A review of Canadian Mid Market Activity in Canada for Q1 2018

1. RBC Mid-Market
Mergers & Acquisitions
Q1 2018 Canadian Mid-Market Update

2. RBC Royal Bank
Canadian M&A Market – Q1 Update
Key Highlights
 The Canadian M&A market continued to exhibit strength in the first quarter of 2018, a continuation of the trend seen in 2017
 Mid-market transactions under $150MM drove deal volume, representing 95% of total activity in 1Q18
 Key drivers for this include (1) strong corporate balance sheets and companies seeking acquisitions to supplement organic
growth (2) an attractive financing environment both in terms of availability and cost of capital and (3) an active private equity
market (see next page)
 Cross-border transactions played an important role in 1Q18, with 70% of transactions involving a foreign target or buyer
 From an industry perspective, Materials led the way in deal activity in 1Q18, while Information Technology and Real Estate
showed the most strength on a year-over-year basis
1 | RBC Mid-Market M&A
40%
Q1 Canadian M&A Deals by Sector (1)
(1) Data is sourced from Capital IQ. Deals reflect only transactions that were either announced or closed
11%
Canadian M&A Deals (1)
Mid-Market Continues to be the Engine for the Canadian M&A Market
12%
30%
Canadian Deal Activity by Province
1%
2%
1%1%
Outbound vs.
Inbound Deal
Volume
2:1
Cross-Border Activity:
Outbound vs.
Inbound Deal
Value
0.5:1
% of Deal
Volume
70
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2013 2014 2015 2016 2017 Q1 2017Q1 2018
DealVolume
< $150MM $150M - $1B > $1B
828 Deals
Under $150mm
927 Deals
Under $150mm
1Q17 1Q18
0 50 100 150 200 250
Telecommunication Services
Utilities
Consumer Staples
Consumer Discretionary
Healthcare
Financials
Energy
Undisclosed
Industrials
Real Estate
Information Technology
Materials
Q1 2018 Q1 2017
2%

3. RBC Royal Bank
7.0x
6.5x
7.7x
7.1x
0x
1x
2x
3x
4x
5x
6x
7x
8x
With
Ins.
Without
Ins.
With
Ins.
Without
Ins.
TEV/EBITDA
 Elevated transaction multiples involving private equity (PE) firms in North America continued to point to a sellers market
 Technology deals broke through the double digit valuation barrier in 2017 for the first time in 5 years, an increase over the
2016 sector average of 7.2x EBITDA (2)
 As of April 2018, there was US$924Bn in private equity “dry powder” globally, with almost 90% of this earmarked for
traditional buy-out or growth situations (3)
 Targets that had management continuity post sale, above average financial performance, and institutional ownership tended
to have premium valuations (8.8x EBITDA) relative to the overall average (7.3x) (2)
 Reps & warranties insurance is more becoming prevalent – usage increased from 7% in 2016 to 42% of all PE transactions
in 2017 (2)
 Transactions involving reps & warranties insurance had an average valuation premium of 0.6x EBITDA (7.7x vs. 7.1x) in
2017 (2)
Private Equity Snapshot
2 | RBC Mid-Market M&A
6.9x
7.5x
8.1x
7.6x 7.6x
8.2x
10.2x
6.6x
0x
2x
4x
6x
8x
10x
12x
TEV/EBITDA
Transaction Multiples and
Reps & Warranties Insurance(2)
Valuation Multiple Drivers Involving PE
Valuation Multiples by Sector (2017)(2)
Global Private Equity
Dry Powder (3)
Institutional seller
Strong financial
performance
Management
continuity
 Professionalized
management team
 Business expanded,
right sized and / or
optimized
 Operations scaled for
growth
 Strong revenue and /
or EBITDA growth
 Attractive margins and
profitability
 Clean balance sheet /
low leverage
 Incumbent
management team
that remains and
invests alongside
buyer
 Buyer brings own
management or
does not require
incumbent
management
Premium Pricing
2016 2017
CAGR between 2013 - 2017
9.5%
638
109
177
Buyout Distressed PE Growth
U.S$924 Billion
(2) GF Data
(3) Prequin, as of April 2018
 Sellers are able to walk away
with more sale proceeds at
closing, and buyers have more
protection and peace of mind

4. RBC Royal Bank3 | RBC Mid-Market M&A
Dissecting the Quarter
There were several notable Canadian deals announced or closed in Q1 2018, including:
Source: Capital IQ, Company press releases
Target Acquirer
Value
($MM)
Target Location Comments
114 Toronto, ON
The transaction expands Fiera Capital’s
asset management division
43 Mississauga, ON
The target is comprised of Del
Monte processed fruit and vegetable
business in Canada
21 Calgary, AB
The target designs, engineers, fabricates,
packages, and services pressure assets,
pipe spooling, structural skids, cargo
transports, and associated equipment
and components
- Langley, BC
The transaction enhances Highline’s
position as both the largest organic
mushroom grower and the only coast-to-
coast mushroom grower in Canada
- Winnipeg, MB
The combined company will own and
operate more than 100 pharmacies
across Canada
Montreal, QC
The target promotes and organizes
business and public events
Notable Transactions under $150mm
Target Acquirer Value ($MM)
5,825
3,709
1,358
1,302
1,006
Largest Transactions
RBC acted as advisor to the Target

5. RBC Royal Bank
RBC Insight
4 | RBC Mid-Market M&A
Q1 Highlights
Q1 Highlights
 NAFTA Update - The first round of NAFTA renegotiations began in August 2017 - Seven formal rounds of negotiation
have since been held
 A noticeable shift occurred in recent months from an expectation that President Trump would withdraw the U.S. from
NAFTA to an expectation that a revised agreement will be reached
 NAFTA termination impact - According to The Conference Board of Canada a termination of the NAFTA would result in
a 0.5% decline in the country’s economy resulting in the loss of about 85,000 jobs within a year(1)
 Despite the heightened talk of a rewrite of NAFTA, the Bank of Canada’s survey of Canadian businesses showed a
broad-based increase in spending intentions
 Uncertainty from the renegotiation of NAFTA; talk of U.S. tariffs broadening out to steel and aluminum and the loss of
competitiveness after the U.S. cut tax rates are factors that are likely keeping business investment lower than it otherwise
would be
 CPTPP - While negotiating the NAFTA, Prime Minister Justin Trudeau announced that Canada has joined 10 other
countries in the new CPTPP trade deal
 CPTPP is a new free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New
Zealand, Peru, Singapore and Vietnam. Once the CPTPP becomes effective, it will be one of the largest free trade
agreements in the world and will provide enhanced market access to key Asian markets
 The signing of CPTPP comes at a pivotal time for Canada, when the U.S. is asserting a more protectionist trade policy
 March recorded a higher than expected employment gain of 32K,
however, job losses of 40K were recorded in Q1
 Full-time employment rose by 78K in the first quarter while part-
time job losses totaled 118K
 The unemployment rate was 5.8% in March and averaged the
same in Q1- Lowest since the mid - 1970s. The broadest
measure of unemployment (seasonally adjusted) averaged 8.3%
in Q1 matching the record low
 Wage growth also firmed up in the first quarter fueled by the jump
in Ontario’s minimum wage
 In the first quarter, Canadian housing starts average level moved
lower to 224K from the 229K recorded in Q4 2017, which
represented the highest level of activity since 2007
 According to the BoC, annual GDP growth is expected to be close
to 2% this year and 2019
Macro Economic Update
Update on NAFTA
Source: RBC Equity Research
(1) Financial post

6. RBC Royal Bank
#1 5 25
Ranked M&A
advisor
in Canada
Regional
Coverage
Offices
Dedicated
M&A
Professionals
RBC Mid-Market Mergers & Acquisitions
A National Platform to Support Canadian Mid-Market Companies
Business Divestitures: Working with business owners to develop
and execute a divestiture process designed to maximize the value
of the business being sold.
Acquisitions: We have extensive experience assisting
companies manage the acquisition process including valuation,
negotiations, and capital structure.
Buyouts: We provide advice to companies or individuals seeking
to complete a management or shareholder buyout.
Who We Are
The team provides mergers and acquisitions advisory services to
Canadian companies operating in a variety of industries.
Transaction Focus
Jeff Ng
Toronto
Director
(416) 348-3170
jeffrey.ng@rbc.com
Robert Hickey
Toronto
Managing Director & Head
(416) 955-3635
robert.hickey@rbc.com
Paul Morgan
Toronto
Managing Director
(416) 974-3624
paul.morgan@rbc.com
Mark Marshall
Halifax
Director
(902) 421-7530
mark.marshall@rbccm.com
Norm Eaton
Calgary
Director
(403) 292-2513
norm.eaton@rbc.com
Mark-Anthony Serri
Montreal
Managing Director
(514) 874-5209
mark-anthony.serri@rbc.com
Greg Wright
Vancouver
Director
(604) 257-3249
gregory.wright@rbc.com
Focus on Private Company M&A, with geographic coverage
of all Canadian markets
RBC ranks as the #1 mid-market M&A advisor in North
America and #1 M&A advisor in Canada(1)
Global network of industry leading sector coverage teams
Strong track record in a variety of sectors including
consumer products, industrials, services, and technology
Global relationships with key decision makers in public and
private businesses, and private equity firms
Ability to access RBC’s deep resources in leverage finance,
commercial lending, market research, and wealth
management
Why RBC Mid-Market M&A
What We Offer Our Clients
 Insight into current capital market trends
 Exploration of financial options
 Perspectives on valuation
 Sound advice based on extensive experience
 Comprehensive transaction support through closing
 Professionally managed transaction process
(1) RBC Capital Markets

7. RBC Royal Bank
Tech - Industrials
Selected Transactions
Champ’s Mushrooms
has merged with
South Mill Mushrooms
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
ARL Group Inc.’s greater
Moncton seniors housing
portfolio has been acquired by
Hillcore Real Estate Investment
RBC Mid-Market M&A and RBCCM Real Estate Group
acted as exclusive financial advisors to ARL Group
Ocean Sales Group Ltd. has
been acquired by Western
Investment Company of
Canada Limited
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
PFC Flexible Circuits
has been acquired by OSI
Systems (NASDAQ: OSIS)
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Conagra Brands has agreed to
sell its Del Monte processed fruit
and vegetable business in
Canada to Bonduelle Group
RBC Mid-Market M&A and RBC Capital Markets
acted as exclusive financial advisors to Conagra
Apex Construction Specialties
Inc. has been acquired by
Produits et Services de la
Construction (Montreal) Inc.
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Kii Naturals Inc.
has been acquired by
NuStef Baking Ltd.
(The Riverside Company)
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
The ITB Marine Group
has been acquired by
Tidewater (Stonepeak
Infrastructure Partners)
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Frost Refrigeration & Air
Conditioning Inc. has been
acquired by a private Canadian
business
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Winvan Paving Ltd.
has been acquired by
Summit Materials
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
McLean Insurance has been
acquired by BrokerLink,
a subsidiary of Intact
Financial Corporation
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Reinier Plastic Inc. has been
acquired by Aurora Plastics,
LLC. (Wind Point Partners &
Ontario Teachers’ Pension Plan)
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
iders Incorporated
has been acquired by
GE Transportation
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Graham Group International Inc.
has been acquired by a
consortium of Quebec investors
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Recapitalization in partnership
with management and
Ardenton Capital
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
Eptcon Ltd. & One Line
Engineering Inc.
have been acquired by
Columbus Utility Services
RBC Mid-Market M&A acted as exclusive
financial advisor to the seller
RBC Mid-Market Mergers & Acquisitions
A National Platform to Support Canadian Mid-Market Companies
Food – Consumer Tech – Industrials Food – Consumer Healthcare
Business Services Food – Consumer Transportation Business Services
Financial Services Industrials Engineering & Construction Engineering & Construction
Tech - Industrials Engineering & Construction Tech - Industrials
Pending

8. RBC Royal Bank
Disclaimer
The material contained in this report is the property of Royal Bank of Canada and may not be reproduced in any way, in
whole or in part, without express authorization of the copyright holder in writing. Certain statements and statistics contained
herein have been prepared by RBC Economics Research based on information from sources considered to be reliable.
We make no representation or warranty, express or implied, as to its accuracy or completeness. This publication is for the
information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
This presentation was prepared exclusively for the benefit and internal use of the recipient for the purpose of considering the
transaction or transactions contemplated herein. This presentation is confidential and proprietary to RBC Royal Bank and may
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cannot be assured by RBC Royal Bank. The information and any analyses in these materials reflect prevailing conditions and
our views as of this date, all of which are subject to change.
To the extent projections and financial analyses are set forth herein, they may be based on estimated financial performance
prepared by or in consultation with the recipient and are intended only to suggest reasonable ranges of results. The printed
presentation is incomplete without reference to the oral presentation or other written materials that supplement it.
Any calculations or value ranges indicated herein (i) are preliminary and should not be construed as opinions of RBC Royal
Bank or their individual members as to value, fair market value, or prices at which a transaction would be considered fair from a
financial point of view, and (ii) have not been subject to the processes that we apply to fairness opinions and valuations,
including our due diligence process and our internal opinion review process and, accordingly, must not be considered to
constitute a valuation, formal valuation, appraisal, professional opinion, or fairness opinion as contemplated under IIROC Rules
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opinion.
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threatening to change research, a rating or a price target, to a company as inducement for the receipt of business or
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7 | RBC Mid-Market M&A