M&A Activity and Valuation Trends Q3 2014

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1 Robert Ullman Managing Director NORTH AMERICAN HEALTHCARE SERVICES M&A Activity and Valuation Trends Q Michael Pucci Vice President Michael Reister Analyst

2 Table of Contents Section Page I. Economic Indicators 3 II. Ceres Index Constituents 5 III. Capital Market Activity 6 IV. Public Sector Valuations 8 V. Mergers and Acquisitions Overview 11 VI. Second Quarter Transactions Overview 12 VII. Ceres Capital Advisors 18

3 Economic Indicators Macroeconomic Overview Percent Change, Index Price 25% 20% 15% 10% 5% 0% -5% Major Indices Performance S&P 500 Index (^SPX) - Index Value Dow Jones Industrial Average (^DJI) - Index Value NASDAQ Composite Index (^COMP) - Index Value Russell 2000 Index (^RUT) - Index Value As of As of As of As of Index 9/30/2014 6/30/2014 3/31/ /31/2013 ^SPX ^COMP ^DJI ^RUT Major Economic Indicators Economic Indicator Q Q Q3E Real GDP (% change) 2.50% 1.60% 2.30% 2.20% -2.10% 4.20% 3.90% CPI (% change) 1.60% 3.10% 2.10% 1.50% 1.90% 3.00% 1.50% Cons. Spending (% change) 1.90% 2.30% 1.80% 2.40% 1.20% 2.50% 2.00% Nonfarm Productivity 3.30% 0.10% 1.00% 0.90% -4.50% 2.30% 2.50% Unemployment Rate 9.60% 8.90% 8.10% 7.40% 6.70% 6.20% 6.10% Interest Rates Interest Rates 9/30/2014 6/30/2014 3/31/ /31/2013 United States Treasury - 2 Year 0.58% 0.47% 0.44% 0.38% United States Treasury - 5 Year 1.748% 1.62% 1.73% 1.75% United States Treasury - 10 Year 2.52% 2.53% 2.73% 3.04% United States Treasury - 30 Year 3.21% 3.34% 3.56% 3.96% United States Prime Rate 3.25% 3.25% 3.25% 3.25% Sources: Capital IQ, S&P NetAdvantage 3

4 Economic Indicators Healthcare Spending Dollars (Trillions) $20 $15 $10 National Health Expenditures as a Portion of GDP (Monthly) $5 $0 $17.50 $16.78 $16.36 $15.56 $3.02 $2.89 $2.83 $2.70 Jul-14 Jul-13 Jul-12 Jul-11 GDP NHE Dollars (Billions) $200 $150 $100 $50 $0 PPACA Insurance Coverage Provisions Impact on Mandatory Spending $35 $92 $147 $173 $ E 2015E 2016E 2017E 2018E The figure above indicates National Health Expenditures and GDP year over year based on the seasonally adjusted average rate. The numbers are adjusted by Altarum using annual NHEA ratios provided by the Bureau of Economic Analysis. The figure above indicates new mandatory spending for the federal government as a result of insurance provisions in the Affordable Care Act. Most new spending will come specifically from exchange subsidies and new Medicaid and Child Health Insurance Program outlays. Federal Government Healthcare Spending E $ Spending in Billions $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $110 $109 $93 $16 $17 $22 $24 $10 $26 $62 $368 $397 $418 $251 $273 $275 $251 $265 $299 $330 $499 $520 $560 $551 $585 $612 $627 $672 $686 $ E 2015E 2016E 2017E 2018E Medicare Medicaid Other Sources: Congressional Budget Office Yearly Budget Report, ALTARUM INSTITUTE Spending Brief #14-05: July 2014 Data 4

5 Ceres Index Constituents Acute-Care Hospitals Assisted Living/ Rehabilitation Diagnostic Services Healthcare Information Systems Healthcare Staffing Managed Care Specialty Services 5

6 Capital Market Activity 40% 35% Percemt Change, Index Price 30% 25% 20% 15% 10% 5% 0% -5% Ceres HS Index (Price) - Index Value S&P 500 Index (^SPX) - Index Value Based on our industry experience and data analysis, Ceres believes that valuations in the industry will remain strong, principally driven by continued consolidation and industry-wide changes impacting all facets of the United States healthcare system. The Ceres Index comprised of the publicly traded companies found on page 5 has risen 23.95% and outperformed the S&P500Indexoverthepast12months. Capitalization Number of % of Agg. Equity % of Agg. Equity Profile Companies Companies Mkt. Value Mkt. Value > $5 B % $96, % $1 B. - $5 B % $53, % $100 M. - $1 B % $6, % < $100 M % $ % Total % $156, % 6

7 Capital Market Activity Ceres Index Segments vs. S&P 500 Percent Change, Index Price Percent Change, Index Price 60% Acute-Care Hospitals vs. S&P % -20% Ceres Acute-Care Hospitals Index (Price)- Index Value 60% Diagnostic Services vs. S&P % -20% S&P 500 Index (^SPX) - Index Value Percent Change, Index Price Percent Change, Index Price 60% Assisted Living/Rehabilitation vs. S&P % -20% Ceres Assisted Living/Rehabilitation Index (Price)- Index Value S&P 500 Index (^SPX)- Index Value 60% Healthcare Information Systems vs. S&P % -20% Ceres Diagnostic Services Index (Price) - Index Value S&P 500 Index (^SPX) - Index Value Ceres Healthcare Information Systems Index (Price) - Index Value S&P 500 Index (^SPX) - Index Value Percent Change, Index Price 60% 20% -20% Healthcare Staffing vs. S&P 500 Percent Change, Index Price 30% -20% Managed Care vs. S&P 500 Ceres Healthcare Staffing Index (Price) - Index Value S&P 500 Index (^SPX) - Index Value Ceres Managed Care Index (Price) - Index Value S&P 500 Index (^SPX) - Index Value Percent Change, Index Price 60% 20% -20% Specialty Services vs. S&P 500 Ceres Specialty Services Index (Price) - Index Value S&P 500 Index (^SPX) - Index Value 7

8 Public Sector Valuations Historical TEV/EBITDA by Segment 25x 20x 15x 10x 5x 6.5x 6.0x 10.5x 9.3x 8.2x 7.7x 7.2x 8.1x 6.6x 5.2x 6.4x 8.4x 18.1x 19.9x 19.1x 15.2x 8.4x 6.6x 15.2x 17.1x 5.0x 5.6x 10.7x 9.3x 8.4x 7.9x 9.7x 11.5x 0x Acute-Care Hospitals Assisted Living/ Rehabilitation Diagnostic Services Healthcare Information Systems Healthcare Staffing Managed Care Specialty Services TEV/EBITDA - 9/30/09 TEV/EBITDA - 9/30/11 TEV/EBITDA - 9/30/13 TEV/EBITDA - 9/30/14 5x 4x 3x 2x 1x 0x 1.6x 1.0x 1.1x 1.3x 1.0x 0.9x 1.0x 1.0x Acute-Care Hospitals Assisted Living/ Rehabilitation 1.4x Historical TEV/Revenue by Segment 1.3x 1.4x 1.5x Diagnostic Services 4.5x 3.9x 3.4x 3.0x Healthcare Information Systems 1.3x 1.1x 0.4x 0.5x 0.3x 0.4x 0.4x 0.4x TEV/REV - 9/30/09 TEV/REV - 9/30/11 TEV/Rev - 9/30/13 TEV/REV - 9/30/14 1.0x 1.4x 1.5x Healthcare Staffing Managed Care Specialty Services 1.4x 8

9 Public Sector Valuations Industry / Last Twelve Months Next Twelve Months Company Name Ticker TEV (mm) Market Cap (mm) Rev (mm) EBITDA (mm) EBIT (mm) TEV/Rev TEV/EBIT TEV/EBITDA Forward TEV/Rev Forward TEV/EBITDA Acute-Care Hospitals Acadia Healthcare Company, Inc. NasdaqGS:ACHC $3, $2, $ $ $ x 23.80x 20.63x 2.67x 12.49x Community Health Systems, Inc. NYSE:CYH $23, $6, $15, $1, $1, x 18.94x 11.69x 1.19x 7.54x HCA Holdings, Inc. NYSE: HCA $60, $30, $35, $6, $5, x 11.75x 8.70x 1.62x 8.38x Lifepoint Hospitals Inc. NasdaqGS:LPNT $5, $3, $3, $ $ x 19.14x 9.79x 0.94x 7.87x Tenet Healthcare Corp. NYSE:THC $17, $5, $14, $1, $ x 20.07x 11.02x 0.99x 8.14x Universal Health Services Inc. NYSE:UHS $13, $10, $7, $1, $1, x 13.37x 9.91x 1.56x 8.90x Median $15, $6, $10, $1, $ x 19.04x 10.47x 1.38x 8.26x Assisted Living/ Rehabilitation Brookdale Senior Living Inc. NYSE:BKD $8, $5, $2, $ $ x 47.16x 18.10x 1.67x 9.30x Chemed Corp. NYSE:CHE $1, $1, $1, $ $ x 12.07x 10.39x 1.29x 9.02x Extendicare Inc. TSX:EXE $1, $ $2, $ $ x 20.42x 10.84x 0.89x 9.57x HEALTHSOUTH Corp. NYSE:HLS $4, $3, $2, $ $ x 10.05x 8.30x 1.98x 8.02x Kindred Healthcare Inc. NYSE:KND $2, $1, $5, $ $ x 21.72x 9.64x 0.52x 6.96x National Healthcare Corp. AMEX:NHC $ $ $ $ $ x 9.32x 6.87x 0.90x - Select Medical Holdings Corp NYSE:SEM $3, $1, $2, $ $ x 10.97x 8.96x 1.04x 8.38x The Ensign Group, Inc. NasdaqGS:ENSG $ $ $ $ $ x 8.87x 6.33x 0.70x 6.92x Median $2, $1, $2, $ $ x 11.52x 9.30x 0.97x 8.38x Diagnostic Services Alliance, Inc. NasdaqGM:AIQ $ $ $ $ $ x 11.66x 5.55x NA NA Digirad Corporation NasdaqGM:DRAD $51.69 $73.09 $52.52 $5.05 $ x 16.35x 10.24x 0.90x 9.89x Quest Diagnostics Inc. NYSE:DGX $12, $8, $7, $1, $1, x 11.24x 8.89x 1.69x 8.54x RadNet, Inc. NasdaqGM:RDNT $ $ $ $ $ x 16.63x 7.84x 1.21x 7.71x Median $ $ $ $ $ x 14.01x 8.37x 1.21x 8.54x Healthcare Information Systems Allscripts Healthcare Solutions NasdaqGS:MDRX $2, $2, $1, $ $ x NM 99.77x 2.03x 11.97x athenahealth, Inc. NasdaqGS:ATHN $5, $4, $ $61.30 $ x NM 83.30x 6.13x 35.18x Catamaran Corporation TSX:CCT $10, $9, $18, $ $ x 19.91x 12.99x 0.43x 11.08x Cerner Corporation NasdaqGS:CERN $19, $20, $3, $ $ x 31.29x 24.16x 5.42x 15.64x Computer Programs & Systems NasdaqGS:CPSI $ $ $ $56.62 $ x 11.70x 10.96x 2.87x 9.91x HMS Holdings Corp. NasdaqGS:HMSY $1, $1, $ $ $ x 28.09x 15.94x 3.82x 14.03x MedAssets, Inc. NasdaqGS:MDAS $2, $1, $ $ $ x 20.49x 10.05x 2.83x 8.36x Merge Healthcare Incorporated NasdaqGS:MRGE $ $ $ $28.86 $ x 24.78x 14.49x 1.90x 9.93x Median $2, $2, $ $85.71 $ x 22.64x 15.22x 2.85x 11.53x The following companies have been removed from the Ceres Health Services Index after being acquired: Emeritus Corp. 9

10 Public Sector Valuations Industry / Last Twelve Months Next Twelve Months Company Name Ticker TEV (mm) Market Cap (mm) Rev (mm) EBITDA (mm) EBIT (mm) TEV/Rev TEV/EBIT TEV/EBITDA Forward TEV/Rev Forward TEV/EBITDA Healthcare Staffing AMN Inc. NYSE:AHS $ $ $ $84.06 $ x 12.70x 10.46x 0.85x 10.07x Cross Country Healthcare, Inc. NasdaqGS:CCRN $ $ $ $7.57 $ x x 45.70x 0.46x 13.93x Envision Healthcare Holdings, Inc. NYSE:EVHC $8, $6, $4, $ $ x 26.04x 17.36x 1.75x 13.40x Team Health Holdings, Inc. NYSE:TMH $4, $4, $2, $ $ x 21.62x 16.80x 1.57x 13.43x Median $2, $2, $1, $ $ x 23.83x 17.08x 1.21x 13.42x Managed Care Assurant Inc. NYSE:AIZ $4, $4, $8, $ $ x 5.10x 4.46x 0.44x NA Centene Corp. NYSE:CNC $4, $4, $11, $ $ x 13.19x 10.84x NA 6.86x CorVel Corporation NasdaqGS:CRVL $ $ $ $72.44 $ x 12.08x 9.33x 1.32x NA Health Net, Inc. NYSE:HNT $3, $3, $11, $ $ x 11.06x 9.87x 0.22x 6.45x Magellan Health, Inc. NasdaqGS:MGLN $1, $1, $3, $ $ x 8.77x 6.78x 0.34x 5.76x Median $3, $3, $8, $ $ x 11.06x 9.33x 0.39x 6.45x Specialty Services Air Methods Corp. NasdaqGS:AIRM $2, $2, $ $ $ x 17.08x 11.54x 2.72x 9.67x DaVita HealthCare Partners Inc. NYSE:DVA $23, $15, $11, $2, $1, x 12.72x 9.80x 1.83x 9.72x IPC The Hospitalist Company, Inc. NasdaqGS:IPCM $ $ $ $69.53 $ x 12.84x 11.92x 1.10x 10.00x Northstar Healthcare Inc. TSX:NHC $71.57 $64.58 $48.38 $8.54 $ x 8.85x 7.85x 0.58x 3.14x Providence Service Corp. NasdaqGS:PRSC $ $ $1, $60.68 $ x 17.71x 12.95x 0.50x 8.23x Median $ $ $ $69.53 $ x 12.84x 11.54x 1.10x 9.67x 10

11 Mergers & Acquisitions Overview Yearly Transaction Overview Quarterly M&A Activity Transaction Count YTD Transaction Count Q Q Q Q Q Q Strategic Q PEG Q Q Q Q Q Transaction Multiples 12x 10.90x 11.00x 10x 8x 7.37x 9.12x 8.37x 8.20x 6x 4x 2x x 1.09x 1.10x 1.17x 0.92x 1.14x TEV/Revenue TEV/EBITDA 11

12 Second Quarter Transaction Overview Target LTM Enterprise Enterprise Value / LTM Date Acquirer Target Industry Segment Revenue EBITDA Value Revenue EBITDA 9/29/2014 Civitas Solutions, Inc. Mass Adult Day Health Alliance Assisted Living/ Rehabilitation /29/2014 Private Investors Catasys, Inc. Managed Care $1.17 $ /26/2014 North American Partners in Anesthesia, LLP Total Anesthesia, Inc. Specialty Services /26/2014 Canada Pension Plan Investment Board 21st Century Oncology Holdings, Inc. Specialty Services $ $ /26/2014 Wilson Senior Care, Inc. Loris Rehab and Nursing Center, LLC Assisted Living/ Rehabilitation /25/2014 IPC The Hospitalist Company, Inc. Midland Hospitalists PLC Acute-Care Hospitals /25/2014 The Fort Hamilton Hospital Obstetric & Gynecological Services Inc. Specialty Services - - $ /24/2014 HealthPort Incorporated One Source Document Management, Inc. Healthcare Information Systems /24/2014 Meridian Health System, Inc. Raritan Bay Medical Center Acute-Care Hospitals /23/2014 Conifer Health Solutions, LLC. Springfield Service Corporation Healthcare Information Systems - - $ /22/2014 Aurora Diagnostics Holdings, LLC Richard Bernert, PLLC Specialty Services /22/2014 Arthur J Gallagher & Co. The Benfield Group LLC Healthcare Information Systems /22/2014 Private Investors CNS Response, Inc. Specialty Services $0.16 $ /18/2014 IPC The Hospitalist Company, Inc. Clyo Internal Medicine, Inc. Acute-Care Hospitals /18/2014 Providence Service Corp. Community Care Health Network, Inc. Specialty Services $ $43.54 $ x 9.19x 9/17/2014 Geisinger Health System PrimeMed P.C. Diagnostic Services /17/2014 California HealthCare Foundation Omada Health, Inc. Assisted Living/ Rehabilitation /16/2014 RestorixHealth, Inc. Paradigm Medical Management, Inc. Managed Care /16/2014 ACSH Urgent Care Holdings, LLC Mid-South Urgent Care, Inc. Specialty Services - - $ /16/2014 Cardinal Partners Privia Health LLC Managed Care /16/2014 University of Pittsburgh Medical Center Jameson Health System, Inc. Acute-Care Hospitals /16/2014 Accountable Healthcare Staffing, LLC The Parx Group Of New York Inc Healthcare Staffing /15/2014 Private Investors Agility Health, Inc. Assisted Living/ Rehabilitation $60.75 $ /15/2014 Private Investors BBK Worldwide LLC Specialty Services /11/2014 Savaria Home Access Inc. SILVER CROSS Assisted Living/ Rehabilitation - - $ /11/2014 Private Investors Molina Healthcare, Inc. Managed Care $7, $ /11/2014 Private Investors Ortho Kinematics, Inc. Diagnostic Services /10/2014 PracticeMax, Inc. OptiMED Management, LLC Managed Care /10/2014 Private Investors Premier Diagnostic Health Services Inc. Diagnostic Services $0.20 $ /10/2014 Team Health Holdings, Inc. Emergency Medicine Specialists, P.C Specialty Services /10/2014 Hackensack University Medical Center Palisades Medical Center, Inc. Acute-Care Hospitals /10/2014 Kettering Adventist HealthCare, Inc. Ross Urgent Care Specialty Services - - $

13 Second Quarter Transaction Overview Target LTM Enterprise Enterprise Value / LTM Date Acquirer Target Industry Segment Revenue EBITDA Value Revenue EBITDA 9/10/2014 Private Investors Emergency Medicine Physicians, Ltd. Healthcare Staffing /9/2014 IPC The Hospitalist Company, Inc. East Coast Hospitalist Inpatient Specialists Acute-Care Hospitals /9/2014 Private Investors Milestone Retirement Communities, LLC Assisted Living/ Rehabilitation /9/2014 Private Investors Northstar Healthcare Inc. Specialty Services $48.38 $ /9/2014 Team Health Holdings, Inc. Florida Gulf-to-Bay Anesthesiology Acute-Care Hospitals /9/2014 HCP, Inc.; Brookdale Senior Living Inc. Freedom Village of Bradenton, LLC Assisted Living/ Rehabilitation - - $ /9/2014 Ochsner Health System River Parishes Hospital, LLC Acute-Care Hospitals /8/2014 Team Health Holdings, Inc. Heartland Anesthesia Services, P.C. Specialty Services /8/2014 Private Investors Fayetteville Lithotripters Ltd Partnership Specialty Services /8/2014 Private Investors Molina Healthcare, Inc. Managed Care $7, $ /5/2014 Century Capital Partners Priority Care Solutions, LLC Managed Care /5/2014 Private Investors Trumpet Behavioral Health LLC Acute-Care Hospitals /4/2014 Chiropractic Care of Minnesota, Inc. Chiropractic Care of Wisconsin, Inc. Specialty Services /3/2014 Private Investors Northstar Healthcare Inc. Specialty Services $48.38 $ /3/2014 North American Partners in Anesthesia Newton Anesthesia Associates LLC Specialty Services /3/2014 Team Health Holdings, Inc. Teaneck Emergency Physicians, PA Healthcare Staffing /3/2014 SSM Health Audrain County Health Department Assisted Living/ Rehabilitation /3/2014 Dignity Health PriMed Management Consulting Services, Inc. Healthcare Information Systems /3/2014 Collaborative Care Holdings, LLC WESTMED Practice Partners LLC Managed Care /2/2014 Advanced Dermatology & Cosmetic Fort Collins Skin Clinic, P.C. Diagnostic Services /2/2014 Private Investors Riverside Health, Inc. Managed Care /1/2014 Private Investors Visante, Inc. Healthcare Information Systems /1/2014 Private Investors Nephrology Care Group, LLC Specialty Services /29/2014 BC Technical, Inc. Polaris Medical Imaging Diagnostic Services /29/2014 Pathways Community Behavioral Crider Health Center, Inc. Acute-Care Hospitals /29/2014 NewYork-Presbyterian Hospital The Farber Center for Radiation Oncology Diagnostic Services - - $ /29/2014 Private Investors HRM Services, Inc. Healthcare Information Systems /29/2014 Thoughtful Care, Inc. Kansas City Home Care, Inc. Assisted Living/ Rehabilitation /28/2014 Medequities Realty Trust Inc 1125 Sir Francis Drake Boulevard Acute-Care Hospitals - - $ /28/2014 Medequities Realty Trust Inc Fundamental Healthcare Acute-Care Hospitals - - $ /27/2014 ProHEALTH Circle Urgent Care Heartland Medical Services P.C. Specialty Services /27/2014 Centre De Réadaptation Constance Centre De Réadaption Lucie Bruneau Assisted Living/ Rehabilitation

14 Second Quarter Transaction Overview Target LTM Enterprise Enterprise Value / LTM Date Acquirer Target Industry Segment Revenue EBITDA Value Revenue EBITDA 8/26/2014 Clearlake Capital Group, LLC First Physicians Capital Group, Inc. Healthcare Information Systems $23.11 $9.70 $ x 2.41x 8/25/2014 Private Investors Ortho Kinematics, Inc. Diagnostic Services /25/2014 Health Services of North Texas, Inc. Family Health Care, Inc. Specialty Services /21/2014 Private Investors Largo Endoscopy Center, L.P. Specialty Services /21/2014 Private Investors Autism Home Support Services Inc. Assisted Living/ Rehabilitation /20/2014 California Pain Network Advanced Pain Management Acute-Care Hospitals /20/2014 NovaQuest Capital Management California Cryobank, Inc. Specialty Services /20/2014 Mediplane, Inc. EAL Leasing, Inc. Specialty Services /20/2014 Aequor Technologies, Inc. Sound Advice Consulting Services LLC Healthcare Staffing /19/2014 Private Investors Urgent Care Specialists, LLC Specialty Services /18/2014 MEDNAX, Inc. MedData, Inc. Healthcare Information Systems /18/2014 Genesis HealthCare, LLC Skilled Healthcare Group, Inc. Assisted Living/ Rehabilitation $ $ /18/2014 Consonance Capital; Enclara Health, Inc. excellerx, Inc. and PBM Holding Company Acute-Care Hospitals /18/2014 Phoenix Home Care, Inc. Essential Home Health Care Assisted Living/ Rehabilitation /15/2014 Concordia Lutheran Ministries Concordia of Monroeville Assisted Living/ Rehabilitation /14/2014 Wi-Lan Inc. Hospital for Special Surgery, Inc. Specialty Services /14/2014 Private Investors United Medical Systems (DE), Inc. Specialty Services - - $ /13/2014 Erie County Medical Center Corporation Inc. Synergy Bariatrics, P.C. Acute-Care Hospitals /13/2014 Physicians Realty L.P. An Ambulatory Surgical Center in Monroe Specialty Services - - $ /13/2014 NorthStar Healthcare Income Four Senior Living Facilities in Nassau Assisted Living/ Rehabilitation - - $ /12/2014 Private Investors Patient Home Monitoring Corp. Assisted Living/ Rehabilitation $11.59 $ /11/2014 Network Global Logistics, LLC Medical Logistic Solutions, Inc. Specialty Services /11/2014 MDSTAT Urgent Care, Inc. Healthcare Staffing Specialty Services /11/2014 JHC Operations, LLC Healthcare Staffing Healthcare Staffing /11/2014 Stratose, Inc. Healthcare Staffing Healthcare Information Systems - - $ /8/2014 Molina Healthcare of Florida, Inc. First Coast Advantage, LLC Managed Care /7/2014 IPC The Hospitalist Company, Inc. GeriCare LLC Acute-Care Hospitals /7/2014 Alliance, Inc. Two Radiology Centers Diagnostic Services /7/2014 Synergy MedSales, Inc. MedEx Trade Diagnostic Services /4/2014 Private Investors Two Skilled Nursing Facilities Assisted Living/ Rehabilitation - - $ /4/2014 NAAMTA The International Air Ambulance Alliance Specialty Services /4/2014 Cornerstone Healthcare, Inc. Angeles Home Health Care, Inc. Assisted Living/ Rehabilitation

15 Second Quarter Transaction Overview Target LTM Enterprise Enterprise Value / LTM Date Acquirer Target Industry Segment Revenue EBITDA Value Revenue EBITDA 8/4/2014 Beecken Petty O'Keefe & Company himagine solutions, Inc. Healthcare Staffing - - $ /4/2014 Advanced Home Care, Inc. Central Georgia Home Care Services, Inc. Assisted Living/ Rehabilitation /1/2014 PharMerica Corporation Rx Advantage, Inc. Healthcare Information Systems /1/2014 OU Medical Center OU Medical Center Breast Imaging Diagnostic Services /1/2014 Ben Franklin Technology Partners InnovaTel Telepsychiatry, LLC Specialty Services /1/2014 Private Investors Fresenius Medical Care Anderson, LLC Specialty Services /31/2014 Private Investors AristaMD, Inc. Specialty Services /31/2014 ARK Investment Fund HRM Services, Inc. Healthcare Information Systems /30/2014 WeiserMazars LLP, Investment Arm pmpm Consulting Group Inc. Healthcare Information Systems /29/2014 Greystone Healthcare Management Corp. Amity Hospice, LLC Acute-Care Hospitals /29/2014 Private Investors Caregiver Services, Inc. Assisted Living/ Rehabilitation /29/2014 Yuma Regional Medical Center Inc. Southwest PET / CT Institute Diagnostic Services /29/2014 Private Investors Galaxy Diagnostics, Inc. Diagnostic Services /29/2014 GlobalHealth, Inc. Today's Options of Oklahoma, Inc. Healthcare Information Systems - - $ /28/2014 Active Home Care Holland Health, Inc. Assisted Living/ Rehabilitation /28/2014 Investment 360 L.L.C Deer Meadows Retirement Community Assisted Living/ Rehabilitation - - $ /24/2014 Omega Healthcare Investors Inc. Skilled Nursing Facilities in Georgia Assisted Living/ Rehabilitation - - $ /24/2014 Private Investors IMD Companies, Inc. Diagnostic Services /23/2014 Omega Healthcare Investors Inc. Skilled Nursing Facility In Texas Assisted Living/ Rehabilitation - - $ /22/2014 On Call International Rescue Nurse International, LLC Specialty Services /22/2014 Sentio Healthcare Properties, Inc St. Andrews Village Assisted Living/ Rehabilitation - - $ /22/2014 Tenet Healthcare Corp.; Dignity Health Carondelet Health Network Assisted Living/ Rehabilitation /21/2014 Chartwell Retirement Residences Jardins Notre-Dame Assisted Living/ Rehabilitation - - $ /21/2014 imedx, Inc. Superior Global Solutions Healthcare Information Systems /21/2014 IRB Medical Equipment, LLC Henry Ford Health System, Inc. Assisted Living/ Rehabilitation /18/2014 Sound Inpatient Physicians, Inc. Inpatient Specialists Medical Group, Inc. Healthcare Information Systems /18/2014 Spring Mountain Capital, LP Activate Healthcare, LLC Managed Care /18/2014 Private Investors NextCare, Inc. Specialty Services /17/2014 Private Investors Valley Ambulatory Surgery Center Specialty Services /17/2014 Seacoast Capital Walden Behavioral Care, LLC Acute-Care Hospitals /17/2014 Private Investors Gentiva Health Services Inc. Assisted Living/ Rehabilitation $ $ $1, x 11.91x 7/17/2014 Wellpoint Health Services Corp. WRI Group of Companies Inc. Managed Care

16 Second Quarter Transaction Overview Target LTM Enterprise Enterprise Value / LTM Date Acquirer Target Industry Segment Revenue EBITDA Value Revenue EBITDA 7/16/2014 Illumina Inc. Myraqa, Inc. Diagnostic Services /16/2014 UMH Properties Inc. Four Pennsylvania Home Communities Assisted Living/ Rehabilitation - - $ /16/2014 Foot Health Centers, P.A. Academy Podiatry Associates, P.C. Acute-Care Hospitals /16/2014 DreamIt Ventures Tissue Analytics Diagnostic Services /16/2014 United Surgical Partners International Inc. Siouxland Surgery Center LLP Acute-Care Hospitals /15/2014 LHC Group, Inc. Life Care Home Health, Inc. Assisted Living/ Rehabilitation $ $ x - 7/11/2014 Source One Healthcare Professionals, Inc. Metz&Baum Healthcare Professionals Healthcare Staffing /10/2014 Aviv REIT, Inc. Two ALFs, One SNF And Two Parcels Of Land Acute-Care Hospitals - - $ /9/2014 Dry Hill Properties LLC HCR ManorCare, Inc. Assisted Living/ Rehabilitation - - $ /8/2014 Resolute Anesthesia and Pain Solutions Perth Amboy Anesthesiology. P.C. Specialty Services /8/2014 ProMedica Mercy Memorial Hospital System Corp. Acute-Care Hospitals /8/2014 Accountable Healthcare Staffing, LLC MedAscend LLC Healthcare Staffing /8/2014 Endeavour Capital, Inc. Zoom Care, P.C. Acute-Care Hospitals Care Senior Solutions Home Care Assisted Living/ Rehabilitation /7/2014 Shelby Residential And Vocational Services Special Kids and Families Inc. Assisted Living/ Rehabilitation /7/2014 J-Dek Investments Ltd Leisure Village LLC, Living Facility in Tulsa Assisted Living/ Rehabilitation - - $ /7/2014 Private Investors Auxilio Inc. Healthcare Information Systems $43.7 $ /3/2014 Corner Market Capital Corporation Premier Diagnostic Health Services Inc. Diagnostic Services $0.2 $ /3/2014 Graham Holdings Company Residential Home Health, LLC Assisted Living/ Rehabilitation /2/2014 Private Investors OB Hospitalist Group, Inc. Healthcare Staffing /2/2014 Vitus Group, Inc. Christ Unity Manor Assisted Living/ Rehabilitation - - $ /2/2014 Private Investors Primrose Retirement Communities, LLC Assisted Living/ Rehabilitation /1/2014 Capital Senior Living Corp. Three Senior Living Communities Located Assisted Living/ Rehabilitation - - $ /1/2014 Amerita, Inc. Altius Healthcare Assisted Living/ Rehabilitation /1/2014 Tryko Partners, LLC Rock Glen Healthcare, Inc. Assisted Living/ Rehabilitation - - $ /1/2014 Private Investors Integrated Physicians Management Services Healthcare Information Systems High $7, $ $1, x 11.91x Low $0.16 -$6.24 $ x 2.41x Mean $1, $43.36 $ x 7.84x Median $48.38 $8.54 $ x 9.19x Total Transactionl Count:

17 Ceres Capital Advisors Disclaimer The information and views contained in this report were prepared by Ceres Capital Advisors, LLC.( Ceres ). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy and is provided for informational purposes only. The information contained herein is believed by Ceres to be reliable, but Ceres makes no representation as to the accuracy or completeness of such information. Opinions, estimates and projections in this report constitute Ceres judgment and are subject to change without notice. Also, past performance is not necessarily indicative of future results. Any unauthorized reproduction of this information is strictly prohibited. This report may contain references to registered trademarks, service marks and copyright owned by third-party information providers. None of the third-party information providers is endorsing the offering of, and shall not in any way be deemed an issuer or underwriter of, the securities, financial instruments or other investments discussed in this report, and shall not have any liability or responsibility for any statements made in the report or for any financial statements, financial projections or other financial information contained or attached as an exhibit to the report. For more information about the materials provided by such third parties, please contact us through the contact information provided on the following page. 17

18 Ceres Capital Advisors Ceres Capital Advisors delivers a highly tailored strategic approach for middle-market companies that seek to capitalize on merger and acquisition transactions. Our services are comparable in scope to those employed by Wall Street investment banks for the world's most profitable multinational corporations, while using methodologies, processes and cost-effective structures that make sense for middle-market companies. Based on a highly structured process that leverages our experience, research capabilities, and proprietary technology platforms, we initiate every engagement by first assessing the market climate, and then developing an understanding of the current situation and strategic objectives of each company. From there, we partner with our clients to develop a plan that maximizes shareholder value and delivers the optimal transaction outcome. Ceres is the registered FINRA member broker-dealer division of the Dinan Group of Companies, responsible for executing the securities related transactions of the firm. The Dinan Group is a leading diversified financial services company with over 25 years of advisory and merchant banking experience dedicated to middle-market transactions. For any query regarding this report, please contact: Robert Ullman Managing Director [email protected] Michael Pucci Vice President [email protected] Michael Reister Analyst [email protected]