Thermon Group Holdings (proposed THR) is scheduling a $130 million IPO with a market capitalization of $377 million at a price range mid-point of $13 for Wednesday May 4, 2011.

CONCLUSION

. Based in San Marcos, Texas THR is in a prosaic business that provides a system to maintain or raise the temperature of pipes & vessels, . Significant global foot print, second largest in the industry. . Sales expected to be up 23% to $238 million for the fiscal year ended March 31, 2011, from $193 million for fiscal 2011. . THR is a product of a leverage buyout April 30, 2010 and remains leveraged

. Backing out acquisition costs the P/E multiple for the year ended March 31, 2011 is 15: adjusted earnings are expected to be $25 million, up from $7 million in 2010. A P/E o 15 seems reasonable if THR can continue to increase top line revenue and maintain profit margins.

Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
Fiscal 2011 estimate, March yr	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Thermon Group (THR)	$377	1.6	15	2.4	-3.1	34%

BUSINESS

THR believes it is the second largest industrial electric heat tracing (used to maintain or raise the temperature of pipes and vessels) company in the world, significantly larger than the next largest competitor and one of only a few solutions providers with a comprehensive suite of products and services, global capabilities and local on-site presence. . THR has a 56-year history, has an installed base operated by thousands of customers and long-standing relationships with some of the largest companies in the world that drive the spending decisions for the major facilities that require THR products.

RECURRNG REVENUE

. THR"s existing installed base generates significant recurring revenue. . On average, annual recurring maintenance, repair and operations and facility upgrades or expansions (MRO/UE) expenditures generated from an installed heat tracing system are 5 to 10% of the initial cost of the system and expansions may require approximately 10 to 20% of the initial cost of the system. . THR estimates that 60% of revenues in fiscal 2010 were generated from MRO/UE sales. . THR believes it has the second largest installed base in the industrial electric heat tracing industry

MARKET

Alvarez & Marsal Private Equity Performance Improvement Group, LLC, or A&M, estimates that the market for industrial electric heat tracing is approximately $1 billion in annual revenues and estimates that it is growing its share of the overall heat tracing market as end users appear to continue to favor electric heat tracing solutions over steam heat tracing solutions for new installations.

When revenues for steam heat tracing parts are included, A&M estimates the overall addressable market for heat tracing is approximately $2 billion in annual revenues.

TRANSACTION SUMMARY

On April 30, 2010 private equity firms acquired THR for $320 million, borrowing $210 million and presumably providing $100 million ‘short term’ equity.

The lead private equity firms plan on taking $75 million of the $81 million going to selling shareholders, substantially reducing their equity investment. And the two lead private equity firms will retain 42% of THR valued at $158 million, at the price range mid-point of $13

SELLING SHAREHOLDERS

Two shareholders who own 75% pre-IPO are sellilng 30% of their stock . CHS Private Equity V LP(1), owns 56% pre-IPO . Thompson Street Capital Partners II, L.P owns 19% pre-IPO

COMPETITION

The most significant competitor is Tyco Thermal Controls, a subdivision of Tyco International Ltd.

The global industrial electric heat tracing industry is fragmented and consists of approximately 40 companies, that typically only serve discrete local markets and provide a limited service offering.

THR believes it is the second largest participant in the industrial electric heat tracing market and one of only a few solutions providers with a comprehensive suite of products and services, global capabilities and local on-site presence.

USE OF PROCEEDS

$46 million from sale of 4 million shares. Shareholders intend to sell 6 million shares for $81million.

. $21.6 million to prepay $21.0 million of the $189.0 million principal amount of 9.500% Senior Secured Notes that will be outstanding immediately prior to this IPO, leaving $168 million in Senior notes. . The 9.500% Senior Secured Notes were issued in connection with the Acquisition by THR’s wholly owned subsidiary, Thermon Industries, Inc. The proceeds were used to fund a portion of the purchase price for the Acquisition. . Balance for general corporate purposes

PLUS USE OF CASH ON HAND PRE-IPO to pay . $7.4 million to private equity ‘sponsors’ for termination of management contract. . An additional $21.6 million to reduce the Senior Notes.

Thermon Group	THR, C+, 7					Post IPO shares: 29mm
Thermal solutions for inds		March 31 fiscal		Proforma**		IPO Mkt
			Dec 2009	Dec 2010	12 mos end	Cap (mm)
San Marcos, TX		2010	9 months	9 months	Mar 31 '11est	$377
Revenues ($mm)		$193	$143	$179	$238	@$13
Gross margin		47%	48%	45%
Operating income % of rev		17%	19%	18%
Interest ($mm)		$18	$14	$14	$29
Interest % of revenue		9%	10%	8%	12%
Pre-tax income/loss		$14	$13	$19	-$25.7
Income tax		$7	$7	$0
Income tax % of pretax		52%	58%	1%
AFTER TAX PROFITS
Applry fiscal 2010 tax rate of 52%
to estimate 2010 9 most after tax profits		$7	$5	$9
March 31 2011 pre-tax estimate
excluding acquisiton expenses					$53
Apply tax rate for fiscal 2010 of 52%					52%
Adjusted after tax for fiscal 2011, estimated					$25
				*pages 41-13 in the S-1
Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
Fiscal 2011 estimate, March yr	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Thermon Group (THR)	$377	1.6	15	2.4	-3.1	34%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	1	7