BUILDING PRODUCTS & MATERIALS - harriswilliams.com

1 ,aregisteredbroker-dealerandmemberofFINR AandSIPC,andHarrisWilliams& , PRODUCTS & MATERIALSINDUSTRY UPDATE JANUARY 2016 PAGE |BUILDINGPRODUCTS& MATERIALSGROUPOVERVIEW1 CONTENTS WHAT WE RE READING ECONOMIC UPDATE M&A MARKET TRENDS SELECT SECTOR OVERVIEWS & TRENDS PUBLIC MARKETS PUBLIC COMPARABLES M&A TRANSACTIONS CONTACTSMike HoganManaging (804) 915-0104 Ryan NelsonManaging (804) 915-0121 Trey PackardVice (804) 887-6016 INTRODUCTIONH arrisWilliams& PRODUCTS &MATERIALSINDUSTRY UPDATE JANUARY 2016 OURPRACTICEH arrisWilliams& ,industries,andbusinessmodels. Aggregates Asphalt Aluminum Bricks Clay Glass Precast Concrete /Ready Mix Steel Stone Acoustical Cabinetsand Countertops CarpetandFlooring Gypsum/Wallboard ElectricalFixtures HVAC Lumber PlumbingFixtures Roofing Siding ToolsandHardware WindowsandDoors Architectural and Engineering Installation and Contracting Lumber and Hardware Plumbing Roofing and Siding Site Development WallboardConstruction MaterialsBuilding ProductsDistribution & MaterialsBuilding ProductsDistribution & Serviceshas been acquired bya portfolio company ofhas been acquired bySelect Atlanta.

2 Georgia aggregates assets of LaFarge SA have been acquired byhas been acquired bya division ofhas been acquired bya subsidiary ofhas been acquired bya portfolio company ofhas been acquired by has been acquired bya portfolio company ofa division ofa portfolio company ofhas been acquired bya subsidiary ofhas been acquired bya portfolio company ofhas been acquired bya portfolio company ofa portfolio company ofhas been acquired bya portfolio company ofhas been acquired byhas been acquired by a portfolio company ofhas been acquired by a portfolio company ofhas been acquired byPAGE |RECENTMOMENTUMINBUILDINGPRODUCTSBUILDIN G PRODUCTS &MATERIALSINDUSTRY UPDATE JANUARY 2016a portfolio company ofhas been acquired bya portfolio company ofis being acquired byhas been acquired by a portfolio company ofHarvey: Company Description Leading BUILDING PRODUCTS supplier focused on Northeast region Founded in and family-owned since 1961, headquartered outside Boston in Waltham, MA Vertically integrated window and door manufacturer and distributor Distributes broad line of exterior BUILDING PRODUCTS including windows, siding and roofing to over 44,000 customers annually through its network of 33 warehousesWoodcraft Industries.

3 Company Description Best-in-class cabinet door and components manufacturer with highly automated and efficient operations Offers a comprehensive line of over one million hardwood and engineered wood SKUs in a wide variety of styles, sizes, designs, and wood species Focus on providing high-quality components and just-in-time ( JIT ) service to large, demanding cabinet OEMsUS LBM: Company Description Provides a comprehensive line of specialty PRODUCTS , including engineered lumber, windows and doors, roofing and siding, drywall, and cabinetry Over 30,000 residential and commercial construction customers Broad coverage, going to market through 19 local or regional brands with 150 locations across 22 states in the Northeast, Midwest and Southeast United StatesInfiltrator.

4 Company Description Leading manufacturer of engineered plastic chambers, synthetic aggregate leachfields, tanks, and accessories for the onsite wastewater and stormwaterindustries Pioneer in innovative plastic technologies for onsite wastewater management Demonstrated ability to drive conversion through enhanced product performance and installed cost savingshas been acquired by 2 PAGE |WHATWE SLATESTGROWTHISLOOKINGINCREASINGLYFRAILT HEYEARAHEADINHOUSINGNOVEMBERCONSTRUCTION SLIDES5%10 CONSTRUCTIONINDUSTRYTRENDSTOWATCHIN2016 WallStreetJournal1/4/2016 Thefirstweekof2016hasbroughtsinkingtempe raturesandstocks , ,thoughunspectacular, sgrossdomesticproduct orthesumofallgoodsandservicesproduced grewatanannualpaceofroughly2% ,duetoweakreadingsMondaymorningonthenati on smanufacturingandconstructionactivity, ,economicgrowth,pent-updemand,affordable homeprices, , ,thisrecoveryneedsmorejobstoconvincecons umersthattherecessionisover,thattheywill retaintheirjobs, $ ,newconstructionstartsinNovemberfell5%fr omthepreviousmonth,accordingtoDodgeData& , ,whilethenon-buildingconstructionsector( publicworksandelectricutilities/gasplant s)

5 ,totalconstructionstartsonanunadjustedba siswere$ ,up8% , ,asDodgeData&Analytics'2016 ConstructionOutlookreportpredicted6%grow th,withthevalueofconstructionstartsreach inganestimated$ ,toworkforceconcerns, $ thefirstdeclinesinceJune2014, , , , 'sresultscameinbelowexpectations, 'sspendingratewasalsoreviseddownintheCom merceDepartmentreport, PRODUCTS &MATERIALSINDUSTRY UPDATE JANUARY 2016 PAGE |949698100102104106108110 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 ECONOMICUPDATE4 INDUSTRIALPRODUCTIONINDEXBUILDING PRODUCTS & MATERIALSGDP , ,or$ $ TheGrossDomesticIncome(GDI), , ; (QoQpercentage change)(Indexed to 2012)INDUSTRY UPDATE JANUARY 2016( )( )( )( )( ) : Federal ReserveSource: Bureau of Economic AnalysisPAGE |ECONOMICUPDATE5 PERSONALCONSUMPTIONEXPENDITURESECONOMICS ENTIMENT InNovember,personalincomedecreased$ , ,whilepersonalconsumptionexpenditures(PC E)increased$ , WagesandsalarieswereflatinSeptember,foll owingaflatAugustaswell.

6 , TheLeadingEconomicIndex(LEI)measureshowc onsumersviewprospectsfortheirownfinancia lsituation,howtheyviewthenear-termgenera leconomyprospects,andtheirlong-termviewo feconomicprospects , ,andnochangeinSeptember FortheelevenmonthsendingNovember2015, ( ) ThecontinuedriseinLEIsuggestseconomicgro wthwillremainmoderatein2016withlittlerea sontoexpectgrowthtopickupsubstantiallyBU ILDING PRODUCTS & MATERIALSINDUSTRY UPDATE JANUARY 2016(Percentage change in 3-month rolling average)(Indexed to 2010) : Conference Board Leading Economic Index (LEI)Source: Federal ReservePAGE |6 ECONOMICUPDATECONSUMERCONFIDENCEINDEX(CC I)KEYINTERESTRATES , , Consumers good ,thosesayingbusinessconditionsare bad plentiful ,whilethoseclaimingjobsare hardtoget Thecurrentmortgagerateis10basispointshig herthantheratefromDecember2014 TheFedhasindicatedthatitcouldincreaserat esoverthenextsixmonthsBUILDING PRODUCTS & MATERIALSINDUSTRY UPDATE JANUARY 2016 Seasonally-Adjusted(Indexed to 1985)0204060801001200%1%2%3%4%5%6%7%8%30 -Yr Mortgage Rates10-Yr TreasuryEffective Federal Funds RateSource: Federal ReserveSource.

7 Conference BoardPAGE | PRODUCTS & MATERIALSINDUSTRY UPDATE JANUARY 2016 , Severalsectorswithinnon-residentialconst ructionthatcontinuetoseespendingincrease sincludecommercial,industrial,andoffice/ lodging InthereleaseofitsestimatesforNovember201 5, ,citingaprocessingerrorinthetabulationof dataSeasonally-Adjusted Annual Rate-12%-8%-4%0%4%8%12%$450$500$550$600$ 650$700$750 Non-Residential ConstructionMoM Change($ in billions) , Risingemploymentandhistorically-lowmortg ageratesareenticingbuyers,whileincreasin gpricesinducedbyalackofhomesonthemarketa reanincentivetostartnewdevelopments Housingstartscontinuetoreboundfromunprec edentedlowsreachedin2009,yetremain~20% (Units in 000 s)Nov. 2015 Total: 1,173 MoM : : ,0001,5002,0002,5003,0001960196519701975 19801985199019952000200520102015 Source: Census BureauSource: Census Bureau50-year average of 1,443 startsPAGE |8 ECONOMICUPDATERESIDENTIALHOUSINGSPENDING NAHBREMODELINGMARKETINDEX(RMI) Totalresidentialbuildingspendingfor2015i sprojectedtobe$382billion,upfrom$354bill ionin2014 TheQ3 RMIwas58andhasnotdippedbelow50sinceQ3200 9 Onaseasonally-adjustedbasis, PRODUCTS & MATERIALSINDUSTRY UPDATE JANUARY 20162016E 2019P CAGR.

8 $249 $253 $287 $342 $354 $382 $412 $447 $486 $527 0100200300400500600201020112012201320142 0152016E2017P2018P2019 PSingle-FamilyMulti-FamilyImprovements** Improvements includes additions, alterations, and major replacements. It does not include maintenance and repairs.($ in billions)Source: FMI Consulting 2012 2015 CAGR: : NAHB303540455055606570Q3 2007Q3 2009Q3 2011Q3 2013Q3 2015 Seasonally-Adjusted Annual RatePAGE |9M&A MARKETTRENDSMARKETOBSERVATIONSBUILDINGPR ODUCTSQUARTERLYM&AACTIVITY 2015globalM&Aactivityreachedrecordlevels duetoabuyingspreefromcompanieslookingfor growth Thetotalvalueofdealsannouncedin2015reach ed$ ,comfortablyexceedingthe$ Q42015wasthethirdquarterinarowtopostover $1trillioninannounceddealvalue Ten$50+billionM&Adealswereannouncedin201 5,accountingfor19%ofthetotalannounceddea lvalue,thehighestshareonrecord Averagedealsizehasincreasedforthefifthye ar-over-yearperiodtoreachthehighestavera geonrecord Thefavorableconditionsinthedebtmarketsfr omthefirsthalfof2015dissipatedastheyearc ametoaclose.

9 Andsecondlienmarketshavesignificantlymod eratedoverthelasttwomonths LargecorporationscontinuetodriveM&Aactiv itywithsignificantcashbalancesandrelativ elycheapcredit Marketvolumein2015wasdrivenprimarilybyou tsizedactivitywithinafewsectors,mostnota blyhealthcareandtechnology,media&telecom PRODUCTS & MATERIALSINDUSTRY UPDATE JANUARY 2016 Note: Includes all BUILDING PRODUCTS or construction MATERIALS M&A transactions announced in the or CanadaTotal Transactions: 270 YoY Change: Transactions: 263 YoY Change: ( )Total Transactions: 267 YoY Change: Transactions: 217 YoY Change: ( )Total Transactions: 242 YoY Change: Transactions: 234 YoY Change: ( )01020304050607080Q4 2010Q4 2011Q4 2012Q4 2013Q4 2014Q4 2015 Sources: PitchBook, MergermarketPAGE |10 SELECTSECTOROVERVIEWS& TRENDSLUMBERANDWOODPRODUCTSROOFINGWINDOW SANDDOORSD escription Lumber,boards,beams,boltsorientedstrandb oard,poles,shingles,siding,andwoodchipsI ndustryCommentary: 70% ,includingnewconstructionandremodeling PricesrecoveredinQ42015fromdepressedleve lsinAugustthroughOctoberFraming Lumber Composite Price Index($ per thousand board feet)Description Roofingmarketincludesbituminous,wood,and tileroofingusedinresidentialapplications andmetalelastomericandplasticroofingused innon-residentialapplicationsIndustryCom mentary.

10 ,valuedatapproximately$ Demandforroofingiscloselylinkedtobuildin gconstructionexpenditures,buthasbeenmore shelteredthanotherbuildingproductsmarket sfromthehousingslumpduetothenon-discreti onaryneedforroofrepairandreplacement Additionally,renewedstrengthinnewhousing constructionandagenerallystrongereconomi cclimatewillsupportgrowthRoofing Demand by Primary SegmentDescription Windowsanddoorsmarketincludesmetal,wood, andvinylwindowsanddoorsforresidentialand non-residentialendmarketsIndustryComment ary: Windowanddoordemandisprimarilydrivenbyne wcommercialandresidentialconstruction,as wellasrepairandremodelspending , ~$148billionLeading I