegion’s (NYSE:ALLE) double digitgrowth in its Residential segment in Q3.3

IP Video Surveillance and VSaaS Market: With recentadvancements in internet protocol (IP) video surveillanceand video surveillance-as-a-service (VSaaS), which isprojected to grow at a 16% compound annual growthrate to reach $4.7 billion by 2025 (Market and Markets),4end users can effectively survey facilities much moreefficiently while benefiting from a reduction in humancapital security costs. Trends in surveillance systems haveshifted from proprietary, higher cost systems to IP basedsystems, which utilize common protocols to transfer data,providing scalability and flexibility to existing networks inaddition to increasing storage capacity via cloud-utilization. The convergence of operational technology(OT) and information technology (IT) has led to anemergence of IP security access control and surveillanceequipment, providing new opportunities for technology-focused security operators. As demand for securityanalytics presents new smart platforms and equipment,service providers must invest, organically andinorganically, to fulfill the shifted demand landscape.

3

Security Solutions | December 2020

Source: Capstone Research

Analog Surveillance Video Surveillance IP Surveillance

Analog surveillance has certain disadvantages such as higher complexity in cabling, limited number of network devices, and high installation and operational costs.

After analog surveillance, digital era produced some advantages that reduce system complexity with the help of fiber optic cable. Still the video surveillance system is not scalable/flexible, and the cost of installation of the system is high.

To eliminate these disadvantages, software designers used Internet Protocol as a platform to transfer data. Use of IP delivers the scalability and flexibility to existing networks. Additionally, the use of cloud-based solutions increases storage capacity.

Shifting Trends in IP Surveillance Systems

Notably, ADT has released its Blue smart security devices,catering toward residential DIY customers. In addition,ADT entered into a long-term commercial agreement withGoogle (Nasdaq:GOOG), highlighted on page eight, tocreate next generation smart home products andsolutions. The partnership highlights traditional serviceproviders advancing investment into the smart home andremote access and monitoring space.

$4.9 billion

$11.7 billion

2020 2025

Video Analytics Projected Market Growth

Video Analytics: The Video Analytics market is projectedto reach $4.9 billion in 2020, with a growth rate of 19% toreach $11.7 billion by 2025, according to Market andMarkets.5 Historically, video surveillance has been humancapital intensive, and heavily inefficient, with less than 1%of all video surveillance footage viewed, according toELERTS.6 As security systems across Transportation,Public Safety, as well as new contract tracing systemspermeate our cities and facilities, demand for analyticsplatforms as well as equipment that supports their use ismission critical to support real-time threat detection.Notably, Motorola has utilized M&A to bolster its IPsurveillance and video management offerings, acquiringthree companies in 2020 (highlighted on page five).

Source: Market and Markets

M&A OVERVIEW

4

Merger and acquisition (M&A) activity through year-to-date (YTD) has trailed 2019 levels by ~30%, driven bydecreased deal activity in Q2. In Q1, there were 37 dealsin the Security Solutions industry, modestly lower thanhistoric Q1 levels while Q2 activity fell substantially withonly 18 deals. As the pandemic swept across the globe,strategic and private equity buyers focused on internal riskmitigation strategies to assess operational and liquidityconcerns. In addition, sellers have largely delayed exits asowners assess valuation impacts and look for enhancedvisibility into capital markets. However, transaction activityrebounded in Q3, rising 67% quarter-over-quarter asbuyers selectively seek quality assets that have displayeddefensibility through the COVID-19 downturn.

Private equity (PE) buyers accounted for 36.6% oftransaction volume, consistent with levels seen in 2019.Notably, add-on activity composed 26.0% of deal volumewhile platform investments accounted for 10.6%. Theflight toward add-on activity, as opposed to large buyouts,has been driven by scarcity of debt availability, as leveragelevels declined 0.25x to 1.25x while pricing increased ~75to 125 basis point increases, according to CapstoneHeadwaters' Debt Advisory Group. The challenging, albeitimproving, lending environment has forced PE buyers toput platform investments on hold in favor of smaller,strategic tuck ins to stimulate growth in existing platforminvestments. However, as leverage and pricing dynamicscontinue to recover, PE buyers are likely to return tobuyout activity, supported by the war chest of deployablecapital amounting to $1.2 trillion in 2019 (Pitchbook).7

40.3%

23.1%

10.6%

26.0%STRATEGIC

PrivatePublic

FINANCIAL

PlatformAdd-on

Annual Transaction Volume Year-To-Date Buyer Breakdown

Note: Year-to-date ended November 10Source: Capital IQ, PitchBook, FactSet, and Capstone Research

Num

ber o

f Tra

nsac

tions

86101

126 135 143

182

149

104

0

50

100

150

200

250

2014 2015 2016 2017 2018 2019 YTD2019

YTD2020

Strategic buyers have accounted for 63.4% of totaltransaction volume. Capstone’s conversations withleading strategics have indicated that many major playersare opportunistically looking to pursue acquisitions as theessential industry has maintained relatively steady cashflow and liquidity positions. However, many privatebusiness owners considering a sale of their companies areplacing those plans on hold until financial performancerecovers and valuation expectations better align withstrategic or financial buyers. Notably, ADT (NYSE:ADT)has indicated it continues to seek acquisitions in theCommercial market. With a historic playbook of tuck-inacquisitions, amounting to 10 deals since 2018, thecompany has only completed two deals in 2020 – bothoccurring pre-COVID. However, many strategics havecompleted deals in the post-COVID environment, seekingto bolster its security technology to augment existingequipment offerings and further align with long-termindustry trends. Notably, Johnson Controls acquiredhome security and control systems provider Qolsys,reflecting the heightened demand for ease of integrationremote home surveillance and access control. In addition,Motorola (NYSE:MSI) has bolstered its security offeringswith acquisitions in August of Callyo, a mobile technologyfor law enforcement body cameras, and Pelco ($110million), a manufacturer of professional video surveillanceand security system products and technologies(highlighted on next page).

As the market stabilizes and projected performancebecomes more visible, Capstone expects a robust reboundin M&A activity within the Security Solutions market.

Security Solutions | December 2020

NOTABLE TRANSACTIONS

5

Acquires

Acquires

Callyo 2009 Corp. (August, Undisclosed) – a provider of cloud-based software-as-a-serviceapplications serving thousands of public safety customers across North America, was acquired byMotorola in August for an undisclosed sum.8 Callyo serves law enforcement customers, providing twoapplication suites: 10-21, an application which simplifies communication between first responders andcitizens, and Callyo, which offers investigative tools to enhance digital evidence collection processes.The deal strengthens Motorola’s existing command center software suite, adding a leading criticalmobile technology that enables seamless information flow from the field to the command center.

Pelco, Inc. (August, $110 Million) – a global provider of end-to-end video security solutions, hasbeen acquired by Motorola for $110 million in August.9 The company was sold by Transom CapitalGroup, who acquired the business in March 2019 from Schneider Electric (ENXTPA:SU). Pelco designs,develops, and distributes IP video security cameras and video management system software. Its end-to-end solutions include a video management platform, VideoXpert, as well as physical securitycameras such as fixed, pan tilt and zoom, panoramic, explosion-proof, thermal, and fortifiedequipment. The company also provides field services, remote services, and training solutions. Inrecent years, Motorola has expanded and enhanced its video surveillance offerings, with theacquisitions of Avigilon in April 2018 and WatchGuard in July 2019. The acquisition of Pelco furtherexpands its offerings, bolstering next-generation security solutions which continue to serve a criticalrole in enabling safer cities and securing enterprises. Motorola plans to enhance Pelco’s productportfolio, leveraging Motorola’s industry leading video hardware and analytics technology.

IndigoVision (June, Undisclosed) – a provider of end-to-end video security solutions, has beenacquired by Motorola in June for undisclosed terms. Based in Edinburgh, Scotland, IndigoVision offerscameras, video management software, encoders, and storage devices. The deal showcases Motorola’scontinued growth and investment in next generation video security offerings. IndigoVision’s productsuite will complement Motorola’s existing video portfolio of fixed cameras, in-car and body-worncameras, and advanced analytics and software. “We share IndigoVision’s commitment to providingend-to-end video security solutions that enhance safety, security and efficiency. IndigoVision’s end-to-end offering, global presence and customer base will complement our existing and growing presencein video security and analytics,” commented John Kedzierski, Senior Vice President of Motorola’s VideoSecurity and Analytics division, in a press release.10

ACRE, backed by Security industry-focused private equity firm Egis Capital, has acquired RazberiTechnologies in November for an undisclosed sum.11 The deal marks ACRE’s third transaction since 2018,following the acquisitions of RS2 (May 2019, undisclosed) and Open Options (December 2018,undisclosed). ACRE provides state-of-the-art security systems including access control on-premises andcloud-based, intrusion detection, and communications network solutions. Razberi will join ComNet, asubsidiary of ACRE.

Founded in 2011, Razberi produces a portfolio of enterprise security solutions such as intelligent videosurveillance server appliances, automated cybersecurity software, and video health monitoring software.Its product suite integrates with leading third-party video management software as well as IP cameras toenable enterprises to securely manage physical and network security equipment. Razberi complementsACRE’s existing offerings across its video and access control brands.

Motorola Acquires Three Security Companies in 2020

ACRE, LLC Acquires Razberi Technologies, Inc. (November, Undisclosed)

Several notable transactions have been announced or completed in the industry in 2020. Select transactions are outlined below, followed by a more comprehensive list on the following pages.

Security Solutions | December 2020

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

11/05/20 StratoZen ConnectWiseProvides industry leading security orchestration, automation, and response platform. CF CF CF

11/05/20 RazberiTechnologies, Inc. ACRE, LLC

Manufactures network video solutions for professional video surveillance and security applications. - - -

11/04/20 Linkware/PRE AE Industrial Partners

Provides customized software solutions and security and travel consulting services. - - -

11/02/20 A&D Fire Sprinklers

The Hiller Companies Offers fire protection services. - - -

10/21/20 Safe Environmental Business Solutions Allied Universal Provides private security services. - - -

10/20/20 Assets of White’s Electronics Garrett Electronics Produces security metal detectors. - - -

10/14/20 Martin Security Systems

Per Mar Security and Research

Offers home security, business security, alarm systems, and fire alarm services. - - -

10/09/20 Mitec Controls Pye-Barker Fire & Safety

Provides inspection and testing services for fire alarm, access control, and video monitoring systems. - - -

10/08/20 FrontPoint Security Solutions Twin Point Capital Offers do-it-yourself home security systems. - - -

10/06/20 Danetech Connectivity Point Design & Installation

Distributes and installs integrated security solutions. - - -

10/02/20 Platinum Protection Group

AEGIS Security & Investigations

Offers physical security and investigative solutions. - - -

09/28/20 Assets of STANLEY Securitas Comprises the electronic security businesses in

Germany, Portugal, Switzerland, Singapore, and India. $64.0 0.8x -

09/17/20 Skynet Integrations

Minuteman Security Technologies

Offers security products and services for access control, video surveillance, and alarm systems. - - -

09/09/20 Delve Laboratories SecureWorks(Nasdaq:SCWX) Develops internet of things (IoT) security solutions. $15.5 - -

08/31/20 Callyo 2009 Motorola Solutions(NYSE:MSI)

Provides mobile technology tools for law enforcement agencies, such as body camera applications. - - -

08/31/20 Service Works Allied Universal Offers customized security and IT infrastructure integrator services in northeast Tri-state area. - - -

08/27/20 Advanced Fire; Approved Fire Certasite Provides commercial fire and life safety consultancy

services and installs fire alarm systems. - - -

08/27/20 Price’s Alarm Systems

TELUS(TSX:T)

Offers security alarm systems and monitoring services for commercial and residential clients. - - -

08/04/20 Qolsys Johnson Controls(NYSE:JCI)

Provides home security and control systems including life safety systems and remote cameras. - - -

08/03/20 Pelco Motorola Solutions(NYSE:MSI)

Comprises Schneider Electric’s professional video surveillance and security system manufacturing division. $110.0 0.7x -

07/20/20 Phoenix Systems & Service Allied Universal Provides full-service security systems integration. - - -

07/10/20 Vio Security Arena Investors

Offers security and automation solutions for residential and commercial applications. - - -

07/09/20 Access Control Systems

Brixey & Meyer Capital

Distributes residential and commercial access control systems and provides integration services. - - -

Note: CF = confidential; highlighted deals are Capstone’s transactionsSource: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS

6

Security Solutions | December 2020

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

06/30/20 Advantech Cook & Boardman Provides security integration to Education, Government, Commercial, and Healthcare markets. - - -

05/31/20Internal Security Associates

Patrol Protect Secure

Engages in premium on-site security services serving public sector clients. - - -

05/23/20 G2 Secure Staff Tenex Capital Provides security and staffing services for airports, sports events, and other events. - - -

05/22/20 Approved Safety and Security CertaSite Offers security system services. - - -

04/07/20 Revolutionary Security Accenture Provides cyber security solutions for IT and OT systems. CF CF CF

04/03/20 GT Fire & Security Midwest Alarm Services

Offers security solutions including fire alarms and access controls for residential and commercial clients. - - -

04/02/20 Fulcrum Biometrics

Fujitsu FrontechNorth America

Manufactures and integrates biometric identification systems and devices for commercial, civil, and military. - - -

03/23/20 Doorport PointCentral Develops a remote access control application that connects to your residential intercom. - - -

03/16/20 AlarmeTecno-Kébec

TélénetCommunications

Offers security and alarm products and services to residential, commercial, and industrial sectors. - - -

03/11/20 CENTRI Technology AgilePQ Provides data security solutions for IoT devices in Healthcare, Industrial, Residential, and Utilities markets. - - -

03/06/20 High Rise Fire and Security Scutum Group

Engages in the installation, service, and maintenance of fire alarm and life safety systems. - - -

03/02/20 Norris Minuteman Security Technologies

Designs, installs, and maintains security, life safety, and communications systems. - - -

02/24/20 Kele The Stephens Group

Distributes leading access control and building automation solutions. - - -

02/10/20 A+ Technology & Security Solutions

BiztekConnection

Offers access control, mass notification, IP cameras, visitor management, and training solutions. $4,500.0 0.5x 9.9x

02/06/20 Forescout Technologies

Advent International

Provides network security products including IoT device security monitoring. ~$1,786.0 5.3x -

02/05/20 Alliant Integrators ADT Offers commercial fire alarm detection, installation, inspection, and maintenance services. - - -

02/04/20 L3 Security & Detection Leidos Manufactures security detection systems. $1,000.0 2.0x -

01/28/20 Liberty Defense DrawDown Detection

Develops security solutions for concealed weapons detection in high volume foot traffic areas. - - -

01/27/20 Titan Security Doyle Security Systems

Provides video surveillance, managed access control and biometrics, and monitored detection. - - -

01/09/20 Sequr Genea Develops cloud-based access control systems that integrate into existing hardware systems. - - -

01/07/20 NextGenID Zeva Manufactures biometric access control systems. - - -

01/06/20 Defenders ADT Provides residential security services, doing business as Protect Your Home. $381.3 - -

01/06/20 Armis Insight Partners; CapitalG

Develops IoT security solutions that detect activity and threats on devices and networks. $1,100.0 - -

SELECT TRANSACTIONS

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Note: CF = confidential; highlighted deals are Capstone’s transactionsSource: Capital IQ, PitchBook, FactSet, and Capstone Research

Security Solutions | December 2020

Google (Nasdaq:GOOG) closed a $450 investment in ADT, allowing ADT to reduce debt and fund future growth. In addition,ADT and Google entered a long-term partnership to create next generation smart home security offerings, leveraging Nest’sleading hardware and services, powered by Google’s machine learning, with ADT’s installation, services, and monitoringsolutions as well as a new end-to-end platform under development. Despite commercial headwinds driven by the downturn,ADT remains optimistic in its commercial business. “Looking ahead, while there are still a number of economic and politicaluncertainties, we're optimistic about our ability to compete in the commercial space and returning to growth in 2021. High-quality commercial tuck-in acquisitions will continue to be a part of our playbook. And as the economy recovers, we remainoptimistic about this part of our business,” commented James DeVries, CEO of ADT, in its Q3 earnings call.

Analysis: ADT’s revenue slightly declined YOY, with monitoring and relatedservices (M&S) revenue falling 4%, reflecting ADT’s sale of ADT Canada inNovember 2019.12 Offsetting the decline in M&S revenue was a RMRincrease of 10% in the U.S. as a result of improvement in average priceswhile installation and other revenue increased 22%. The rise in installationand other revenues was driven by higher installation sales in its Residentialsegment, offsetting commercial installations declines as a result of COVID-19headwinds and the sale of ADT Canada.

PUBLIC COMPANY HIGHLIGHTS

Q3 Performance Highlights:• Total revenue fell to $1,299 million in Q3 2020, compared to $1,301

million in Q3 2019• Net loss of $113 million compared to $182 million in Q3 2019• Adjusted EBITDA modestly increased quarter-over-quarter to reach $564

million, while declining YOY from $624 million• Trailing twelve-month gross customer revenue attrition of 12.9% beat

expectations, compared to 13.1% in Q2 and 13.5% in Q3 2019

Source: Capital IQ

8

Source: Capital IQ

(NYSE:ADT)

(NYSE:ALLE)

Trading Data (11/10/2020):

Stock Price $7.32

52 Week High $17.63

Enterprise Value $15,751.9mm

EV/EBITDA 7.1x

EV/Revenue 3.0x

Net Debt/EBITDA 4.6x

Trading Data (11/10/2020):

Stock Price $115.15

52 Week High $139.24

Enterprise Value $11,967.1mm

EV/EBITDA 17.9x

EV/Revenue 4.3x

Net Debt/EBITDA 1.7x

Allegion intends to continue to utilize M&A to stimulate growth, with heightened focus on seeking electronics and softwarecomponents as well as traditional mechanical access solutions. “We will also take a hard look at traditional mechanicalaccess -- opportunities in markets where we think we can win and they have sufficient scale, size. We've, I think, done 20-plusacquisitions of different sizes. Size -- scale and size matter. A small acquisition, especially in a mechanical space, doesn't -- ittakes all the human capital, so we're leaning more towards technology, software and assets of size,” commented DavidPetratis, Chairman, CEO, and President of Allegion, in its Q3 earnings call.

Analysis: Allegion, consistent with current industry dynamics, experienced arevenue decline of 2.7%, driven by softness in its non-residential divisionwhich experienced low double digit revenue declines.13 Year-to-dateelectronics sales have declined mid-single digits as discretionary commercialprojects are delayed. This was offset by its residential division, generatinglow double digit growth. However, when comparing to Q2 2020, thecompany delivered ~24% revenue growth in Q3, indicating an improvementin industry conditions and a recovery in the broader market for securitysolutions.

Q3 Performance Highlights:• Revenue in Q3 of $728.4 million is down 2.7% YOY and 3.4% on an

organic basis• Adjusted operating margin of 23.3%, reflects a 20 bps increase YOY• Improved revision to 2020 revenue guidance, indicating a projected

decline of 6-6.5%• Adjusted operating income of $169.4 million represents a 2.1% decline

YOY, driven by COVID-induced reduction in volume

Security Solutions | December 2020

PUBLIC COMPANY TRADING & OPERATING DATA: ACCESS CONTROL

Source: Capital IQ as of November 10, 2020

9

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 11/10/20 High Cap Value Revenue EBITDA Margin Revenue EBITDAAllegion plc $115.15 82.7% $10,598.3 $11,697.1 $2,712.1 $653.9 24.1% 4.3x 17.9x

ASSA ABLOY AB $25.44 88.2% $28,256.7 $31,891.2 $9,969.3 $1,754.4 17.6% 3.2x 18.2x

dormakaba Holding AG $514.66 65.4% $2,139.5 $2,868.8 $2,681.8 $343.0 12.8% 1.1x 8.4x

Mean 18.2% 2.9x 14.8x

Median 17.6% 3.2x 17.9x

Harmonic Mean 17.0% 2.0x 13.0x

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 11/10/20 High Cap Value Revenue EBITDA Margin Revenue EBITDAADT Inc. $7.32 42.5% $6,042.4 $15,751.9 $5,298.3 $2,226.0 42.0% 3.0x 7.1x

Alarm.com Holdings, Inc. $70.38 88.7% $3,456.5 $3,379.1 $592.9 $103.4 17.4% NM NM

Monitronics International, Inc. $3.35 33.5% $75.3 $1,079.1 $490.2 $240.3 49.0% 2.2x 4.5x

Mean 36.2% 2.6x 5.8x

Median 42.0% 2.6x 5.8x

Harmonic Mean 29.5% 2.5x 5.5x

PUBLIC COMPANY TRADING & OPERATING DATA: ALARM MONITORING

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 11/10/20 High Cap Value Revenue EBITDA Margin Revenue EBITDADiebold Nixdorf, Incorporated $8.55 65.5% $664.2 $2,996.9 $3,948.0 $414.3 10.5% 0.8x 7.2x

Honeywell International Inc. $201.98 96.2% $141,726.5 $149,962.5 $33,233.0 $7,873.8 23.7% 4.5x 19.0x

Johnson Controls International $44.42 93.4% $32,257.8 $39,211.8 $22,317.0 $2,739.0 12.3% 1.8x 14.3x

Kratos Defense & Security $19.29 86.7% $2,368.0 $2,392.8 $726.4 $68.6 9.4% 3.3x NM

Shotspotter, Inc. $31.51 76.9% $359.9 $331.7 $44.0 $8.6 19.5% NM NM

Stanley Black & Decker, Inc. $178.79 93.8% $28,646.3 $34,773.0 $13,841.2 $2,412.2 17.4% 2.5x 14.4x

Mean 15.5% 2.6x 13.8x

Median 14.9% 2.5x 14.4x

Harmonic Mean 13.8% 1.8x 12.1x

PUBLIC COMPANY TRADING & OPERATING DATA: DIVERSIFIED IT SERVICES & INTEGRATION

EV = enterprise value; LTM = last twelve months$ in millions, except per share dataNM = Not Meaningful

Security Solutions | December 2020

41.3%

69.6%

35.4%42.2%

18.2%

36.2%

15.5%10.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Access Control Alarm Monitoring Diversified IT Video Solutions

Mean Gross Margin % Mean EBITDA Margin %

PUBLIC COMPANY TRADING & OPERATING DATA: VIDEO SOLUTIONS

Source: Capital IQ as of November 10, 2020

10

2.9x 2.6x 2.6x1.6x

14.8x

5.8x

13.8x 14.5x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x18.0x20.0x

Access Control Alarm Monitoring Diversified IT Video Solutions

Mean EV/Revenue Mean EV/EBITDA

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 11/10/20 High Cap Value Revenue EBITDA Margin Revenue EBITDACanon Inc. $18.35 62.2% $19,189.5 $22,960.5 $30,036.2 $3,601.1 12.0% 0.8x 6.4x

FLIR Systems, Inc. $36.06 60.7% $4,729.1 $5,242.3 $1,888.4 $445.4 23.6% 3.7x 11.8x

Mobotix AG $7.03 69.6% $94.0 $119.7 $75.9 $4.7 6.2% 1.4x 25.5x

Shenzhen Infinova Limited $0.62 62.3% $739.2 $888.1 $696.3 $4.4 0.6% 1.4x NM

Mean 10.6% 1.6x 14.5x

Median 9.1% 1.4x 11.8x

Harmonic Mean 2.2% 1.3x 10.7x

EV = enterprise value; LTM = last twelve months$ in millions, except per share dataNM = Not Meaningful

Last Twelve Month Margin Performance By Segment

Last Twelve Month Revenue and Historic EBITDA Multiples

Security Solutions | December 2020

SECURITY SOLUTIONS REPORT CONTRIBUTORS

Benjamin Kelly Research Analystbkelly@capstoneheadwaters.com | 617-619-3390

Ben joined Capstone Headwaters in 2018 and serves as an Analyst on the Boston Research Team. Heworks directly with senior investment bankers, utilizing data and market analysis to deliver key industryinsights to C-suite executives. Ben has a primary focus in the Industrial & Manufacturing and BusinessServices sectors. Prior to joining Capstone Headwaters, Ben worked as an intern at The Baupost Groupwithin its Portfolio Valuation department. Ben earned a BA in Economics from Providence College andis a Series 79 Registered Investment Banking Representative.

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Todd McMahonHead of Investment Bankingtmcmahon@capstoneheadwaters.com | 617-619-3334

Todd McMahon possesses over 20 years of transaction, financial services and corporate executiveexperience. Prior to Capstone Headwaters, Todd was President of Array Financial Services, a Bostonbased boutique M&A advisory firm he founded in 2002. He began his career at Putnam Investments,later moving to Bank Boston’s investment banking group. Later, Todd served as Managing Director atRoss Crossland Weston/RCW Mirus, where he was responsible for managing the firm’s technologyinvestment banking practice. Todd’s investment banking experience is complemented by hisinvolvement as an entrepreneur and investor where he was involved in various consolidationtransactions, raised over $30mm of debt and equity financing and was responsible for managing allaspects of operations. He earned his BA from the University of Massachusetts and his MBA fromBoston University.

Tom McConnellManaging Directortmcconnell@capstoneheadwaters.com | 303-951-7125

Tom joined Capstone Headwaters in 2011 and brings over 20 years of investment banking experience for clients’ benefit. He has an impressive track record of completed transactions with cyber security, physical security, compliance and risk management related companies. Mergers, acquisitions, and capital raise engagements with founder owned, private equity backed and public corporations across the United States and internationally, demonstrate the depth of his sector knowledge and transaction acumen.

Throughout his career, Tom has also believed in the importance of giving back to the community and has been recognized for his professional accomplishments and leadership. He co-founded Colorado Cyber with the mission of connecting private and public sector leaders in the cybersecurity ecosystem, stimulating discussion on critical issues, and supporting economic growth. Tom is a regular contributor to security industry publications and has a personal commitment to the broader mission of the security industry in helping make our world a safer place.

He earned his BA in Economics from Miami University, JD/MBA from the Denver Strum College of Law and Daniels College of Business at University of Denver. Additionally, he is a Series 63 Registered Securities Representative and Series 79 Registered Banking Representative.

Security Solutions | December 2020

FIRM TRACK RECORD

Capstone Headwaters maintains an active Business Services practice in the middle market, with Security Solutions being animportant vertical within our focus. This market presence allows Capstone Headwaters to provide security companies withexperienced, up-to-date market data and access to key decision makers among the industry’s most active acquirersand investors.

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has been acquired by has been acquired by has merged to form

a portfolio company of

Managed Security Services Provider

PROJECTNITRO

Value-AddedReseller

PROJECTBOREALIS

corporate sale(in process)

corporate sale(in process)

PROJECTPRESERVE

corporate sale(in process)

has been acquired by

Biometrics Technology Provider

PROJECTIRONMAN

corporate sale(in process)

has been acquired byhas been acquired by

Fire & Life Safety Systems Provider

Note: Deals also include Cybersecurity industry clients

Security Solutions | December 2020

CITATIONS

1. McKinsey, “When will the COVID-19 pandemic end?” https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/when-will-the-covid-19-pandemic-end, accessed November 23, 2020.

2. ADT, “ADT Reports Third Quarter 2020 Results,” https://investor.adt.com/press-releases/press-release-details/2020/ADT-Reports-Third-Quarter-2020-Results/default.aspx, accessed November 18, 2020.

3. Allegion, “Allegion Reports Third-Quarter 2020 Financial Results; Raises Full-Year EPS Outlook,” https://investor.allegion.com/~/media/Files/A/Allegion-IR/press-release/q3-2020-earnings-release.pdf, accessed November 18, 2020.

4. Markets and Markets, “Vsaas Market with COVID-19 Impact by Type (Hosted, Managed, and Hybrid), Vertical (Commercial, Infrastructure, Residential, Public Facilities, Military & Defense, and Industrial) and Region-Global Forecast to 2025,” https://www.marketsandmarkets.com/Market-Reports/video-surveillance-as-a-service-market-773.html, accessed November 18, 2020.

5. Markets and Markets, “Video Analytics Market by Component, Application (Intrusion Management, Incident Detection, People/Crowd Counting, Traffic Monitoring), Deployment (On-premises and Cloud), Type, Vertical, and Region - Global Forecast to 2025,” https://www.marketsandmarkets.com/Market-Reports/intelligent-video-analytics-market-778.html, accessed November 18, 2020.

6. ELERTS, “Candid About Camera – Human Analytics vs. Video Analytics,” https://elerts.com/candid-about-cameras/, accessed November 18, 2020. 7. PitchBook, “2019 Annual Fund Strategies Report,” https://files.pitchbook.com/website/files/pdf/PitchBook_2019_Annual_Private_Fund_Strategies_

Report.pdf, accessed November 18, 2020. 8. Motorola, “Motorola Solutions Adds Cloud-Based Mobile Application Capabilities with Acquisition of Callyo,” https://newsroom.motorolasolutions

.com/news/motorola-solutions-adds-cloud-based-mobile-application-capabilities-with-acquisition-callyo.htm, accessed November 18, 2020. 9. Motorola, “Motorola Solutions Acquires Global Video Security Solutions Provider Pelco for $110M in Cash, Continuing Investment in Video Security

& Analytics,” https://newsroom.motorolasolutions.com/news/motorola-solutions-acquires-global-video-security-solutions-provider-pelco-for-110m-in-cash-continuing-investment-in-video-security-analytics.htm, accessed November 18, 2020.

10. Motorola, “Motorola Solutions Acquires IndigoVision, UK-Based Provider of End-to-End Video Security Solutions,” https://newsroom.motorolasolutions.com/news/motorola-solutions-acquires-indigovision-uk-based-provider-end-to-end-video-security-solutions.htm, accessed November 18, 2020.

11. Razberi Technologies, “Razberi Technologies Acquired By ACRE,” http://blog.razberi.net/2020/11/razberi-acquired-by-acre, accessed November 18, 2020.

12. ADT, “Q3 2020 Earnings Presentation,” https://s22.q4cdn.com/631128414/files/doc_financials/2020/q3/ADT-3Q20-Earnings-Deck_Final.pdf, accessed November 18, 2020.

13. Allegion, “Third-Quarter 2020 Financial Results,” https://investor.allegion.com/~/media/Files/A/Allegion-IR/reports-and-presentations/allegion-third-quarter-2020-earnings-presentation.pdf, accessed November 18, 2020.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission ofany reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security ofany such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for thegeneral information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation orneeds of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for allinvestors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be reliedupon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to varymaterially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subjectto change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. Thisreport may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information containedherein should not be construed as legal advice.

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Security Solutions | December 2020

INTEGRATED CRISIS MANAGEMENT SOLUTIONS

BUILD REALIZE SUPPORTGROW

As a firm, we have mobilized our collective resources to deliver an integrated solution to business owners navigating throughthese times. We can help frame your decisions, access capital to protect your position, and provide specialty transactionexpertise to capture opportunities as they arise.

Our full-service capabilities help companies through every aspect of the business, supported by dedicated industry experts,market intelligence, and private equity coverage.

Financial Advisory

We specialize in performance improvement and value creation

in difficult situations.

Board Advisory • Strategic Blueprinting• Evaluate Capital Adequacy• Performance Tracking• Management Accountability• Communication

Operational Effectiveness • Cost Structure Management• Operational Assessment• Management Assessment• Sales Augmentation• Organizational Optimization

Crises Management • Turnaround / Interim Mgmt.• Corporate Restructuring• Bankruptcy Protection

Capital Access

We help manage through new or existing lenders or investors and

secure an optimal solution.

Debt Financing• Bridge / Interim Financing• ABL and Cash Flow Revolvers• 1st and 2nd Lien Term Loans• Subordinated Debt• Sale-Leasebacks

Equity Financing • Growth Equity• Secondary Equity Recaps• Structured Equity• Acquisition Financing• Investor Management

Alternatives • Creditor Mediation• DIP and Exit Financing • Government Support Programs

Mergers & Acquisitions

We can assist opportunist acquisitions, execute sales, and

navigate distressed transactions.

Strategic Acquisitions• Target Identification• Valuation & Structure• Buy-Side Due Diligence• Quality of Earnings• Buy-Side M&A Execution

Sales & Divestitures• Corporate Valuation• Market Assessment• Transaction Readiness• Sell-Side M&A Execution• Asset Divestiture

Distressed Transactions• Business Unit Divestiture• Distressed M&A• §363 Sale

WE ARE ENGINEERED TO MEET THE FULL LIFECYCLE DEMANDS OF PRIVATE COMPANIES

12TO LEARN MORE ABOUT OUR SERVICES AND SPEAK TO A MEMBER OF OUR TEAM CONTACT US.

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www.capstoneheadwaters.com

Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. Thefirm has a rich 18+ year history of achieving extraordinary results for middle market entrepreneurs, business owners,investors, and creditors. The firm offers a fully integrated suite of corporate finance services, including merger & acquisition,debt & equity placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisoryservices.

Headquartered in Boston, Capstone Headwaters has over 170 professionals across 16 offices in the U.S. with 16 dedicatedindustry groups. Capstone has been recognized consistently as one of the top investment banks to work for and “U.S. MiddleMarket Firm of the Year.”

BUILT FOR THE MIDDLE MARKET

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