Healthcare Services Industry Update August 2013

Healthcare Services Industry Update August 2013 Mergers & Acquisitions Business Valuation Strategic Consulting Corporate Finance

Industry Snapshot: Healthcare Notable M&A Activity 8/7/13. Levine Leichtman Capital Partners acquired Champion Manufacturing from Invacare Corp. (NYSE: IVC) in a $45 million deal. Champion offers medical treatment products to the healthcare market with expertise in healthcare related furniture, furnishings and fixtures. Capital Markets % Change - 1 Week 4 Weeks YTD 52 Weeks Medical Devices -3.40% -3.23% 25.26% 30.52% Healthcare InfoTechnology -1.84% 1.61% 20.48% 32.79% Healthcare Services -1.79% -4.67% 22.92% 28.47% S&P 500-2.47% -2.37% 12.33% 16.25% 8/2/13. Emergent BioSolutions (NYSE: EBS) acquired Bracco Diagnostics Healthcare Protective Products Division in a $26 million transaction. This division manufactures healthcare products that protect the human body from external threats, including a skin protection product and a topical skin decontamination product. 8/2/13. Health Care Service Corp. acquired Blue Cross and Blue Shield of Montana from the Blue Cross and Blue Shield Association in a $40.6 million transaction. BC/BS of Montana provides healthcare to Montanans, including integrated healthcare management, case management, disease management and much more. 7/31/13. The Sputnik Group acquired PalliaTech in a $28.6 million transaction. PalliaTech operates in the healthcare sector. 7/31/13. Signature Health Care acquired seven nonstrategic nursing centers from Kindred Healthcare for $47 million. 7/26/13. Trinity Biotech acquired Immco Diagnostics from Summit Partners in a $32.8 million transaction. Immco develops, manufactures and distributes diagnostic kits and laboratory supplies for hospitals, clinical laboratories and research institutions for rapid diagnostic tests. 7/15/13. Healthcare Services Group Inc. acquired Platinum Health Services, LLC. Platinum provides housekeeping and linen services to healthcare facilities. It offers laundry/linen services for bed linens, towels, resident clothing, and other items utilized at the facilities. 2

Healthcare Industry Snapshot ($ MM except EPS) Healthcare Medical Devices Quarter Ending Consensus ($MM) Consensus EPS Actual ($MM) Actual EPS Difference vs. Estimated Difference vs. Estimated EPS 6/30/13 $17,705.1 $1.39 $17,877.0 $1.32 0.97% -4.7% 7/26/13 $4,384.9 $1.03 $4,460.0 $0.96 1.71% -7.3% 6/30/13 $2,203.5 $1.01 $2,190.0 $0.80-0.61% -20.6% 6/29/13 $1,069.0 $0.18 $1,075.0 $0.16 0.57% -13.8% 6/30/13 $1,142.9 $1.40 $1,138.9 $1.30-0.35% -7.7% HCIT Consensus ($MM) Consensus EPS Actual ($MM) Actual EPS Difference vs. Estimated Difference vs. Estimated EPS 6/30/13 $32,012.3 $2.30 $30,620.0 $1.12-4.35% -51.4% 6/30/13 $3,527.4 $0.41 $3,219.7 $0.25-8.72% -38.7% 6/30/13 $367.4 $0.14 $347.1 -$0.07-5.54% -148.0% 6/29/13 $709.5 $0.31 $665.5 $0.32-6.21% 1.5% 3

Industry Snapshot: Healthcare Healthcare Services ($ Millions except EPS) Quarter Ending Consensus ($MM) Consensus EPS Actual ($MM) Actual EPS Difference vs. Estimated Difference vs. Estimated EPS 6/30/13 $1,524.7 $0.37 $1,554.9 $0.06 2.0% 15.5% 6/30/13 $357.3 $0.06 $308.0 $0.04-13.8% 62.4% 6/30/13 $222.5 $0.18 $218.9 $0.08-1.6% 46.6% 6/30/13 $224.7 $0.68 $218.2 -$0.56-2.9% -82.6% 4

Capital Markets: Last 52 Weeks Index Performances 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% -10.00% Medical Devices: JNJ, MDT, SYK, SN., 1 more (Market Cap) - Index Value S&P 500 (^SPX) - Index Value Healthcare InfoTechnology: MCK, CCT, MDRX, 1 more (Market Cap) - Index Value Healthcare Services: KND, FVE, SKH, ENSG (Market Cap) - Index Value 5

Capital Markets: Stock Performance Data as of Market Close Tuesday, Last 4 Weeks Last 52 Weeks Catamaran Corp. 8.2% McKesson Corp. 41.4% McKesson Corp. 3.7% Allscripts Healthcare 38.4% Smith & Nephew 1.9% Five Star Quality Care 36.3% Ensign Group -0.4% Kindred Healthcare 35.4% Kindred Healthcare -0.5% Cerner Corp. 33.9% S&P 500-2.4% Johnson & Johnson 32.4% Johnson & Johnson -2.9% Ensign Group 29.8% Stryker -3.9% Zimmer Holdings 28.5% Allscripts Healthcare -4.3% Medtronic 28.4% Cerner Corp. -4.6% Catamaran Corp. 26.2% Medtronic -4.8% Stryker 25.7% Zimmer Holdings 0.2% Smith & Nephew 17.2% Five Star Quality Care -11.5% S&P 500 16.9% Skilled Healthcare -23.9% Skilled Healthcare -3.6% (30%) (25%) (20%) (15%) (10%) (5%) 0% 5% 10% 15% 20% (20%) 0% 20% 40% 60% 80% 100% Index Medical Devices HCIT Healthcare Services 6

Capital Markets: Market Movers (Medical Devices) Company 8/20/13 Close % 52 Week High 4 Weeks Change 52 Weeks Change $89.73 95.0% -2.91% 32.38% $52.83 94.4% -4.78% 28.42% $68.25 95.4% -3.94% 25.69% $12.29 97.3% -0.19% 18.07% $79.85 93.9% -5.50% 28.54% Recent News J&J completed its acquisition of Aragon Pharmaceuticals, a privately-held pharmaceutical discovery and development company focused on drugs to treat hormonally-driven cancers. Development of compounds from Aragon s androgen receptor antagonist program will be managed by Janssen R&D, LLC. Medtronic closed its acquisition of Cardiocom, a privately-held developer and provider of integrated telehealth and patient services for the management of chronic diseases. The all-cash transaction was valued at $200 million. Stryker declared a $0.265 quarterly dividend payable 10/31/13 to S/Hs of record 9/30/13. For FY 13, it expects 4% to 5.5% revenue growth vs. FY 12 s $8.7 billion and from $4.20 to $4.26 in adjusted EPS. Smith & Nephew declared an FH 13 interim dividend of $10.46 P/S or $52.06 per American Depository Receipt, vs. $9.96 in 2012. The dividend will be paid 10/29/13 to S/H of record 10/11/13 A US District Court judge ordered Zimmer to pay Stryker Corp. $228 million for infringing Stryker s surgical irrigation patents and in doing so tripled a damages award by a jury that found Zimmer s conduct was willful. Zimmer plans to appeal. $1,652.35 96.6% -2.37% 16.92% The S&P 500 and other major US stock indices continued to set new market highs through August 2013. 7

Capital Markets: Market Movers (Medical Devices) Company 8/20/13 Close % 52 Week High 4 Weeks Change 52 Weeks Change $122.52 97.0% 3.73% 41.40% $54.89 94.1% 9.15% 33.05% $15.07 91.7% -4.32% 38.38% $47.63 93.7% -4.59% 33.92% Recent News McKesson ratified the appointment of Deloitte & Touche, LLP, as its independent registered public accounting firm for the fiscal year ending 3/31/14. Catamaran projects FY 13 of $14.2 billion to $14.6 billion with $650 million to $660 million EBIDTA and fully-diluted GAAP EPS in the range of $1.18 to $1.23. Allscripts Wand 2.0 for Enterprise EHR is now generally available. In busy physician practices, with clinicians and physicians moving quickly from patient to patient, the Wand ipad application couples the latest in tablet technology with the latest in user-experience innovation for a revolutionary approach to how physicians practice medicine. Cerner projects $2.95 billion to $3.05 billion in FY 13 revenues and adjusted diluted EPS before share-based compensation expense of $1.40 to $1.42. $1,652.35 96.6% -2.37% 16.92% The S&P 500 and other major US stock indices continued to set new market highs through August 2013. 8

Capital Markets: Market Movers (Medical Devices) Company 8/20/13 Close % 52 Week High 4 Weeks Change 52 Weeks Change $15.17 91.2% -0.52% 35.45% $5.29 77.0% -11.54% 36.34% $5.05 63.0% -23.95% -3.63% $38.68 97.6% -0.44% 29.84% Recent News Kindred reaffirmed FY 13 guidance including $5.8 billion in consolidated revenues, $797 million to $813 million in operating income and $1.10 to $1.30 per diluted share income from continuing operations. Five Star s 4QTR 12 revenues increased 14.4% to $359.1 million vs. 4QTR 11 s $314 million while EBITDA increased to $12.0 million vs. $8.4 million for the prior year. It also extended a $35 million credit facility to 2016. Skilled Healthcare lowered its FY 13 guidance, projecting $860 million to $870 million in consolidated revenue, $78 million to $82 million in EBITDA, and adjusted net income per diluted common share of $0.39 to $0.45. Ensign reaffirmed FY 13 projected revenues of $915 million to $931 million and adjusted EPS of $2.72 to $2.81. $1,652.35 96.6% -2.37% 16.92% The S&P 500 and other major US stock indices continued to set new market highs through August 2013. 9

Dry Powder Calculations ($ MM) Medical Devices Index 3x LTM EBITDA $67,170.0 $16,779.0 $6,204.0 $3,540.0 $5,003.4 Plus Cash $0.0 $860.0 $1,913.0 $125.0 $657.0 Less LT Debt $0.0 ($9,759.0) ($2,738.0) ($209.0) ($1,702.8) Dry Powder $67,170.0 $7,880.0 $5,379.0 $3,456.0 $3,957.6 HCIT Index 3x LTM EBITDA $8,709.0 $1,518.6 $317.3 $2,236.7 Plus Cash $2,456.0 $311.4 $92.2 $281.5 Less LT Debt ($4,521.0) ($1,019.9) ($481.8) ($135.5) Dry Powder $6,644.0 $810.1 ($72.3) $2,382.7 Healthcare Services Index 3x LTM EBITDA $1,261.4 $137.6 $272.2 $265.0 Plus Cash $42.7 $15.2 $5.1 $42.5 Less LT Debt ($1,671.3) ($37.3) ($438.2) ($201.3) Dry Powder ($367.2) $115.5 ($160.8) $106.2 10

About The McLean Group Founded in 1997, The McLean Group is a national, middle market investment bank with deep expertise in a variety of industry verticals. Headquartered in McLean, VA, The McLean Group is among the largest independent middle market investment banks in the region. Our core advisory services include: Mergers & Acquisitions The McLean Group uses its considerable experience and expertise in the aerospace, defense and government services industry to guide its clients through each stage of the mergers & acquisitions (M&A) process and ultimately identify the most probable and suitable candidates to complete transactions under the most favorable terms. Business Valuation & Litigation Support As a core competency and complement to its M&A business, The McLean Group provides business valuation services, including intangible asset and financial security valuations for a variety of transactions, financial reporting and tax purposes. In addition, The McLean Group has the experience and credentials necessary to support litigation proceedings, including quantifying economic damages and valuing a minority interest in a business. Capital Formation The McLean Group arranges private equity, venture capital, senior debt and subordinated debt to support clients expansions, M&A, refinancings, recapitalizations, leveraged buyouts and other shareholder liquidity objectives. Strategic Consulting The McLean Group's Strategic Consulting business provides transaction, financial and interim management services to companies ranging from start-up entities to publicly-held corporations across an assortment of industries. McLean Securities, a wholly-owned affiliate of The McLean Group, is a registered broker/dealer with the Financial Industry Regulatory Authority (FINRA) and a Member, Securities Investor Protection Corporation (SIPC). 11

Healthcare M&A and Competitive Intelligence Engagements 12

Healthcare Valuation Engagements 13

Select Recent Healthcare Transactions (US & Canada) Closed Target/Issuer Buyers/Investors Primary Industry [Target/Issuer] 8/7/13 Champion Manufacturing (Invacare Corp. (NYSE:IVC)) Implied Enterprise Value ($ MM) Implied EV/s (x) Implied EV/EBITDA (x) % Sought Levine Leichtman Capital Partners Healthcare Equipment $45.00 2.04 8.18 100.0% 8/6/13 Assisted Living Property in Round Rock, TX 8/2/13 Bracco Diagnostics, Healthcare Protective Products Division 8/2/13 Blue Cross and Blue Shield Of Montana (Blue Cross and Blue Shield Association) One Liberty Properties (NYSE:OLP) Healthcare Facilities $22.80 - - 100.0% Emergent BioSolutions (NYSE:EBS) Pharmaceuticals $26.00 - - 100.0% Health Care Service Corp. Life and Health Insurance $40.60 - - 100.0% 7/31/13 PalliaTech The Sputnik Group - $28.57 - - 35.0% 7/31/13 Kindred Healthcare, Seven Non Strategic Nursing Centers (NYSE:KND) Signature Health Care Healthcare Facilities $47.00 0.681 5.88 100.0% 7/31/13 John J. Foley Skilled Nursing Facility - Healthcare Facilities $23.00 - - 100.0% 7/30/13 Life Uniform Company (Sun Capital Partners) Scrubs & Beyond Apparel Retail $22.63 - - 100.0% 7/26/13 Immco Diagnostics (Summit Partners) 7/26/13 Six Operating Properties Located in Ohio, Virginia and North Carolina Trinity Biotech plc (NasdaqGS:TRIB) Healthcare Equipment $32.75 2.62-100.0% MPG Healthcare - $78.70 - - 100.0% 7/23/13 Foundation Surgery Affiliates, LLC and Foundation Surgical Hospital Affiliates, LLC (Foundation Healthcare Affiliates, LLC) Graymark Healthcare (OTCPK:GRMH) Healthcare Facilities $52.50 1.19-100.0% 14

Healthcare Team Team Members Dennis Roberts Chairman & Managing Principal droberts@mcleanllc.com Charles Andrews Managing Director candrews@mcleanllc.com Stephen Findlay Managing Director sfindlay@mcleanllc.com Michael LaMancuso Director mlamancuso@mcleanllc.com Shari Overstreet Managing Director soverstreeet@mcleanllc.com George Petrulis Managing Director gpetrulis@mcleanllc.com Stephen Zielinski Managing Director szielinski@mcleanllc.com Jack Zollinger Managing Director jzollinger@mcleanllc.com The McLean Group 7900 Westpark Drive, Suite A320 McLean, VA 22102 Main: 703.827.0200 Fax: 703.827.0175 15