NEW FACTORS IMPACT VALUATION IN STORAGE, SUPPLY CHAIN …

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NEW FACTORS IMPACT VALUATION IN STORAGE, SUPPLY CHAIN AND FULFILLMENTWAREHOUSING & FULFILLMENT | FEBRUARY 2021

CONTACTSBurke SmithManaging [email protected]

Jay MercierVice [email protected]

Nathan [email protected]

www.capstoneheadwaters.com

For many decades, third-party storage, whether dedicated or public, was anunderappreciated segment of the supply chain with valuation EBITDA multiplesin the mid-single digits and few marquee transactions to make headlines.However, awareness of the significance of warehousing started to germinate inthe 1980's with the introduction of lean manufacturing philosophies and just-in-time inventory capabilities driven by computer software advances.

Large manufacturers began to outsource their supply chain to streamlineoperations as speed to market and inventory turnover became key metrics forfinancial analysts. Third party warehousing was a cost-effective way to positionproduct with much great flexibility and became the default pathway for gettingproduct to retail locations. With the turn of the millennium, an even largerparadigm shift would emerge, that of online transactions and ultimately thewholesale migration of consumers from brick-and-mortar retail to shoppingfrom home.

Well, what does this really mean for warehousing? Basically, all the “operational”functions of a store, like storing product, sorting product, packaging productand servicing the product shifted from a retail location to a warehouse location.So much of that fulfillment responsibility and customer experience valuehandled by stores, are rapidly transferring to the warehouse, or “fulfillmentcenter.” This shift has large implications for the perceived value of category(now called fulfillment services) and therefore transaction values of third-partystorage companies.

1,336 1,548 1,845 2,3822,982 3,535

4,2064,927

5,6956,542

$2,000

$4,000

$6,000

$8,000

$10,000

2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E

Retail E-Commerce Sales Worldwide

Source: Statista

TABLE OF CONTENTS Industry Transformation The Covid-19 Effect Key Trends & Drivers What Buyers Are Looking For in 2021 Valuation Estimates Notable M&A Transactions Public Company Transaction Update Public Company Comparisons Q&A With NFI Select Transactions Report Contributors Firm Track Record

INDUSTRY TRANSFORMATION

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U.S.

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Billio

ns

WAREHOUSING & FULFILLMENTNew Factors Impact Valuation in Storage, Supply Chain, and Fulfillment

0x

10x

20x

30x

40x

50x

60x

70x

$0

$100

$200

$300

$400

$500

$600

$700

$800

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32015 2016 2017 2018 2019 2020

Revenue TEV/Revenue

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Warehousing & Fulfillment | February 2021

THE COVID-19 EFFECTOnline shopping has accelerated during the pandemic and heightened demand for e-commerce fulfilment services. As aresult, and with this trend expected to continue over the next few years, acquisition activity in the Fulfilment sector has alsoaccelerated and brought heightened valuations for companies that provide the infrastructure to make e-commerce possible.

While e-commerce giants such as Amazon (Nasdaq:AMZN) have seen a jump in revenue, rising from $75 billion in Q1 2020to over $125 billion in Q4, small and medium-sized enterprises (SMEs) have also shifted their strategies to an online focus.This trend can be seen in Shopify’s (NYSE:SHOP) impressive revenue jump in Q2, rising from $470 million in Q1 to $714million in Q2. Traditional brick and mortar retailers have taken notice. After its acquisition of Jet.com in 2016, Walmart(NYSE:WMT) has been actively pushing into e-commerce and is top of mind for CEO Doug McMillon, who stated:

“Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future.” 3

The most telling part of this statement is “in the future,” which signals that the largest retailer in the world understands thatthese changes are not going away. This omni-channel distribution requirement is putting significant pressure on large third-party warehousing and supply chain companies which service the consumer space. The choice is either invest in upgradingexisting facilities to handle omni-channel or seek acquisitions and partners to manage online orders.

Source: Capital IQ, multiples are an average for the quarter; Shopify Q2 2020 Earnings Transcript

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E-Commerce Fueled Multiple Expansion

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KEY TRENDS & DRIVERS: DISTRIBUTED FULFILLMENT NETWORKS

Shopify introduced its fulfillment network plan in 2019 with a stated total capital investment of $1 billion to build out its owndistribution infrastructure. This vertical integration strategy is meant to drive shippers to use their software platformexclusively. Other companies are taking the opposite approach by remaining agnostic to the e-commerce platform andleveraging the tens of thousands of existing local and regional warehouses in the U.S. Several meaningful attempts atdeveloping national scale fulfillment platforms have emerged in the last five years, primarily to service smaller independentbrands that market directly to consumers. Valuations of these companies, which have raised significant venture capital, tendto be much higher than the warehousing companies doing the fulfillment work, on the promise that their platforms canaggregate large order volumes from thousands of smaller shippers.

The idea is also catching on with very large strategics like UPS (NYSE:UPS), which launched its own independentsubsidiary Ware2Go in 2018. There is a ferocious land grab for customer accounts and warehousing partners to servicethese accounts. For warehousing companies that have underutilized capacity or are looking to shift from storage tofulfillment models, there are some benefits to partnering with platforms that can deliver significant volume, as well aspotential valuation premiums for their own businesses. The question remains whether the unit economics of partneringjustifies the required investment in technology, racking/binning/sorting, and additional staffing.

Headquarters: Chicago, IL

Capital Raised: $130 million

Valuation: $568 million

Key Investors: Softbank, Menlo Ventures, Bain Capital

Locations: 9 domestic fulfillment 2 internationalAdding partner locations

Headquarters: Seattle, WA


Valuation: $100 to $500 million

Key Investors: Activate, Madrona, Tiger Global, T. Rowe Price

Locations: Claims 1,000+ warehouse partners with various service levels

Headquarters: San Francisco, CA



Key Investors: 9Yards, Alumni Ventures


Headquarters: Los Angeles, CA



Key Investors: Canvas Ventures


Source: Pitchbook, Crunchbase and Company Interviews


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Technology Integration

Transportation RevenueFootprint and Scalability

Value Added Services

WHAT BUYERS ARE LOOKING FOR IN 2021Over the past few months, we have spoken with dozens of larger supply chain companies about their acquisition plans for2021. While there are always company specific factors which weigh more heavily with specific buyers, four characteristicsregularly emerge as important differentiators for prime acquisition targets. Based on the interest level of buyers, we expectthat 2021 should be an active transaction year as companies adjust to the post-COVID supply chain environment.

You don’t have to have your own team ofprogrammers to have a successful technologycapability. Most buyers are looking for efficient EDIimplementation as the highest priority. It should nottake months to onboard a new customer that wantsto transact electronically. Beyond EDI, your WMSshould be capable of handling connectivity to thirdparty software platforms like Shopify, Magento, BigCommerce (Nasdaq:BIGC), Amazon, and others.Advanced fulfillment processing and automatedconnection to transportation and delivery providersare other technology hot-buttons for buyers.

• Fast EDI implementation• E-commerce connectivity

Value added services does not just apply to fulfillinge-commerce orders. Think about how youroperation can streamline your customers’ supplychain process. Activities like custom sorting andpackaging, wrapping and printing can help makeyour company more valuable to customers andacquirers. Even commodity and B2B storagecompanies need to think about omnichanneldistribution models. The needs of one customermost likely apply to a spectrum of potential newcustomers and are typically worthy of strategicinvestment.

Acquisition transactions, take considerable financialand personnel resources to execute and buyerswant to make sure they are spending time wherethe impact is greatest. This generally means thatmore focus is placed on scale, targets with morecapacity and transaction volume. Larger buyers willwant to bring their own customer accounts into anacquired warehouse, so some room to grow iscertainly a plus if not access to new space.Additionally, while some buyers are looking for veryspecific locations on the map, acquisition candidateswith a bigger footprint are usually more appealing.

Storage provides a solid base for warehouseoperation but does not offer the transactionalrevenue opportunities that buyers are looking for.Operators with e-commerce customers can ofteninsert a service charge for connecting with parceldelivery providers like UPS and Fedex (NYSE:FDX).Other transportation revenue services includearranging LTL transport or even inbound logistics,particularly for smaller shippers. Some largerwarehouses also successfully integrate drayageservices or last mile delivery on a captive or owneroperator basis.

• Picking and packing• Custom packaging & delivery options

• 500k+ overall capacity• Multi-market presence

• Parcel management or last mile delivery • Brokerage capability


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NOTABLE M&A TRANSACTIONS

2020Clearly a vertical integration statement for the shipping giant looking to build a presence in the US retail and e-commerce distribution space.

2019The Whiplash acquisition was about software to grow e-commerce fulfillment. Now PLG is looking to scale the network and customer base.

2020Big Box supply chain has become its own animal. CHR realized that consolidation services are critical to cost effectively manage lots of shippers with the same endpoints.

2020Hub Group wanted a leading position in retail consolidation and did so with the acquisition of Case Stack. The asset lite platform leverages Hub’s own footprint to more rapidly gain scale and market coverage.

2019 and 2020Dot Family Holdings wants to replicate its success in food distribution within the e-commerce logistics space. Its acquisition of Tagg and LeSaint creates a formidable network to service the branded retail and omnichannel market.

2018Korea based CJ Logistics saw an opportunity to dramatically expand its US network as it seeks to fulfill its ambition to become an international logistics leader. The transaction was a notable marker for international interest in the US supply chain sector.

VALUATION ESTIMATES: MIDDLE MARKET STORAGE AND FULFILLMENT COMPANIES

6-7x EBITDA

8-10x15x+

Regional players with 1-3 warehouses Minimal B2C business, low transport

spend revenue Minimal technology integrations, still

largely manual Mostly smaller SMB customers with

higher-than-average churn 3%-5% revenue growth 3%-7% EBITDA margins

Multi-state company with 10+ facilities >75% B2C revenue with control of transportation spend Automated order flow with leading e-commerce aggregators Fortune 500 and growth customer mix 10%+ revenue growth 10%+ EBITDA margins

Pure play software platform with revenue share warehouse partners

National network coverage of major population centers

20%+ annual account growth 90%+ B2C order flow Control of transportation spend 25%+ revenue growth Profitable model

11-13x

Multi-state company with 5-10 facilities 50%+ B2C revenue with significant transportation

spend revenue Robust TMS with connectivity capability to e-

commerce platforms 5%-10% revenue growth 5%-8% EBITDA margins


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$125Volume Stock Price

2020

The plan to pursue a spin-off is announced after the market close.

PUBLIC COMPANY TRANSACTION UPDATEOn December 2, 2020, XPO (NYSE:XPO) announced that its board of directors has unanimously approved a plan to pursue aspin-off of its logistics business unit that would result in XPO shareholders owning stock in both companies. XPO intendedto structure the spin-off as a transaction that is tax-free to XPO shareholders. XPO Logistics will retain the freighttransportation business which consists of LTL and non-asset freight brokerage. NewCo will be the second largest contractlogistics company in the world with ~200 million square feet of warehouse space.

Source: XPO Logistics 8-K Published 12.02.20 & Capital IQ

“By uncoupling our transportation and logistics segments, we intend to create two high-performing, pure-play companies toserve the best interest of all our stakeholders. Both businesses will have greater flexibility to tailor strategic decision makingand capital allocations to their end-markets, with the benefit of strong positioning as customer-focused innovators. Wecurrently believe that this spin-off is the most effective way to unlock significant value for our customers, employees andshareholders.”4 - Brad Jacobs, Chairman and Chief Executive Officer of XPO Logistics

As standalone companies, the freight transportation and contract logistics businesses will probably have a higher combinedequity market valuation (sum-of-the-parts) than what is currently being reflected in XPO Logistics’ market capitalization. Theboard of directors want to unlock shareholder value and discard the “Conglomerate Discount” that weighs heavily on thestock price of the company.

Company Rationale for the Spin-Off:

The companies will have the ability to focus on their specific strategic priorities and customer requirements Provide additional differentiation by having its technology team focus on enhancing proprietary software developed for

its specific service offering The investor base will be aligned with a clear-cut value proposition and be properly valued by the investment community Each busines would have a better opportunity to attract and retain world-class talent by offering meaningful equity-based

compensation that correlates closely to performance Separate public stock listing would enhance each company’s ability to purse accretive M&A opportunities, with the benefit

of an independent equity currency at a potentially higher value.

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The equity market reacted favorably to the corporate announcement and the stock price moved higher withapproximately four million shares changing hands on the first day of trading after the 8-K was released.

XPO Logistics Sees Stock Rise after Spin-Off Announcement

Warehousing & Fulfillment | February 2021U.

S. Do

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s

7.8x

14.7x

18.0x

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10x15x20x25x30x35x

2018 2019 2020 2021

XPO Logistics C.H. Robinson Echo Global LogisticsFreight Brokerage

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PUBLIC COMPANY COMPARISONS: CONGLOMERATE VS. “PURER” PLAY

Source: Capital IQ

7.8x

14.9x

20.1x

0x

5x

10x

15x

20x

25x

2018 2019 2020 2021

XPO Logistics SAIA Old Dominion Freight Lines

7.8x

30.2x

10.4x

0x5x

10x15x20x25x30x35x40x

2018 2019 2020 2021

XPO Logistics Prologis Clipper Logistics

Less-Than-Truckload

Warehousing & E-Commerce Fulfillment

Warehousing & Fulfillment | February 2021EV

/EBIT

DA

EV/E

BITDA

EV

/EBIT

DA

Q&A With NFI

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How has NFI evolved over the past five years with the rapid ascension of e-commerce?

Over the past five years, within our network our distribution centers have transformed into omnichannel facilities. What wewere shipping from our warehouses to distribution centers, we are now shipping from our warehouses to distributioncenters, stores, and direct to consumers. Furthermore, we are processing more returns with respect to e-commerce becausea large percentage of what is shipped to consumers ultimately gets returned. Consumers are buying multiples of items withthe goal of keeping one and sending the remainder back to the shipper. We are doing a lot more processing of returnswithin our warehouses and fulfillment centers.

What are some of the challenges that have been created by consumer demand for faster delivery times?

The challenge we are seeing is that shippers’ networks have been disrupted. The larger shippers who have a store format aretrying to figure out how to change that store format into a combo store/fulfillment center. For small to mid-size shippers,2020 was a very difficult time for them, especially if they did not have an e-commerce solution. What we saw was that thebig got bigger and the small to medium size shippers struggled to compete.

As a 3PL, we are working very hard with shippers to determine if those distributions centers are located in the appropriateplaces in order to cut down on transportation costs and to improve speed to market. The truncation of time from two-day tosame day delivery has challenged shippers with how to balance inventory on hand (holding costs) versus making sure thatthey have enough inventory to avoid a stockout in a specific location. A missed sale or getting a product a few days late for alot of these retailers is unacceptable because consumers are going to move on to the next best retailer.

How has NFI positioned itself to grow its market share of e-commerce fulfillment in North America?

We continue to be bullish on warehousing and e-commerce fulfillment. What we have been doing to position ourselves overthe past few years is to invest in both technology and engineering. NFI has invested in the tier-one warehouse managementsystems, yard management systems and labor management systems. We feel that we have some of the best technology inorder to tap into shippers and to provide them with the visibility that they demand.

The second thing is that we have grown our engineering group and our utilization of robotics and automation. We havetalented engineers that work side by side with our shippers to lay out distribution centers to optimize efficiency betweenautomation and labor. Lastly, something that might be unique to NFI as a 3PL is that we have a large real estate competency.We feel that with our competency in real estate, we can see where shippers want to be located and can get out ahead of thisneed with flexible solutions.

Capstone Headwaters spoke with TJ Lynch, Senior Vice President of Finance andMarketing at NFI, to discuss their views on the evolution of e-commercefulfillment, NFI’s warehousing and fulfillment businesses, and the M&A industryas it relates to logistics.

NFI is a fully integrated North American supply chain solutions providerheadquartered in Camden, N.J. Privately held by the Brown family since itsinception in 1932, NFI generates more than $2.6 billion in annual revenue andemploys over 14,500 associates. NFI owns facilities globally and operates morethan 50 million square feet of warehouse and distribution space. Its dedicatedfleet consists of over 3,000 tractors and 12,500 trailers operated by 3,000company drivers and leveraging partnerships with 400 owner operators.


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TJ Lynch has been with NFI since 2010 and leads corporate finance functions including financial planning andbusiness analytics, mergers and acquisitions, certain administrative functions, and special projects. In addition,TJ oversees NFI’s marketing efforts which focus on business line sales support, brand awareness, digitalmarketing, and corporate events such as the Customer Advisory Board.

Prior to joining NFI, TJ was a Senior Manager in the Transaction Advisory Services Group at Ernst & Young,where the practice focused on financial diligence for mergers and acquisitions. At E&Y, TJ advised large publiccompanies, private equity firms, and middle market companies in the US, Canada, and Europe.

Contact Mr. Lynch at [email protected]

Do you see any trends, or shift, in the value-added services that your customers expect as their fulfillment provider?

We are seeing more of an each-picking environment that entails a lot more in terms of labeling, tagging and/or co-packing.

The second area of value-added service is reverse logistics but it depends on the shipper and how they handle reverselogistics. There are a lot of retailers and apparel companies whose returns are going back to one of our distribution centersor warehouses.

Then you must decide on what to do with these products. Do you put it back in inventory, scrap it, or wholesale it? We spenda lot of time thinking about how to process those returns in the most efficient and effective way to maximize value ofreturned products when they come back into our warehouses and fulfillment centers.

Could you provide some color or thoughts on the M&A market as it relates to warehousing and fulfillment? Do youexpect the market to remain hot in 2021?

I see 2021 as being a very good M&A market for logistics in general and specifically warehousing and fulfillment. There is alarger emphasis on having agile supply chains and 3PLs will fair well because of that.

Our M&A strategy mainly focuses on founder-owned or family-owned business. These owners went through a lot this pastyear and many of them might be thinking about a liquidity event if they do not have a succession plan in place. NFI wants tobe involved with family-owned reverse logistics companies located in logistics hubs. There are a lot of good companies, withNFI being one them, that had great 2020s because of their alignment with essential customers. Reverse logistics is a conceptthat is moving quickly. This will be a focus area of NFI and we love warehousing and fulfillment and will continue to look forgood deals out there that will add some size, scale, and industry specializations to our portfolio. We are focused on logisticsbusinesses located in the United States and Canada.

Q&A With NFI (CONTINUED)


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

01/28/21 Recommerce Group Cannagistics Inc. Offers reverse logistics services, including returned return center services, and remanufacturing. - - -

01/07/21 SEKO Worldwide Ridgemont Equity Partners

Provider of transportation, logistics, forwarding, and warehousing services. - - -

12/23/20 Moulton Logistics Management Amware Fulfillment Provides fulfillment, retail distribution, promotional

distribution, and mailing services. - - -

12/10/20 Weber Logistics Stellex Capital Management

Provides warehousing and distribution services in addition to drayage, consolidation, and transload. - - -

12/09/20 NonstopDelivery Hub Group, Inc. Provider of third-party logistics and transportation services. $94.5 - -

11/12/20 Optimum Fulfillment Flat River Group Engages in the distribution of toys, games, and other consumer products. - - -

07/07/20 TriCon Visible Supply Chain Management

Operates as a logistics and fulfillment company headquartered in Dallas. - - -

04/28/20 BGS Fulfillment NovEx Supply Chain Provides warehousing, fulfillment, and fulfillment services. - - -

03/20/20 Fulfillment Services of EasyPost Ruby Has Comprises a business division that offers warehousing

to receiving, pick-packing, and shipping services. - - -

03/17/20 Innovel Solutions Costco Wholesale Offers warehousing, transportation, home delivery, freight/carrier and end-to-end custom solutions. $998.0 - -

03/02/20 NAL Group CRST International Offers last-mile delivery, dispatch, simple and complex installation, warehousing, and direct fulfillment services. - - -

02/19/20 Performance Team A.P. Møller - Mærsk Offers fulfillment and e-commerce solutions for retail, wholesale, and omni-channel customers. $545.0 1.0x 6.1x

01/30/20 RPM Consolidated Services

Odyssey Logistics & Technology

Offers freight forwarding, storage, warehousing, trans loading and cross docking and fulfilment services. - - -

01/28/20 Prime Distribution Services

C.H. Robinson Worldwide

Provides warehousing, cross-docking, packaging, and multi-vendor freight consolidation services. $222.7 2.1x -

01/27/20All Assets Of Sid Wainer & Son

The Chefs' Warehouse

Comprises specialty food products fulfillment business in the Northeast. $50.5 - -

01/21/20 EchoData Services Advantage Media Services

Offers third party fulfillment, returns processing, reverse logistics, and inventory management solutions. - - -

01/14/20 LeSaint Logistics TAGG LogisticsOffers supply chain, inventory, and warehouse management along with transportation and fulfillment services.

- - -

01/07/20 Air-CityGreenbriar Equity Group; SEKO Enterprises

Provides webtracking, e-Commerce, warehousing and distribution, and pick and pack services. - - -

12/03/19 Veeco Holdings STG Logistics Provides transportation, and warehousing and fulfillment services in the US. - - -

09/18/19 Milan Supply Chain Solutions

Wellspring Capital Management

Specializes in truckload transportation, logistics, warehousing/storage consolidation, and fulfillment. - - -

08/20/19Assets of Great Lakes Fulfillment Services

Jet Mail Services, Incorporated Assets offer fulfillment services. - - -

06/20/19 Fusion Transport Hudson Hill Capital Offers logistics services. - - -

05/07/19 Advantage Media Services Fort Point Capital Provides third party warehouse management, order

management, and fulfillment services. - - -Source: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS

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

04/24/19 Whiplash Merchandising Inc.

Port Logistics Group

Provides storage and shipping services for products on demand for e-commerce companies. - - -

03/26/19International Fulfillment Solutions/ IFS360

Rakuten Super Logistics

Offers complete front end e-commerce shipping solutions and integrated e-commerce fulfillment services.

- - -

03/13/19 Quiet LogisticsThe Related Companies; Greenfield Partners

Provides e-Commerce fulfillment services. - - -

03/13/19 Kane Logistics Harkness Capital Partners

Offers distribution and fulfillment, contract packaging, cross docking, and transportation management solutions.

- - -

01/14/19 DSI Warehouse & Storage Houston-Johnson Provides storage, pick up and packaging, assembling,

kitting, container handling, and fulfillment. - - -

12/12/18 FulfillPlus Balwa Group Provides fulfillment, warehousing, order processing, kitting, assembly, and shipping services. - - -

11/05/18 CaseStack Hub Group Offers integrated logistics solutions to retailers and CPG companies. $252.1 1.0x 11.5x

10/09/18 HA Logistics Sunteck Transport Group

Offers trucking, forwarding, supply chain, warehousing and fulfillment services. - - -

10/02/18 Iron Mountain Fulfillment Services Amware Fulfillment Provides marketing production and fulfillment services. - - -

08/31/18 TAGG Logistics Dot Family Holdings Provides third party logistics services for mid-sized healthcare and consumer products businesses. - - -

06/11/18New Age Transportation and Warehousing

Evans Delivery Company

Offers third-party freight, warehousing, and fulfillment services. - - -

06/07/18 DSC Logistics CJ Logistics Provides logistics and supply chain management services. $240.1 0.4x -

04/16/18 Lasership Greenbriar Equity Provides last-mile e-commerce delivery solutions through an integrated hub-and-spoke network . - - -

04/03/18 MXD Group Ryder System Provides logistics services for home delivery and retail replenishment. $120.0 - -

03/23/18 Trinity Logistics Agrisolutions Provides production line support, inventory management, warehousing, and fulfillment services. - - -

International Transactions07/17/20 Mobiltron France Cordon Electronics Offers e-commerce logistics services. - - -

04/27/20 ASAP Log Soluções em Logística VVLog Logística Provides logistics services to e-commerce businesses. - - -

01/08/19 CML Rhenus Warehousing

Provides international freight forwarding, warehousing, multichannel fulfillment, and value-added services. - - -

12/18/18 Aramex Global Solutions Australian Postal Offers logistics, transportation, and shipping services

for the e-commerce industry. $33.3 - -

09/07/18 Alpha Direct Services Hopps Group Offers E-commerce logistics solutions. - - -

09/04/18 S&H DSV Panalpina Provides warehousing, response handling, fulfilment, and returns handling. - - -

Source: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS (CONTINUED)

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Burke Smith Managing Director, Head of Transportation & Logistics [email protected] | 310-872-0038

Burke is the Head of the Transportation & Logistics practice at Capstone Headwaters and is based in theDenver office. Burke joined the firm in 2014, bringing to Capstone Headwaters 19 years experienceas an advisor to or leader of middle market companies. Most recently, Burke ran several asset-basedtrucking and warehousing operations, and previously managed an 8-state last mile delivery network.Over his career to date, Burke has executed more than 45 transactions with a combinedvalue in excess of $40 billion. Burke began his career working on Wall Street. He initiallytrained at Wasserstein Perella & Co., where he worked directly for famed M&A banker Bruce Wasserstein.Burke then joined Donaldson, Lufkin & Jenrette (DLJ) as an early member of the firm’s Exclusive SalesGroup, which became one of the most successful middle market sell-side advisory practices on WallStreet. Following the acquisition of DLJ by Credit Suisse, Burke joined UBS as an ExecutiveDirector in the mergers and acquisitions group. Burke earned a Law degree from Harvard Law School,and an MA and BA from Stanford University.

TRANSPORTATION & LOGISTICS TEAM

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Jay MercierVice President404-934-6362 | [email protected]

Jay serves as a Vice President in Capstone Headwaters’ Transportation & Logistics coverage group. He brings over 10+ years of capital markets experience that spans investment banking, credit trading and equity derivatives trading. Prior to joining Capstone Headwaters, Jay worked as a Director at Cowen where he was a member of the Outsourced Trading Team. He was responsible for the account coverage of institutional buy-side accounts and advised clients on risk mitigation strategies with the use of exchange-traded derivatives. Jay earned a BA from the University of Georgia and an MBA from the Georgia Institute of Technology.

Nathan FeldmanAssociate845-416-5906 | [email protected]

Nathan joined Capstone Headwaters in 2015 and while he has held multiple different roles at the firm, he currently works as an investment banking Associate on the firm’s Transportation & Logistics team. His responsibilities primarily include helping middle market business owners throughout the industry execute exit, recapitalization, and capital raise transactions.. Nathan earned his BA from Brandeis University with a degree in English, Business and Physics.

2019US MIDDLE MARKET INVESTMENT BANK

OF THE YEAR

TURNAROUND AWARDS

2019

INVESTMENT BANKING FIRM OF THE YEAR

INTERNATIONAL AWARDS

2019


2020MIDDLE MARKETINVESTMENT BANK

OF THE YEAR

2020



CITATIONS

1. Statista, “Retail E-Commerce Sales Worldwide From 2014 to 2023,” https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/

2. Seeking Alpha, “Shopify Inc. (SHOP) CEO Tobi Lutke on Q2 2020 Results –Earnings Call Transcript,” https://www.seekingalpha.com/article/4361920-shopify-inc-shop-ceo-tobi-lutke-on-q2-2020-results-earnings-call-transcript

3. Business Wire, “Walmart U.S. Q1 comp sales1 grew 10.0% and Walmart U.S. eCommerce sales grew 74%, Q1 FY21 GAAP EPS of $1.40; Adjusted EPS2 of $1.18, Company incurs incremental costs related to COVID-19 of nearly $900 million, Provides update on the business amid global health pandemic,” https://www.businesswire.com/news/home/20200519005526/en

4. XPO Logistics, “XPO Logistics Announces Plan to Spin Off Logistics Segment to Its Shareholders,” https://www.investors.xpo.com/static-files/e04f3e02-1e83-4a98-b0f8-4c85c7fe1679

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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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, 20-year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors,and creditors. Capstone offers a fully integrated suite of corporate finance services, including M&A, debt and equityplacement, corporate restructuring, valuation and fairness opinions, financial advisory, and ESOP advisory services.

Headquartered in Boston, the firm has 175+ professionals across 16 offices in the U.S., and an international presenceincluding over 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertisethrough large, cross-functional teams on a global basis.

BUILT FOR THE MIDDLE MARKET

UNITED STATES170+ professionals17 offices

Boston Burlington Chicago Dallas Denver Detroit Houston Los Angeles New York Orange County Philadelphia Richmond San Diego San Francisco St Louis Tampa Washington DC

INTERNATIONAL450+ professionals

60+ offices in 40 countries

Asia: China India Japan Latin America: Argentina Brazil Chile Colombia Mexico Peru

Africa: Congo Egypt Ghana Ivory Coast Mauritius Morocco Senegal South AfricaEurope: Belgium Bosnia Croatia Czech Republic Finland France Germany Herzegovina

Hungary Ireland Italy London Netherlands Norway Poland Russia Serbia Slovenia Spain Sweden Switzerland Turkey United Kingdom

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