Q Healthcare Services Market Snapshot

Transcription

1 Q Healthcare Services Market Snapshot Jeff Nahley Managing Director (615) B a l t i m o r e B a n g a l o r e B o s t o n M u m b a i N a s h v i l l e N e w Y o r k R e s t o n S a n F r a n c i s c o

2 Contents Signal Hill at a Glance Signal Hill s Healthcare Services Practice... 4 Q Healthcare Services M&A Overview Notable Q Healthcare Services M&A Transactions... 6 Q Healthcare Services M&A Transactions Q Healthcare Services Public Company Valuation Metrics LTM Relative Healthcare Services Stock Price Performance

3 Signal Hill at a Glance Signal Hill, named 2014 Boutique Investment Bank of the Year by the Global M&A Network, is a leading independent advisory boutique serving the M&A and private capital raising needs of growth companies. Signal Hill's experienced bankers provide deep domain expertise and an unyielding commitment to clients in our sectors: Internet & Digital Media, Internet Infrastructure, Services and Software. With more than 600 completed transactions and offices in Baltimore, Bangalore, Boston, Mumbai, Nashville, New York, Reston and San Francisco, Signal Hill leverages deep strategic industry and financial sponsor relationships to help our clients achieve Greater Outcomes. Recent Mergers & Acquisitions, Strategic Advisory Transactions Mergers & Acquisitions Equity Private Placements Restructurings Strategic Advisory Special Committee Advisory Fairness Opinions 3

4 Signal Hill s Healthcare Services Practice Includes previous experience 4

5 Q Healthcare Services M&A Overview The Healthcare Services sector experienced a slight decrease in terms of deal volume from Q to Q1 2015, but the 103 announced deals remain in line with metrics from the last twelve months (LTM). Total announced enterprise value (EV), however, experienced a significant jump, reaching its highest point of the LTM at more than $24.8B. Total announced EV was bolstered by three mega deals: Catamaran / OptumRx (UnitedHealth), Life Time Fitness / Leonard Green & Partners and TPG Capital, and United Surgical Partners / Tenet Healthcare*. Median announced deal size decreased by approximately 29 percent while median EBITDA multiples held steady. Source: Signal Hill Q Q Q Q Q Number of Announced Deals % change from prior quarter - 6.7% (9.9)% 24.0% (16.9%) Total Announced Enterprise Value ($M) $15,277.5 $9,139.5 $15,229.5 $17,690.4 $24,822.5 % change from prior quarter - (40.2)% 66.6% 16.2% 40.3% Median Announced Deal Size ($M) $24.7 $20.4 $33.9 $33.6 $22.0 % change from prior quarter - (17.5)% 66.2% (0.9)% (34.6%) Median EV/TTM EBITDA Multiple NM (1) NM (1) NM (1) 11.7x 11.6x % change from prior quarter - NA NA NA (1.1%) (1) This figure is NM as there were only two disclosed EBITDA multiples in Q and Q1 2014, three disclosed in Q and four in Q *Deals profiled on page 6 5

6 Notable Q Healthcare Services M&A Transactions Catamaran to be Acquired by OptumRx (UnitedHealth Group) EV: $13,215.3M Revenue Multiple: 0.6x EBITDA Multiple: 15.6x Life Time Fitness to be Acquired by Leonard Green & Partners and TPG EV: $4,062.7M Revenue Multiple: 3.1x EBITDA Multiple: 10.9x United Surgical Partners to be Acquired by Tenet Healthcare EV: $3,525.0M EBITDA Multiple: 15.6x Concentra to be Acquired by Welsh, Carson, Anderson & Stowe and Select Medical Holdings Corporation EV: $1,055.0M Revenue Multiple: 1.1x EBITDA Multiple: 8.3x Envision Healthcare Holdings Acquires Scottsdale Emergency Associates and Emergency Medical Associates EV: $380.0M and VISTA Staffing Solutions EV: $123.0M Select Healthcare Services Transactions, Q Catamaran (Nasdaq: CTRX, TSX: CCT), a leading provider of pharmacy benefit management services and technology solutions, has agreed to combine with OptumRx, UnitedHealth Group s (NYSE: UNH) free-standing pharmacy care services business. The combination diversifies OptumRx s customer and business mix, while accelerating its technology leadership and flexible service offerings. Life Time Fitness (NYSE: LTM), a company that helps organizations, communities and individuals achieve their total health objectives, athletic aspirations and fitness goals inside and outside of sports, professional fitness, family recreation and spa destinations, has entered into a definitive merger agreement to be acquired by affiliates of Leonard Green & Partners and TPG Capital. This is a go-private transaction that will enable greater flexibility for the Company in light of a growing trend toward boutique exercise studios. Tenet Healthcare Corporation (NYSE: THC) and Welsh, Carson, Anderson & Stowe have signed a definitive agreement under which Tenet and United Surgical Partners International (USPI) will combine their short-stay surgery and imaging center assets into a new joint venture. The Tenet and USPI joint venture will create the largest provider of ambulatory surgery in the United States. Concentra, a provider of occupational health, urgent care and physical therapy services, has agreed to be acquired by private equity fund Welsh, Carson, Anderson & Stowe and Select Medical Holdings Corporation (NYSE: SEM), an operator of specialty hospitals and outpatient rehabilitation clinics. Concentra is being sold by Humana. Envision Healthcare Holdings (NYSE: EVHC) offers an array of healthcare related services to consumers, hospitals, healthcare systems, health plans and local, state and national government entities. Scottsdale Emergency Associates is a premier emergency physician group in the greater Phoenix market. Emergency Medical Associates provides emergency department, hospitalist and urgent care services at 47 facilities in New Jersey, New York, Rhode Island and North Carolina. VISTA is a leading provider of locum tenens staffing and permanent placement services for physicians, nurse practitioners and physician assistants. 6

7 Q Healthcare Services M&A Transactions Date Enterprise Enterprise Value Target Acquirer Announced Value Revenue EBITDA 30-Mar-15 Flexeon Rehabilitation, Inc. Athletic & Therapeutic Institute of Naperville, LLC Mar-15 Sunrise House Foundation, Inc. American Addiction Centers, Inc. $ Mar-15 HCR ManorCare, Inc., Nine Specified Facilities HCP, Inc. (NYSE:HCP) $ Mar-15 The Village at the Woodlands Waterway in the The Woodlands Kensington Realty Advisors, Inc.; SEDCO Capital Mar-15 Catamaran Corporation (TSX:CCT) UnitedHealth Group Incorporated (NYSE:UNH) $13, x 15.6x 27-Mar-15 Central Suffolk Hospital North Shore - Long Island Jewish Health System, Inc Mar-15 Oakmont of San Antonio Heights in Upland and Oakmont of Folsom in Folsom Health Care REIT, Inc. (NYSE:HCN) Mar-15 Concentra, Inc. Welsh, Carson, Anderson & Stowe; Select Medical Holdings Corporation (NYSE:SEM) $1, x 8.3x 23-Mar-15 Pediatric Services of America, Inc. J.H. Whitney & Co., LLC Mar-15 Cannon & Associates Inc Mar-15 Matt Smith Physical Therapy ATI Physical Therapy Holdings, LLC Mar-15 United Surgical Partners International Tenet Healthcare Corp. (NYSE:THC) $3, x 3/19/2015 Shawnee Heartland Assisted Living, Inc. Granite Investment Group $ Mar-15 4D Pharmacy Management Systems, Inc. Magellan Rx Management, LLC $ Mar-15 CSH Master Care USA Inc. HCP, Inc. (NYSE:HCP); Brookdale Senior Living Inc. (NYSE:BKD) $ Mar-15 Life Time Fitness Leonard Green & Partners; LNK Partners; TPG Capital $4, x 10.9x 16-Mar-15 An Assisted Living Community with 103 Living Units in Pennsylvania - $ Mar-15 McDowell Home Health Agency, Inc. Ephraim Mcdowell Health, Inc Mar-15 Air Medical Group Holdings, Inc. KKR & Co. L.P. (NYSE:KKR) Mar-15 PGC Endoscopy Center of Excellence, LLC Physicians Endoscopy L.L.C.; Philadelphia Gastroenterology Consultants, LTD Mar-15 Dynamic Rehabilitation Centers Inc. Pure HealthyBack, Inc Mar-15 Radiology Associates of Hollywood, P.A. Sheridan Radiology Services Of South Florida, Inc Mar-15 West Home Health Care, Inc. Patient Home Monitoring Corp. (TSXV:PHM) $ Mar-15 Lovelace Health System, Retail Pharmacy Business in New Mexico Walgreen Co Mar-15 Roto-Rooter Services Company, 6,000-Square-Foot Building at 3865 Industrial Drive CHS Holding Co. LLC $ Mar-15 Autumn Health Care Inc. and TheraTrust Inc. Greystone Healthcare Management Corp

8 Q Healthcare Services M&A Transactions Date Announced Target Acquirer Enterprise Value Enterprise Value Revenue EBITDA 5-Mar-15 Clarity Service Group, LLC Epic Health Services, Inc Mar-15 Industrial Medicine, P.C. Nova Medical Centers Mar-15 Weslaco Regional Rehabilitation Hospital, LLC Ernest Health, Inc Mar-15 Chesterfield/Marlboro, L.P Mar-15 20% Stake in Five Hospitals in Oklahoma Health Management Associates Inc Mar-15 Mercy Suburban Hospital Prime Healthcare Services, Inc Mar-15 Accelecare Wound Centers, Inc. Healogics, Inc Mar-15 Quality Addiction Management Inc. Acadia Healthcare Company, Inc. (NasdaqGS:ACHC) $ Mar-15 Legacy Hospice, LLC and Legacy Hospice of Colorado Springs, LLC New Century Hospice, Inc Mar-15 Sentage Corporation Golub Capital; Cressey & Company, LP Feb-15 Healthcare Solutions, Inc., Delaware Catamaran Corporation (TSX:CCT) $ x 25-Feb-15 Mineral Area Osteopathic Hospital, Inc. Parkland Health Center, Farmington Community Feb-15 Haas Medical Office Park Universal Health Realty Income Trust (NYSE:UHT) $ Feb-15 Bracor, Inc. Almost Family Inc. (NasdaqGS:AFAM) $ x - 24-Feb-15 Abeking Associates, L.P. and Westrum Hanover, L.P. and One Boyertown Properties LP Griffin-American Healthcare REIT III, Inc. $ Feb-15 Mountain Crest Senior Housing Portfolio Griffin-American Healthcare REIT III, Inc. $ Feb-15 Warm Springs Specialty Hospital of San Antonio, LLC Citizens Medical Center Feb-15 The Pain Center of Arizona, PC Alliance Healthcare Services, Inc. (NasdaqGM:AIQ) $ x - 17-Feb-15 Overland Park Rehab, Heartland Rehabilitation Hospital Carter Validus Operating Partnership II, LP $ Feb-15 Executive Care Greystone Healthcare Management Corp Feb-15 Landmark Hospital of Savannah Carter Validus Mission Critical REIT, Inc. $ Feb-15 Aetna Life Insurance Company, Inc., Olympic Place Altus Properties, LLC $ Feb-15 Forsyth Court Newcastle Investment Corp. (NYSE:NCT) $ Feb-15 BioDiagnostics Inc. Eurofins Scientific SA (ENXTPA:ERF) Feb-15 CORVA Kidney Center-Webster ISD Renal, Inc Feb-15 National Hospice Holdings, LLC Hospice Compassus, Inc Feb-15 Forest Haven Nursing Home, Inc. Mid-Atlantic Health Care, LLC $ Feb-15 CareSTAT Urgent Care Centers MNR Industries LLC Feb-15 Data Innovations, LLC Sunquest Information Systems, Inc

9 Q Healthcare Services M&A Transactions Date Enterprise Enterprise Value Target Acquirer Announced Value Revenue EBITDA 5-Feb-15 Muir Wood Adolescent & Family Services, LLC Feb-15 Reynolds Rehabilitation Enterprises, Inc. Orthology, Inc Feb-15 The Medical Care Group, Ltd. Alexian Brothers Health System /5/2015 Four Suburban Healthcare Clinics in Indiana, Georgia and Pennsylvania The Sanders Trust $ Feb-15 Rest Haven Schuylkill County Home Nationwide Healthcare Services, LLC. $ Feb-15 Bethany Rehabilitation Center CareTrust REIT, Inc. (NasdaqGS:CTRE) $ Feb-15 Cardinal Hill Rehabilitation Hospital HEALTHSOUTH Corp. (NYSE:HLS) Feb-15 Delaware Outpatient Center for Surgery, LLC Surgery Partners LLC Feb-15 Five Companies in North Carolina Griffin-American Healthcare REIT III, Inc Feb-15 University HealthSystem Consortium, Inc. VHA Inc Feb-15 Barren County Health Care Center, Inc. Diversicare Healthcare Services Inc. (NasdaqCM:DVCR) $ /2/2015 Nine-Clinic Physical Therapy Practice US Physical Therapy Inc. (NYSE:USPH) $ x - 1/31/2015 LCA-Vision Inc. Joffe Family $ x NM 30-Jan-15 Encore Rehabilitation Services, LLC Revelstoke Capital Partners LLC Jan-15 Coventry Village Senior Housing Properties Trust (NYSE:SNH) $ Jan-15 Four Non-Core Communities - $ Jan-15 One Living Community In USA Capital Senior Living Corp. (NYSE:CSU) Jan-15 Trillium Diagnostics, LLC Vivione Biosciences, LLC $ /28/2015 FiftyNine Palms, 84-licensed-bed hospital in Aliso Viejo, California Behavioral Healthcare Realty, LLC $ Jan-15 Agate Resources, Inc. Centene Corp. (NYSE:CNC) Jan-15 Qualcare Alliance Networks, Inc. Cigna Corp. (NYSE:CI) Jan-15 Sears Methodist Retirement System, Inc., Four Retirement Communities Evergreen Senior Living Properties LLC $ Jan-15 Radisphere National Radiology Group, Inc. Sheridan Healthcare, Inc Jan-15 MidAtlantic MedEvac, L.L.C. Med-Trans Corporation Jan-15 IVR Care Transition Systems, Inc. MDnetSolutions, LLC Jan-15 Lifecare Medical Associates, PC Finger Lakes Health Systems Agency Inc., Endowment Arm Jan-15 VISTA Staffing Solutions, Inc. Envision Healthcare Holdings, Inc. (NYSE:EVHC) $ Jan-15 HSM, Inc. National Imaging Associates, Inc Jan-15 The Assist Group, Inc. Equian, LLC Jan-15 Cassell & Associates, LLC Civitas Solutions, Inc. (NYSE:CIVI)

10 Q Healthcare Services M&A Transactions Date Target Acquirer Enterprise Enterprise Value Announced Value Revenue EBITDA 14-Jan-15 Johnson Memorial Medical Center, Inc. Saint Francis Care, Inc. $ Jan-15 Scottsdale Emergency Associates Ltd and Emergency Medical Associates Of New Jersey P.A. Envision Healthcare Holdings, Inc. (NYSE:EVHC) $ Jan-15 8 Medical Office Facilities Physicians Realty Trust (NYSE:DOC) $ Jan-15 Loving Care Agency, Inc. Epic Health Services, Inc Jan-15 Podiatry Affiliates, PC Buffalo Medical Group, P.C Jan-15 Traditions Home Care, Inc. Accelera Innovations, Inc (OTCPK:ACNV) $ x - 9-Jan-15 Twenty/20 Management, English Meadows at Christiansburg and English Meadows Elks' Home CareTrust REIT, Inc. (NasdaqGS:CTRE) /9/2015 Advanced Surgery Center, LLC Centers for Special Surgery, LLC $ Jan-15 The Mccullough-Hyde Memorial Hospital Incorporated Trihealth, Inc. $ Jan-15 Integrity Urgent Care, PC The Ensign Group, Inc. (NasdaqGS:ENSG) Jan-15 Crittenton Hospital Medical Center Ascension Health, Michigan Jan-15 Healthcare Management Solutions, Inc. The Corridor Group, Inc Jan-15 Priority Home Health Care, Inc. Addus HomeCare Corporation (NasdaqGS:ADUS) Jan-15 Health Through Friendship, Inc. Centene Corp. (NYSE:CNC) Jan-15 Home Health Operations in Phoenix The Ensign Group, Inc. (NasdaqGS:ENSG); Cornerstone Healthcare, Inc /5/2015 Traditions Home Care, Inc. Accelera Innovations, Inc $ x - 2-Jan-15 Caring Partners Home Health, Inc. United Methodist Retirement Communities, Inc. $ Jan-15 Ambient Healthcare, Inc. AxelaCare Health Solutions, LLC

11 Q Healthcare Services Public Company Valuation Metrics Source: Signal Hill Enterprise Value as a Multiple of: Equity Enterprise Pricing Date: 3/31/2015 % Of 52 Value Value Revenue EBITDA EBITDA Margin Median Metrics Wk High ($ in mm) ($ in mm) LTM 2015E 2016E LTM 2015E 2016E LTM 2015E Acute Care 94.4% 6, , x 1.1x 1.1x 8.7x 8.0x 7.4x 14.2% 14.4% Alternate Site 93.8% 1, , x 2.1x 1.9x 10.7x 10.3x 9.4x 18.9% 20.2% Behavioral 98.4% 3, , x 1.2x 1.1x 13.8x 9.5x 8.5x 9.9% 12.2% Home Health 93.3% x 0.8x 0.8x 12.8x 10.5x 9.6x 6.9% 8.0% Laboratories 95.9% 2, , x 1.9x 2.2x 11.0x 9.5x 9.3x 22.9% 20.3% Managed Care 97.3% 26, , x 0.5x 0.5x 11.2x 9.2x 8.4x 5.4% 5.8% Senior Care / Rehab 96.5% 1, , x 1.0x 0.9x 13.2x 9.8x 9.2x 8.7% 10.0% All Select Healthcare Services 95.9% 2, , x 1.1x 1.1x 11.2x 9.5x 9.2x 9.9% 12.2% 11

12 Q Healthcare Services Public Company Valuation Metrics Select U.S. and International Public Companies ($ in millions, except per share data) Price % of 52 Equity Enterprise '12-'14E '14E EBITDA TEV / Revenue TEV / EBITDA Price / Earnings P/E / LTG Rate LTG Company Name 03/31/15 Week High Value Value Rev Growth Margin LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E Rate Acute Care HCA Holdings, Inc. $ % $31,559 $62,169 6% 20% 1.7x 1.6x 1.5x 8.4x 8.1x 7.7x 18.1x 15.3x 13.6x 1.4x 1.2x 1.1x 13% $36,918 $39,044 $40,996 $7,385 $7,635 $8,105 $4.16 $4.93 $5.55 Universal Health Services Inc. $ % $11,647 $15,188 12% 17% 1.9x 1.6x 1.6x 10.3x 9.5x 8.9x 21.7x 18.3x 16.8x 2.2x 1.8x 1.7x 10% $8,065 $9,239 $9,681 $1,475 $1,597 $1,705 $5.42 $6.42 $7.01 Tenet Healthcare Corp. $ % $4,909 $17,058 38% 11% 1.0x 0.9x 0.9x 8.7x 8.0x 7.4x NM 24.2x 18.5x NM 2.4x 1.9x 10% $16,615 $18,006 $18,962 $1,952 $2,138 $2,296 $0.34 $2.05 $2.68 Community Health Systems, Inc. $ % $6,104 $23,190 21% 15% 1.2x 1.1x 1.1x 8.5x 7.5x 7.1x 39.6x 13.4x 11.7x 2.3x 0.8x 0.7x 17% $18,639 $20,185 $21,209 $2,737 $3,087 $3,246 $1.32 $3.90 $4.45 Lifepoint Hospitals Inc. $ % $3,246 $5,388 15% 14% 1.2x 1.0x 1.0x 9.3x 7.6x 7.2x 27.3x 18.5x 17.1x 2.6x 1.7x 1.6x 11% $4,483 $5,181 $5,450 $577 $706 $747 $2.69 $3.97 $4.29 Min $3,246 $5,388 6% 11% 1.0x 0.9x 0.9x 8.4x 7.5x 7.1x 18.1x 13.4x 11.7x 1.4x 0.8x 0.7x 0.1x Mean $11,493 $24,599 18% 15% 1.4x 1.3x 1.2x 9.1x 8.2x 7.7x 26.7x 17.9x 15.5x 2.1x 1.6x 1.4x 0.1x Median 94% $6,104 $17,058 15% 15% 1.2x 1.1x 1.1x 8.7x 8.0x 7.4x 24.5x 18.3x 16.8x 2.2x 1.7x 1.6x 0.1x Max $31,559 $62,169 38% 20% 1.9x 1.6x 1.6x 10.3x 9.5x 8.9x 39.6x 24.2x 18.5x 2.6x 2.4x 1.9x 0.2x Alternate Site DaVita HealthCare Partners Inc. $ % $17,540 $25,762 29% 19% 2.0x 1.9x 1.8x 10.7x 10.3x 9.8x 24.4x 21.4x 19.8x 2.1x 1.8x 1.7x 12% $12,781 $13,601 $14,476 $2,400 $2,505 $2,639 $3.33 $3.79 $4.11 AmSurg Corp. $ % $2,919 $5,565 34% 27% 3.4x 2.3x 2.1x 11.6x 10.4x 9.1x 48.3x 18.9x 16.3x 2.9x 1.2x 1.0x 16% $1,622 $2,446 $2,704 $478 $537 $613 $1.27 $3.25 $3.78 Surgical Care Affiliates, Inc. $ % $1,337 $2,359 11% 18% 2.8x 2.5x 2.3x 10.7x 13.8x 12.6x 33.3x 19.5x 16.7x 3.3x 1.9x 1.7x 10% $851 $956 $1,014 $221 $171 $187 $1.03 $1.76 $2.06 Alliance Healthcare Services, Inc. $ % $234 $767 NA NA 1.8x NA NA 6.3x NA NA 22.6x NA NA NA NA NA NA $436 NA NA $122 NA NA $0.98 NA NA RadNet, Inc. $ % $367 $966 10% 17% 1.3x 1.3x 1.3x 8.4x 7.5x 6.9x NM 16.4x 12.1x NM 1.6x 1.2x 10% $718 $741 $772 $115 $129 $141 $0.03 $0.51 $0.69 Min $234 $767 10% 17% 1.3x 1.3x 1.3x 6.3x 7.5x 6.9x 22.6x 16.4x 12.1x 2.1x 1.2x 1.0x 10% Mean $4,479 $7,084 21% 20% 2.3x 2.0x 1.9x 9.5x 10.5x 9.6x 32.2x 19.1x 16.2x 2.8x 1.6x 1.4x 12% Median $1,337 $2,359 20% 18% 2.0x 2.1x 1.9x 10.7x 10.3x 9.4x 28.9x 19.2x 16.5x 2.9x 1.7x 1.4x 11% Max $17,540 $25,762 34% 27% 3.4x 2.5x 2.3x 11.6x 13.8x 12.6x 48.3x 21.4x 19.8x 3.3x 1.9x 1.7x 16% Behavioral Universal Health Services Inc. $ % $11,647 $15,188 12% 17% 1.9x 1.6x 1.6x 10.3x 9.5x 8.9x 21.7x 18.3x 16.8x 2.2x 1.8x 1.7x 10% $8,065 $9,239 $9,681 $1,475 $1,597 $1,705 $5.42 $6.42 $7.01 Acadia Healthcare Company, Inc. $ % $4,725 $5,728 57% 21% 5.7x 3.5x 3.0x 27.9x 15.5x 13.0x 47.7x 34.3x 27.8x 2.1x 1.5x 1.2x 23% $1,005 $1,641 $1,938 $205 $369 $440 $1.50 $2.09 $2.58 Magellan Health, Inc. $ % $1,888 $1,819 8% 7% 0.5x 0.4x 0.3x 8.3x 6.5x 6.0x 24.4x 23.6x 21.6x 1.4x 1.4x 1.3x 17% $3,760 $4,469 $5,263 $220 $281 $302 $2.90 $3.00 $3.28 Providence Service Corp. $ % $845 $1,260 14% 6% 0.9x 0.7x 0.6x 17.2x 9.5x 8.1x 39.3x 31.2x 22.8x 2.5x 2.0x 1.4x 16% $1,481 $1,879 $2,031 $73 $133 $155 $1.35 $1.70 $2.33 AAC Holdings, Inc. $ % $666 $652 45% 15% 5.4x 3.7x 2.6x 38.8x 19.7x 13.2x 74.6x 51.0x 33.0x 3.7x 2.5x 1.6x 20% $122 $175 $246 $17 $33 $50 $0.41 $0.60 $0.93 Min $845 $1,260 8% 6% 0.5x 0.4x 0.3x 8.3x 6.5x 6.0x 21.7x 18.3x 16.8x 1.4x 1.4x 1.2x 10% Mean $4,776 $5,999 23% 13% 2.2x 1.6x 1.4x 15.9x 10.2x 9.0x 33.3x 26.9x 22.2x 2.0x 1.7x 1.4x 16% Median $3,307 $3,773 13% 12% 1.4x 1.2x 1.1x 13.8x 9.5x 8.5x 31.9x 27.4x 22.2x 2.1x 1.7x 1.3x 17% Max $11,647 $15,188 57% 21% 5.7x 3.5x 3.0x 27.9x 15.5x 13.0x 47.7x 34.3x 27.8x 2.5x 2.0x 1.7x 23% 12

13 Q Healthcare Services Public Company Valuation Metrics Select U.S. and International Public Companies ($ in millions, except per share data) Price % of 52 Equity Enterprise '12-'14E '14E EBITDA TEV / Revenue TEV / EBITDA Price / Earnings P/E / LTG Rate LTG Company Name 03/31/15 Week High Value Value Rev Growth Margin LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E Rate Home Health Amedisys Inc. $ % $902 $1,011 (0%) 8% 0.9x 0.8x 0.8x 15.2x 10.8x 10.2x 67.0x 25.2x 23.2x 6.1x 2.3x 2.1x 11% $1,188 $1,224 $1,257 $66 $93 $100 $0.40 $1.06 $1.15 LHC Group, Inc. $ % $588 $663 10% 8% 0.9x 0.9x 0.8x 11.1x 10.1x 9.0x 26.2x 20.5x 18.1x 1.6x 1.2x 1.1x 17% $718 $776 $827 $60 $66 $74 $1.26 $1.61 $1.83 Almost Family Inc. $ % $424 $467 21% 7% 0.9x 0.9x 0.8x 14.6x 12.0x 10.7x 30.4x 22.0x 19.6x 2.8x 2.0x 1.8x 11% $496 $525 $560 $32 $39 $44 $1.47 $2.04 $2.28 Addus HomeCare Corporation $ % $252 $242 14% 8% 0.8x 0.7x 0.6x 10.5x 8.7x 8.0x 21.3x 18.0x 16.1x 1.4x 1.2x 1.1x 15% $313 $348 $374 $23 $28 $30 $1.08 $1.28 $1.43 Min $252 $242 (0%) 7% 0.8x 0.7x 0.6x 10.5x 8.7x 8.0x 21.3x 18.0x 16.1x 1.4x 1.2x 1.1x 11% Mean $541 $596 11% 8% 0.9x 0.8x 0.8x 12.9x 10.4x 9.4x 36.2x 21.4x 19.3x 3.0x 1.7x 1.5x 13% Median $506 $565 12% 8% 0.9x 0.8x 0.8x 12.8x 10.5x 9.6x 28.3x 21.2x 18.8x 2.2x 1.6x 1.4x 13% Max $902 $1,011 21% 8% 0.9x 0.9x 0.8x 15.2x 12.0x 10.7x 67.0x 25.2x 23.2x 6.1x 2.3x 2.1x 17% Laboratories Quest Diagnostics Inc. $ % $11,090 $14,717 0% 19% 2.0x 1.9x 1.9x 10.4x 9.7x 9.3x 20.3x 16.2x 15.0x 2.2x 1.7x 1.6x 9% $7,435 $7,622 $7,793 $1,409 $1,520 $1,589 $3.78 $4.76 $5.14 Laboratory Corp. of America Holdings $ % $12,647 $15,114 3% 19% 2.5x 1.8x 1.6x 12.9x 9.4x 8.4x 21.3x 16.6x 14.7x 2.2x 1.7x 1.5x 10% $6,012 $8,528 $9,239 $1,168 $1,613 $1,799 $5.91 $7.60 $8.56 Myriad Genetics Inc. $ % $2,518 $2,352 15% NA 3.2x 3.0x 2.9x 11.5x 10.3x 10.7x 24.5x 19.7x 18.6x 1.7x 1.4x 1.3x 14% $725 $775 $807 $204 $229 $219 $1.45 $1.80 $1.90 Genomic Health Inc. $ % $983 $879 9% (7% ) 3.2x 2.9x 2.6x NM NM NM NM NM NM NM NM NM NA $276 $299 $341 ($17) ($8) $11 ($0.78) ($0.56) $0.05 Bio-Reference Laboratories Inc. $ % $979 $1,012 23% 13% 1.2x 1.0x NA 8.8x 7.9x NA 19.5x 16.9x NA 1.1x 1.0x NA 17% $860 $975 NA $115 $128 NA $1.81 $2.08 NA Min $979 $879 0% (7%) 1.2x 1.0x 1.6x 8.8x 7.9x 8.4x 19.5x 16.2x 14.7x 1.1x 1.0x 1.3x 9% Mean $5,643 $6,815 10% 11% 2.4x 2.1x 2.3x 10.9x 9.3x 9.5x 21.4x 17.3x 16.1x 1.8x 1.5x 1.5x 13% Median $2,518 $2,352 9% 16% 2.5x 1.9x 2.2x 11.0x 9.5x 9.3x 20.8x 16.8x 15.0x 2.0x 1.6x 1.5x 12% Max $12,647 $15,114 23% 19% 3.2x 3.0x 2.9x 12.9x 10.3x 10.7x 24.5x 19.7x 18.6x 2.2x 1.7x 1.6x 17% 13

14 Q Healthcare Services Public Company Valuation Metrics Select U.S. and International Public Companies ($ in millions, except per share data) Price % of 52 Equity Enterprise '12-'14E '14E EBITDA TEV / Revenue TEV / EBITDA Price / Earnings P/E / LTG Rate LTG Company Name 03/31/15 Week High Value Value Rev Growth Margin LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E Rate Managed Care UnitedHealth Group Incorporated $ % $112,813 $122,426 14% 9% 0.9x 0.9x 0.8x 10.8x 9.8x 9.0x 20.8x 19.1x 16.8x 1.8x 1.7x 1.5x 11% $130,474 $141,637 $153,171 $11,330 $12,546 $13,655 $5.70 $6.20 $7.03 Cigna Corp. $ % $33,463 $38,320 20% 11% 1.1x 1.0x 0.9x 9.9x 9.8x 9.1x 16.5x 15.6x 14.0x 1.4x 1.3x 1.2x 12% $34,914 $38,088 $41,220 $3,885 $3,916 $4,211 $7.83 $8.31 $9.27 Aetna Inc. $ % $37,467 $43,254 33% 8% 0.7x 0.7x 0.6x 9.1x 8.5x 7.9x 18.8x 14.9x 13.4x 1.8x 1.4x 1.3x 10% $58,003 $62,766 $67,149 $4,737 $5,092 $5,460 $5.68 $7.16 $7.98 Humana Inc. $ % $26,637 $29,396 14% 6% 0.6x 0.5x 0.5x 11.2x 9.2x 8.4x 24.2x 20.1x 17.9x 2.1x 1.7x 1.5x 12% $48,500 $54,667 $59,352 $2,620 $3,191 $3,481 $7.36 $8.87 $9.97 WellCare Health Plans, Inc. $ % $4,020 $4,831 32% 2% 0.4x 0.3x 0.3x 19.9x 9.2x 7.4x 63.5x 24.8x 16.4x 5.0x 2.0x 1.3x 13% $12,960 $14,002 $15,056 $243 $528 $649 $1.44 $3.69 $5.57 Centene Corp. $ % $8,401 $9,356 47% 3% 0.6x 0.4x 0.4x 16.3x 12.5x 10.8x 31.7x 25.5x 22.1x 1.9x 1.6x 1.3x 16% $15,689 $21,882 $24,170 $575 $750 $865 $2.23 $2.77 $3.20 Molina Healthcare, Inc. $ % $3,359 $4,062 32% 3% 0.4x 0.3x 0.3x 15.1x 8.7x 6.8x 51.8x 26.7x 19.5x 1.7x 0.9x 0.6x 31% $9,372 $14,251 $16,113 $269 $468 $594 $1.30 $2.52 $3.46 Min $3,359 $4,062 14% 2% 0.4x 0.3x 0.3x 9.1x 8.5x 6.8x 16.5x 14.9x 13.4x 1.4x 0.9x 0.6x 10% Mean $32,308 $35,949 28% 6% 0.7x 0.6x 0.5x 13.2x 9.7x 8.5x 32.5x 20.9x 17.1x 2.3x 1.5x 1.3x 15% Median $26,637 $29,396 32% 6% 0.6x 0.5x 0.5x 11.2x 9.2x 8.4x 24.2x 20.1x 16.8x 1.8x 1.6x 1.3x 12% Max $112,813 $122,426 47% 11% 1.1x 1.0x 0.9x 19.9x 12.5x 10.8x 63.5x 26.7x 22.1x 5.0x 2.0x 1.5x 31% Senior Care / Rehab Brookdale Senior Living Inc. $ % $6,929 $13,092 42% 17% 3.9x 2.5x 2.4x 21.6x 14.6x 13.4x NM NM NM NM NM NM 14% $3,344 $5,161 $5,357 $605 $898 $977 ($1.01) ($1.42) ($0.07) Kindred Healthcare Inc. $ % $1,885 $4,542 23% 9% 0.9x 0.6x 0.6x 13.2x 7.0x 6.3x NM 17.2x 14.1x NM 1.2x 1.0x 14% $5,028 $7,255 $7,645 $343 $650 $718 ($0.24) $1.39 $1.69 Chemed Corp. $ % $2,030 $2,163 3% 15% 1.5x 1.4x 1.4x 11.0x 9.7x 9.3x 21.4x 18.2x 17.1x 2.1x 1.8x 1.7x 10% $1,456 $1,513 $1,572 $197 $222 $232 $5.57 $6.57 $6.99 The Ensign Group, Inc. $ % $1,177 $1,188 16% 10% 1.2x 1.0x 0.9x 12.0x 10.0x 9.2x 30.0x 19.9x 18.6x 2.0x 1.3x 1.2x 15% $1,027 $1,210 $1,314 $99 $119 $130 $1.56 $2.36 $2.52 National Healthcare Corp. $ % $899 $743 11% NA 0.9x 0.8x 0.7x 7.1x NA NA 20.3x 18.7x 15.9x NA NA NA NA $872 $973 $1,015 $105 NA NA $3.14 $3.40 $4.01 Capital Senior Living Corp. $ % $755 $1,388 10% 21% 3.7x 3.4x 3.1x 21.8x 16.1x 14.1x NM 58.7x NM NM 2.9x NM 20% $380 $412 $443 $64 $86 $98 ($0.83) $0.44 $0.28 Five Star Quality Care Inc. $ % $218 $268 13% 3% 0.2x 0.2x 0.2x 18.0x 6.7x 5.9x NM NM 55.5x NM NM NA NA $1,109 $1,378 $1,399 $15 $40 $46 ($1.65) $0.02 $0.08 Min $218 $268 3% 3% 0.2x 0.2x 0.2x 7.1x 6.7x 5.9x 20.3x 17.2x 14.1x 2.0x 1.2x 1.0x 10% Mean $1,985 $3,341 17% 12% 1.7x 1.4x 1.3x 15.0x 10.7x 9.7x 23.9x 26.5x 24.2x 2.1x 1.8x 1.3x 15% Median $1,177 $1,388 13% 12% 1.2x 1.0x 0.9x 13.2x 9.8x 9.2x 21.4x 18.7x 17.1x 2.1x 1.6x 1.2x 14% Max $6,929 $13,092 42% 21% 3.9x 3.4x 3.1x 21.8x 16.1x 14.1x 30.0x 58.7x 55.5x 2.1x 2.9x 1.7x 20% 14

15 LTM Relative Healthcare Services Stock Price Performance Last Twelve Months Healthcare Services Stock Price Performance 15

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