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					2010 Wharton LBO
Competition



NYU Stern – Washington Square Capital Partners
Amit Bapat
Sid Choraria
Christopher Kramer
Daniel Krysewski
Maxwell (Shizhen) Yu


February 26, 2010
Executive Summary

   ▪   We propose a LBO transaction of Aquilex with the following terms:
   TRANSACTION SUMMARY
   ▪   Offer purchase price:                                          USD 760M
       ▪ 7.6x 2010E EBITDA
       ▪ Total Transaction Fees                                       USD 17.6M
   ▪   Debt Financing 59.5%:                                          USD 565.8M (5.5x EBITDA)
       • Term Loan A (L+350, 7y)                                      USD 185.1M (1.8x EBITDA)
       • Term Loan B (L+400, 8y)                                      USD 138.9M (1.4x EBITDA)
       • Term Loan C (L+450, 9y)                                      USD 138.9M (1.4x EBITDA)
       • High Yield (10% all-in, 10y)                                 USD 102.9M (1.0x EBITDA)
   ▪   Private Equity financing 34.4%                                 USD 180.1M
   ▪   Management Equity financing 6.1%                               USD 31.7M
   ▪   Estimated exit value in 2015:                                  USD 1,294M
       ▪ Thereof equity value                                         USD 1,030M (80%)
       ▪ Estimated IRR                                                34.4%
   ▪   Expected Closing Date                                          6/30/2010

                            NYU Stern – Washington Square Capital Partners                       | 1
Agenda



         1   Investment Thesis


         2   Valuation


         3   Transaction Structure & Exit


         4   Risks & Mitigating Factors


         5   Next Steps




              NYU Stern – Washington Square Capital Partners   | 2
Aquilex Overview
    Provide critical maintenance, repair and industrial cleaning services to the energy industry
        Combine proprietary technology, automated equipment fleet, skilled workforce and management
         expertise to provide a broad range of complementary industrial services
    Operate in two segments: Specialty Repair and Overhaul (SRO), and Industrial Cleaning
        SRO services - Highly engineered welding repair solutions that mitigate erosion and corrosion of
         plant infrastructure, and specialty construction services
        Industrial Cleaning services - Recurring maintenance services including hydroblasting,
         industrial vacuuming, chemical cleaning and tank cleaning
    Serves over 800 customers worldwide
    Revenue and adjusted EBITDA of $615.7 million and $104.5 million, respectively, for FYE 2010E
                                                                                  Revenue & EBITA Trajectory




                                 NYU Stern – Washington Square Capital Partners                                | 3
Industry Landscape
 Nuclear Field Services                                                Non-Nuclear Field Services
 Estimated Market Size - $0.5 billion
                                                  +                    Estimated Market Size - $1.4 billion
                                                                                                                  +
                                     Significant nuclear                                             A vast base of Waste-
                                      reactor additions in                                             to-Energy plant in the
                                      US & Europe till 2025                                            US and Europe

                                     Historically high                                               116 new and replacement
                                      utilization requires to                                          plants to expected to
                                      extend plant life                                                operational by 2012
                                      and service capacity



 Shop Services                                                         Industrial Cleaning
 Estimated Market Size - $0.4 billion                                  Estimated Market Size - $2.5 billion
                                                  +                                                               +
                                    The SRO segment                                                     Strong demands from
                                     has a strong presence in                                             fossil power, oil
                                     this market                                                          refining and chemical
                                                                                                          & petrochemical end
                                    Represents significant                                               markets
                                     pull-through opportunities




             Market Leader in a diverse, fragmented market with huge
                      potential for consolidation and growth
                                        NYU Stern – Washington Square Capital Partners                                    | 4
Aquilex Only Full-Service Provider in SRO and Industrial Cleaning Market
                                                 SRO
                     Nuclear        Non-Nuclear    Shop                       Industrial
   Company           Field Services Field Services Service                    Cleaning

   Aquilex                                                                      
   Westinghouse
                                                                                
   Wachs
                                                                                
   Areva
                                                                                
   JV Industrial
                                                                                
   P2S
                                                                                
   Boiler                                                                       
   Steinmuller                                                                  
   TEI                                                                          
   Philips Service                                                              
   Veolia                                                                       
                         NYU Stern – Washington Square Capital Partners                    | 5
Buyout Rationale – Is Aquilex an attractive LBO candidate?
                Criteria                                                       Aquilex
   Motivated and competent management team                   - Possess 140 years of industry and
                                                                leadership experience
                                                              - Deliver consistently solid results
   Healthy, steady and predictable cash flow                 - Proven business model well-positioned
                                                                for non-cyclical growth
                                                              - Longstanding relationships with diverse,
                                                                recurring, blue-chip customer base
   Leading position in a sizable market niche                - No.1 market leader across all segments
    with high entry barrier                                   - Steady revenue streams from a diverse,
                                                                global-based customer base

   Technology leadership                                     - Unparalled technology helps ensure
                                                                maximum efficiency and profitability
                                                              - Focused R&D continuously creates
                                                                superior value proposition to customers
   Reliable and Flexible Exit Strategy                       - Have contingency exit plan in place (Yr.6
                                                                & Yr.8), depending on market situations

      Aquilex meets requirements to be an attractive LBO candidate

                              NYU Stern – Washington Square Capital Partners                          | 6
Buyout Rationale – When to buy out Aquilex?
  FOCUS AREAS
                   Capital market has been stabilized…equity price stays relatively
    Market


                    low but on an upward trend
                   Liquidity started to rebound…borrowing rate seems reasonable
                   Expected consolidation will re-shape the landscape of SRO and
                    Industrial cleaning industries

                   Current stakeholders seeking for financial returns
    Company




                   Insufficient cash to expand the current portfolio
                   Steady revenue stream, coupled with conservative balance
                      sheet, brings a significant latitude to raise debt
                     Recent transactions at multiples below historical average

                   A possible proprietary deal without competitors, if move faster
    Competitors




                   Bring in expertise to re-reengineer Aquilex and take it to the
                      next level


                      Now is a suitable time to acquire Aquilex
                              NYU Stern – Washington Square Capital Partners           | 7
1   Investment Thesis


2   Valuation


3   Transaction Structure & Exit


4   Risks & Mitigating Factors


5   Next Steps




     NYU Stern – Washington Square Capital Partners   | 8
Valuation and Exit Analysis Conducted Along 4 Scenarios


   Scenarios            Description                                              Assessment
                        ▪ All central assumptions as provided in Confidential    ▪ Certain assump-
      Management            Information Memorandum                                 tions questionable
  A
      Case              ▪   Extrapolated until 2019P with slowing growth after     (e.g., CapEx)
                            2012P

                        ▪ More conservative long-term growth assumptions         ▪ No further growth
  B   Base Case         ▪ Maintenance CapEx increased to more realistic            potential quantified
                            level given assumed growth rate


                        ▪ Growth potential in European waste-to-energy           ▪ Appropriately
     Extended               market quantified (in addition to "Base Case")         reflects Aquilex's
  C
  High                                                                             growth potential
     Base Case


                        ▪ Assumes recessionary environment                       ▪ Stress test for
  D
     Downside
  High                  ▪ Slower growth and margin contraction assumed             resilience of
     Case                                                                          business case



         Core scenario going forward


                               NYU Stern – Washington Square Capital Partners                           | 9
Valuation – Proposed Offer Price of USD 760M (7.6x 2010E EBITDA)
                                                                                                                Low            High
                                                                                                                      Median
                                      Firm Value (USD millions)            760

                 Commercial
                Repair Services       388                 564                             957



                Oil & Gas Equip-                                                                                               1,409
   Trading       ment Services   350                           603
 Comparables

               Environmental and
                                                                     745                  965                             1,339
               Facilities Services


  Precedent      All segments
 Transaction                                                   702               828            1045
 Comparables

               Extended Base &
 Discounted    Downside cases
 Cash Flow                                                                 812                          1,173


               Extended Base &
    LBO        Downside cases                            638                       835


                                     300          500             700               900         1,100           1,300             1,500

                                  NYU Stern – Washington Square Capital Partners                                                | 10
Detailed Discounted Cash Flow Analysis – Extended Base Case

Unlevered Free Cash Flows
(Dollar in millions)


                                                  Dez-10E         Dez-11E      Dez-12E     Dez-13E        Dez-14E    Dez-15E    Dez-16E    Dez-17E      Dez-18E     Dez-19E
                                                      1               2            3           4              5          6          7          8            9          10
Revenue                                             641             744          875         982          1,098      1,182      1,241      1,272        1,297       1,323
COGS                                               (538)           (614)        (712)       (801)          (896)      (966)    (1,015)    (1,042)      (1,063)     (1,084)
EBITDA                                              103             130          163         182            202        216        225        230          235         239
  D&A                                               (10)            (11)         (13)        (20)           (22)       (24)       (25)       (25)         (26)        (26)
  Extraordinary tax deductible cash items             –               –            –           –              –          –          –          –            –           –
  Extraordinary tax deductible non cash items         –               –            –           –              –          –          –          –            –           –
Un-levered EBIT                                      93             119          150         162            180        192        201        205          209         213
  Corporate Taxes                                   (33)            (42)         (53)        (57)           (63)       (67)       (70)       (72)         (73)        (74)
  Regional Taxes                                     (5)             (6)          (8)         (8)            (9)       (10)       (10)       (10)         (10)        (11)
Unlevered Net Income                                 56              71           90          97            108        115        120        123          125         128
(+) D&A                                              10              11           13          20             22         24        25          25          26           26
(–) Capex                                           (23)            (24)         (27)        (31)           (34)       (37)      (31)        (25)        (26)         (26)
(–) Extraord. non-tax deductible cash items           –               –            –           –              –          –         –           –           –            –
(–) Increase in Working Capital                      (3)             (3)          (4)         (3)            (3)        (2)       (1)         (1)         (1)          (1)
Unlevered Free Cash Flow (UFCF)                     40              55           72          84             93        100        113         122         125         127
End-Period discount factor @ 10.9%                  1.1             1.2          1.3         1.4            1.6        1.8       2.0         2.2          2.4         2.7
Mid-Period discount factor @ 10.9%                  1.0             1.1          1.2         1.4            1.5        1.7       1.9         2.1          2.3         2.5
Discounted (UFCF) @ 10.90%                          19              47           56          58             58         57         57          56          52          47

Enterprise Value ($m)                                                                       EV / EBITDA 2010E Multiple
                                            Terminal UFCF Growth Rate                                                                         Terminal UFCF Growth Rate
                                                                                                                                   Terminal UFCF Growth Rate
                       995     0.50%     0.75%        1.00%       1.25%           1.50%                                0.50%     0.75%       1.00%       1.25%      1.50%
                       9.20%    1,190     1,211         1,233      1,256           1,281                    9.20%      11.6x     11.8x       12.0x       12.2x      12.4x
                       9.70%   1,117      1,134           1,153        1,173       1,194                    9.70%      10.9x     11.0x      11.2x      11.4x       11.6x
      WACC




                                                                                                   WACC




                   10.20%      1,051      1,066           1,082        1,099       1,117                    10.20%     10.2x     10.4x      10.5x      10.7x       10.9x
                   10.70%        991      1,005           1,019        1,033       1,049                    10.70%     9.6x      9.8x        9.9x      10.0x       10.2x
                   11.20%        938        949             962          974         988                    11.20%     9.1x      9.2x        9.3x      9.5x        9.6x




                                                          NYU Stern – Washington Square Capital Partners                                                             | 11
Required IRR of 30% Indicates Valuation Range between USD 638-845M



                                            Extended Base Case                                                                                                      Downside Case

 EXIT year 5 - IRR                                                                                            EXIT year 5 - IRR
 Entry LTM Multiple                                             7.2x    7.4x      7.7x   7.9x    8.2x         Entry LTM Multiple                                           6.5x    6.7x    6.9x    7.2x    7.4x
 Entry Enterprise Value                                         737     764       791    818     845          Entry Enterprise Value                                       657     678     699     720     741
   Exit Enterprise Value




                                                                                                                Exit Enterprise Value
                            1,009                        5.0x   30.0%   26.4%    23.3%   20.6%   18.2%                                  789                         5.0x   30.0%   25.5%   21.8%   18.6%   15.9%
                                     Exit LTM Multiple




                                                                                                                                                Exit LTM Multiple
                            1,110                        5.5x   33.7%   30.0%    26.8%   24.0%   21.6%                                  868                         5.5x   34.7%   30.0%   26.1%   22.9%   20.1%

                            1,211                        6.0x   37.1%   33.3%    30.0%   27.2%   24.7%                                  947                         6.0x   38.8%   34.0%   30.0%   26.6%   23.8%

                            1,312                        6.5x   40.2%   36.2%    32.9%   30.0%   27.4%                                  1,025                       6.5x   42.5%   37.5%   33.4%   30.0%   27.0%

                            1,413                        7.0x   43.0%   39.0%    35.6%   32.6%   30.0%                                  1,104                       7.0x   45.8%   40.7%   36.6%   33.0%   30.0%


 EXIT year 7 - IRR                                                                                            EXIT year 7 - IRR
 Entry LTM Multiple                                             6.8x    6.9x      7.1x   7.3x    7.5x         Entry LTM Multiple                                           6.3x    6.5x    6.6x    6.8x    6.9x
 Entry Enterprise Value                                         696     714       732    749     767          Entry Enterprise Value                                       638     652     666     680     694
   Exit Enterprise Value




                                                                                                                Exit Enterprise Value
                            1,127                        5.0x   30.0%   27.7%    25.8%   24.0%   22.4%                                  890                         5.0x   30.0%   27.3%   25.0%   23.0%   21.3%
                                     Exit LTM Multiple




                                                                                                                                                Exit LTM Multiple
                            1,239                        5.5x   32.3%   30.0%    28.0%   26.2%   24.6%                                  979                         5.5x   32.7%   30.0%   27.7%   25.6%   23.8%

                            1,352                        6.0x   34.4%   32.0%    30.0%   28.2%   26.5%                                  1,068                       6.0x   35.2%   32.4%   30.0%   27.9%   26.1%

                            1,465                        6.5x   36.3%   33.9%    31.8%   30.0%   28.3%                                  1,157                       6.5x   37.4%   34.5%   32.1%   30.0%   28.1%

                            1,577                        7.0x   38.0%   35.6%    33.5%   31.7%   30.0%                                  1,246                       7.0x   39.4%   36.5%   34.0%   31.9%   30.0%



                           Approx. proposed
                           offer price




                                                                               NYU Stern – Washington Square Capital Partners                                                                               | 12
Trading Comparables Indicate Valuation Range between 6-7x EBITDA
                                              Income Statement               Capitalization              Trading Multiples
    USD millions                                                                       Total                       TEV/
                                       Rev.      EBITDA    EBIT    NI     Market    Enterprise       P/E    LTM    LTM     LTM
    Company                                                                Cap.    Value (TEV)               Rev.   EBITDA   EBIT
    Commercial Repair Service
      ATC Technology Corp.              485.0       82.2    68.6   11.7      459.2          395.8    39.2x   0.8x     4.8x    5.8x
      Mears Group plc                   449.7       23.9    17.2   12.5      216.6          218.2    17.3x   0.5x     9.1x   12.7x
      Teleplan International N.V.       292.8       28.2    23.2   11.9      147.3          168.7    12.4x   0.6x     6.0x    7.3x
      Regenersis plc                     98.3        6.3     4.7    2.5       18.8           23.3     7.5x   0.2x     3.7x    5.0x
    Median                                                                   182.0          193.5    14.9x   0.5x     5.4x    6.5x
    Mean                                                                     210.5          201.5    19.1x   0.5x     5.9x    7.7x
    Oil and Gas Equipment Service
      Cal Dive Interna                  943.6      241.3   184.3 119.9        727.0          960.4    6.1x   1.0x     4.0x    5.2x
      Geokinetics Inc                   506.4       87.3    32.4   2.3        134.1          291.1   58.3x   0.6x     3.3x    9.0x
      Chart Industries Inc.             650.1      136.4   115.0 67.2         510.9          536.2    7.6x   0.8x     3.9x    4.7x
      CARBO Ceramics Inc.               341.9      104.0    79.6 52.8       1,467.6        1,398.1   27.8x   4.1x    13.4x   17.6x
      Matrix Service Co.                689.7       58.1    47.3 30.6         268.3          235.7    8.8x   0.3x     4.1x    5.0x
    Median                                                                   510.9          536.2     8.8x   0.8x     4.0x    5.2x
    Mean                                                                     621.6          684.3    21.7x   1.4x     5.7x    8.3x
    Environmental and Facilities Service
      Waste Management, Inc.          11,791.0   3,184.0 2,020.0 994.0     16,178.7       24,204.7   16.3x   2.1x     7.6x 12.0x
      Republic Services Inc.           8,199.1   2,474.5 1,516.0 495.0     10,662.4       17,579.6   21.5x   2.1x     7.1x 11.6x
      Rentokil Initial plc             3,918.6     582.6   105.4 47.4       3,638.1        5,364.5   76.8x   1.4x     9.2x 50.9x
      Covanta Holding Corp.            1,557.1     472.5   252.2 111.0      2,703.6        4,834.4     N/A   3.1x    10.2x 19.2x
      Rollins Inc.                     1,074.0     167.7   130.2 84.0       2,120.4        2,141.2   25.2x   2.0x    12.8x 16.4x
    Median                                                                  3,638.1        5,364.5   23.4x   2.1x     9.2x 16.4x
    Mean                                                                    7,060.6       10,824.9   35.0x   2.1x     9.4x 22.0x
    Overall Min                                                                18.8           23.3    6.1     0.2      3.3    4.7
    Overall Max                                                            16,178.7       24,204.7   76.8     4.1     13.4   50.9
    Overall Median                                                            619.0          748.3   17.3     0.9      6.5   10.3
    Overall Mean                                                            2,803.8        4,168.0   25.0     1.4      7.1   13.0

                                         NYU Stern – Washington Square Capital Partners                                              | 13
Precedent Transaction Comparables Indicate Valuation Range between
6-8x EBITDA

  Definitive                                                                                           Implied    Implied    Implied
                                                                                                      Enterprise Enterprise Enterprise
 Agreement                     Target                               Acquirer                 TTV
                                                                                                        Value     Value /    Value /
    Date
                                                                                                                  EBITDA    Revenues
May-03-2007    Hydrochem Industrial Services Inc.     Aquilex Services Corp.                  315.0        315.0       7.9x       1.3x
Jan-20-2010    Areva T&D SA                           Alstom SA / Schneider Electric S.A.   3,493.0      3,493.0       6.7x       0.8x
Dec-29-2009    Dioro Exploration NL                   Avoca Resources Ltd.                     72.3        117.9       7.6x       1.4x
Jul-03-2009    Veolia ES Waste-to-Energy, Inc.        Covanta Holding Corporation             450.0        450.0      10.0x          *
Sep-16-2009    Veolia Proprete Nettoyage Multiserv    TFN Group                               168.2        168.2       9.0x       0.3x

                                                                                                        Multiples Summary
                                                                    Minimum                    72.3        117.9       6.7x       0.3x
                                                                    Maximum                 3,493.0      3,493.0      10.0x       1.4x
                                                                     Median                   315.0        315.0       7.9x       1.1x
                                                                     Mean                     899.7        908.8       8.2x       1.0x




                                          NYU Stern – Washington Square Capital Partners                                          | 14
1   Investment Thesis


2   Valuation


3   Transaction Structure & Exit


4   Risks & Mitigating Factors


5   Next Steps




     NYU Stern – Washington Square Capital Partners   | 15
Sources and Uses of Funds
                             SOURCES                                                                       USES
                               LTM         % of        Tenor     Cash                                                  LTM      % of
                     ($m )   EBITDA x     Sources     (years)   spread                                       ($m )   EBITDA x   Uses

Term Loan A         185.1     1.8x         23.8%       7yrs      3.50%    Target enterprise value           760.0     7.4x      97.7%
Term Loan B         138.9     1.4x         17.9%       8yrs      4.00%
Term Loan C         138.9     1.4x         17.9%       9yrs      4.50%
Senior facility 4     –        –            –          10yrs       –      Pre-payment penalties              5.0      0.0x      0.6%
Total senior debt   462.9     4.5x         59.5%                          Other expenses                     5.0      0.0x      0.6%
                                                                          Total trans. expenses              10.0     0.1x      1.3%
Mezzanine             –        –            –          10yrs       –
High Yield          102.9     1.0x         13.2%       10yrs     10.00%
Total junior debt   102.9     1.0x         13.2%                          Fees - financing (capitalised)      –        –         –
                                                                          Fees - M&A (capitalised)           7.6      0.1x      1.0%
TOTAL               565.7     5.5x         72.8%                          Total cap. trans. fees             7.6      0.1x      1.0%

Management Equity   31.8      0.3x         4.1%
Fin. Spon. Equity   180.1     1.8x         23.2%
Total               211.9     2.1x         27.2%

TOTAL SOURCES       777.6     7.6x        100.0%                          TOTAL USES                        777.6     7.6x      100.0%




                                        NYU Stern – Washington Square Capital Partners                                                 | 16
Substantial Part of Value Creation Generated from Growth


       Development of Capital Structure                              Sources of Value Creation (USD millions)
               (USD millions)
                                        1.380
                      1.295                                                                                      1.319
                                         198                                                              85
                       155
                                                                                                 204
                                                                                         1.030

       778
       32                                                                        517
                       876
       180
                                        1.121


                                                                       301
       566                                                  212
                       265
                                          61
    Acquisition     Exit              Exit                Equity Debt          Growth Equity Debt       Growth   Equity
    cost            5 years           7 years             at entry pay-               at exit   pay-             at exit
                                                                   down               (5 years) down             (7 years)
       Management         Financial        Debt
       Equity             Sponsor                        Share
                          Equity                         of Value     37%         63%            46%      54%
                                                         Creation
                                                                        5 year exit               7 year exit

                                        NYU Stern – Washington Square Capital Partners                                       | 17
Credit Statistics
              Debt / EBITDA                                                Debt Paydown




                                       Coverage Ratios




                          NYU Stern – Washington Square Capital Partners                  | 18
Exit IRR Sensitivity Analysis


                                                      Extended Base Case                                                                                         Downside Case

EXIT year 5 - IRR                                                                                        EXIT year 5 - IRR
Entry LTM Multiple                                           6.4x    6.9x      7.4x    7.9x     8.4x     Entry LTM Multiple                                           6.6x    7.1x    7.6x    8.0x    8.5x
Entry Enterprise Value                                       660     710       760     810      860      Entry Enterprise Value                                       660     710     760     810     860
  Exit Enterprise Value




                                                                                                           Exit Enterprise Value
                          863                         4.0x   38.2%   28.3%    21.8%    17.0%   13.2%                               678                         4.0x   23.2%   15.2%   9.7%    5.6%    2.3%
                                  Exit LTM Multiple




                                                                                                                                           Exit LTM Multiple
                          1,079                       5.0x   46.1%   35.7%    28.8%    23.7%   19.7%                               848                         5.0x   32.2%   23.6%   17.7%   13.3%   9.8%

                          1,294                       6.0x   52.5%   41.6%    34.4%    29.1%   24.9%                               1,018                       6.0x   39.1%   30.1%   23.9%   19.2%   15.5%

                          1,510                       7.0x   57.8%   46.6%    39.2%    33.6%   29.3%                               1,187                       7.0x   44.7%   35.3%   28.9%   24.0%   20.1%

                          1,726                       8.0x   62.5%   50.9%    43.3%    37.6%   33.1%                               1,357                       8.0x   49.5%   39.8%   33.1%   28.1%   24.1%


EXIT year 7 - IRR                                                                                        EXIT year 7 - IRR
Entry LTM Multiple                                           6.4x    6.9x      7.4x    7.9x     8.4x     Entry LTM Multiple                                           6.6x    7.1x    7.6x    8.0x    8.5x
Entry Enterprise Value                                       660     710       760     810      860      Entry Enterprise Value                                       660     710     760     810     860
  Exit Enterprise Value




                                                                                                           Exit Enterprise Value
                          920                         4.0x   33.0%   26.0%    21.3%    17.7%   14.9%                               730                         4.0x   23.7%   17.8%   13.7%   10.5%   8.0%
                                  Exit LTM Multiple




                                                                                                                                           Exit LTM Multiple
                          1,150                       5.0x   37.3%   30.0%    25.2%    21.5%   18.6%                               913                         5.0x   28.5%   22.3%   18.0%   14.7%   12.1%

                          1,380                       6.0x   40.8%   33.4%    28.4%    24.6%   21.6%                               1,095                       6.0x   32.3%   25.9%   21.5%   18.1%   15.4%

                          1,610                       7.0x   43.9%   36.3%    31.2%    27.3%   24.3%                               1,278                       7.0x   35.5%   29.0%   24.5%   21.0%   18.2%

                          1,840                       8.0x   46.5%   38.8%    33.6%    29.7%   26.6%                               1,460                       8.0x   38.3%   31.6%   27.0%   23.5%   20.7%




                                                                             NYU Stern – Washington Square Capital Partners                                                                           | 19
    Agenda




1   Investment Thesis


2   Valuation


3   Transaction Structure & Exit


4   Risks & Mitigating Factors


5   Next Steps




     NYU Stern – Washington Square Capital Partners   | 20
Risks and Mitigation Strategies
       Risks                    Description                                            Mitigant

                      Adverse and prolonged economic                     • Market leader in all segments
    Top line growth   cycle could impact actual realized top             • Operate in a wide range of
A
    slowdown          line growth                                          niche market
                                                                         • Downside case cash flow
                                                                           covers debt with IRR at 24%

                      Increased competitive environment                      •   Proprietary technology
B Margin pressure     resulting in price wars                                •   Superior access to skilled
                                                                                 labor force



                      Key management personnel                               • Equity stake would align
   Key management     departure poses threat to competitive                    company performance with
C
High
   departure          position                                                 management incentives



                      Surprises pop up after closure of the                  • Conduct thorough due
D “Skeletons in the
High                  transaction                                              diligence before final decision
  boardroom”                                                                 • Hire external parties to cross-check
                                                                               the target company



                            NYU Stern – Washington Square Capital Partners                                      | 21
1   Investment Thesis


2   Valuation


3   Transaction Structure & Exit


4   Risks & Mitigating Factors


5   Next Steps




     NYU Stern – Washington Square Capital Partners   | 22
Next Steps




        •    Start discussion with Aquilex Management and Harvest Partners
        •    Conduct Additional Due Diligence
                 Detailed business plan for growth initiatives / assumptions
                 Information about customer accounts and long-term contracts
                 Details on proprietary technologies (e.g., MSP system)
                 CAPEX and depreciation schedules
                 Succession plan for current CEO
                 Potential Acquisition Targets
                 Further information on potential tax shield




                           NYU Stern – Washington Square Capital Partners       | 23
      Appendix




NYU Stern – Washington Square Capital Partners   | 24
Business Plan Scenarios – Summary


                                   2010E     2011E     2012E     2013E    2014E    2015E    2016E    2017E    2018E    2019E
             Revenue growth        17.2%     16.0%     16.0%     12.5%    10.0%     7.5%     5.0%     2.5%     2.0%     2.0%
  Manage-    EBITDA margin         16.1%     17.4%     18.7%     18.5%    18.4%    18.3%    18.2%    18.1%    18.1%    18.1%
   ment      Capax as % revenue     2.6%      2.1%      2.0%      2.0%     2.0%     2.0%     2.0%     2.0%     2.0%     2.0%
   Case      Debt / EBITDA           6.1x      4.3x      3.3x      2.7x     2.2x     1.9x     1.7x     1.1x     0.5x     0.4x
             ICR                     1.4x      1.7x      2.2x      2.6x     3.0x     3.5x     4.3x     5.0x     7.5x    16.8x
             Revenue growth        15.0%     15.0%     15.0%     10.0%    10.0%     7.5%     5.0%     2.5%     2.0%     2.0%
             EBITDA margin         16.1%     17.4%     18.7%     18.5%    18.4%    18.3%    18.2%    18.1%    18.1%    18.1%
    Base
             Capax as % revenue     3.7%      3.2%      3.1%      3.1%     3.1%     3.1%     3.1%     2.5%     2.0%     2.0%
    case
             Debt / EBITDA           6.0x      4.3x      3.3x      2.8x     2.4x     2.0x     1.8x     1.1x     0.5x     0.5x
             ICR                     1.4x      1.7x      2.2x      2.5x     2.9x     3.3x     4.1x     4.8x     7.1x    15.1x
             Revenue growth        15.0%     16.1%     17.7%     12.2%    11.8%     7.6%     5.0%     2.5%     2.0%     2.0%
  Extended   EBITDA margin         16.1%     17.4%     18.7%     18.5%    18.4%    18.3%    18.2%    18.1%    18.1%    18.1%
    Base     Capax as % revenue     3.7%      3.2%      3.1%      3.1%     3.1%     3.1%     3.1%     2.5%     2.0%     2.0%
    Case     Debt / EBITDA           6.0x      4.2x      3.2x      2.7x     2.2x     1.8x     1.7x     1.1x     0.4x     0.4x
             ICR                     1.4x      1.7x      2.2x      2.6x     3.1x     3.6x     4.5x     5.2x     7.8x    18.2x
             Revenue growth        12.5%     10.0%     10.0%      7.5%     7.5%     7.5%     5.0%     2.5%     2.0%     2.0%
             EBITDA margin         13.1%     14.4%     15.7%     15.5%    15.4%    15.3%    15.2%    15.1%    15.1%    15.1%
  Downside
             Capax as % revenue     3.7%      3.2%      3.1%      3.1%     3.1%     3.1%     3.1%     2.5%     2.0%     2.0%
    Case
             Debt / EBITDA           6.0x      4.5x      3.8x      3.4x     2.9x     2.5x     2.1x     1.3x     0.5x     0.5x
             ICR                     1.4x      1.7x      2.0x      2.2x     2.5x     2.8x     3.3x     4.0x     5.7x    10.8x




                                  NYU Stern – Washington Square Capital Partners                                        | 25
     Appendix – Extended Base Case Debt Paydown
                                             Historical FYE 31/12                                           Projected FYE 31/12
                                                2009A        LTM    Dec-10A   Dec-11A   Dec-12E   Dec-13E   Dec-14E      Dec-15E   Dec-16E   Dec-17E   Dec-18E   Dec-19E
  Revenues                                      557         599       320       744       875       982      1,098       1,182     1,241     1,272     1,297     1,323
  EBITDA                                          84         94        51       130       163       182        202         216       225       230       235       239
  Free cash flow before debt service                         41        28        71        89        99        107         113       124       132       132       130
  Cash interest expense                                       –       (21)      (41)      (40)      (38)       (35)        (32)      (28)      (26)      (17)       (7)
  Free cash flow before debt amortisation                    41         8        30        49        61         72          82        96       107       115       123
  Debt amortisation (incl. capex facility)                    –        (1)      (13)      (28)      (38)       (47)        (55)       (1)     (139)     (139)        –
  Net revolver drawdown (amortisation)                        –         –         –         –         –          –           –         –          –         –        –
  Free cash flow                                             41         7        16        20        23         25          26        95        (32)      (24)     123

Balance sheet
  Minimum Cash
  Cash balance                                                –
                                                              –         7
                                                                      184        23
                                                                                171        43
                                                                                          142        66
                                                                                                    104         91
                                                                                                                57         117
                                                                                                                             1       212–      180–      156–      279–
  Term Loan A                                               185       184       171       142       104         57           1          –         –         –         –
  Term Loan B                                               139       139       139       139       139        139         139       139          –         –         –
  Term Loan C                                               139       139       139       139       139        139         139       139       139          –         –
  Total bank debt                                           463       462       448       420       382        334         279       278       139          –         –
    % of bank debt repaid                                             0.2%      3.1%      9.2%     17.5%      27.8%       39.8%     40.0%     70.0%    100.0%    100.0%
  Senior facility 4                                           –          –         –         –         –          –           –         –         –         –         –
  Total senior debt                                         463       462       448       420       382        334         279       278       139          –         –
    % of Senior debt repaid                                           0.2%      3.1%      9.2%     17.5%      27.8%       39.8%     40.0%     70.0%    100.0%    100.0%
  High Yield                                                103       103       103       103       103        103         103       103       103       103       103
  Total debt                                                566       565       551       523       485        437         382       381       242       103       103
  Net debt                                                  566       558       528       480       418        346         265       168        61       (53)     (177)

Credit statistics

  Senior debt / EBITDA                                     4.95x     4.94x     3.46x     2.57x     2.10x      1.66x       1.29x     1.23x     0.60x         –         –
  Net senior debt / EBITDA                                 4.95x     4.87x     3.28x     2.31x     1.74x      1.21x       0.75x     0.29x    (0.18x)   (0.67x)   (1.17x)
  Total debt / EBITDA                                      6.05x     6.04x     4.25x     3.20x     2.67x      2.17x       1.77x     1.69x     1.05x     0.44x     0.43x
  Net debt / EBITDA                                        6.05x     5.97x     4.07x     2.94x     2.30x      1.71x       1.23x     0.75x     0.27x    (0.23x)   (0.74x)




                                                        NYU Stern – Washington Square Capital Partners                                                           | 26
     Appendix – Extended Base Case Debt Paydown
                                             Historical FYE 31/12                                           Projected FYE 31/12
                                                2009A        LTM    Dec-10A   Dec-11A   Dec-12E   Dec-13E   Dec-14E      Dec-15E   Dec-16E   Dec-17E   Dec-18E   Dec-19E
  Revenues                                      557         592       313       689       758       815        876         942       989     1,014     1,034     1,055
  EBITDA                                          84         92        50       120       137       147        158         170       178       183       186       190
  Free cash flow before debt service                         40        28        68        77        84         88          93       101       108       107       105
  Cash interest expense                                       –       (20)      (40)      (39)      (38)       (36)        (33)      (30)      (27)      (19)      (10)
  Free cash flow before debt amortisation                    40         8        27        38        46         53          60        71        81        88        95
  Debt amortisation (incl. capex facility)                    –        (1)      (12)      (20)      (27)       (32)        (38)      (50)     (136)     (136)        –
  Net revolver drawdown (amortisation)                        –         –         –         –         –          –           –         –          –         –        –
  Free cash flow                                             40         6        16        18        19         20          21        21        (55)      (48)      95

Balance sheet
  Minimum Cash
  Cash balance                                                –
                                                              –         6
                                                                      180        22
                                                                                168        40
                                                                                          148        59
                                                                                                    121         80
                                                                                                                89         101
                                                                                                                            50       122–       67–       19–      114–
  Term Loan A                                               181       180       168       148       121         89          50          –         –         –         –
  Term Loan B                                               136       136       136       136       136        136         136       136          –         –         –
  Term Loan C                                               136       136       136       136       136        136         136       136       136          –         –
  Total bank debt                                           453       452       440       420       393        360         322       272       136          –         –
    % of bank debt repaid                                             0.3%      2.9%      7.3%     13.2%      20.4%       28.9%     40.0%     70.0%    100.0%    100.0%
  Senior facility 4                                           –          –         –         –         –          –           –         –         –         –         –
  Total senior debt                                         453       452       440       420       393        360         322       272       136          –         –
    % of Senior debt repaid                                           0.3%      2.9%      7.3%     13.2%      20.4%       28.9%     40.0%     70.0%    100.0%    100.0%
  High Yield                                                101       101       101       101       101        101         101       101       101       101       101
  Total debt                                                553       552       540       520       493        461         423       372       236       101       101
  Net debt                                                  553       546       518       481       434        381         322       251       170        82       (14)

Credit statistics

  Senior debt / EBITDA                                     4.90x     4.89x     3.66x     3.08x     2.68x      2.28x       1.90x     1.53x     0.74x         –         –
  Net senior debt / EBITDA                                 4.90x     4.82x     3.47x     2.78x     2.27x      1.78x       1.30x     0.84x     0.38x    (0.10x)   (0.60x)
  Total debt / EBITDA                                      5.99x     5.98x     4.49x     3.81x     3.36x      2.92x       2.49x     2.09x     1.30x     0.54x     0.53x
  Net debt / EBITDA                                        5.99x     5.91x     4.31x     3.52x     2.96x      2.42x       1.90x     1.41x     0.93x     0.44x    (0.07x)




                                                        NYU Stern – Washington Square Capital Partners                                                           | 27
Detailed Discounted Cash Flow Analysis – Downside Case


Unlevered Free Cash Flows
(Dollar in millions)


                                                    Dez-10E        Dez-11E        Dez-12E        Dez-13E       Dez-14E    Dez-15E   Dez-16E    Dez-17E     Dez-18E     Dez-19E
                                                        1              2              3              4             5          6         7          8           9          10
Revenue                                               627            689            758            815           876        942       989      1,014       1,034       1,055
COGS                                                 (526)          (569)          (622)          (669)         (719)      (773)     (811)      (831)       (848)       (865)
EBITDA                                                101            120            137            147           158        170       178        183         186         190
  D&A                                                  (9)           (10)           (11)           (16)          (18)       (19)      (20)       (20)        (21)        (21)
  Extraordinary tax deductible cash items               –              –              –              –             –          –         –          –           –            –
  Extraordinary tax deductible non cash items           –              –              –              –             –          –         –          –           –            –
Un-levered EBIT                                        91            110            125            130           140        151       158        162         165         169
  Corporate Taxes                                     (32)           (38)           (44)           (46)          (49)       (53)      (55)       (57)        (58)        (59)
  Regional Taxes                                       (5)            (5)            (6)            (7)           (7)        (8)       (8)        (8)         (8)          (8)
Unlevered Net Income                                   55             66             75             78            84         90        95         97          99         101
(+) D&A                                                 9             10             11             16            18         19        20         20          21           21
(–) Capex                                             (23)           (22)           (24)           (24)          (26)       (28)      (25)       (20)        (21)         (21)
(–) Extraord. non-tax deductible cash items             –              –              –              –             –          –         –          –           –            –
(–) Increase in Working Capital                        (2)            (2)            (2)            (1)           (2)        (2)       (1)        (1)         (1)          (1)
Unlevered Free Cash Flow (UFCF)                       39             52             61             69            74         79        89          97          99         101


Enterprise Value ($m)                                                                             EV / EBITDA 2010E Multiple
                                            Terminal UFCF Growth Rate                                                                             Terminal UFCF Growth Rate
                                                                                                                                       Terminal UFCF Growth Rate
                       804     0.50%     0.75%        1.00%       1.25%              1.50%                                  0.50%    0.75%       1.00%       1.25%      1.50%
                       9.20%      960       976           993      1,012              1,031                       9.20%     9.5x     9.7x        9.9x        10.1x      10.2x
                       9.70%     901          915            930            945            962                    9.70%     9.0x      9.1x      9.2x        9.4x       9.6x
      WACC




                                                                                                        WACC



                   10.20%        849          861            873            887            901                   10.20%     8.4x      8.6x      8.7x        8.8x       9.0x
                   10.70%        801          812            823            835            847                   10.70%     8.0x      8.1x      8.2x        8.3x       8.4x
                   11.20%        759          768            778            788            798                   11.20%     7.5x      7.6x      7.7x        7.8x       7.9x




                                                         NYU Stern – Washington Square Capital Partners                                                                 | 28
Aquilex's Management to Retain 15% Share in Company's Equity


                      Washington Square                                  Aquilex's
                       Capital Partners                                 Management

                            85%                                                 15%

                                           NewCo ("Purchaser")                 ▪ To issue high yield bond


                                                    HoldCo                     ▪ To issue TLA, TLB and TLC


                                           Aquilex Holdings LLC




   HydroChem Holdings, Inc.                                                            Aquilex Corporation


     HydroChem Industrial               Southeastern Mechanical
                                                                                      Welding Services, Inc.
        Services, Inc.                       Services, Inc.


                              NYU Stern – Washington Square Capital Partners                                   | 29

				
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