As HCP, would you do the deal, why or why not? If you were mandated to do the deal at some price, what would that be?

As HCP, would you do the deal, why or why not?

If you were mandated to do the deal at some price, what would that be?

and how would you capitalize the deal? (i.e., How would you pay for it, what capital structure?)

Requirements: ONE PAGE ONLY IN WORD DOCUMENT

UV2554 July 27, 2009 This case was prepared by Jason Gaede (MBA ’09) under the supervision of Professor Robert Harris. Paul Capital, a global leader in the private equity secondary market, sponsored this case with the cooperation of the private equity fund (in which Paul Capital purchased an interest) that originated the investment in Lonestar Graphite. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Names and some data have been disguised. Copyright  2009 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to [email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. LONESTAR GRAPHITE Steve Patterson smiled as he walked past Lonestar Graphite’s (Lonestar) headquarters in Henderson, Texas, a small town about an hour’s drive southwest of Dallas. The company was producing some of the most technologically advanced products in its industry and was being offered for sale by its parent United Oil Company of Texas (UNOTEX). Patterson and Ravi Desai were cofounding directors of Hamilton Capital Partners (HCP), a relatively new $450 million middle-market private equity firm. Patterson and Desai wondered whether Lonestar Graphite was a good addition to its growing portfolio of companies. The final due diligence meeting between HCP and Lonestar’s management team had just ended. It was a Friday, in late September 2000, and management was insistent that the meeting end by 5:00 p.m. On a fall Friday evening in Henderson, you would not find many businesses open, cars on the streets, or people in their homes. Everyone was under the lights at the Henderson High School stadium watching the Panthers play football. Lonestar was the largest employer in the town, and a majority of employees’ families would insist they arrive at the game early. Fortunately, Patterson had covered his remaining questions and concerns before the 5:00 p.m. deadline. But rather than head to the game, he drove back to the local hotel. He had come to Henderson to look at Lonestar—not football. The due diligence process had gone smoothly thus far but the final valuation and purchase price were still left to be determined. A Monday morning meeting had been scheduled to negotiate a purchase price and begin drafting the final legal documents. Patterson would be in close contact with Desai, who was back at HCP’s home office—both of them knowing it would be a long weekend ahead. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-2- UV2554 Company Background Headquartered in Henderson, Texas, and operating as an independent subsidiary of UNOTEX, Lonestar manufactured and marketed superior-quality specialty graphite and silicon carbide materials. The company’s history began in 1964 when Lonestar bought a specialty graphite technology originally intended for use in space travel. Graphite, an allotrope of carbon, had a chemical structure that made it an excellent conductor of electricity. Once used sparingly as an alternate material, graphite had overtaken copper as the material of choice for electrical discharge machining in North America, and was gradually becoming the preferred material worldwide. Since inception, Lonestar had combined research and development and innovation with strict quality standards to become North America’s leading manufacturer of premium specialty graphite and silicon carbide materials. Management Lonestar’s senior management team had extensive industry experience (an average of over 15 years) and a history of working together (see Table 1). Table 1. Management team. Name Position Years at Lonestar GraphitePrevious Experience Charles W. Ross CEO 24 Various positions at Lonestar Graphite Mark Richardson CFO 3 UNOTEX, Spirit Energy 76 Dan Stevenson General manager, EDM group 22 Various positions at Lonestar Graphite Chris Pulaski General manager, SIP group 12 Various positions at Lonestar Graphite Richard L. Smith General manager, R&D group 2 Advanced Refractory Technologies, Inc. In anticipation of a purchase, HCP utilized its extensive professional network to identify two individuals to work with Lonestar in an advisory role post-transaction. Mike Miller, with years of experience in the financial services industry and a long track record of significantly growing business, would serve as chairman and lead advisor. Matt Snyder, an industry veteran, would help Lonestar expand into new markets. The addition of these two individuals was essential to the potential success of both the deal negotiations and future returns. Geographic reach Lonestar’s operations fell into three primary global regions. In North America, Lonestar was the market leader in the premium graphite segment and had gained market share during a recent economic downturn as competitors had gone out of business or exited the market. New investment and management emphasis on Europe and the Pacific Rim had already begun to create new growth in those regions. Table 2 depicts Lonestar’s 1999 sales breakout. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-3- UV2554 Table 2. Sales by region (in thousands of dollars). Sales by Region 1999 United States/Canada $36,299Europe 6,300Pacific Rim 2,740Other 682 Total$46,021 Facilities The company’s primary manufacturing operations were housed in modern, recently expanded 350,000-square-foot facilities located on 62.5 acres in Henderson. The design of the plant and purpose of each machine was carefully chosen and had evolved over the company’s history. In fact, the complexity of Lonestar’s manufacturing operations was its primary competitive advantage and made it impossible for competitors to replicate Lonestar’s products. The company’s headquarters were two miles from its plant in an 18,400-square-foot office facility. In addition to Henderson operations, Lonestar leased a 10,800-square-foot sales, training, and warehouse facility in France and a 3,600-square-foot sales and technical-training facility in Illinois. These training facilities had helped to maintain Lonestar’s leadership in key lines of business. Employees The vast majority of the company’s approximately 350 individuals were located in Henderson, with much smaller employee groups residing in Europe and Asia. Industry and Product Overview Worldwide expenditures for carbon and graphite products in 1999 were estimated at $5 billion. Lonestar competed in the industrial applications segment, which accounted for approximately $900 million or 18% of worldwide sales. A significant portion of the segment was large-micron (i.e., greater than 100 microns) graphite material. Lonestar, however, operated in the premium niche, focusing on the manufacture of precision graphite products with between one and twenty microns. Lonestar served three distinct premium-oriented customer groups: (1) electrical discharge machining, (2) semiconductor and industrial products, and (3) glass container. Exhibit 1 shows the market distribution of Lonestar’s end users. Electrical discharge machining (EDM) EDM processes were used to make plastic parts and to precision machine extremely hard For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-4- UV2554 materials such as steel and titanium into intricate shapes. Lonestar produced premium graphite materials that were machined into electrodes for the production of molds and dies. The company’s graphite products were used by specialty machine shops for virtually every EDM machine application. Lonestar’s high-quality and superior-performance products set the industry standard and have allowed the company to develop a strong brand identity. The company sold its EDM products through a worldwide network of 56 distributors who in turn sold Lonestar products to over 18,000 end users in North America alone. Lonestar had done business with many of its EDM distributors for over 20 years. EDM demand depended on the competitive environments of businesses that used graphite, primarily for molds, but also for tools, dies and fixtures, and aircraft engine production. The EDM customer group was diverse, with over 20,000 companies in North America. Between late 1997 and the first half of 1999, global demand for graphite products, particularly EDM products, declined as a result of the severe manufacturing slowdown in the Pacific Rim. During this time, the production of molds, tools, dies, and fixtures declined as much as 17%. Simultaneously, a strong U.S. dollar relative to many Asian currencies led to increased imports of manufactured products, resulting in higher U.S. inventories and significant declines in factory orders. This gave rise to lower capacity utilization. After mid-1999, however, the global manufacturing environment had significantly improved, prompting greater demand for molds, tools, dies, and fixtures. Industry reports forecast a 6% increase in 2000 in orders for tooling and machining equipment, including molds. In addition, the customer industries with above-average capacity usage rates, which therefore had a higher probability of needing additional equipment and tooling and machining help, included electrical machining (currently at 85.0% capacity) and semiconductor (currently at 91.9% capacity).1 Semiconductor and industrial products (SIP) Lonestar’s SIP division housed two main segments: semiconductors and industrial products. Products were primarily sold directly to end users, many of whom had done business with the company for over 15 years. Lonestar’s semiconductor segment manufactured a broad range of graphite products that were consumable parts in wafer processing equipment. These included sputtering targets, e-beam crucibles, plasma tech electrodes, and others that held the integrated circuit when it was soldered or brazed to a connector device. In addition, Lonestar produced a line of silicon carbide products used in the production of wafer carriers to hold the silicon wafers during processing. Some of these had been specified in the next generation of plasma tech equipment. 1 Spring 2000 Forecast Report by the National Tooling and Machining Association. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-5- UV2554 Demand for Lonestar’s semiconductor product was driven by semiconductor production and new capacity additions, subject to a secular trend toward increasing use of graphite and silicon carbide. This secular trend was due to existing materials lacking the required purity levels to meet the ever-increasing industry demands. The semiconductor industry was emerging from one of its worst recessions, which occurred in 1998 and early 1999, because of overcapacity combined with a slowdown in consumption in the Far East. Driven by strengthening Asian economies and increased applications of technology in developing economies, analysts at Hamilton saw the recovery continuing and that, taken as a whole, the semiconductor industry would grow approximately 30% in 2000 and 15% over the subsequent two to three years. The analysts anticipated even higher growth for the front-end processing segment of the semiconductor industry, which is the most relevant sector for Lonestar’s products: 70% to 75% growth in 2000 and 35% to 40% growth in 2001. In its industrial products segment, Lonestar produced more than 40 different graphite grades for general industrial, scientific, aerospace, and biomedical applications. Products included materials infiltrated with oxidation inhibitors for high temperature bearings and seals, porous graphite for fuel cell development, heaters for vacuum furnaces, and graphite with tungsten inclusion to provide radio opaqueness for biomedical use. In addition, Lonestar was the sole supplier of graphite for carbon heart valves and radioactive pellets that were implanted in the body to treat prostate cancer as well as thyroid gland problems. Silicon carbide materials were also introduced to these market applications. Lonestar’s silicon carbide aero shells were on board the January 1999 launch of probes to explore the planet Mars. Glass container Graphite was used in the glass container industry as a hot-glass contact material because of its strength, durability thermal properties, nonabsorption of liquids, nonchecking and nonsticking capabilities. The glass container industry had experienced relatively slow growth in recent years as a result of competitive pressures from aluminum cans, plastic, and other soft containers. The majority of Lonestar’s sales to the glass industry were machined from graphite scrap. The remaining sales to the glass industry were derived from other glass industry segments, such as tableware, lighting, scientific, and display (TV/CRT). Lonestar’s SIP division housed its glass products. In recent years, there had been substantial consolidation of glass container manufacturers. This consolidation lowered production costs, created a more competitive pricing environment among glass producers (and manufacturers of other packaging materials), and forced suppliers to retool with high-speed and higher-precision machines. Such a retooling favored greater usage of graphite because of its close tolerances. Management estimated the size of its addressable glass container opportunities in 1999 at $28.9 million, assuming 100% use of graphite as the preferred For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-6- UV2554 hot contact material. Other products The SIP division also included Lonestar’s developing activity in thermal management products. These products possessed concentrated high-thermal characteristics useful for heating/cooling systems, refrigeration, as well as thermal transfer. Management believed these materials had tremendous potential with continued development. Comparative Advantage and Competition Lonestar’s superior ability to convert graphite into silicon carbide was a significant competitive advantage for the company. As both the semiconductor and the industrial products industries produced more intricate and precise products, the demand for silicon carbide produced using Lonestar’s process would increase. Silicon carbide offered higher purity than alternative materials and Lonestar’s process produced higher-purity products capable of more complex end uses. In addition, Lonestar had distinguished itself from its glass container competition by providing superior service and being the first mover with premium graphite products. Both activities have solidified the company’s relationships with large customers. The company’s primary competitors in the EDM segment were virtually the same as those they competed against in the SIP segment. These companies were large international firms that had much more diverse revenue streams than Lonestar. A full description of each key competitor is located in the Appendix. In glass products, the company faced competitive pressures from HGH, Fieldco, Pyrotek, Le Carbone Lorraine, Schunk, Dura Temp, and Toyo Tanso. HCP Background and Motivations HCP, the private equity affiliate of Hamilton Group, Inc., was in its infancy as a private equity firm. Located in New York and consisting of three experienced investment professionals, HCP utilized its professionals’ proven track record of investment sourcing, execution, management, and realization to partner with management teams that could benefit from HCP’s guidance. The firm would complete both leveraged buyouts and growth equity transactions within business services, health care services, and specialty manufacturing industries. Additionally, HCP focused on the lower-middle market consisting of companies with $30 million to $300 million in revenue and $5 million to $20 million in EBITDA. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-7- UV2554 Before cofounding HCP, Desai had over a decade of experience in investment banking at Goldman Sachs and Morgan Stanley. And Patterson had been with Chase Securities in the High Yield Leverage Finance group, specializing in leveraged acquisitions. Typically HCP sought to invest in businesses with the following characteristics:  strong free cash flow with the ability to apply leverage  the opportunity to bridge the company into new applications for additional products  a company that would benefit from professional oversight and executive contact  a company that commanded a significant market share in a niche market Investment Opportunity Lonestar met all the characteristics listed above and HCP felt this was an attractive investment opportunity. First, Lonestar was essentially a corporate orphan that presented many opportunities for synergies in SG&A expenses, working capital management, and capital expenditures. UNOTEX had decided to sell Lonestar as part of a plan to divest all of UNOTEX’s businesses not related to its core activities in oil and gas exploration and production. Second, the company held significant market share in a niche market and had the ability to command premium prices for its products. Third, the company had developed superior technological capabilities for its manufacturing process that provided a significant competitive advantage. Finally, Lonestar had the opportunity to grow in existing markets and enter new markets due to its strong R&D pipeline. As shown in Exhibit 2, management has provided its forecast for the remainder of 2000 through 2004. Exhibit 3 depicts a balance sheet as of August 31, 2000. Revenues were expected to grow significantly from 2000 to 2004 as Lonestar capitalized on opportunities with core graphite customers and garnered additional success with the sale of silicon carbide. A significant portion of this growth was expected to come from international sales, as Lonestar leveraged its dominant U.S. position into a stronger international presence. Risks and Concerns Despite the upside for this investment opportunity, HCP saw a number of risks and concerns and incorporated many of them into a potential downside case, shown in Exhibit 4. The following are risks and concerns that HCP had regarding Lonestar:  management’s ability to effectively manage working capital and reduce inventory levels and overhead expenditures.  the ability to grow sales domestically and internationally. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-8- UV2554  the cyclicality of the EDM business and future trends of the semiconductor industry; some analysts were projecting a major drop in both the growth of the overall economy and demand for semiconductors.  the ability to quickly transition into a stand-alone entity.  customer concentration; Lonestar’s top-ten customers accounted for 48% of sales while the top-four customers accounted for 34% (a breakout of Lonestar’s top-ten customers is shown in Exhibit 5).  the potential that Lonestar’s key competitive advantage of process manufacturing semiconductor micron graphite could be replicated by a competitor.  the consolidation among glass container manufacturers combined with slow industry growth, which significantly limited the company’s opportunities in its glass container unit. Investment Overview After speaking with numerous potential lenders, HCP determined it could borrow up to $51 million to complete the transaction if it bought Lonestar from UNOTEX. As Exhibit 6 shows, this debt would consist of three separate tranches—a revolving line of credit, a senior bank loan, and a mezzanine tranche. HCP would be the sole equity investor and ideally would like to keep equity to total transaction value between 15% and 50%. HCP generally made equity investments with a goal of a five- to seven-year horizon and an approximate 25% hurdle rate. Patterson and Desai looked at comparables for both public companies and sale transactions to assist them. They used the information in Exhibits 7 through 9 to help them calculate their initial valuation. Decision HCP still had to decide how much equity to invest in Lonestar. Because HCP was a young firm, the success of the first few equity investments was crucial to future funding from its limited partners. HCP wanted this deal but could not afford to jeopardize potential returns by paying too much. Lonestar’s investment advisors had learned that at least three other firms had already submitted final bids. Once a fair valuation was calculated, Patterson and Desai could evaluate and determine the appropriate capital structure: total purchase price and how much debt versus equity would be needed to complete the transaction. More debt would allow HCP to drive its potential equity return—but introduce some financial risk in a downturn. Which forecast should they use—management’s forecast or HCP’s downside case? Would they be able to hit the firm’s internal hurdle rate? What about the risk of a downturn in semiconductors? Could Lonestar, with the help For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-9- UV2554 of outside advisors, continue to operate efficiently and realize the projected synergies as a stand-alone entity? Would HCP’s bid be high enough to acquire Lonestar? As Patterson sat in his hotel room and worked through spreadsheets, he could hear the roar of the stadium down the street. The Panthers must have just scored. That was good news. The meeting on Monday would certainly have a more positive tone if the local team could pull out a victory. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-10- UV2554 Exhibit 1 LONESTAR GRAPHITE Customer End Markets Served by Lonestar Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-11- UV2554 Exhibit 2 LONESTAR GRAPHITE Pro Forma Management Case Forecast 199719981999LTM*2000 2001200220032004Total revenues $44.30 $45.10 $46.00 $46.40 $51.20 $62.40 $69.10 $76.50 $84.70 Gross profit 21.8023.8027.6018.1027.60 33.5037.0041.4046.60EBITDA 14.0011.8014.8012.4014.00 17.2019.8022.9026.70EBIT 8.9010.50 11.7014.1017.1020.80Total interest 6.006.00 5.604.703.502.50CAPEX 1.000.70 4.103.704.705.20Total debt 53.40 45.5035.8025.6015.00Change in NWC −3.23 3.092.041.01−2.55Percent growth 5.6%1.7%2.0%11.4% 21.7%10.8%10.8%10.7%Gross margin 49.1%52.7%60.0%39.0%53.9% 53.7%53.6%54.0%54.9%EBITDA margin 31.6%26.2%32.3%26.7%27.4% 27.5%28.7%29.9%31.5%Tax rate 35.0%35.0% 35.0%35.0%35.0%35.0%* LTM stands for “last 12 months,” ending August 31, 2000. Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-12- UV2554 Exhibit 3 LONESTAR GRAPHITE Balance Sheet (8/31/2000) Cash $0.4Accounts receivable 9.1 Inventory 22.2Current assets 31.7 Net property, plant, and equipment 36.1 Other long-term assets 2.8 Total assets $70.6 Accounts payable $1.1 Accrued liabilities 1.9 Current liabilities 3.0 Long-term debt – Stockholders’ equity 67.6 Total liabilities and stockholders’ equity $70.6 Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-13- UV2554 Exhibit 4 LONESTAR GRAPHITE Pro Forma Downside Case Forecast 199719981999LTM*2000 2001200220032004Total revenues $44.30$45.10$46.00$46.40$51.20 $56.40$58.10$64.80$70.90Gross profit 21.8023.8027.6018.1027.60 28.7029.1033.4035.30EBITDA 14.0011.8014.8012.4012.90 12.4011.9015.0015.50EBIT 8.909.40 6.906.209.209.60Total interest 0.000.000.006.006.00 5.805.304.704.40CAPEX 1.000.70 4.103.704.705.20Total debt 53.40 48.7040.5035.6034.30Change in NWC −3.23 3.092.041.01−2.55Revenue growth 5.6%1.7%2.0%11.4% 10.2%3.0%11.5%9.4%Gross margin 49.1%52.7%60.0%39.0%53.9% 50.9%50.0%51.5%49.8%EBITDA margin 31.6%26.2%32.3%26.7%25.2% 22.1%20.5%23.1%21.9%Tax rate 35.0% 35.0%35.0%35.0%35.0%* LTM stands for “last 12 months,” ending August 31, 2000. Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-14- UV2554 Exhibit 5 LONESTAR GRAPHITE Top-Ten Customer List (in thousands of dollars) Customer SinceBusiness1998 Sales 1999 SalesBelmont Equipment Co. 1967EDM$3,641 $5,606 Graphel Corporation 1971EDM4,853 3,322 EDM Sales & Supplies 1982EDM2,044 1,930 LAM Research 1984SIP580 1,179 Bullen Ultrasonics, Inc. 1985SIP3,134 3,288 Applied Materials 1987SIP470 559 South Tech Industries 1982EDM1,249 814 Novetec BV 1987EDM917 1,100 Southern Tool 1986EDM1,670 1,308 Electrodes, Inc. 1974EDM2,624 2,789 Total $21,182 $21,895 Percentage of total sales 46% 48% Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-15- UV2554 Exhibit 6 LONESTAR GRAPHITE Proposed Deal Ownership Structure Sources of Funds AmountMultiple LTM EBITDA*Cumulative Multiple LTM EBITDA*Use of Funds AmountRevolving credit facility (8.5%) $6.80.5× 0.5× Purchase common stock ?Senior term loan (8.5%) 30.02.4 3.0 Transaction fees/exp. 5.1Mezzanine financing (11.5%) 15.01.2 4.2 HCP: common and preferred equity ?? ? Total sources ?? ? Total uses ?* LTM stands for “last 12 months,” ending August 31, 2000. Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-16- UV2554 Exhibit 7 LONESTAR GRAPHITE Public Comparables Enterprise Value ÷ Company 9/22/2000 Stock Price52-Week High Price 52-Week Low Price Market Value of Equity(a) Enterprise Value(b) EBITDA LTM Sales LTM EBITDA 3-Year Revenue CAGR Beta(c) SGL CARBON AG -SPON ADR (SGG)(d) $22.0 $37.3 $17.0 $1,401.2 $1,767.1 $170.6 1.8x 10.4x −8.1% 0.57 UCAR INTERNATIONAL INC (UCR) 12.2 28.0 11.3 550.1 1,292.1 193.0 1.6 6.7 −13.0% 0.93 CARBIDE/GRAPHITE GROUP INC (CGGI) 3.8 10.8 2.3 31.2 145.4 22.4 0.7 6.5 −8.9% 1.09 MORGAN CRUCIBLE CO (060272) (e) 3.7 5.2 3.1 859.3 828.2 182.4 0.6 4.5 −1.6% 0.68 Mean 1.2x 6.9x −7.9% 0.82 Median 1.1 6.6 −8.5% 0.80 High 1.8 10.4 −1.6% 1.09 Low 0.6 4.5 −13.0% 0.57 (a) Market value of equity calculated by multiplying current market price by number of common shares outstanding. (b) Enterprise value equals net debt plus market value of equity plus book value of preferred stock and minority interests. (c) Five-year adjusted beta ending September 22, 2000. Data source: Bloomberg. (d) Beta calculated using DAX Index as comparison. (e) Beta calculated using UKX Index as comparison. Data source: Case writer analysis and company documents. For the exclusive use of S. Mukkamala, 2023.This document is authorized for use only by Sai RushiKasyap Mukkamala in UH Bauer Investment Banking – Private Equity taught by MARCUS STEWART, University of Houston from Sep 2023 to Feb 2024.

-17- UV2554 Exhibit 8 LONESTAR GRAPHITE Comparable Transactions LTM Transaction Value ÷ Ann. Date Transaction Transaction Value Revenue EBITDA EBIT Income LTM Rev. LTM EBITDA LTM EBIT Net Income 7/25/1998 Acq: Hexcel Corp. $453.00 $228.60 $38.70 $17.30 $9.35 1.98× 9.35× 11.71× 26.15× Target: Clark-Schwebel Holdings Inc.(a) 6/20/2000 Acq: Loctite Corporation 400 325 40 32 NA 1.23 10 12.5 NA Target%3

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