Q Healthcare Services Market Snapshot

Transcription

1 Q Healthcare Services Market Snapshot Jeff Nahley Managing Director 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 Select Q Healthcare Services Financing Activity

3 Signal Hill at a Glance Signal Hill 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 upswing in terms of deal velocity in Q with 111 announced deals, the second highest deal volume in the last twelve months (LTM). Total announced enterprise value (EV) did not follow suit, however, only reaching approximately $9.1B. Median announced deal size declined to its second lowest point of the LTM. When comparing across all metrics from the LTM, Q figures remain consistent. Source: Signal Hill Q Q Q Q Q Number of Announced Deals % change from prior quarter % (34.8)% 15.6% 6.7% Total Announced Enterprise Value ($M) $23,795.3 (1) $12,120.9 $5,757.3 $15,277.5 $9,139.5 % change from prior quarter - (49.1)% (52.5)% 165.4% (40.2)% Median Announced Deal Size ($M) $25.0 $17.1 $25.8 $24.7 $20.4 % change from prior quarter - (31.5)% 50.3% (4.0)% (17.5)% Median EV/TTM EBITDA Multiple 9.4x 8.6x NM (2) NM (2) NM (2) % change from prior quarter - (8.2)% NA NA NA (1) Includes $15,773.0M Life Technologies / Thermo Fisher Scientific transaction (2) This figure is NM as there were only two disclosed EBITDA multiples in Q and Q1 2014, and three disclosed in Q

6 Notable Q Healthcare Services M&A Transactions Select Healthcare Services Transactions, Q Sheridan Healthcare Acquired by AmSurg Corp EV: $2,350.0M Revenue Multiple: 2.1x EBITDA Multiple: 12.2x American Realty Capital Healthcare Trust to be Acquired by Ventas EV: $2,303.7M Revenue Multiple: 14.1x EBITDA Multiple: 29.8x Gentiva Health Services Receives Unsolicited Takeover from Kindred Healthcare EV: $1,742.2M Revenue Multiple: 1.0x EBITDA Multiple: 13.5x Healogics to be Acquired by Clayton, Dubilier & Rice EV: $910.0M Revenue Multiple: 3.0x Symbion Holdings to Merge with Surgery Partners EV: $792.0M Partnerships in Care Acquired by Acadia Healthcare EV: $660.0M Revenue Multiple: 2.3x EBITDA Multiple: 8.8x Sheridan Healthcare, a Florida-based company that provides physician services including radiology, anesthesia and emergency medicine to hospitals and other health care facilities, has been acquired by AmSurg Corp (Nasdaq: AMSG), an operator of same-day surgery centers. Sheridan Healthcare was sold by private equity firm Hellman & Friedman. American Realty Capital Healthcare Trust (Nasdaq: HCT) has entered into a definitive agreement to be acquired by Ventas (NYSE: VTR). The acquisition will create the largest healthcare REIT and the sixth largest overall REIT in the United States. Gentiva Health Sciences (Nasdaq: GTIV) one of the nation s largest providers of home health, hospice and community care services, received an unsolicited offer to be acquired by Kindred Healthcare (NYSE: KND), a provider of long-term medical care, for $17.25 per share in July Since May 2014, Gentiva has rejected unsolicited takeover offers for $14 and $16 per share from Kindred. Healogics, the largest advanced wound care services provider in the U.S., has entered into an agreement to be acquired by private equity firm Clayton, Dubilier & Rice. Healogics is being sold from Metalmark Capital and Scale Venture Partners. Symbion Holdings, an owner and operator of a national network of short stay surgical facilities, has entered into a merger agreement with Surgery Center Holdings, a leading owner and operator of ambulatory surgery centers. The transaction combines two best-in-class organizations and creates a portfolio of approximately 100 healthcare facilities and complementary ancillary services. Partnerships in Care, the second largest independent provider of inpatient behavioral healthcare services in the United Kingdom, has been acquired by Acadia Healthcare (Nasdaq: ACHC), a provider of inpatient behavioral healthcare services. The acquisition will allow Acadia to enter the U.K. market. 6

7 Q Healthcare Services M&A Transactions Date Announced Target Acquirer Enterprise Value Enterprise Value Revenue EBITDA 30-Jun-14 ProHEALTH Medical Management, LLC UnitedHealth Group Incorporated (NYSE:UNH) Jun-14 Building at 7005 Cortez Road and th Street West Building Health Care REIT, Inc. (NYSE:HCN) $ Jun-14 Three Senior Living Communities Located in Ohio Capital Senior Living Corp. (NYSE:CSU) $ Jun-14 CRG Operating Company, LLC Fresenius Medical Care AG & Co. KGAA (DB:FME) Jun-14 Honored Citizens Choice Health Plan, Inc. Alignment Healthcare LLC Jun-14 Advanced Health Care Partners, LLC Regenerative Medicine Solutions, LLC Jun-14 Hallmark Pathology, P.C. Aurora Diagnostics Holdings, LLC Jun-14 Aged Care Portfolio Opal Aged Care $ Jun-14 Sound Inpatient Physicians, Inc. Fresenius Medical Care AG & Co. KGAA (DB:FME) $ Jun-14 Three Nursing Centers in Missouri Aviv REIT, Inc. (NYSE:AVIV) $ Jun-14 Prosthetic Laboratories of Rochester, Inc. Hanger, Inc. (NYSE:HGR) Jun-14 Adam Nutrition, Inc. IVC Industries, Inc Jun-14 Four Senior Living Communities Focus Healthcare Partners $ Jun-14 Park Avenue Nursing & Rehabilitation Center Inc. Synergy Health Centers LLC Jun-14 Spectrum Health Systems, Inc. RepuCare Onsite LLC Jun-14 La Conner Retirement Inn and South Pointe Assisted Living CNL Lifestyle Properties, Inc. (OTCPK:CLLY) $ Jun-14 Bay Walk-In Clinic American Caresource Holdings, Inc. (NasdaqCM:ANCI) 17-Jun-14 Health & Comfort Home Care Agency C & M Health Services Jun-14 California Occupational Clinic, Inc. U.S. Healthworks, Inc Jun-14 Symbion Holdings Corporation Surgery Partners LLC $ Jun-14 Rancho Injury Care Center Matt Smith Physical Therapy Jun-14 Harmony Information Systems, Inc. Mediware Information Systems, Inc Jun-14 Access Bio, Inc. Allianz Global Investors Korea Limited Jun-14 Two Massachusetts Skilled Nursing Assets Tryko Partners, LLC Jun-14 Behavioral Connections of Wood County Harbor, Inc Jun-14 Cardiac Data Solutions, Inc. Healthtrust Purchasing Group, LP Jun-14 Texas Regional Medical Center Ltd. Tenet Healthcare Corp. (NYSE:THC) $2.2 7

8 Q Healthcare Services M&A Transactions Date Enterprise Enterprise Value Target Acquirer Announced Value Revenue EBITDA 3-Jun-14 AKM Medical Group, Inc. Apollo Medical Holdings, Inc. (OTCPK:AMEH) Jun-14 Pine Manor Healthcare, Greentree Health & Rehab, Englewood Post-Acute & Rehab and Rainier Rehab The Ensign Group, Inc. (NasdaqGS:ENSG) Jun-14 Kindred Healthcare, Inc., Seven Nursing Centers Located in Wisconsin Midwest Geriatric Management, LLC Jun-14 The Cottages at MeadowLands The Cottages Investment Group, LLC Jun-14 Partnerships in Care Acadia Healthcare Company $ x 8.8x 2-Jun-14 Brevard HMA Nursing Home, LLC Greystone Healthcare Management Corp Jun-14 Industricare, LLC U.S. Healthworks, Inc Jun-14 Aid & Assist At Home LLC Addus HomeCare Corporation (NasdaqGS:ADUS) Jun-14 Medical Staffing Network Healthcare, LLC Cross Country Healthcare, Inc. (NasdaqGS:CCRN) $ x - 2-Jun-14 Mid-Atlantic Pathology Services, Inc. Aurora Diagnostics Holdings, LLC Jun-14 American Realty Capital Healthcare Trust, Inc. (NasdaqGS:HCT) Ventas, Inc. (NYSE:VTR) $2, x 29.8x 2-Jun Unit Assisted Living Community in Sacramento National Health Investors Inc. (NYSE:NHI) $ Jun-14 Post-Acute And Long-Term Care Skilled Nursing Facility In Kentucky Aviv REIT, Inc. (NYSE:AVIV) $ May-14 The Kindred Nursing and Rehabilitation-Westgate facility National Health Care Associates, Inc May-14 Memphis Surgery Associates, PC SFMP, Inc May-14 GENEX Services, Inc. Apax Partners LLP May-14 Sheridan Healthcare, Inc. AmSurg Corp. (NasdaqGS:AMSG) $2, x 12.2x 29-May-14 Boulder County Public Health, Addiction Recovery Centers Division Mental Health Partners May-14 Kindred Hospital-Pittsburgh-North Shore, L.L.C. Lifecare Hospitals, LLC May-14 The Hospital Committee for the Livermore-Pleasanton Areas Stanford Hospital May-14 Fairfield Surgery Center, LLC National Specialty Hospitals, Inc May-14 Chadwick Medical Associates, P.C. Reliant Medical Group Inc May-14 Mount Pleasant Senior Apartments Coachlight Communities, LLC $ May-14 Laboratory Partners Inc. Marathon Asset Management, LP; American Health Associates, Inc. $ May-14 Healogics, Inc. Clayton, Dubilier & Rice, Inc. $ x - 21-May-14 Lawley Premier Hospice Care, LLC Camellia Home Health Holding Company, Inc May-14 Galaviz & Company LLC Global Market Advisors, LLC

9 Q Healthcare Services M&A Transactions Date Enterprise Enterprise Value Target Acquirer Announced Value Revenue EBITDA 21-May-14 Riverchase Village ADK, LLC May-14 Specialty Hospitals of America, LLC Silver Point Capital L.P May-14 Cedars of Monroeville Concordia Lutheran Ministries $ May-14 AthletiCo Ltd. Harvest Partners, LP May-14 Employee Benefit Solutions, Inc. Pharos Capital Group May-14 Seven Retirement Communities Regal Lifestyle Communities, Inc. $ May-14 Five Hospitals CHP Partners LP $ May-14 Gentiva Health Services Inc. (NasdaqGS:GTIV) Kindred Healthcare Inc. (NYSE:KND) $1, x 13.5x 15-May-14 RG Psychological Services IPC the Hospitalist Company May-14 Mercy Hospital Cadillac and Mercy Hospital Grayling and Affiliated Facilities Munson Healthcare, Inc May-14 Senior Care of Clifton Heights Senior Care Centers of America, Inc May-14 Leesville Rehabilitation Hospital LLC Maxim Management Group, LLC May-14 PracticeMatch Services, LLC M3 USA Corporation May-14 Anthem Property in Manchester Brady Sullivan Properties, LLC $ May-14 Washington Heights Healthcare, Inc. The Ensign Group, Inc. (NasdaqGS:ENSG) May-14 Sunhill Medical Arts Building HCA Holdings, Inc. (NYSE:HCA) $ May-14 Mission Care Center And California Mission Inn The Ensign Group, Inc. (NasdaqGS:ENSG) May-14 Advanced Interventional Pain Clinic, LLC Prospira PainCare Holdings, LLC May-14 Anesthesia and Pain Management Group American Anesthesiology May-14 Amarillo Diagnostic Clinic, P.A. BSA Health System May-14 An Office Building near Mercy Hospital along Biscayne Bay in Miami HCP MOB Miami LLC $ May-14 Casas Adobes Post-Acute Rehabilitation Center The Ensign Group, Inc. (NasdaqGS:ENSG) May-14 MDVIP, Inc. Summit Partners LLP May-14 Four Post-Acute And Long-Term Care Skilled Nursing Facilities in Texas Aviv REIT, Inc. (NYSE:AVIV) $ May-14 Three Skilled Nursing Facilities In California and One Skilled Nursing Facility In Texas Aviv REIT, Inc. (NYSE:AVIV) $ May-14 CorrectMed, LLC American Caresource Holdings, Inc. (NasdaqCM:ANCI) $ May-14 Onward Behavioral Health, Inc. Pyramid Healthcare, Inc May Clinic Physical Therapy Practice US Physical Therapy Inc. (NYSE:USPH) $ x - 9

10 Q Healthcare Services M&A Transactions Date Enterprise Enterprise Value Target Acquirer Announced Value Revenue EBITDA 1-May-14 Cross River Anesthesiologist Services American Anesthesiology Apr-14 HCR ManorCare, Inc., Heartland of Beckley Nursing Home Dry Hill Properties LLC $ Apr-14 Park Place in Fort Wayne, Indiana Sabra Health Care REIT, Inc. (NasdaqGS:SBRA) $ Apr-14 Technimark LLC The Pritzker Group Apr-14 Lifeguard Air Ambulance, Inc. Air Medical Group Holdings, Inc Apr-14 Psychiatric Institute of Washington, D.C., Inc. And Arbor Group, L.L.C. Universal Health Services Inc. (NYSE:UHS) Apr-14 Quiet Oaks Distinctive Assisted Living Pacifica Senior Living, LLC $ Apr-14 Sinar Identiti, Three Hemodialysis Centers Davita Healthcare Partners Apr-14 Steward Health Care System, LLC, Laboratory Service Operations Quest Diagnostics Inc. (NYSE:DGX) Apr-14 Great Lakes Home Health Services, Inc. Wellspring Capital Management LLC Apr-14 MDdatacor, Inc. Symphony Technology Group Apr-14 Heritage Labs, Inc. and Hooper Holmes Services Clinical Reference Laboratory, Inc. $ Apr-14 Sports SA Holdings, Texas Center For Athletes Medical Office Building in Northwest San Antonio Senior Housing Properties Trust (NYSE:SNH) $ Apr-14 Gaylord Hospital, Sleep Medicine Services in North Haven Yale-New Haven Hospital, Inc Apr-14 RecoverCare, LLC Joerns Healthcare Inc Apr-14 Seniors Housing and Care Property Portfolio HealthLease Properties Real Estate Investment Trust (TSX:HLP.UN) $ Apr unit Facility Located in Kokomo, Indiana HealthLease Properties Real Estate Investment Trust (TSX:HLP.UN) Apr-14 MZI Healthcare, LLC Orange Health Solutions, Inc Apr-14 South Windsor Ambulance Corps, Inc. American Medical Response, Inc. $ Apr unit Facility Located in Kokomo, Indiana HealthLease Properties Real Estate Investment Trust (TSX:HLP.UN) Apr-14 MZI Healthcare, LLC Orange Health Solutions, Inc Apr-14 Life's Doors Hospice, Inc. The Ensign Group, Inc. (NasdaqGS:ENSG) Apr-14 Serenity Hospice, Inc. and Vibrant Home Health Care and Care One Home Health ViaQuest, Inc Apr-14 Whatcom Counseling & Psychiatric Clinic Compass Health Apr-14 Iquum, Inc. Roche Molecular Systems Inc. $ Apr-14 Multigen Diagnostics, Inc. Physicians Choice Laboratory Services Inc

11 Q Healthcare Services M&A Transactions Date Enterprise Enterprise Value Target Acquirer Announced Value Revenue EBITDA 4-Apr-14 Natchez Regional Medical Center Community Health Systems, Inc. (NYSE:CYH) Apr-14 St. Joseph Hospital Home Health and Hospice LHC Group, Inc. (NasdaqGS:LHCG) Apr-14 Professional Nursing Solutions, LLC LHC Group, Inc. (NasdaqGS:LHCG) Apr-14 Diversicare Rose Terrace LLC - $ Apr-14 Advanced Urgent Care, L.L.C. FastMed Urgent Care Apr-14 VNA-TIP Healthcare Celtic Healthcare, Inc Apr-14 Medical Physics Services, Inc. West Physics Consulting, LLC

12 Q Healthcare Services Public Company Valuation Metrics Source: Signal Hill Enterprise Value as a Multiple of: Equity Enterprise Pricing Date: 6/30/2014 % Of 52 Value Value Revenue EBITDA EBITDA Margin Median Metrics Wk High ($ in mm) ($ in mm) LTM 2014E 2015E LTM 2014E 2015E LTM 2014E Acute Care 94.1% 5, , x 1.2x 1.1x 9.6x 8.1x 7.4x 16.2% 14.6% Alternate Site 86.3% 1, , x 2.1x 2.0x 8.6x 9.1x 8.5x 22.9% 23.1% Behavioral 90.6% 2, , x 1.0x 0.9x 9.7x 8.8x 7.9x 11.6% 10.8% Home Health 79.4% x 0.7x 0.6x 12.9x 9.2x 8.8x 5.5% 7.1% Laboratories 91.6% 2, , x 1.9x 1.9x 9.1x 9.2x 9.3x 21.0% 20.6% Managed Care 98.0% 19, , x 0.5x 0.4x 9.8x 7.8x 7.3x 5.4% 5.9% Senior Care / Rehab 92.2% , x 0.9x 0.8x 10.0x 8.8x 8.4x 11.1% 10.1% All Select Healthcare Services 91.6% 2, , x 1.0x 0.9x 9.7x 8.8x 8.4x 11.6% 10.8% 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 06/30/14 Week High Value Value Rev Growth Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E Rate Acute Care HCA Holdings, Inc. $ % $24,223 $53,859 9% 17% 1.6x 1.4x 1.3x 8.2x 7.9x 7.4x 16.6x 15.2x 13.1x 1.5x 1.4x 1.2x 11% $34,574 $38,982 $40,561 $6,607 $6,787 $7,238 $3.39 $3.70 $4.32 Universal Health Services Inc. $ % $9,460 $12,956 13% 16% 1.8x 1.5x 1.4x 9.3x 9.4x 8.7x 18.0x 18.7x 16.8x 2.0x 2.1x 1.9x 9% $7,372 $8,830 $9,298 $1,393 $1,384 $1,487 $5.31 $5.12 $5.70 Tenet Healthcare Corp. $ % $4,584 $16,070 38% 11% 1.3x 0.9x 0.9x 11.0x 8.7x 7.7x NM 36.1x 18.3x NM 2.1x 1.1x 17% $12,641 $17,306 $18,090 $1,455 $1,847 $2,089 ($0.64) $1.30 $2.56 Community Health Systems, Inc. $ % $5,229 $22,460 21% 15% 1.6x 1.2x 1.1x 13.1x 8.0x 7.2x NM 16.5x 11.9x NM 0.8x 0.5x 22% $13,919 $19,134 $20,776 $1,709 $2,805 $3,129 ($0.33) $2.75 $3.80 Lifepoint Hospitals Inc. $ % $2,762 $4,708 19% 12% 1.3x 1.0x 0.9x 9.6x 8.1x 7.4x 22.4x 23.0x 19.9x 2.9x 3.0x 2.6x 8% $3,754 $4,820 $5,184 $490 $585 $635 $2.77 $2.69 $3.11 Min $2,762 $4,708 9% 11% 1.3x 0.9x 0.9x 8.2x 7.9x 7.2x 16.6x 15.2x 11.9x 1.5x 0.8x 0.5x 0.1x Mean $9,252 $22,011 20% 14% 1.5x 1.2x 1.1x 10.3x 8.4x 7.7x 19.0x 21.9x 16.0x 2.2x 1.9x 1.5x 0.1x Median 94% $5,229 $16,070 19% 15% 1.6x 1.2x 1.1x 9.6x 8.1x 7.4x 18.0x 18.7x 16.8x 2.0x 2.1x 1.2x 0.1x Max $24,223 $53,859 38% 17% 1.8x 1.5x 1.4x 13.1x 9.4x 8.7x 22.4x 36.1x 19.9x 2.9x 3.0x 2.6x 0.2x Alternate Site DaVita HealthCare Partners Inc. $ % $15,491 $23,609 28% 19% 2.0x 1.9x 1.8x 9.9x 9.8x 9.3x 19.8x 19.6x 18.0x 1.8x 1.8x 1.6x 11% $11,971 $12,537 $13,307 $2,377 $2,402 $2,533 $3.66 $3.70 $4.02 AmSurg Corp. $ % $1,872 $2,951 11% 34% 2.7x 2.6x 2.4x 8.1x 7.6x 6.8x 20.2x 18.6x 16.2x 1.6x 1.5x 1.3x 12% $1,084 $1,136 $1,245 $365 $387 $433 $2.26 $2.45 $2.81 Surgical Care Affiliates, Inc. $ % $1,113 $1,935 8% 18% 2.4x 2.3x 2.2x 11.5x 12.6x 11.1x NM 30.9x 20.7x NM NA NA NA $791 $839 $866 $168 $154 $174 ($1.30) $0.94 $1.40 Alliance Healthcare Services, Inc. $ % $284 $813 NA NA 1.8x NA NA 6.0x NA NA NM NA NA NM NA NA NA $444 NA NA $136 NA NA ($1.61) NA NA RadNet, Inc. $ % $277 $904 10% 15% 1.3x 1.3x 1.2x 8.6x 8.3x 7.8x NM 34.1x 16.0x NM NA NA NA $699 $714 $727 $105 $109 $116 ($0.23) $0.19 $0.41 Min $277 $813 8% 15% 1.3x 1.3x 1.2x 6.0x 7.6x 6.8x 19.8x 18.6x 16.0x 1.6x 1.5x 1.3x 11% Mean $3,807 $6,042 14% 22% 2.1x 2.0x 1.9x 8.8x 9.6x 8.8x 20.0x 25.8x 17.8x 1.7x 1.7x 1.5x 12% Median $1,113 $1,935 10% 19% 2.0x 2.1x 2.0x 8.6x 9.1x 8.5x 20.0x 25.2x 17.1x 1.7x 1.7x 1.5x 12% Max $15,491 $23,609 28% 34% 2.7x 2.6x 2.4x 11.5x 12.6x 11.1x 20.2x 34.1x 20.7x 1.8x 1.8x 1.6x 12% Behavioral Universal Health Services Inc. $ % $9,460 $12,956 13% 16% 1.8x 1.5x 1.4x 9.3x 9.4x 8.7x 18.0x 18.7x 16.8x 2.0x 2.1x 1.9x 9% $7,372 $8,830 $9,298 $1,393 $1,384 $1,487 $5.31 $5.12 $5.70 Acadia Healthcare Company, Inc. $ % $2,717 $3,373 47% 21% 4.5x 3.8x 3.3x 22.8x 18.6x 15.2x 43.8x 33.2x 25.8x 1.8x 1.4x 1.1x 24% $754 $881 $1,031 $148 $182 $222 $1.04 $1.37 $1.76 Magellan Health Services Inc. $ % $1,674 $1,417 8% 6% 0.4x 0.4x 0.3x 5.9x 5.9x 5.3x 14.0x 19.4x 20.9x 0.8x 1.1x 1.2x 17% $3,691 $3,709 $4,407 $240 $239 $266 $4.44 $3.21 $2.97 Providence Service Corp. $ % $533 $558 7% 5% 0.5x 0.4x 0.4x 10.1x 8.3x 7.1x 26.8x 19.2x 16.8x 1.6x 1.2x 1.0x 17% $1,131 $1,257 $1,408 $55 $67 $79 $1.36 $1.91 $2.18 Min $533 $558 7% 5% 0.4x 0.4x 0.3x 5.9x 5.9x 5.3x 14.0x 18.7x 16.8x 0.8x 1.1x 1.0x 9% Mean $3,596 $4,576 18% 12% 1.8x 1.5x 1.3x 12.0x 10.6x 9.1x 25.7x 22.6x 20.1x 1.6x 1.4x 1.3x 17% Median $2,196 $2,395 10% 11% 1.1x 1.0x 0.9x 9.7x 8.8x 7.9x 22.4x 19.3x 18.9x 1.7x 1.3x 1.2x 17% Max $9,460 $12,956 47% 21% 4.5x 3.8x 3.3x 22.8x 18.6x 15.2x 43.8x 33.2x 25.8x 2.0x 2.1x 1.9x 24% 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 06/30/14 Week High Value Value Rev Growth Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E Rate Home Health Gentiva Health Services Inc. $ % $555 $1,662 8% 9% 0.9x 0.8x 0.8x 12.9x 9.2x 8.8x NM 17.0x 14.9x NM 1.8x 1.6x 10% $1,799 $1,979 $2,022 $129 $181 $190 ($11.76) $0.88 $1.01 Amedisys Inc. $ % $549 $590 (8% ) 3% 0.5x 0.5x 0.5x 19.0x 16.0x 12.6x NM NM NM NM NM NM 11% $1,203 $1,193 $1,190 $31 $37 $47 ($3.44) $0.21 $0.08 LHC Group, Inc. $ % $380 $461 6% 7% 0.7x 0.7x 0.6x 8.9x 8.8x 8.1x 18.3x 17.4x 15.8x 1.7x 1.6x 1.4x 11% $647 $709 $744 $52 $53 $57 $1.17 $1.23 $1.35 Almost Family Inc. $ % $209 $257 19% 6% 0.7x 0.5x 0.5x 13.3x 9.0x 8.4x 32.0x 16.0x 14.6x 2.9x 1.5x 1.3x 11% $392 $487 $498 $19 $28 $30 $0.69 $1.38 $1.51 Addus HomeCare Corporation $ % $245 $228 12% 7% 0.8x 0.7x 0.7x 12.9x 10.5x 8.9x 23.2x 20.9x 17.4x 1.5x 1.4x 1.2x 15% $275 $305 $338 $18 $22 $26 $0.97 $1.08 $1.29 Min $209 $228 (8%) 3% 0.5x 0.5x 0.5x 8.9x 8.8x 8.1x 18.3x 16.0x 14.6x 1.5x 1.4x 1.2x 10% Mean $387 $639 7% 7% 0.7x 0.7x 0.6x 13.4x 10.7x 9.4x 24.5x 17.8x 15.7x 2.0x 1.6x 1.4x 12% Median $380 $461 8% 7% 0.7x 0.7x 0.6x 12.9x 9.2x 8.8x 23.2x 17.2x 15.4x 1.7x 1.5x 1.4x 11% Max $555 $1,662 19% 9% 0.9x 0.8x 0.8x 19.0x 16.0x 12.6x 32.0x 20.9x 17.4x 2.9x 1.8x 1.6x 15% Laboratories Quest Diagnostics Inc. $ % $8,480 $12,342 (0% ) 19% 1.7x 1.7x 1.7x 8.8x 8.7x 8.3x 11.0x 14.6x 13.4x 1.0x 1.4x 1.3x 11% $7,105 $7,345 $7,475 $1,402 $1,421 $1,495 $5.36 $4.02 $4.37 Laboratory Corp. of America Holdings $ % $8,684 $11,231 2% 20% 1.9x 1.9x 1.9x 9.9x 9.7x 9.3x 17.0x 15.3x 14.2x 1.7x 1.5x 1.4x 10% $5,846 $5,909 $6,058 $1,134 $1,155 $1,203 $6.01 $6.67 $7.20 Myriad Genetics Inc. $ % $2,912 $2,700 19% 32% 3.5x 3.5x 3.3x 8.7x 11.0x 10.5x 16.5x 18.7x 19.0x 1.4x 1.6x 1.7x 11% $764 $768 $809 $312 $245 $257 $2.36 $2.08 $2.05 Genomic Health Inc. $ % $856 $755 9% (8% ) 2.8x 2.7x 2.4x NM NM NM NM NM NM NM NM NM 26% $266 $282 $316 ($12) ($22) ($10) ($0.63) ($0.88) ($0.51) Bio-Reference Laboratories Inc. $ % $838 $879 19% 14% 1.2x 1.1x 1.0x 9.5x 7.9x NA 21.6x 15.9x 14.9x 1.4x 1.1x 1.0x 15% $760 $821 $908 $93 $111 NA $1.40 $1.90 $2.03 Min $838 $755 (0%) (8%) 1.2x 1.1x 1.0x 8.7x 7.9x 8.3x 11.0x 14.6x 13.4x 1.0x 1.1x 1.0x 10% Mean $4,354 $5,581 10% 15% 2.2x 2.2x 2.0x 9.2x 9.3x 9.4x 16.5x 16.1x 15.4x 1.4x 1.4x 1.3x 15% Median $2,912 $2,700 9% 19% 1.9x 1.9x 1.9x 9.1x 9.2x 9.3x 16.8x 15.6x 14.6x 1.4x 1.4x 1.3x 11% Max $8,684 $12,342 19% 32% 3.5x 3.5x 3.3x 9.9x 11.0x 10.5x 21.6x 18.7x 19.0x 1.7x 1.6x 1.7x 26% 14

15 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 06/30/14 Week High Value Value Rev Growth Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E Rate Managed Care UnitedHealth Group Incorporated $ % $80,104 $89,865 13% 9% 0.7x 0.7x 0.7x 8.4x 7.8x 7.3x 15.0x 14.8x 13.6x 1.6x 1.5x 1.4x 10% $126,023 $128,704 $137,786 $10,701 $11,509 $12,328 $5.47 $5.51 $6.00 Cigna Corp. $ % $24,708 $29,578 11% 10% 0.9x 0.9x 0.8x 10.1x 8.4x 7.9x 13.3x 12.6x 11.5x 1.3x 1.2x 1.1x 10% $32,654 $33,747 $36,023 $2,917 $3,513 $3,747 $6.92 $7.30 $8.02 Aetna Inc. $ % $28,978 $33,950 32% 8% 0.7x 0.6x 0.6x 7.3x 7.3x 7.0x 14.3x 12.5x 11.4x 1.3x 1.1x 1.0x 11% $51,746 $56,615 $60,906 $4,634 $4,639 $4,860 $5.68 $6.50 $7.12 Humana Inc. $ % $19,769 $22,235 13% 6% 0.5x 0.5x 0.4x 9.8x 8.1x 7.3x 18.0x 16.3x 14.5x 1.8x 1.7x 1.5x 10% $42,539 $48,028 $52,446 $2,276 $2,749 $3,053 $7.11 $7.82 $8.78 WellCare Health Plans, Inc. $ % $3,275 $3,387 29% 4% 0.3x 0.3x 0.2x 9.6x 7.3x 5.8x 16.6x 17.3x 15.0x 1.6x 1.7x 1.5x 10% $10,257 $12,339 $13,886 $353 $466 $579 $4.49 $4.33 $4.97 Centene Corp. $ % $4,361 $5,332 41% 4% 0.4x 0.4x 0.3x 12.7x 9.6x 7.7x 24.4x 20.3x 16.8x 1.3x 1.1x 0.9x 18% $12,963 $15,183 $18,157 $420 $554 $692 $3.10 $3.72 $4.50 Molina Healthcare, Inc. $ % $2,065 $2,524 33% 4% 0.4x 0.3x 0.2x 14.6x 7.1x 5.2x NM 22.0x 15.7x NM 1.0x 0.7x 22% $6,881 $9,803 $12,711 $173 $356 $489 $0.41 $2.03 $2.83 Min $2,065 $2,524 11% 4% 0.3x 0.3x 0.2x 7.3x 7.1x 5.2x 13.3x 12.5x 11.4x 1.3x 1.0x 0.7x 10% Mean $23,323 $26,696 25% 6% 0.6x 0.5x 0.5x 10.4x 7.9x 6.9x 16.9x 16.5x 14.1x 1.5x 1.3x 1.2x 13% Median $19,769 $22,235 29% 6% 0.5x 0.5x 0.4x 9.8x 7.8x 7.3x 15.8x 16.3x 14.5x 1.4x 1.2x 1.1x 10% Max $80,104 $89,865 41% 10% 0.9x 0.9x 0.8x 14.6x 9.6x 7.9x 24.4x 22.0x 16.8x 1.8x 1.7x 1.5x 22% Senior Care / Rehab Brookdale Senior Living Inc. $ % $4,287 $6,876 10% 17% 2.7x 2.3x 2.2x 15.8x 13.8x 11.7x NM NM 71.4x NM NM 6.2x 12% $2,572 $2,966 $3,082 $436 $498 $586 ($0.08) $0.25 $0.47 Emeritus Corp. $ % $1,552 $5,481 23% 18% 2.8x 2.6x 2.5x 15.8x 14.6x 13.4x NM NM NM NM NM NM NA $1,981 $2,102 $2,182 $347 $376 $408 ($3.15) ($2.29) ($1.63) Kindred Healthcare Inc. $ % $1,474 $3,040 2% 8% 0.6x 0.6x 0.6x 10.3x 7.8x 6.7x NM 20.2x 18.1x NM 1.5x 1.3x 14% $4,924 $5,140 $5,328 $296 $388 $454 ($0.81) $1.14 $1.28 Chemed Corp. $ % $1,644 $1,790 1% 14% 1.3x 1.2x 1.2x 9.8x 8.6x 8.2x 22.8x 15.9x 15.0x 1.5x 1.1x 1.0x 15% $1,405 $1,452 $1,509 $183 $209 $217 $4.11 $5.88 $6.26 The Ensign Group, Inc. $ % $691 $888 10% 13% 1.0x 0.9x 0.8x 6.9x 6.7x 6.0x 14.0x 11.5x 10.5x 1.0x 0.8x 0.8x 14% $926 $998 $1,076 $130 $132 $147 $2.21 $2.71 $2.95 Skilled Healthcare Group, Inc. $ % $249 $664 (1% ) 9% 0.8x 0.8x 0.8x 10.3x 9.1x 8.6x NM 22.6x 17.3x NM 1.1x 0.8x 21% $835 $839 $857 $64 $73 $77 ($0.22) $0.28 $0.36 National Healthcare Corp. $ % $800 $651 9% NA 0.8x 0.8x 0.7x 5.9x NA NA 14.7x 16.6x 11.5x NA NA NA NA $807 $835 $930 $111 NA NA $3.83 $3.39 $4.89 Capital Senior Living Corp. $ % $692 $1,208 12% 18% 3.5x 3.1x 2.8x 22.6x 17.2x 14.2x NM 44.0x 35.5x NM 2.9x 2.3x 15% $349 $384 $424 $53 $70 $85 ($0.67) $0.54 $0.67 Algoma Central Corp. $ % $603 $640 NA NA 1.4x NA NA 6.8x NA NA 14.1x NA NA NA NA NA NA $446 NA NA $93 NA NA $1.10 NA NA Five Star Quality Care Inc. $ % $244 $258 12% 4% 0.2x 0.2x 0.2x 6.1x 4.9x 4.5x 30.3x 19.8x 17.0x NA NA NA NA $1,087 $1,362 $1,347 $42 $53 $57 $0.17 $0.25 $0.29 Min $244 $258 (1%) 4% 0.2x 0.2x 0.2x 5.9x 4.9x 4.5x 14.0x 11.5x 10.5x 1.0x 0.8x 0.8x 12% Mean $1,223 $2,150 9% 13% 1.5x 1.4x 1.3x 11.0x 10.3x 9.2x 19.2x 21.5x 24.6x 1.3x 1.5x 2.1x 15% Median $746 $1,048 10% 14% 1.1x 0.9x 0.8x 10.0x 8.8x 8.4x 14.7x 19.8x 17.2x 1.3x 1.1x 1.2x 14% Max $4,287 $6,876 23% 18% 3.5x 3.1x 2.8x 22.6x 17.2x 14.2x 30.3x 44.0x 71.4x 1.5x 2.9x 6.2x 21% 15

16 LTM Relative Healthcare Services Stock Price Performance Last Twelve Months Healthcare Services Stock Price Performance 16

17 Select Q Healthcare Services Financing Activity Announced Date Target Investor(s) Sector Amount Raised ($mm) 30-Jun-14 TrovaGene, Inc. (NasdaqCM:TROV) Silicon Valley Bank, Inc.; Oxford Finance LLC Biotechnology $ Jun-14 Syapse Inc. 19-Jun-14 Walden Behavioral Care, LLC Seacoast Capital 12-Jun-14 BioNano Genomics, Inc. Safeguard Scientifics, Inc. (NYSE:SFE); The Social+Capital Partnership Domain Associates, L.L.C.; Gund Investment Corporation; Battelle Ventures Health Care Technology Rehabilitation Hospitals; Psychiatric Hospitals Life Sciences Tools and Services 30-May-14 Sera Prognostics, Inc. - Healthcare Equipment $ May-14 IASIS Healthcare Holdings, Inc. - Healthcare Facilities $ May-14 Cianna Medical, Inc. GE HFS Holdings Inc. Healthcare Equipment $ May-14 Urgent Team Holdings, Inc. - Urgent Care Centers $5.3 7-May-14 Flatiron Health, Inc. Laboratory Corporation of America; First Round Capital; Google Ventures Health Care Technology 6-May-14 Krueger-Gilbert Health Physics, Inc. Seneca Creek Partners LLC Healthcare Services - 30-Apr-14 ConvenientMD LLC - Urgent Care Centers $ Apr-14 Integrated Diagnostics Inc. InterWest Partners LLC; Wellcome Trust, Investment Division; Baird Capital; Alexandria Venture Investments $ $15.0 $130.0 Healthcare Equipment $ Apr-14 Great Basin Corporation - Healthcare Equipment $ Apr-14 Alliqua, Inc. (NasdaqCM:ALQA) Celgene Cellular Therapeutics; Perceptive Advisors LLC; Broadfin Capital, LLC Healthcare Equipment $ Apr-14 1Life Healthcare, Inc. - Managed Healthcare $ Apr-14 Galichia Heart Hospital, LLC - Specialty Hospitals $8.5 8-Apr-14 Provista Diagnostics, Inc. Golden Seeds LLC Healthcare Equipment $6.0 Note: Only includes financing activity >$5M 17

18 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 Member, FINRA