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Mercer Capital's Value Focus: Agribusiness | Q2 2015 | Segment: Crops and Crop Services

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Mercer Capital's Agribusiness Industry newsletter provides perspective on valuation issues. Each newsletter also includes a sector focus, commodity pricing, comparable public company metrics, and key indices of the top agribusinesses.

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Mercer Capital's Value Focus: Agribusiness | Q2 2015 | Segment: Crops and Crop Services

  1. 1. Segment Focus 1 Imports/Exports 2 Seeds 3 Crop Services 4 Government and Regulatory Activity 4 Crop Crop Services MA Activity: Spotlight on Monsanto/Sygenta Combination 5 Agribusiness Industry Commodity Prices 6 Publicly Traded Agriculture Companies 7 Indices Performance 8 Historical EV / EBITDA Multiples 8 About Mercer Capital 9 Erickson Partners Merges with Mercer Capital 10 Q1: Agriculture Machinery, Equipment Implements Q2: Crops Crop Services Q3: Agriculture Real Estate Q4: Agriculture Chemicals SEGMENT FOCUS Crops Crop Services 2015 www.mercercapital.com VALUE FOCUS Agribusiness Industry
  2. 2. © 2015 Mercer Capital // www.mercercapital.com 1 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 Agribusiness experienced a successful year in 2013, as farm income reached record-levels, totaling $128.9 billion.1 However, farm incomes declined in 2014 and into 2015 due to lower commodity prices from record high yields. Net U.S. farm income is expected to measure $73.5 billion in 2015, a 32% decline from the 2014 estimate of $108 billion and the lowest level recorded since 2009, according to the USDA. The largest decline is expected for corn receipts, while smaller declines are anticipated for rice and cotton. Livestock was one of the better performing agricultural sectors in 2014 due to more favorable supply and demand conditions, although 2015 receipts are expected to be lower for that segment as well. The continued decline in crop and livestock pricing should be offset to some extent by increased government payments and a slowing increase in operating expenses. Farm balance sheets remain relatively strong, despite minimal asset growth and a decline in farmland values, although certain financial risk indicators (for example, debt to equity ratios) are beginning to trend modestly upward, indi- cating some degree of increasing financial pressure. With respect to production expenses, declines in fuel and oil, feed, and fertilizer expenses will help to keep overall expense growth in check.2 Figure 1: U.S. Farm Sector Income Statement, 2011–2015F ($ billions) 2011 2012 2013 2014F 2015F Crops $204.7 $236.1 $218.5 $198.2 $182.6 Livestock 163.9 168.7 182.8 209.2 199.0 Direct Government Payments 10.4 10.6 11.0 10.8 12.4 Other Farm-related Income 26.1 28.5 31.5 27.3 27.3 Gross Cash Income $405.1 $443.9 $443.8 $445.5 $421.3 Noncash Income 22.8 20.2 23.4 24.0 23.8 Value of Inventory Adjustment (1.7) (19.1) 13.7 6.4 (1.2) Total Gross Income $426.3 $445.0 $480.9 $475.9 $443.9 Total Expenses 312.5 342.4 352.0 367.9 370.4 Net Farm Income $113.8 $102.6 $128.9 $108.0 $73.5 Source: U.S. Department of Agriculture SEGMENT FOCUS Crops Crop Services
  3. 3. © 2015 Mercer Capital // www.mercercapital.com 2 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 2009 2010 2011 2012 2013 2014 2015 F Exports 96.3 108.5 137.5 135.9 141.0 152.5 141.5 Imports 73.4 79.0 94.5 103.4 103.9 109.2 119.0 Balance 22.9 29.6 43.0 32.5 37.1 43.3 22.5 Reflects forecasts in the February 10, 2015 World Agricultural Supply and Demand Estimates report. Source: Compiled by USDA using data from U.S. Census Bureau, U.S. Department of Commerce The USDA is forecasting a decline in agricultural exports for the 2015 fiscal year following a long-term increasing trend, primarily due to the strong U.S. dollar which dampens overseas demand for U.S. originated commodities. The agricultural trade surplus, estimated at $22.5 billion in 2015, is the smallest surplus since 2007. The effect of the strong U.S. dollar on exports will be partially offset by lower energy prices and stronger economic growth worldwide. Among exports, higher-value commodities such as livestock, tree nuts and fruit are expected to experience the most significant declines, while row crops (grains, feed, cotton, etc.) should be more stable relative to the prior year.3 Imports/Exports Figure 2: U.S. Agricultural Trade, fiscal years ending September 30, 2009-2015 ($ billions)
  4. 4. © 2015 Mercer Capital // www.mercercapital.com 3 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 The overall seed market is concentrated among a select number of industry providers, with Monsanto (NYSE: MON) and Pioneer, a subsidiary of Dupont (NYSE: DD), controlling 65% to 75% of both the soybean and corn seed markets. Local and regional companies account for small but measurable market share for corn and soybean seeds (11% and 19%, respectively), but have seen their market share shrink over the last five years.4 The chart below presents market share for soybean and corn seed markets in the U.S. The demand for crops naturally carries a strong correlation to the demand for seeds, particularly seeds that help increase productivity and lower costs. Genetically modified (GM) seeds have continued to improve farm yields and helped create a more stable crop in a highly cyclical industry. In 2014, approximately 93% of corn farmers planted GM corn seeds, compared to 85% in 2009. GM soybean seeds were adopted earlier than corn, with the majority of farmers implementing GM soybean seeds in the late 1990s to early 2000s. In 2008, GM seeds accounted for 92% of U.S. soybean plantings, ticking up slightly to 93% in 2014. Producers of GM corn and soybean varieties prohibit the reuse of seeds from season to season in order to protect their patented gene developments and to create demand for such seeds each year. Therefore, farmers must purchase new seeds from these companies every year; consequently, the revenue derived from seed sales is expected to remain steady.5, 6 Seeds Figure 3: Corn and Soybeans 37% 35% 7% 6% 6% 11% Corn Source: Growing Georgia Mercer Capital Analysis 29% 34% 10% 5% 3% 19% Soybeans Monsanto DuPont Pioneer Syngenta Dow AgroSciences AgReliant Local Regional Companies (Combined) Corn Soybeans
  5. 5. © 2015 Mercer Capital // www.mercercapital.com 4 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 Crop Services Government and Regulatory Activity The Crop Services industry consists of firms that assist in a variety of planting, harvesting and treatment activities for crop producers. The industry provides services for all types of crops, including handpicking fruit, crop dusting and cotton ginning. As such, industry performance is the aggregate result of many different types of industry operators. Despite slow growth in the industry’s largest market segment, fruit and vegetable farming, revenue has increased an estimated 0.7% per year on average from $13.2 billion in 2010 to a projected $13.7 billion in 2015. The well-established nature of U.S. farming guarantees demand for crop services. Demand for fresh fruit and vegetables calls for specialized operators to plant and pick these crops. Similarly, continued international demand for U.S. cotton will ensure a place for cotton ginners, another industry segment. Due to the specialized nature of most industry services, profit margins tend to be strong, at 7.4% of revenue in 2015. Despite stable margins and demand for services, industry revenue is expected to fall over the next five years. Falling crop prices and decreasing planted acreage are expected to negatively affect crop production from 2015 to 2020, weakening demand for crop services. This decline is expected to be lessened as interest rates increase, which will lead farmers to be less inclined to invest in their own machinery, preferring to outsource to industry operators. As a result, industry revenue is expected to fall at an annualized rate of 0.3% to $13.5 billion by 2020.7 Government subsidies over the past year were comprised primarily of payments for the corn and soybean industries, the two largest in American agriculture. Once the data are finalized, this government assistance is expected to decrease during 2014, contributing to a decrease in farming revenues. This reduction of subsidies is a direct result of the Agricultural Act of 2014, which went into effect on February 7, 2014. Among other things, this “Farm Bill” legislation places income caps on farm subsidies, ends direct payment subsidies, and reverts to a farm insurance model of subsidizing, the effect of which will decrease the overall government funds paid to farmers. In the 2007 Energy and Security Independence Act, Congress raised the Revised Renewable Fuel Standard, mandating that by the year 2022, 36 billion gallons of biofuel and renewable fuels must be in production. An increase in biofuel production directly increases the demand for corn, soybeans, and other crops, such as canola oil, that can be used in the manufacture of biofuels. Ethanol, derived from corn, serves as the most widely used biofuel.
  6. 6. © 2015 Mercer Capital // www.mercercapital.com 5 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 Syngenta AG (SYNN.VX), the Swiss-based fertilizer and ag-chemical giant, recently rejected U.S rival Monsanto’s (NYSE: MON) acquisition bid, rejecting an offer estimated at $45 billion made on May 8, 2015. The 449 Swiss-franc (approximately $484) per share offer represented an approximate 45% premium to Syngenta’s closing stock price on May 7, 2015. Monsanto planned to fund the acquisition with approximately 45% cash and the rest with stock. On June 6, 2015, Monsanto made a new attempt to acquire Syngenta, with only one change to the offer: the addition of a reverse regulatory breakup fee, with Monsanto agreeing to pay Syngenta $2 billion if it cannot obtain the regulatory approvals necessary to complete the deal. Syngenta rejected the second takeover offer by Monsanto, citing the $45 billion price as undervaluing the Com- pany. Syngenta also raised antitrust and regulatory issues; Monsanto has previously been the subject of U.S. antitrust probes and is already one of the top seed and agricultural chemical companies in the U.S. 8, 9 The Companies long courtship dates back over four years, when the two companies held merger talks in 2011, with Syngenta repeat- edly denying Monsanto’s advances. The $45 billion offer values Syngenta at nearly 17x LTM EBITDA (earnings before interest, taxes, depreciation, and amortization) according to SP Capital IQ research. Editor’s Note: On August 26, 2015, Monsanto abandoned its bid for Syngenta, following several days of extreme volatility in stock prices and a clear message from Syngenta that a takeover process would be opposed based on the Board’s view of “very attractive” long-term prospects for the company and its portfolio of products and services. The move was also relatively well received by Mon- santo shareholders, with the stock rising nearly 9% following the abandoned bid. Crop Crop Services MA Activity Spotlight on Monsanto/Sygenta Combination References and Data Sources 1 U.S. Farm Income. Feb, 28, 2014. Randy Schnepf. Congressional Research Service 2 “2015 Farm Sector Income Forecast,” Online, Available, http://www.ers.usda.gov/topics/farm-economy/farm-sector-income-fi- nances/2015-farm-sector-income-forecast.aspx, Accessed May 19, 2015. 3 Outlook for U.S. Agricultural Trade, USDA, February 19, 2015. 4 “Estimated U.S. Seed Market Shares Released,” Online, Available, http://growinggeorgia.com/news/2015/07/estimated-u-s- seed-market-shares-released/, Accessed August 24, 2015. 5 IBISWorld, Corn Farming in the US Industry Report, April 2015 6 IBISWorld, Soybean Farming in the US Industry Report, May 2015 7 IBISWorld, Crop Services in the US Industry Report, April 2015 8 “Monsanto set to press ahead with Syngenta plan: source,” Online, Available, http://www.reuters.com/article/2015/05/08/us-syn- genta-m-a-monsanto-idUSKBN0NS2AF20150508, Accessed August 21, 2015. Accessed August 24, 2015. 9 “Monsanto Offers to Pay Syngenta $2 Billion If takeover Fails,” Online, Available, http://www.bloomberg.com/news/arti- cles/2015-06-07/monsanto-offers-2-billion-break-up-fee-should-syngenta-bid-fail, Accessed August 24, 2015.
  7. 7. Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 © 2015 Mercer Capital // www.mercercapital.com // Data Source: Bloomberg 6 7/15/13 536.25 7/16/13 545.25 7/17/13 538.5 7/18/13 541 7/19/13 544 7/22/13 540.75 7/23/13 522.5 7/24/13 508.25 7/25/13 496 7/26/13 492 7/29/13 489.25 7/30/13 495.5 7/31/13 499 8/1/13 487.5 8/2/13 476 8/5/13 469.25 8/6/13 472.25 8/7/13 468.25 8/8/13 473.5 8/9/13 465.75 8/12/13 472 8/13/13 455.25 8/14/13 464.75 8/15/13 481.5 0! 100! 200! 300! 400! 500! 600! 700! 800! Price(cents/bushel)! 7/9/13 1613.25 7/10/13 1591.75 7/11/13 1601.25 7/12/13 1563.25 7/15/13 1453.75 7/16/13 1475.25 7/17/13 1477.5 7/18/13 1469.25 7/19/13 1490.75 7/22/13 1520.25 7/23/13 1462.5 7/24/13 1392.5 7/25/13 1355.25 7/26/13 1349.75 7/29/13 1367.5 7/30/13 1350 7/31/13 1374 8/1/13 1357.75 8/2/13 1331 8/5/13 1329.75 8/6/13 1324.25 8/7/13 1327.75 0! 200! 400! 600! 800! 1000! 1200! 1400! 1600! 1800! Price(cents/bushel)! 7/15/13 669.5 7/16/13 669.5 7/17/13 665 7/18/13 660.5 7/19/13 664.5 7/22/13 659.75 7/23/13 653.75 7/24/13 653.25 7/25/13 649.25 7/26/13 650.25 7/29/13 651.5 7/30/13 655.25 7/31/13 664.25 8/1/13 658 8/2/13 660.5 8/5/13 645.25 8/6/13 650.5 8/7/13 643.5 8/8/13 641.25 8/9/13 633.5 8/12/13 635 8/13/13 628.25 8/14/13 630.5 8/15/13 637.5 8/16/13 631 0! 100! 200! 300! 400! 500! 600! 700! 800! Price(cents/bushel)! Corn Soybeans Wheat 7/15/13 85.35 7/16/13 84.67 7/17/13 84.07 7/18/13 84.99 7/19/13 86.52 7/22/13 86.39 7/23/13 86.01 7/24/13 86.16 7/25/13 86.19 7/26/13 85.37 7/29/13 84.85 7/30/13 85.48 7/31/13 85.63 8/1/13 85.88 8/2/13 85.32 8/5/13 85.4 8/6/13 85.82 8/7/13 88.53 8/8/13 89.38 8/9/13 89.05 8/12/13 90.06 8/13/13 91.59 0! 10! 20! 30! 40! 50! 60! 70! 80! 90! 100! Price(cents/lb)! 7/17/13 15.28 7/18/13 15.39 7/19/13 15.555 7/22/13 15.405 7/23/13 15.77 7/24/13 15.925 7/25/13 15.745 7/26/13 15.885 7/29/13 15.84 7/30/13 15.895 7/31/13 15.825 8/1/13 15.855 8/2/13 15.8 8/5/13 15.76 8/6/13 15.695 8/7/13 15.345 8/8/13 15.28 8/9/13 15.19 8/12/13 15.015 8/13/13 15.06 8/14/13 15.26 8/15/13 15.4 0! 2! 4! 6! 8! 10! 12! 14! 16! 18! Price($/cwt)! 7/16/13 354.25 7/17/13 353.25 7/18/13 353.25 7/19/13 355 7/22/13 357 7/23/13 352.75 7/24/13 345.75 7/25/13 338 7/26/13 331.25 7/29/13 336 7/30/13 338 7/31/13 340.25 8/1/13 339.75 8/2/13 338.75 8/5/13 335.75 8/6/13 339.75 8/7/13 352.25 8/8/13 362 8/9/13 359 8/12/13 362.25 8/13/13 360.75 8/14/13 365.75 0! 100! 200! 300! 400! 500! 600! Price(cents/bushel)! Cotton Rough Rice Oats 400! 450! 500! 550! 600! 650! 700! Pric($/metricton)! Potash! Nitrogen! Phosphates! 0! 0.5! 1! 1.5! 2! 2.5! 3! 3.5! Price($/gallon)! 7/8/13 2.41 7/9/13 2.426 7/10/13 2.441 7/11/13 2.469 7/12/13 2.449 7/15/13 2.491 7/16/13 2.557 7/17/13 2.526 7/18/13 2.503 7/19/13 2.474 7/22/13 2.43 7/23/13 2.379 7/24/13 2.339 7/25/13 2.225 7/26/13 2.228 7/29/13 2.226 7/30/13 2.235 7/31/13 2.294 8/1/13 2.289 8/2/13 2.29 0! 0.5! 1! 1.5! 2! 2.5! 3! 3.5! 4! Price($/gallon)! Retail Fertilizer Gulf Coast Diesel: Ultra-low Sulfur No. 2 Ethanol
  8. 8. © 2015 Mercer Capital // www.mercercapital.com 7 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 Company Name Ticker June 30 Price ($) 52 Wk Perform (Market Cap) LTM Revenue ($) Enterprise Value ($M) Debt/ MVTC EBITDA Margin EV / LTM EBITDA (x) EV / Nxt Yr EBITDA (x) Price/ LTM Earnings (x) Diversified Agribusiness Agrium Inc. TSX:AGU 106.09 15.0% 15,489 19,137 34.4% 11.0% 11.20 8.27 18.06 CF Industries Holdings, Inc. NYSE:CF 64.28 20.8% 4,403 18,298 30.4% 46.6% 8.91 8.03 16.38 The Mosaic Company NYSE:MOS 46.85 -9.8% 9,256 18,430 22.5% 26.0% 7.67 7.55 13.84 Potash Corporation of Saskatchewan Inc. TSX:POT 31.00 -18.8% 6,402 29,920 16.3% 43.4% 10.76 9.70 17.05 Intrepid Potash, Inc. NYSE:IPI 11.94 -28.7% 337 958 16.5% 29.0% 9.79 9.67 146.85 Rentech Nitrogen Partners, L.P. NYSE:RNF 14.30 -15.7% 344 863 61.8% 24.9% 10.07 8.21 NM Terra Nitrogen Company, L.P. NYSE:TNH 121.09 -16.1% 583 2,264 0.0% 60.0% 6.47 NM 10.96 Yara International ASA OB:YAR 51.84 2.9% 13,418 15,960 11.9% 16.7% 7.12 6.34 15.61 Monsanto Company NYSE:MON 106.59 -23.8% 15,276 57,771 18.0% 30.7% 12.31 11.25 19.65 Syngenta AG SWX:SYNN 405.82 8.9% 14,260 39,433 11.5% 19.5% 14.17 13.49 25.70 Archer-Daniels-Midland Company NYSE:ADM 48.22 3.6% 73,703 35,092 23.1% 5.1% 9.27 8.91 13.24 Bunge Limited NYSE:BG 87.80 13.3% 48,495 16,916 38.4% 3.6% 9.56 7.72 25.15 Median - Diversified Agribusiness -3.5% 11,337 18,364 20.2% 25.5% 9.67 8.27 17.05 Agricultural Machinery Equipment Manufacturers Deere Company NYSE:DE 97.05 -1.6% 32,940 66,262 115.4% 15.5% 12.95 21.08 13.13 AGCO Corporation NYSE:AGCO 56.78 -5.3% 8,412 6,218 30.3% 8.9% 8.26 9.23 18.30 Lindsay Corporation NYSE:LNN 87.91 -6.4% 584 969 11.7% 14.0% 11.88 12.20 26.16 Blount International Inc. NYSE:BLT 10.92 -23.9% 896 931 82.4% 12.6% 8.27 6.98 NM Art's-Way Manufacturing Co. Inc. NasdaqCM:ARTW 4.68 -18.2% 36 28 52.2% 9.0% 8.89 NM 14.15 Median - Manufacturers -6.4% 896 969 52.2% 12.6% 8.89 10.71 16.23 Dealers Titan Machinery, Inc. NasdaqGS:TITN 14.73 -9.9% 1,788 1,019 79.8% 3.6% 15.69 20.49 NM Rocky Mountain Dealerships, Inc. TSX:RME 7.37 -28.6% 768 469 71.4% 4.3% 14.10 15.20 12.17 Cervus Equipment Corporation TSX:CVL 12.85 -34.0% 895 503 62.3% 4.7% 11.99 10.09 NM Median - Dealers -28.6% 895 503 71.4% 4.3% 14.10 15.20 12.17 Source: Capital IQ Publicly Traded Agribusiness Companies
  9. 9. © 2015 Mercer Capital // www.mercercapital.com 8 Mercer Capital’s Value Focus: Agribusiness Industry Second Quarter 2015 70 75 80 85 90 95 100 105 110 115 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 MCM Diversified Ag Index MCM Ag Machinery Manufacturing Index MCM Ag Machinery Dealer Index SP 500 12/31/13 = 100 Mercer Capital Agriculture Indices: One Year Performance 5.00 7.00 9.00 11.00 13.00 15.00 17.00 6/30/13 9/30/13 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 3/31/15 6/30/15 Diversified Ag Equip Manufacturers Equip Dealers Historical EV / EBITDA Multiples Source: Yahoo! Finance Source: Capital IQ
  10. 10. Mercer Capital Agribusiness Industry Services Contact Us Copyright © 2015 Mercer Capital Management, Inc. All rights reserved. It is illegal under Federal law to reproduce this publication or any portion of its contents without the publisher’s permission. Media quotations with source attribution are encouraged. Reporters requesting additional information or editorial comment should contact Barbara Walters Price at 901.685.2120. Mercer Capital’s Industry Focus is published quarterly and does not constitute legal or financial consulting advice. It is offered as an information service to our clients and friends. Those interested in specific guidance for legal or accounting matters should seek competent professional advice. Inquiries to discuss specific valuation matters are welcomed. To add your name to our mailing list to receive this complimentary publication, visit our web site at www.mercercapital.com. Mercer Capital has expertise providing business valuation and financial advisory services to companies in the agribusiness industry. Industry Segments Mercer Capital serves the following industry segments: • Agriculture Machinery, Equipment, Implements • Crop and Crop Services • Agriculture Real Estate • Agriculture Chemicals Contact a Mercer Capital professional to discuss your needs in confidence. Nicholas J. Heinz, ASA 901.322.9788 heinzn@mercercapital.com Matthew R. Crow, CFA, ASA 901.685.2120 crowm@mercercapital.com Timothy R. Lee, ASA 901.322.9740 leet@mercercapital.com Laura J. Stevens, CFA 901.322.9764 stevensl@mercercapital.com Mercer Capital 5100 Poplar Avenue, Suite 2600 Memphis, Tennessee 38137 901.685.2120 (P) www.mercercapital.com BUSINESS VALUATION FINANCIAL ADVISORY SERVICES Services Provided • Valuation of agriculture companies • Transaction advisory for acquisitions and divestitures • Valuations for purchase accounting and impairment testing • Fairness and solvency opinions • Litigation support for economic damages and valuation and shareholder disputes
  11. 11. Erickson Partners Merges with Mercer Capital Mercer Capital, a national business valuation and financial advi- sory firm specializing in Corporate Valuation, Litigation Support, Fi- nancial Reporting Valuation, and Transaction Advisory Consulting, and Erickson Partners, Inc., a Texas-based Valuation and Litiga- tion Support firm, announce their merger effective July 1, 2015. Mercer Capital, with its strong presence throughout the Southeast and Midwest, and Erickson Partners, with its strong presence in Texas and Oklahoma, are a perfect fit. Both firms maintain the highest standards of quality for financial analysis and client service and believe deeply in hiring and devel- oping the best professionals. “The culture of both firms is so similar and that was important to us. The professionals of Erickson Partners are well-known in the valuation profession as some of the best and brightest. Their work product and reputation are stellar. This merger not only allows us to broaden our geographic reach but also our industry expertise,” said Matt Crow, President of Mercer Capital. Erickson Partners enhances Mercer Capital’s broad base of indus- try concentrations with their exceptional history working with and knowledge of professional sports franchises and the energy sector. “Over our 30 plus year history, Mercer Capital has developed sev- eral industry concentrations. By adding the knowledge, insight, and expertise of Don Erickson, Bryce Erickson, and the rest of the professionals of Erickson Partners, we now bring deep experience and insight to a broader range of industries than we could as sepa- rate firms,” said Chris Mercer, CEO of Mercer Capital. “Combining with Mercer Capital, we will now be able to offer new or expanded services that complement our existing services, as well as additional industry expertise,” said Bryce Erickson, Managing Director of Erickson Partners. “In addition to our sports franchise and energy industry concentrations, we will be able to offer deep industry concentrations in construction and building materials, agribusiness, manufacturing and financial institutions, which in- cludes depository institutions, insurance companies, fintech com- panies, asset management firms, and PE firms.” “The combined firm will have over 40 valuation professionals po- sitioned in five markets throughout the southwest and southeast. Such a deep bench will provide us with a tremendous opportuni- ty to better serve the expanding needs of our clients,” said Don Erickson, President of Erickson Partners. “Joining with Mercer Capital gives us national resources that will benefit our clients in Texas and beyond.” About Mercer Capital Mercer Capital is a national business valuation and financial advi- sory firm offering corporate valuation, litigation support, financial reporting valuation, and transaction advisory consulting services to a national client base. Clients include private and public oper- ating companies, financial institutions, asset holding companies, high-net worth families, and private equity/hedge funds. About Erickson Partners, Inc. Erickson Partners is a professional valuation and advisory firm spe- cializing in business valuation, litigation support, financial investiga- tions and strategic corporate advisory services. Founded by Don Bryce Erickson, Erickson Partners has served large and small cli- ents by providing complex financial and economic analysis, leading to reasonable valuation opinions that withstand scrutiny. CONTACT US Z. Christopher Mercer, ASA, CFA, ABAR 901.685.2120 mercerc@mercercapital.com Matthew R. Crow, CFA, ASA 901.685.2120 crowm@mercercapital.com Donald Erickson, ASA 214.468.8400 ericksond@mercercapital.com Bryce Erickson, ASA, MRICS 214.468.8400 ericksonb@mercercapital.com MERCER CAPITAL Headquarters 5100 Poplar Avenue, Suite 2600 Memphis, TN 38137 901.685.2120 Dallas 12201 Merit Drive, Suite 480 Dallas, TX 75251 214.468.2120 Nashville 102 Woodmont Blvd., Suite 231 Nashville, TN 37205 615.345.0350 www.mercercapital.com COMBINING CULTURES OF EXCELLENCE BUSINESS VALUATION FINANCIAL ADVISORY SERVICES

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