Markets and Industries Served

1

Global Aerospace Industry with Focus on Precision Machining

Conventus has a deep understanding of the North American Aerospace Industry, with an intense focus on Landing Gear component manufacturing.

When working in industry 10+ years ago, the aerospace OEM manufacturing sector was fragmented: asside from the OEM level, which had consolidated by that time, the lower levels of the value chain had yet to consolidated. Our first project consisted of supporting the sale of MBM Machine & Tool and Excentrotech, to Noranco Inc. During that transaction, we provided operational and market intelligence. Noracno has since been sold twice, most recently acquired by Precision Castparts Corp (NYSE: PCP). Most recently PCP was acquired by Berkshire Hathaway (NYSE:BRK.A).

Following the Noranco transaction, our Managing Director spent 2+ years working with Goodrich Landing Gear (acquired by United Technolodgies, NYSE:UTX). Robert performed the task of Manager of Supplier Development, In summary, he spent over 2 years visiting and reviewing multiple suppliers into Goodrich, most with Machining or Light Industrial type of production systems, including launching the companies Low Cost Environment Supply Efforts. Indeed, where move of our competition can claim the ability to be able to research the industry, we are able to claim that we lived the industry.

Since this time, we have been involved in three aerospace transactions: progressively, the values of the transactions have grown, with our last being a Mid-market sized transaction. Rest assured, since the completion of this transaction, we have the attention of our larger competitors.

Fastforward to today; the industrial sector is 'knee deep' in the process of consolidating. We have seen companies sold and resold, with initial shareholders turing over their investments 2x-3x. For companies that remain on the fence, lets discuss what the customer is demanding from you today that it didn't in the past:

• Low Cost Environment (LCE):

  Pressures from China, Mexico, Poland and other emerging markets are real, and pressures will continue to escalate in the coming years. Most SME type companies cannot afford to make the capital investment in an LCE position. As such, there is a need for a partner to support this type of initiative, supporting the companies economic sustainability.

• Economies of Scale:

  Most Tier 1 or OEM customers desire their suppliers to meet a minimum sales threshold. They no longer wish to manage a supplier base of 500+ companies but rather a list of a selected few suppliers. Further, suppliers are no-longer able to bid on material that 'they do best', but rather required to bid on a package of product. In doing so, not all jobs will be profitable. To sustain in this type of environment will require a supplier to be integrated-- no longer are they sustainable with providing a portion of the value chain and instead need to be able to provide customers with efficient and optimized solutions

• Cost of Quality:

  Being AS9100 certitied is no longer an Order winner, nor is it even an order qualifier. Instead, most companies need to adhere to customer specific quality guidelines and need to be certified to the higher standard. This cost of quality deepens a company's adminstration cost, that was not present as recent as a decade or so ago.

• Integration:

  To add to the above, A machine shop today needs to be integrated, ideally performing some metal finishing. Without doing so, a company 'leaves too much on the table' and is losing too much to its suppliers.

• Delivery:

  OEM and Tier 1 companies are growing and have learned to expect JIT delivery, moving to a more, automotive type approach to delivery. As the industry evolves, the need to deliver the 'Perfect Order' becomes the norm.

• Cost of Administration:

  In the past, most companies were able to operate as a mom-pop shop. Indeed, I have had countless discussions with owners while, at the same time, they are running a machining or packing an order. Today, companies are required to have a dedicated management team, with the Quality Department at the forefront
2

International Cleantech (Renewable) Energy Projects: Wind, Solar

The King Street Group is focused on working with investors of Renewable Projects. We have developed relationships at multiple levels, across multiple geographies, with those who have the desire to purchase or partner in projects. The following are some highlights:

• Institutional Investors:

  We are working with a network of International Institutional investors ranging from pension to hedge funds. Typically, the expected internal rate of returns (IRR) are lower in comparison to other investors, affording a higher price on the investment; however conditions are more stringent and conservative in practice.

• "Other" Investors:

  Other Investors are not as 'tight' with policies or procedures, and like the potential security or 'bond like' payments that a renewable project or portfolio may offer. However, usually they expect a premium on their IRR to account for the added risk they are willing to entertain on the project. Some of this may include flexibility to the use of contractors, engineers, or components (panels, inverters, etc) on the project.

• The EPC as an Investor:

  In Today's market, the EPC provider may also be an investor. For example, there are a number of multi-national international contractors seeking to acquire projects for the purpose of both investment and construction. Usually, expected IRR is at or near that of 'Other Investors' however with significantly less risk, given they are responsible for construction and project performance

• Project Types and Size:

  Investors have interest in both ground-mount and rooftop solar projects and wind projects. Our investors are willing to discuss projects as small as 50kW in size. However, the larger the project size (either individual projects or a portfolio of projects), the greater the availability of buyers. Usually, buyers seek Utlity scale projects starting at 10MW in capacity.

• Project Milestone:

  The PPA in hand is key. Development risk, without the Power Purchase Agreement or some type of Sovereignty Agreement, is usually far too high for most investors.