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WHAT WE RE READING HEALTHCARE & LIFE SCIENCES The Huffington post published an article that highlights the nine most significant healthcare-related stories from 2014. Among the stories discussed in the piece are the Ebola outbreak, the emergence of personal health data analytics, and the rapid decline of smoking rates in Americans. The article also contains links to additional information on each topic should readers want to dig deeper. The piece can be found here. According to an article published in The Wall Street Journal, UnitedHealthCare has launched a pilot program with MD Anderson Cancer Center in Houston to reimburse for the care of certain cancer patients through bundled capitated payments. The payments are designed to cover all treatment for a year and are estimated to be in the six figures (specific financial terms were not disclosed). Notably, because the payments are capped, additional treatment costs incurred by MD Anderson due to complications do not trigger additional payments. As many readers may be aware, the shift to bundled payments where providers are at risk is a key development in the current healthcare reform environment. A link to the article can be found here. (a subscription to The Wall Street Journal Online may be required) The Atlantic posted an article discussing the impact of race on the quality of healthcare received by patients. The article primarily relies on two publications in The New England Journal of Medicine: one focused on the quality of acute care received by patients of various races while the other focused on the quality of preventative care. According to the studies, the quality of acute care received by patients of different ethnicities has generally converged while a significant quality gap persists between white and black patients when it comes to preventative care. CONTENTS EQUITY TRADING OVERVIEW EQUITY MARKETS OVERVIEW M&A OVERVIEW DEBT CAPITAL MARKETS OVERVIEW HEALTHCARE & LIFE SCIENCES TRADING STATISTICS M&A DETAIL CONTACTS UNITED STATES Turner Bredrup Managing Director tbredrup@harriswilliams.com +1 (804) 915-0110 James Clark Managing Director jclark@harriswilliams.com +1 (804) 915-0119 Todd Morris Managing Director tmorris@harriswilliams.com +1 (415) 217-3412 Cheairs Porter Managing Director cporter@harriswilliams.com +1 (804) 915-0130 Andy Dixon Director adixon@harriswilliams.com +1 (415) 217-3419 Geoff Smith Director gsmith@harriswilliams.com +1 (804) 915-0195 Paul Hepper Vice President phepper@harriswilliams.com +1 (804) 932-1326 Andy Hewlett Vice President ahewlett@harriswilliams.com +1 (415) 217-3427 Bill Kayser Vice President bkayser@harriswilliams.com +1 (804) 915-0180 Whit Knier Vice President wknier@harriswilliams.com +1 (804) 932-1321 www.harriswilliams.com PAGE 1
EQUITY TRADING OVERVIEW Key Trading Statistics (detail begins on page 6) Sector Number of Companies Average Enterprise Value ($ mm) Median TEV/ LTM Multiples Median TEV/ Forward Mulitples Change in Stock Price 3 mos. 12 mos. Revenue EBITDA Revenue EBITDA Payer, Provider, & Pharmacy Support Services Products & Devices Provider-Based Services Clinical Laboratories 3 $8,438 (0.7%) 2.3% 1.8x 9.3x 1.8x 9.2x Contract Pharma Manufacturing 4 2,470 4.9% 10.8% 2.4x 12.6x 2.7x 13.3x Contract Research Organizations 7 3,841 2.7% 34.5% 2.2x 12.8x 2.1x 12.4x Disease Management 2 4,048 1.0% 17.2% 1.8x 18.3x 1.8x 11.9x Emergency Services 1 2,394 (24.2%) (20.3%) 2.4x 9.7x 2.4x 9.4x Health Care Staffing 4 2,020 8.3% 23.0% 1.0x 14.0x 1.0x 13.2x HMO - Medical 9 23,440 9.7% 32.6% 0.4x 9.7x 0.3x 8.3x Information Services 11 3,591 (8.9%) (4.3%) 3.0x 13.8x 3.0x 11.6x Specialty Managed Care 3 2,227 1.5% 0.0% 1.4x 9.7x 1.4x 32.2x Specialty Pharmacy Management 4 23,950 9.0% 16.6% 0.7x 11.8x 0.7x 11.7x Dental Products 3 40,276 11.2% 19.9% 3.4x 15.6x 3.4x 12.7x Durable Medical Equipment 3 3,473 1.1% 9.3% 1.8x 12.7x 1.6x 10.0x Life Sciences Tools 5 14,098 6.8% 26.5% 2.0x 13.3x 3.3x 15.6x Medical Devices and Products 13 49,930 9.5% 18.3% 3.2x 12.9x 3.4x 12.3x Medical / Surgical / Dental Supplies & Distribution 7 18,170 14.9% 19.9% 0.4x 13.6x 0.3x 11.3x Acute-Care Hospitals 5 23,733 (7.9%) 27.3% 1.3x 9.5x 1.2x 8.2x Assisted Living 4 3,745 (1.3%) 20.0% 2.3x 17.0x 2.1x 14.6x Diagnostic Imaging 3 3,365 4.4% 15.4% 1.7x 8.0x 2.0x 10.0x Dialysis Services 2 27,967 3.8% 17.3% 2.0x 10.4x 2.0x 10.4x Home Care, Hospice, and Home Infusion 7 952 5.6% 2.2% 0.8x 11.7x 0.8x 9.8x Long-Term Care 3 1,491 6.0% 8.8% 0.9x 7.8x 0.7x 7.5x Physician Practice Management 3 2,542 (3.8%) (16.0%) 1.2x 11.3x 2.0x 11.7x Behavioral Health / Management 6 3,843 0.0% 13.9% 1.5x 10.7x 1.4x 10.3x Surgicenters / Rehabilitation 6 2,856 3.8% 13.3% 2.2x 10.6x 2.0x 10.9x Payer, Provider, & Pharmacy Support Services 48 $7,642 0.3% 11.2% 1.7x 12.2x 1.7x 13.3x Products & Devices 31 $25,189 8.7% 18.8% 2.1x 13.6x 2.4x 12.4x Provider-Based Services 39 $7,833 1.2% 11.3% 1.5x 10.8x 1.6x 10.4x HW&Co. HCLS Composite Index 118 $11,369 2.4% 12.8% 1.7x 12.0x 1.8x 12.0x S&P 500 3.5% 14.4% Public Company Sector Performance (12-month % change in stock price) Contract Research Organizations HMO - Medical Acute-Care Hospitals Life Sciences Tools Health Care Staffing Assisted Living Medical / Surgical / Dental Supplies & Distribution Dental Products Medical Devices and Products Dialysis Services Disease Management Specialty Pharmacy Management Diagnostic Imaging S&P 500 Behavioral Health / Management Surgicenters / Rehabilitation HW&Co. HCLS Composite Index Contract Pharma Manufacturing Durable Medical Equipment Long-Term Care Clinical Laboratories Home Care, Hospice, and Home Infusion Specialty Managed Care Information Services Physician Practice Management Emergency Services (30.0%) (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% PAGE 2
EQUITY MARKETS OVERVIEW Healthcare & Life Sciences Industry Stock Performance 220 200 209.9% 180 160 173.8% 165.8% 140 120 100 80 60 40 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 S&P 500 Dow Jones U.S. Health Care Index HW&Co. HCLS Index Top 25 Equity Offerings (by proceeds) Closing Date Issuer Ticker Transaction Type Gross Proceeds ($mm) 11/21/14 Perrigo Co PRGO Follow-On $1,035.0 11/12/14 Isis Pharmaceuticals Inc ISIS Convertible 485.0 11/18/14 Receptos Inc RCPT Follow-On 414.0 11/10/14 AmSurg Corp AMSG Follow-On 228.2 11/17/14 Juno Therapeutics Inc JUNO IPO 203.5 11/19/14 Kindred Healthcare Inc KND Convertible 172.5 11/13/14 FibroGen Inc FGEN IPO 167.7 11/20/14 Lexicon Pharmaceuticals Inc LXRX Follow-On 150.0 11/05/14 Nevro Corp NVRO IPO 144.9 11/18/14 Amicus Therapeutics Inc FOLD Follow-On 103.5 11/18/14 Bellicum Pharmaceuticals Inc BLCM IPO 100.0 11/06/14 Coherus Biosciences Inc CHRS IPO 91.9 11/04/14 Inotek Pharmaceuticals Corp ITEK IPO 86.3 11/19/14 Neothetics Inc NEOT IPO 65.1 11/19/14 Rockwell Medical Inc RMTI Follow-On 58.5 11/18/14 Second Sight Med Prod Inc EYES IPO 36.2 11/04/14 Biolase Inc BIOL Follow-On 33.8 11/25/14 Medgenics Inc MDGN Follow-On 24.2 11/25/14 Eleven Biotherapeutics Inc EBIO Follow-On 20.0 11/06/14 Mast Therapeutics Inc MSTX Follow-On 14.9 11/21/14 Amedica Corp AMDA Follow-On 13.0 11/07/14 Cohbar Inc N/A IPO 11.3 11/12/14 Capnia Inc CAPN IPO 10.7 11/20/14 Immune Pharmaceuticals Inc EPCT Follow-On 9.8 11/26/14 Guided Therapeutics Inc GTHP Follow-On 3.8 PAGE 3
Transaction Volume Aggregate Transaction Value ($ in billions) EV / LTM EBITDA Multiple Number of Transactions HEALTHCARE & LIFE SCIENCES M&A OVERVIEW Announced Healthcare & Life Sciences M&A QUARTERLY M&A ACTIVITY MIDDLE MARKET HEALTHCARE TRANSACTION HIGHLIGHTS 350 Announced Target Buyer 300 250 200 18 11 20 12 22 16 12 18 15 22 14 11 12 11/23/2014 Encompass Home Health, Inc. HEALTHSOUTH Corp. (NYSE:HLS) 11/20/2014 Intralign Health, LLC Pamplona Capital Management LLP, Priv ate Equity 11/19/2014 Change Healthcare Corporation Emdeon Inc. 11/18/2014 PhyMed Healthcare Group Ontario Teachers' Pension Plan 11/12/2014 Cogent Healthcare Inc. Sound Inpatient Physicians, Inc. 11/11/2014 Centerre Healthcare Corporation Kindred Healthcare Inc. (NYSE:KND) 11/7/2014 Kremers Urban Pharmaceuticals Inc. Adv ent International; Av ista Capital 11/5/2014 Ximedica, LLC SV Life Sciences Adv isers, LLC 11/3/2014 Micron Technologies, Inc. Catalent, Inc. (NYSE:CTLT) 11/2/2014 Cov ance Inc. (NYSE:CVD) Laboratory Corp. of America Holdings (NYSE:LH) 150 100 236 219 229 221 291 200 209 304 248 304 290 279 194 LTM DEAL STATISTICS 50 0 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 PEG Acquirer Strategic Acquirer Healthcare & Life Sciences M&A Trends Aggregate Number Median Transaction Multiples Value ($bn) of Deals TEV/Rev TEV/EBITDA $256.4 1,221 2.31x 13.6x Note: Transactions based on publicly available information ANNOUNCED HEALTHCARE & LIFE SCIENCES TRANSACTIONS MEDIAN HEALTHCARE & LIFE SCIENCES TRANSACTION MULTIPLES $500 1200 21x 4.0x $450 $400 $350 $300 $250 $200 $150 $100 $50 $174.6 $110.6 $141.4 $101.6 $108.2 $220.2 1000 800 600 400 200 Number of Transactions 18x 15x 12x 9x 6x 3x 7.7x 12.8x 11.1x 10.9x 10.0x 13.6x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x EV / LTM Revenue Multiple $0 2009 2010 2011 2012 2013 2014YTD Aggregate Deal Value # of deals 0 0x 2009 2010 2011 2012 2013 2014YTD TEV / LTM EBITDA TEV / LTM Sales 0.0x Announced Private Equity M&A Activity PEG INVESTMENTS BY SEGMENT (LAST 3 YEARS) PEG INVESTMENTS AND EXITS HC&LS Industry Number of Segment Companies Biotechnology 4 Healthcare Technology 18 Healthcare Distributors 7 Healthcare Equipment 25 Healthcare Facilities 44 Healthcare Serv ices 50 Healthcare Supplies 9 Life Sciences Tools & Serv ices 17 Managed Healthcare 4 Pharmaceuticals 20 160 140 120 100 80 60 40 20 0 144 139 138 120 113 94 95 79 80 69 71 65 65 58 60 62 61 59 49 50 40 42 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Number of Investments Number of Exits PAGE 4
EBITDA Multiple Average Spread Over LIBOR Average Spread Over LIBOR HEALTHCARE & LIFE SCIENCES DEBT CAPITAL MARKETS OVERVIEW Key Credit Statistics QUARTERLY HEALTHCARE LOAN VOLUME AVERAGE SPREAD ON HEALTHCARE LOANS $24 L + 500 Loan Volume by Quarter ($ in billions) $21 $18 $15 $12 $9 $6 $3 L + 400 L + 300 L + 200 L + 100 $0 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 L + 0 2008 2009 2010 2011 2012 2013 2014YTD Pro Rata Institutional Revolving Credit / Term Loan A Weighted-Average Institutional CREDIT STATISTICS AVERAGE SECONDARY SPREAD 6.0x 2008 2009 2010 2011 2012 2013 2014 L + 1000 L + 800 4.0x L + 600 2.0x L + 400 L + 200 0.0x Debt/EBITDA Senior Debt/EBITDA EBITDA/Cash Interest EBITDA - Capex/Cash Interest L + 0 Recent Healthcare & Life Sciences Debt Offerings (by deal amount) Date Effective Borrower Name Description Tranche Amount ($mn) Type Rating Spread 11/20/14 LabCorp Medical laboratories $3,850.00 Bridge Loan NR / NR N/A 11/05/14 Ascension Health Offices & clinics of medical doctors 500.00 Revolver/Line >= 1 Yr. NR / NR L+ 300 11/05/14 Ascension Health Offices & clinics of medical doctors 500.00 Revolver/Line >= 1 Yr. NR / NR L+ 55 11/20/14 LabCorp Medical laboratories 400.00 Bridge Loan NR / NR N/A 11/19/14 CT Technologies Intermediate Holdings Inc Health and allied services 325.00 Term Loan B / B2 L+ 500 11/26/14 PeaceHealth General medical & surgical hospitals 147.60 Standby Letter of Credit NR / NR N/A 11/21/14 Carson Tahoe Hospital Health and allied services 55.00 Standby Letter of Credit NR / NR N/A 11/25/14 National Eldercare Services Skilled nursing care facilities 31.00 Term Loan NR / NR N/A 11/19/14 CT Technologies Intermediate Holdings Inc Health and allied services 30.00 Revolver/Line >= 1 Yr. B / B2 N/A 11/25/14 National Eldercare Services Skilled nursing care facilities 7.00 Revolver/Line >= 1 Yr. NR / NR N/A PAGE 5
HEALTHCARE & LIFE SCIENCES TRADING STATISTICS Payer, Provider, & Pharmacy Support Services Company Name Stock Price Lastest Twelve Months Equity Total Ent. Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples % Change 52 Week Cash and (LTM) LTM Lastest Mkt. Total Debt Value Equiv. Period FYE Date 11/28/2014 3 mos. 12 mos. High Low Value (TEV) Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA Clinical Laboratories Bio-Reference Laboratories Inc. $28.30 (4.4%) (4.2%) $34.00 $24.13 $785 $60 $20 $825 $797 $97 $73 Jul-14 Oct-13 $837 $109 $84 1.0x 8.5x 1.0x 7.6x Laboratory Corp. of America Holdings 104.64 (0.7%) 2.3% 109.47 87.01 8,842 3,015 576 11,299 5,936 1,138 936 Sep-14 Dec-13 5,993 1,190 945 1.9x 9.8x 1.9x 9.5x Quest Diagnostics Inc. 65.31 5.4% 6.3% 65.64 50.46 9,440 3,893 170 13,191 7,308 1,397 1,090 Sep-14 Dec-13 7,401 1,439 1,117 1.8x 9.3x 1.8x 9.2x Number of Companies 3 Median: (0.7%) 2.3% Total $19,066 $8,438 $14,041 $14,231 1.8x 9.3x 1.8x 9.2x Mean: 0.1% 1.5% $8,438 1.6x 9.2x 1.6x 8.8x Contract Pharma Manufacturing Akorn, Inc. $40.07 3.3% 56.5% $45.25 $20.52 $4,321 $1,157 $131 $5,336 $459 $140 $99 Sep-14 Dec-13 $630 $262 $227 11.6x 38.1x 8.5x 20.3x Cambrex Corporation. 22.75 6.5% 17.8% 24.14 15.20 698 60 27 732 349 71 47 Sep-14 Dec-13 365 77 53 2.1x 11.1x 2.0x 9.5x Integrated Biopharma Inc. 0.11 (54.2%) (28.1%) 0.34 0.08 2 15 0 16 33 2 1 Sep-14 Jun-14 NA NA NA 0.5x 10.7x NA NA West Pharmaceutical Services, Inc. 52.01 19.7% 3.9% 53.28 39.11 3,696 347 247 3,796 1,414 267 176 Sep-14 Dec-13 1,425 285 187 2.7x 14.0x 2.7x 13.3x Number of Companies 4 Median: 4.9% 10.8% Total $8,717 $2,470 $2,255 $2,419 2.4x 12.6x 2.7x 13.3x Mean: (6.2%) 12.5% $2,470 4.2x 18.5x 4.4x 14.4x Contract Research Organizations Albany Molecular Research Inc. $16.27 (17.9%) 36.5% $23.95 $9.71 $531 $124 $18 $636 $257 $35 $18 Sep-14 Dec-13 $279 $50 $34 2.5x 18.0x 2.3x 12.7x Charles River Laboratories International, Inc. 64.75 8.1% 24.4% 66.11 49.60 3,038 787 131 3,708 1,257 281 183 Sep-14 Dec-13 1,289 294 207 2.9x 12.8x 2.9x 12.6x Covance Inc. 102.62 22.7% 21.2% 106.50 73.57 5,807 250 705 5,352 2,510 416 284 Sep-14 Dec-13 2,518 427 285 2.1x 12.8x 2.1x 12.5x ICON Public Limited Company 55.54 8.5% 45.4% 59.81 35.33 3,420 0 154 3,171 1,458 240 189 Sep-14 Dec-13 1,506 259 208 2.2x 13.2x 2.1x 12.2x PAREXEL International Corporation 58.51 2.7% 41.5% 64.72 38.65 3,219 367 281 3,305 1,982 295 213 Sep-14 Jun-14 2,084 318 231 1.7x 11.2x 1.6x 10.4x Quintiles Transnational Holdings Inc. 57.82 2.6% 34.5% 60.71 41.43 7,144 2,060 645 8,559 4,106 657 570 Sep-14 Dec-13 4,180 703 583 2.1x 12.8x 2.0x 12.2x WuXi PharmaTech (Cayman) Inc. 34.31 (7.0%) 3.9% 40.72 29.84 2,402 137 157 2,158 641 156 109 Sep-14 Dec-13 671 175 125 3.4x 13.8x 3.2x 12.4x Number of Companies 7 Median: 2.7% 34.5% Total $25,560 $3,841 $12,211 $12,527 2.2x 12.8x 2.1x 12.4x Mean: 2.8% 29.6% $3,841 2.4x 13.5x 2.3x 12.1x Disease Management Alere Inc. $39.89 12.7% 21.5% $43.00 $31.94 $3,333 $3,789 $445 $7,288 $2,964 $547 $142 Sep-14 Dec-13 $2,899 $543 $475 2.5x 12.9x 2.5x 13.4x Healthways Inc. 15.58 (10.7%) 13.0% 18.73 11.50 551 257 2 807 712 34 7 Sep-14 Dec-13 742 78 22 1.1x 23.6x 1.1x 10.3x Number of Companies 2 Median: 1.0% 17.2% Total $3,884 $4,048 $3,676 $3,641 1.8x 18.3x 1.8x 11.9x Mean: 1.0% 17.2% $4,048 1.8x 18.3x 1.8x 11.9x Emergency Services Air Methods Corp. $44.38 (24.2%) (20.3%) $60.74 $42.16 $1,740 $664 $17 $2,394 $983 $246 $165 Sep-14 Dec-13 $1,006 $255 $172 2.4x 9.7x 2.4x 9.4x Number of Companies 1 Median: (24.2%) (20.3%) Total $1,740 $2,394 $983 $1,006 2.4x 9.7x 2.4x 9.4x Mean: (24.2%) (20.3%) $2,394 2.4x 9.7x 2.4x 9.4x Health Care Staffing AMN Healthcare Services Inc. $17.12 12.0% 23.2% $17.98 $10.35 $798 $146 $10 $935 $1,005 $84 $68 Sep-14 Dec-13 $1,024 $84 $65 0.9x 11.1x 0.9x 11.1x Cross Country Healthcare, Inc. 10.67 33.4% 45.0% 11.54 5.26 333 65 8 391 539 11 4 Sep-14 Dec-13 620 17 9 0.7x 34.7x 0.6x 22.8x On Assignment Inc. 30.73 4.6% (9.7%) 39.86 25.97 1,609 404 30 1,982 1,809 179 143 Sep-14 Dec-13 1,855 198 150 1.1x 11.1x 1.1x 10.0x Team Health Holdings, Inc. 57.16 0.4% 22.8% 63.13 41.37 4,065 717 14 4,769 2,651 282 217 Sep-14 Dec-13 2,774 313 215 1.8x 16.9x 1.7x 15.2x Number of Companies 4 Median: 8.3% 23.0% Total $6,805 $2,020 $6,004 $6,274 1.0x 14.0x 1.0x 13.2x Mean: 12.6% 20.3% $2,020 1.1x 18.5x 1.1x 14.8x As of November 28, 2014. PAGE 6
HEALTHCARE & LIFE SCIENCES TRADING STATISTICS Payer, Provider, & Pharmacy Support Services Company Name Stock Price Lastest Twelve Months Equity Total Ent. Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples % Change 52 Week Cash and (LTM) LTM Lastest Mkt. Total Debt Value Equiv. Period FYE Date 11/28/2014 3 mos. 12 mos. High Low Value (TEV) Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA HMO - Medical Commercial: Aetna Inc. $87.24 6.5% 26.7% $88.11 $64.68 $30,682 $8,784 $1,707 $37,820 $56,415 $4,858 $4,227 Sep-14 Dec-13 $57,650 $4,597 $4,281 0.7x 7.8x 0.7x 8.2x Cigna Corp. 102.89 8.8% 16.9% 104.55 73.47 26,914 5,147 1,621 30,551 34,098 3,053 2,710 Sep-14 Dec-13 34,632 3,685 3,160 0.9x 10.0x 0.9x 8.3x Health Net, Inc. 51.38 9.8% 70.2% 52.32 27.60 4,004 499 1,115 3,388 12,993 368 332 Sep-14 Dec-13 14,190 429 403 0.3x 9.2x 0.2x 7.9x Humana Inc. 137.97 8.1% 32.9% 140.92 91.00 21,156 4,605 2,705 23,056 46,359 2,244 1,977 Sep-14 Dec-13 48,501 2,615 2,220 0.5x 10.3x 0.5x 8.8x UnitedHealth Group Incorporated 98.63 14.2% 32.6% 99.42 69.57 94,664 17,579 7,233 106,396 128,158 10,997 9,961 Sep-14 Dec-13 130,074 11,502 10,074 0.8x 9.7x 0.8x 9.3x Anthem, Inc. 0.00 0.0% 0.0% 0.00 0.00 0 16,962 1,718 0 72,792 5,162 4,595 Sep-14 Dec-13 73,174 4,984 4,549 0.0x 0.0x 0.0x 0.0x Number of Companies 6 Median: 8.5% 29.7% Total $177,419 $33,535 $350,815 $358,220 0.6x 9.4x 0.6x 8.3x Mean: 7.9% 29.9% $33,535 0.5x 7.8x 0.5x 7.1x Government: Centene Corp. $98.77 26.9% 65.3% $100.16 $54.12 $5,795 $956 $1,524 $5,376 $14,132 $459 $376 Sep-14 Dec-13 $16,429 $559 $469 0.4x 11.7x 0.3x 9.6x Molina Healthcare, Inc. 51.12 9.7% 52.8% 51.80 31.60 2,474 909 1,599 1,784 8,324 185 94 Sep-14 Dec-13 9,715 274 186 0.2x 9.7x 0.2x 6.5x WellCare Health Plans, Inc. 73.74 13.1% (1.1%) 78.37 55.16 3,238 900 1,551 2,587 11,984 270 236 Sep-14 Dec-13 12,957 305 250 0.2x 9.6x 0.2x 8.5x Number of Companies 3 Median: 13.1% 52.8% Total $11,506 $3,249 $34,440 $39,102 0.2x 9.7x 0.2x 8.5x Mean: 16.6% 39.0% $3,249 0.3x 10.3x 0.2x 8.2x Information Services Data/Analytics: National Research Corp. $0.00 (10.4%) (0.8%) $44.95 $30.20 $414 $9 $39 $384 $97 $32 $28 Sep-14 Dec-13 $99 $33 $29 4.0x 12.1x 3.9x 11.6x Castlight Health, Inc. 12.43 5.6% 0.0% 41.95 10.05 1,122 0 25 940 36 (85) (86) Sep-14 Dec-13 44 (79) (76) 25.9x NM 21.3x (11.9x) Number of Companies 2 Median: (2.4%) (0.4%) Total $768 $662 $66 $72 15.0x 12.1x 12.6x (0.1x) Mean: (2.4%) (0.4%) $662 15.0x 12.1x 12.6x (0.1x) ehealth: WebMD Health Corp. $36.54 (23.9%) (4.3%) $53.30 $34.48 $1,321 $952 $700 $1,573 $564 $108 $90 Sep-14 Dec-13 $577 $156 $93 2.8x 14.6x NA NA Number of Companies 1 Median: (23.9%) (4.3%) Total $1,321 $1,573 $564 $577 2.8x 14.6x NA NA Mean: (23.9%) (4.3%) $1,573 2.8x 14.6x NA NA Hospital/Physician: Allscripts Healthcare Solutions, Inc. $12.02 (17.9%) (19.5%) $19.68 $11.00 $2,167 $587 $37 $2,717 $1,388 $46 ($56) Sep-14 Dec-13 $1,399 $203 $106 2.0x NM 1.9x 13.4x athenahealth, Inc. 117.30 (18.6%) (9.8%) 206.70 97.30 4,468 213 60 4,576 711 59 (2) Sep-14 Dec-13 747 139 74 6.4x NM 6.1x 33.0x Cerner Corporation 64.40 13.0% 11.7% 64.75 48.39 21,991 147 496 20,806 3,181 841 651 Sep-14 Dec-13 3,381 1,134 851 6.5x 24.7x 6.2x 18.3x Computer Programs & Systems Inc. 58.74 (4.1%) (3.9%) 71.89 56.60 658 0 18 630 210 60 56 Sep-14 Dec-13 210 59 55 3.0x 10.5x 3.0x 10.7x HMS Holdings Corp. 20.86 (8.9%) (9.6%) 26.60 15.10 1,831 198 120 1,909 453 104 55 Sep-14 Dec-13 447 112 51 4.2x 18.4x 4.3x 17.1x MedAssets, Inc. 19.34 (15.5%) (10.9%) 26.09 19.00 1,164 909 14 2,059 692 207 104 Sep-14 Dec-13 716 237 102 3.0x 9.9x 2.9x 8.7x Merge Healthcare Incorporated 3.14 21.7% 33.1% 3.40 1.97 301 228 34 496 212 38 23 Sep-14 Dec-13 215 48 31 2.3x 13.0x 2.3x 10.4x Quality Systems Inc. 14.73 (3.3%) (36.7%) 23.44 13.01 888 0 115 764 462 41 29 Sep-14 Mar-14 484 71 40 1.7x 18.4x 1.6x 10.8x Number of Companies 8 Median: (6.5%) (9.7%) Total $1,498 $4,245 $577 $600 3.0x 15.7x 2.9x 12.1x Mean: (4.2%) (5.7%) $1,984 3.6x 15.8x 3.5x 15.3x As of November 28, 2014. PAGE 7
HEALTHCARE & LIFE SCIENCES TRADING STATISTICS Payer, Provider, & Pharmacy Support Services Company Name Stock Price Lastest Twelve Months Equity Total Ent. Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples % Change 52 Week Cash and (LTM) LTM Lastest Mkt. Total Debt Value Equiv. Period FYE Date 11/28/2014 3 mos. 12 mos. High Low Value (TEV) Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA Specialty Managed Care HealthEquity, Inc. $24.83 28.0% 0.0% $25.28 $16.11 $1,359 $0 $108 $1,389 $80 $22 $16 Oct-14 Jan-14 $85 $23 $16 18.9x 67.9x 16.4x 59.7x Assurant Inc. $67.59 1.5% 4.3% $69.71 $59.17 $4,749 $1,267 $1,411 $4,604 $10,160 $1,023 $897 Sep-14 Dec-13 $10,331 $980 $873 0.5x 4.5x 0.4x 4.7x CorVel Corporation 34.66 (15.0%) (23.9%) 53.35 28.08 716 0 28 688 489 71 54 Sep-14 Mar-14 502 NA NA 1.4x 9.7x 1.4x NA Number of Companies 3 Median: 1.5% 0.0% Total $1,359 $2,227 $489 $502 1.4x 9.7x 1.4x 32.2x Mean: 4.8% (6.5%) $2,227 6.9x 27.4x 6.1x 32.2x Specialty Pharmacy Management Express Scripts Holding Company $83.15 12.6% 23.2% $83.37 $64.64 $61,025 $14,687 $835 $74,888 $100,356 $6,496 $4,420 Sep-14 Dec-13 $100,268 $6,814 $6,403 0.7x 11.5x 0.7x 11.0x Catamaran Corporation 50.63 7.8% 10.9% 51.71 35.51 10,505 1,437 907 11,032 20,371 806 526 Sep-14 Dec-13 21,387 786 595 0.6x 14.0x 0.5x 14.0x Omnicare Inc. 70.32 10.2% 22.2% 71.51 56.41 6,883 2,216 287 8,812 6,326 730 596 Sep-14 Dec-13 6,403 714 608 1.4x 12.1x 1.4x 12.3x PharMerica Corporation 21.81 (11.2%) 0.2% 30.48 19.40 714 361 7 1,068 1,822 115 79 Sep-14 Dec-13 1,862 128 86 0.6x 9.3x 0.6x 8.3x Number of Companies 4 Median: 9.0% 16.6% Total $79,126 $23,950 $128,874 $129,919 0.7x 11.8x 0.7x 11.7x Mean: 4.9% 14.1% $23,950 0.8x 11.7x 0.8x 11.4x As of November 28, 2014. PAGE 8
HEALTHCARE & LIFE SCIENCES TRADING STATISTICS Products & Devices Company Name Stock Price Lastest Twelve Months Equity Total Ent. Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples % Change 52 Week Cash and (LTM) LTM Lastest Mkt. Total Debt Value Equiv. Period FYE Date 11/28/2014 3 mos. 12 mos. High Low Value (TEV) Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA Dental Products 3M Company $160.09 11.2% 19.9% $160.86 $123.61 $102,589 $7,355 $1,929 $107,281 $31,671 $8,467 $7,052 Sep-14 Dec-13 $31,873 $8,506 $7,137 3.4x 12.7x 3.4x 12.6x DENTSPLY International Inc. 54.98 15.5% 15.3% 55.37 42.99 7,781 1,380 98 9,063 2,957 584 452 Sep-14 Dec-13 2,958 616 516 3.1x 15.6x 3.1x 14.7x Sirona Dental Systems Inc. 86.39 7.1% 26.4% 89.08 66.30 4,784 80 383 4,483 1,171 270 229 Sep-14 Sep-14 1,213 352 295 3.8x 16.6x 3.7x 12.7x Number of Companies 3 Median: 11.2% 19.9% Total $115,154 $40,276 $35,799 $36,044 3.4x 15.6x 3.4x 12.7x Mean: 11.3% 20.5% $40,276 3.4x 15.0x 3.4x 13.4x Durable Medical Equipment Hill-Rom Holdings, Inc. $45.76 4.5% 9.9% $46.29 $34.94 $2,632 $492 $99 $3,025 $1,686 $271 $176 Sep-14 Sep-14 $1,892 $302 $210 1.8x 11.2x 1.6x 10.0x Invacare Corporation 15.13 1.1% (31.8%) 25.96 11.65 486 25 29 482 1,301 1 (34) Sep-14 Dec-13 1,281 (5) (41) 0.4x NM 0.4x (99.3x) ResMed Inc. 53.20 0.5% 9.3% 53.92 41.52 7,418 376 882 6,912 1,578 483 409 Sep-14 Jun-14 1,654 510 427 4.4x 14.3x 4.2x 13.5x Number of Companies 3 Median: 1.1% 9.3% Total $10,536 $3,473 $4,564 $4,826 1.8x 12.7x 1.6x 10.0x Mean: 2.0% (4.2%) $3,473 2.2x 12.7x 2.1x (25.2x) Life Sciences Tools Agilent Technologies Inc. $42.74 (25.2%) (20.6%) $61.22 $39.49 $14,254 $2,762 $3,028 $13,991 $6,981 $1,214 $831 Oct-14 Oct-14 $4,149 $894 $765 2.0x 11.5x 3.4x 15.6x Thermo Fisher Scientific, Inc. 129.29 7.7% 28.0% 129.77 99.12 51,719 14,483 534 65,658 15,864 3,641 2,141 Sep-14 Dec-13 16,793 4,052 3,694 4.1x 18.0x 3.9x 16.2x VWR Corporation 26.81 0.0% 0.0% 26.95 20.60 3,522 2,739 135 6,126 4,333 462 331 Sep-14 Dec-13 4,354 443 367 1.4x 13.3x 1.4x 13.8x Becton, Dickinson and Company 140.33 20.5% 28.8% 142.33 104.94 26,940 3,971 1,861 28,163 8,432 2,164 1,643 Sep-14 Sep-14 8,631 2,370 1,791 3.3x 13.0x 3.3x 11.9x LifeWatch AG 10.46 6.8% 26.5% 11.75 7.37 140 5 6 139 96 3 (2) Jun-14 Dec-13 94 4 0 1.6x 51.5x 1.5x 35.6x Number of Companies 5 Median: 6.8% 26.5% Total $41,335 $14,098 $6,981 $4,354 2.0x 13.3x 3.3x 15.6x Mean: 1.9% 12.5% $22,816 2.5x 21.5x 2.7x 18.6x Medical Devices and Products Abbott Laboratories $44.51 5.1% 16.2% $44.77 $35.65 $67,023 $8,301 $3,613 $70,552 $22,162 $4,795 $3,216 Sep-14 Dec-13 $20,730 $5,160 $3,871 3.2x 14.7x 3.4x 13.7x Baxter International Inc. 73.00 (2.5%) 7.0% 77.31 65.53 39,564 9,275 2,078 46,783 16,813 4,187 3,190 Sep-14 Dec-13 16,562 4,425 3,463 2.8x 11.1x 2.8x 10.6x Boston Scientific Corporation 12.87 4.2% 9.9% 14.08 11.10 17,072 4,252 246 21,071 7,331 1,638 921 Sep-14 Dec-13 7,405 1,713 1,084 2.9x 12.9x 2.8x 12.3x CR Bard Inc. 167.35 13.4% 20.2% 169.19 125.00 12,534 1,403 972 12,965 3,218 922 760 Sep-14 Dec-13 3,304 982 812 4.0x 14.1x 3.9x 13.2x Danaher Corp. 83.56 9.5% 10.9% 83.96 70.12 58,717 3,036 4,025 57,797 19,763 4,366 3,432 Sep-14 Dec-13 19,910 4,446 3,506 2.9x 13.2x 2.9x 13.0x Hanger, Inc. 21.45 (3.2%) (44.8%) 40.71 18.25 738 540 5 1,273 1,061 156 117 Jun-14 Dec-13 1,068 162 115 1.2x 8.1x 1.2x 7.8x Hologic Inc. 26.80 8.5% 18.3% 27.35 19.91 7,468 4,302 736 11,034 2,509 888 365 Sep-14 Sep-14 2,570 993 836 4.4x 12.4x 4.3x 11.1x Hospira Inc. 59.64 10.0% 51.3% 60.78 39.31 10,091 1,762 541 11,312 4,422 705 469 Sep-14 Dec-13 4,446 837 627 2.6x 15.6x 2.5x 13.5x Johnson & Johnson 108.25 5.1% 14.0% 109.49 86.09 303,004 15,271 13,818 285,270 74,432 25,171 21,165 Sep-14 Dec-13 74,731 25,811 21,712 3.8x 11.3x 3.8x 11.1x Medtronic, Inc. 73.87 17.0% 28.6% 74.53 53.33 72,711 13,708 1,287 71,935 17,255 5,622 4,770 Oct-14 Apr-14 17,565 6,255 5,477 4.2x 12.8x 4.1x 11.5x Stryker Corporation 92.91 12.4% 24.6% 93.86 71.22 35,150 3,962 1,356 34,435 9,525 1,748 1,384 Sep-14 Dec-13 9,680 2,645 2,276 3.6x 19.7x 3.6x 13.0x Teleflex Incorporated 119.15 9.5% 20.8% 119.99 90.15 4,934 1,065 286 5,716 1,802 405 295 Sep-14 Dec-13 1,839 445 354 3.2x 14.1x 3.1x 12.8x Zimmer Holdings, Inc. 112.29 12.9% 23.9% 113.00 89.58 19,017 1,676 967 18,948 4,691 1,760 1,393 Sep-14 Dec-13 4,697 1,792 1,428 4.0x 10.8x 4.0x 10.6x Number of Companies 13 Median: 9.5% 18.3% Total $648,024 $49,930 $184,984 $184,506 3.2x 12.9x 3.4x 12.3x Mean: 7.8% 15.4% $49,930 3.3x 13.1x 3.3x 11.9x Medical / Surgical / Dental Supplies & Distribution AmerisourceBergen Corporation $91.05 18.7% 29.1% $91.59 $62.55 $19,912 $1,996 $1,809 $20,099 $119,569 $1,374 $1,185 Sep-14 Sep-14 $128,489 $1,877 $1,694 0.2x 14.6x 0.2x 10.7x Cardinal Health, Inc. 82.19 12.2% 27.5% 82.68 62.55 27,202 4,007 2,469 28,740 90,631 2,390 1,940 Sep-14 Jun-14 94,884 2,685 2,358 0.3x 12.0x 0.3x 10.7x Henry Schein, Inc. 137.20 14.9% 19.9% 138.22 109.34 11,554 825 77 12,855 10,196 844 699 Sep-14 Dec-13 10,397 860 710 1.3x 15.0x 1.2x 14.9x McKesson Corporation 210.76 9.2% 27.3% 211.25 156.00 48,871 10,572 3,804 57,234 161,201 3,557 2,692 Sep-14 Mar-14 177,587 4,807 4,098 0.4x 16.1x 0.3x 11.9x Owens & Minor Inc. 34.21 (0.2%) (10.5%) 38.55 31.55 2,158 766 610 2,314 9,267 237 196 Sep-14 Dec-13 9,398 253 195 0.2x 9.8x 0.2x 9.2x Patterson Companies, Inc. 48.18 19.5% 16.5% 48.88 37.03 4,887 726 285 5,269 4,348 418 366 Oct-14 Apr-14 4,416 430 380 1.2x 12.6x 1.2x 12.2x K2M Group Holdings, Inc. 18.91 33.5% 0.0% 19.48 12.31 702 0 23 679 178 (15) (52) Sep-14 Dec-13 185 (10) (52) 3.8x NM 3.7x (68.3x) Number of Companies 7 Median: 14.9% 19.9% Total $115,287 $18,170 $395,389 $425,357 0.4x 13.6x 0.3x 11.3x Mean: 15.4% 15.7% $18,170 1.1x 13.4x 0.6x 11.6x As of November 28, 2014. PAGE 9
HEALTHCARE & LIFE SCIENCES TRADING STATISTICS Provider-Based Services Company Name Stock Price Lastest Twelve Months Equity Total Ent. Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples % Change 52 Week Cash and (LTM) LTM Lastest Mkt. Total Debt Value Equiv. Period FYE Date 11/28/2014 3 mos. 12 mos. High Low Value (TEV) Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA Acute-Care Hospitals Community Health Systems, Inc. $47.08 (11.9%) 14.8% $57.72 $34.55 $5,475 $17,069 $221 $23,106 $17,129 $2,241 $1,394 Sep-14 Dec-13 $18,989 $2,820 $1,617 1.3x 10.1x 1.2x 8.2x HCA Holdings, Inc. 69.69 1.0% 49.8% 73.94 45.07 30,215 28,687 515 59,687 36,118 7,141 5,319 Sep-14 Dec-13 37,061 7,293 5,468 1.7x 8.3x 1.6x 8.2x Lifepoint Hospitals Inc. 69.19 (6.7%) 35.1% 76.50 49.29 3,132 2,222 263 5,202 4,173 547 282 Sep-14 Dec-13 4,474 631 369 1.2x 9.5x 1.2x 8.2x Tenet Healthcare Corp. 48.05 (19.9%) 12.2% 63.61 37.95 4,722 11,553 200 16,602 16,032 1,750 950 Sep-14 Dec-13 17,215 1,930 1,088 1.0x 9.5x 1.0x 8.6x Universal Health Services Inc. 104.62 (7.9%) 27.3% 115.64 73.06 10,354 3,466 40 14,066 7,759 1,386 1,020 Sep-14 Dec-13 8,641 1,464 1,093 1.8x 10.1x 1.6x 9.6x Number of Companies 5 Median: (7.9%) 27.3% Total $53,899 $23,733 $81,210 $86,380 1.3x 9.5x 1.2x 8.2x Mean: (9.1%) 27.8% $23,733 1.4x 9.5x 1.3x 8.6x Assisted Living Brookdale Senior Living Inc. $35.42 1.4% 23.8% $36.18 $26.11 $6,496 $6,415 $238 $12,674 $2,931 $522 $134 Sep-14 Dec-13 $3,806 $597 $17 4.3x 24.2x 3.3x 21.2x Capital Senior Living Corp. 25.45 11.9% 16.2% 26.89 20.33 740 666 28 1,379 367 57 11 Sep-14 Dec-13 383 66 13 3.8x 24.2x 3.6x 20.8x Five Star Quality Care Inc. 4.40 (3.9%) (10.0%) 6.09 3.23 214 75 25 248 1,110 20 (12) Sep-14 Dec-13 1,362 42 15 0.2x 6.4x 0.2x 5.9x Skilled Healthcare Group, Inc. 6.98 (5.2%) 36.9% 7.90 4.08 280 408 11 677 831 67 42 Sep-14 Dec-13 832 81 55 0.8x 9.9x 0.8x 8.4x Number of Companies 4 Median: (1.3%) 20.0% Total $7,731 $3,745 $5,240 $6,382 2.3x 17.0x 2.1x 14.6x Mean: 1.0% 16.7% $3,745 2.3x 16.2x 2.0x 14.1x Diagnostic Imaging Alliance Healthcare Services, Inc. $22.52 (17.2%) (21.4%) $35.40 $20.06 $238 $505 $39 $749 $437 $127 $60 Sep-14 Dec-13 NA NA NA 1.7x 5.7x NA NA RadNet, Inc. 8.42 27.2% 329.6% 10.35 1.50 360 614 0 975 710 116 56 Sep-14 Dec-13 716 125 54 1.4x 8.0x 1.4x 7.8x Varian Medical Systems, Inc. 88.51 4.4% 15.4% 89.90 75.54 8,849 438 849 8,371 3,050 659 596 Sep-14 Sep-14 3,208 689 624 2.7x 12.7x 2.6x 12.2x Number of Companies 3 Median: 4.4% 15.4% Total $9,447 $3,365 $4,198 $3,924 1.7x 8.0x 2.0x 10.0x Mean: 4.8% 107.9% $3,365 1.9x 8.8x 2.0x 10.0x Dialysis Services DaVita HealthCare Partners Inc. $76.53 2.8% 27.8% $78.52 $56.85 $16,446 $8,504 $1,527 $24,217 $12,519 $2,413 $1,837 Sep-14 Dec-13 $12,737 $2,419 $1,834 1.9x 9.9x 1.9x 10.0x Fresenius Medical Care AG & Co. KGAA 73.68 4.7% 6.7% 74.61 58.19 22,336 9,073 588 31,718 15,666 2,902 2,220 Sep-14 Dec-13 15,717 2,938 2,256 2.1x 11.0x 2.0x 10.8x Number of Companies 2 Median: 3.8% 17.3% Total $38,783 $27,967 $28,185 $28,453 2.0x 10.4x 2.0x 10.4x Mean: 3.8% 17.3% $27,967 2.0x 10.4x 2.0x 10.4x Home Care, Hospice, and Home Infusion Home Care / Hospice: Addus HomeCare Corporation $23.08 5.6% (21.4%) $29.80 $17.02 $251 $4 $14 $241 $300 $20 $17 Sep-14 Dec-13 $313 $23 $19 0.8x 12.0x 0.8x 10.4x Almost Family Inc. 27.61 (0.8%) (2.7%) 33.97 19.74 262 53 5 312 466 22 18 Sep-14 Dec-13 493 36 30 0.7x 14.4x 0.6x 8.7x Amedisys Inc. 25.42 22.4% 54.1% 26.73 12.86 849 114 6 957 1,191 52 21 Sep-14 Dec-13 1,206 74 40 0.8x 17.6x 0.8x 13.0x Gentiva Health Services Inc. 19.41 9.2% 55.2% 19.90 7.35 718 1,157 114 1,764 1,970 154 123 Sep-14 Dec-13 1,985 191 162 0.9x 11.5x 0.9x 9.3x LHC Group, Inc. 23.51 (7.8%) 2.2% 26.00 19.69 418 65 5 493 690 56 47 Sep-14 Dec-13 730 56 46 0.7x 8.8x 0.7x 8.8x Chemed Corp. 110.11 5.9% 41.7% 111.98 72.50 1,873 174 19 2,028 1,425 184 158 Sep-14 Dec-13 1,449 207 169 1.4x 11.0x 1.4x 9.8x Number of Companies 6 Median: 5.7% 22.0% Total $4,370 $966 $6,042 $6,177 0.8x 11.7x 0.8x 9.5x Mean: 5.8% 21.5% $966 0.9x 12.6x 0.9x 10.0x Home Infusion: BioScrip Inc. $6.48 (23.3%) (6.4%) $9.05 $5.44 $445 $423 $0 $868 $1,029 ($3) ($25) Sep-14 Dec-13 $986 $46 $31 0.8x NM 0.9x 18.8x Number of Companies 1 Median: (23.3%) (6.4%) Total $445 $868 $1,029 $986 0.8x NM 0.9x 18.8x Mean: (23.3%) (6.4%) $868 0.8x NM 0.9x 18.8x As of November 28, 2014. PAGE 10
HEALTHCARE & LIFE SCIENCES TRADING STATISTICS Provider-Based Services Company Name Stock Price Lastest Twelve Months Equity Total Ent. Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples % Change 52 Week Cash and (LTM) LTM Lastest Mkt. Total Debt Value Equiv. Period FYE Date 11/28/2014 3 mos. 12 mos. High Low Value (TEV) Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA Long-Term Care The Ensign Group, Inc. $39.42 13.6% (12.3%) $47.78 $26.02 $886 $3 $39 $844 $988 $110 $80 Sep-14 Dec-13 $1,013 $111 $85 0.9x 7.7x 0.8x 7.6x Kindred Healthcare Inc. 19.89 (2.9%) 15.7% 26.81 16.76 1,385 1,497 82 2,747 5,081 291 132 Sep-14 Dec-13 5,085 368 207 0.5x 9.5x 0.5x 7.5x National Healthcare Corp. 60.25 6.0% 8.8% 62.87 49.06 849 47 77 881 855 105 72 Sep-14 Dec-13 NA NA NA 1.0x 7.8x NA NA Number of Companies 3 Median: 6.0% 8.8% Total $3,120 $1,491 $6,923 $6,098 0.9x 7.8x 0.7x 7.5x Mean: 5.6% 4.1% $1,491 0.8x 8.3x 0.7x 7.5x Physician Practice Management Multispecialty / Primary Care: IPC The Hospitalist Company, Inc. $44.08 (7.4%) (29.0%) $63.70 $36.12 $759 $70 $25 $804 $676 $71 $66 Sep-14 Dec-13 $694 $72 $66 1.2x 11.3x 1.2x 11.2x Number of Companies 1 Median: (7.4%) (29.0%) Total $759 $804 $676 $694 1.2x 11.3x 1.2x 11.2x Mean: (7.4%) (29.0%) $804 1.2x 11.3x 1.2x 11.2x Specialty: MEDNAX, Inc. $65.46 15.6% 18.4% $66.05 $49.82 $6,573 $289 $72 $6,784 $2,356 $538 $496 Sep-14 Dec-13 $2,425 $553 $510 2.9x 12.6x 2.8x 12.3x Number of Companies 1 Median: 15.6% 18.4% Total $6,573 $6,784 $2,356 $2,425 2.9x 12.6x 2.8x 12.3x Mean: 15.6% 18.4% $6,784 2.9x 12.6x 2.8x 12.3x Dental: Birner Dental Management Services Inc. $16.36 (3.8%) (16.0%) $22.40 $14.50 $29 $10 $0 $39 $65 $4 ($1) Sep-14 Dec-13 NA NA NA 0.6x 10.8x NA NA Number of Companies 1 Median: (3.8%) (16.0%) Total $29 $39 $65 $0 0.6x 10.8x NA NA Mean: (3.8%) (16.0%) $39 0.6x 10.8x NA NA Behavioral Health / Management Magellan Health, Inc. $61.19 10.1% 0.6% $63.81 $52.37 $1,670 $274 $368 $1,560 $3,786 $196 $143 Sep-14 Dec-13 $3,758 $247 $127 0.4x 8.0x 0.4x 6.3x Providence Service Corp. 39.13 (13.2%) 41.8% 49.41 23.91 620 192 137 675 1,304 62 42 Sep-14 Dec-13 1,440 78 45 0.5x 10.8x 0.5x 8.7x AAC Holdings, Inc. 28.86 0.0% 0.0% 30.08 17.91 608 47 5 658 112 9 5 Sep-14 Dec-13 132 20 11 5.9x 72.1x 5.0x 32.4x Acadia Healthcare Company, Inc. 62.01 20.3% 31.9% 66.88 38.76 3,716 1,029 42 4,703 900 180 153 Sep-14 Dec-13 1,006 212 174 5.2x 26.2x 4.7x 22.2x Civitas Solutions, Inc. 17.13 0.0% 0.0% 17.50 11.88 633 812 48 1,397 1,244 131 65 Jun-14 Sep-13 1,268 128 58 1.1x 10.7x 1.1x 10.9x Universal Health Services Inc. 104.62 (7.9%) 27.3% 115.64 73.06 10,354 3,466 40 14,066 7,759 1,386 1,020 Sep-14 Dec-13 8,641 1,464 1,093 1.8x 10.1x 1.6x 9.6x Number of Companies 6 Median: 0.0% 13.9% Total $17,601 $3,843 $1,274 $1,354 1.5x 10.7x 1.4x 10.3x Mean: 1.6% 16.9% $3,843 2.5x 23.0x 2.2x 15.0x Surgicenters / Rehabilitation Surgery Centers 1 : AmSurg Corp. $51.57 (2.6%) 8.0% $54.48 $40.00 $2,482 $2,249 $194 $4,703 $1,342 $234 $188 Sep-14 Dec-13 $1,612 $247 NA 3.9x 20.1x 2.9x 19.1x Surgical Care Affiliates, Inc. 31.80 8.1% NA 37.69 26.55 1,203 683 109 1,776 833 98 51 Sep-14 Dec-13 869 NA NA 2.6x 18.2x 2.0x NA Number of Companies 2 Median: 2.8% 8.0% Total $3,684 $3,240 $2,174 $2,481 3.3x 19.1x 2.5x 19.1x Mean: 2.8% 8.0% $3,240 3.3x 19.1x 2.5x 19.1x Rehabilitation / Long Term Acute Care: HEALTHSOUTH Corp. $41.13 4.6% 15.2% $42.41 $29.82 $3,609 $1,650 $272 $5,235 $2,336 $584 $479 Sep-14 Dec-13 $2,400 $583 $472 2.2x 8.8x 2.2x 9.0x Civitas Solutions, Inc. 17.13 0.0% 0.0% 17.50 11.88 633 812 48 1,397 1,244 131 65 Jun-14 Sep-13 1,268 128 58 1.1x 10.7x 1.1x 10.9x Select Medical Holdings Corporation 14.43 2.9% 68.4% 16.17 8.43 1,889 1,558 11 3,483 2,997 362 295 Sep-14 Dec-13 3,062 370 293 1.2x 9.5x 1.1x 9.4x US Physical Therapy Inc. 38.87 9.4% 13.3% 44.00 29.56 477 48 16 538 290 51 45 Sep-14 Dec-13 301 44 NA 1.9x 10.6x 1.8x 12.3x Number of Companies 4 Median: 3.8% 14.3% Total $6,608 $2,663 $1,790 $1,834 1.5x 10.0x 1.5x 10.2x Mean: 4.2% 24.2% $2,663 1.6x 9.9x 1.6x 10.4x As of November 28, 2014. (1) EBITDA, EBIT, and Enterprise Value figures are adjusted for minority interest. PAGE 11
M&A DETAIL Announced U.S. Healthcare & Life Sciences M&A Enterprise Enterprise Value / LTM Private Equity Announced Target Seller Buyer Value ($mm) Sales EBITDA EBIT Involvement 11/28/2014 hoh18.75 Mölnlycke Health Care AB, Dry Tips Mölnlycke Health Care AB Microbrush International Limited - - - - No 11/26/2014 FutureCare Courtland LLC LifeBridge Health, Inc. FutureCare Health and Management 8.1 - - - No Corporation 11/26/2014 LAXmed, LAX Clinic - 8K Miles Software Services Ltd 2.6 - - - No (BSE:512161) 11/25/2014 Grace Home Health Care, Inc. - Accelera Innovations, Inc 5.3 - - - No 11/25/2014 Watson Health Care, Inc. and Affordable Nursing, - Accelera Innovations, Inc 3.0 - - - No Inc. 11/25/2014 Alpha Systems - DataBank IMX, LLC - - - - No 11/25/2014 PPM Information Solutions, Inc. - Bolder Healthcare Solutions LLC - - - - No 11/25/2014 RFS Pharma, LLC - Cocrystal Pharma, Inc. (OTCBB:COCP) - - - - No 11/25/2014 Five companies in United States - CVS Holdings I LLC - - - - No 11/25/2014 EMS Flight Crew LLC - Voyageur Publishing & Events Ltd. - - - - No 11/24/2014 Millennium Practice Management Associates, Inc. - MediGain, LLC - - - - No 11/24/2014 Probility Physical Therapy, LLC - Saint Joseph Mercy Health System - - - - No 11/24/2014 Newfane Rehab & Health Care Center, Inc. Eastern Niagara Hospital, Inc. Maximus Healthcare LLC - - - - No 11/24/2014 Sears Methodist Centers, Inc. and Sears Permian Retirement Corporation and Sears Panhandle Retiremen Sears Methodist Retirement System, Inc. The Ensign Group, Inc. (NasdaqGS:ENSG) 42.5 - - - No 11/23/2014 Encompass Home Health, Inc. Cressey & Company, LP; Thoma Bravo, HEALTHSOUTH Corp. (NYSE:HLS) 750.0 2.1x - - Yes LLC 11/21/2014 EXP Pharmaceutical Services Corp. - Inmar, Inc. - - - - No 11/21/2014 Cardinal Health, Inc., Physician-Office Business Burrill Venture Capital; Versant Henry Schein, Inc. (NasdaqGS:HSIC) - - - - No Ventures, Inc.; De Novo Ventures; Gund Investment Corporation; Accuitive Medical Ventures, LLC 11/20/2014 Potentia Pharmaceuticals, Inc. - Apellis Pharmaceuticals, Inc. - - - - No 11/20/2014 Intralign Health, LLC - Pamplona Capital Management LLP, - - - - Yes Private Equity 11/20/2014 Hospital Practice Associates, Inc. - IPC The Hospitalist Company, Inc. - - - - No (NasdaqGS:IPCM) 11/20/2014 BRIT Systems, Inc. - Imaging Advantage LLC - - - - No 11/19/2014 Med-Ally LLC SCRA Technology Ventures Kelyniam Global, Inc. (OTCPK:KLYG) - - - - No 11/19/2014 Change Healthcare Corporation HLM Venture Partners; Noro-Moseley Partners; Mitsui & Co. Global Investment, Inc.; Solidus Company; Sandbox Industries Inc.; Blue Cross and Blue Shield Association, Endowment Arm; The West Health Investment Fund Emdeon Inc. 185.0 - - - No 11/19/2014 Oasis Health Products, Inc. - Migranade, Inc. - - - - No 11/19/2014 Plaza Bayamon Medical, Inc., Hermanos New Heritage Capital, LLC; The PRN Ambulance, Inc. - - - - Yes Melendez Realty, Inc., Allied Realty Investments Stephens Group, LLC; Dillon Joyce Ltd. 11/19/2014 QualityHealth Lazard Technology Partners; Hudson Sharecare, Inc. - - - - No Ventures; New York City Investment Fund Manager, Inc. 11/18/2014 PhyMed Healthcare Group Excellere Partners Ontario Teachers' Pension Plan - - - - Yes 11/18/2014 One of the Three Additional Injectable Products From Valeant Valeant Pharmaceuticals North America LLC; Valeant Pharmaceuticals Luxembourg S.a.r.l. IGI, Laboratories, Inc. (AMEX:IG) 0.5 - - - No 11/18/2014 Southlake TX Hospital Southlake Texas Medical Griffin-American Healthcare REIT III, Inc. 128.0 - - - Yes Development, LP 11/18/2014 160,000 Rentable Square Foot Trios Health Medical Office Building in Kennewick, Washington - Physicians Realty L.P. 64.0 - - - No 11/18/2014 Lone Star HMA, L.P. Health Management Associates Inc. Prime Healthcare Services, Inc. - - - - No 11/18/2014 ONFocus Healthcare, Inc. Clayton Associates, LLC; Solidus Company; Nashville Capital Network, Investment Arm; TriStar Technology Ventures; Mountain Group Capital LLC MedeAnalytics, Inc. - - - - Yes 11/18/2014 University of Miami Tissue Bank, Certain Assets University of Miami Tissue Bank Vivex Biomedical, Inc. - - - - No 11/18/2014 The Shappley Clinic, PLLC - The Urology Group, PLLC - - - - No 11/17/2014 NicOx Inc. Nicox SA (ENXTPA:COX) Valeant Pharmaceuticals International, 20.0 - - - No Inc. (TSX:VRX) 11/17/2014 Abbott Animal Health, Animal Health Assets Abbott Animal Health, Inc. Zoetis Inc. (NYSE:ZTS) 255.0 - - - No 11/17/2014 Post-Hypothermia Corporation Philips Electronics North America ZOLL Medical Corporation - - - - No Corporation 11/17/2014 Taconic Health Information Network and - Southern Tier HealthLink NY - - - - No Community, Inc. 11/17/2014 GeigerBevolo, Inc. - Revive Public Relations LLC - - - - No PAGE 12
M&A DETAIL Announced U.S. Healthcare & Life Sciences M&A cont. Enterprise Enterprise Value / LTM Private Equity Announced Target Seller Buyer Value ($mm) Sales EBITDA EBIT Involvement 11/16/2014 Allergan Inc. (NYSE:AGN) BlackRock, Inc. (NYSE:BLK); HBM Actavis plc (NYSE:ACT) 65,333.1 9.3x 28.0x 30.5x Yes Healthcare Investments AG (SWX:HBMN); Paulson & Co. Inc.; HBM Partners Ltd.; Pershing Square Capital Management, L.P.; Pentwater Capital Management LP 11/14/2014 Ricerca Biosciences, LLC SV Life Sciences Advisers, LLC Main Market Partners, LLC - - - - Yes 11/14/2014 Carolina Quick Care, PA - FastMed Urgent Care - - - - No 11/14/2014 John N. Campbell M.D. P.C. - IPC The Hospitalist Company, Inc. - - - - No (NasdaqGS:IPCM) 11/14/2014 Lacerta Bio Inc. - Ventac Partners A/S - - - - Yes 11/13/2014 AxioMed, LLC Blue Chip Venture Company, Ltd.; CID KICVentures - - - - No Capital, Inc., Venture Capital; Primus Capital; Charter Oak Private Equity, L.P.; Investor Growth Capital; Thomas, McNerney & Partners; Aisling Capital LLC 11/13/2014 Health Market Science, Inc. Edison Partners; Cross Atlantic Capital LexisNexis Risk Solutions Inc. - - - - Yes Partners LLC 11/13/2014 Browns Botanicals LLC - Zappy, Inc. - - - - No 11/12/2014 Glenwood Park, Inc. - Stonerise Healthcare LLC 7.0 - - - No 11/12/2014 Cogent Healthcare Inc. AEA Investors LP; Waud Capital Partners, L.L.C. Sound Inpatient Physicians, Inc. - - - - Yes 11/11/2014 Hospice Compassus, Inc. Cressey & Company, LP; Thoma Bravo, LLC 11/11/2014 Centerre Healthcare Corporation River Cities Capital Funds; Sterling Partners; Three Arch Partners; RiverVest Venture Partners, LLC 11/11/2014 NARxCHECK National Association Of Boards Of Pharmacy Foundation Audax Group, Inc.; Health Care REIT, Inc. (NYSE:HCN); Formation Capital, L.L.C.; SAFANAD Limited; National Hospice Holdings, LLC - - - - Yes Kindred Healthcare Inc. (NYSE:KND) 195.0 1.4x 11.7x - Yes Appriss Inc. - - - - No 11/11/2014 Wake Cancer Facilities - Duke University Health System, Inc. - - - - No 11/11/2014 North Vista Hospital, Inc. IASIS Healthcare LLC Prime Healthcare Services, Inc. - - - - No 11/11/2014 Family Practice Associates, Ltd. - Springfield Clinic - - - - No 11/10/2014 StemCells Inc., Stem Cell Research Product StemCells Inc. (NasdaqCM:STEM) Takara Bio Inc. (TSE:4974) - - - - No Related Assets 11/10/2014 DoctorDirectory.com, Inc. - Everyday Health, Inc. (NYSE:EVDY) 65.0 - - - No 11/10/2014 Health Services Integration, Inc. - Syncordia Technologies and Healthcare - - - - No Solutions, Inc. 11/7/2014 Kremers Urban Pharmaceuticals Inc. UCB S.A. (ENXTBR:UCB) Advent International Corporation; 1,525.0 - - - Yes Avista Capital Holdings, L.P. 11/7/2014 Riverview Regional Medical Center, LLC Southeast HMA Holdings, LLC Prime Healthcare Services, Inc. - - - - No 11/7/2014 Extendicare Holdings, Inc. Extendicare International Inc. Formation Capital, L.L.C.; Safanad Inc. 870.0 0.8x 10.4x 6.7x Yes 11/7/2014 Medikmark, Inc. - Stradis Healthcare, LLC - - - - No 11/7/2014 Breast Care of Western New York and Soniwala - Roswell Park Cancer Institute - - - - No Hematology Oncology Associates 11/7/2014 St. Mary's Medical Center Home Health Services, Pallottine Health Services, Inc Cabell Huntington Hospital, Inc. - - - - No LLC 11/7/2014 Superior Global Solutions, Inc. and Medwrite Inc. - imedx, Inc. - - - - No 11/6/2014 Vanta Bioscience LC - GVK Biosciences Private Limited - - - - No 11/6/2014 Accelerated Rehabilitation Centers, Ltd. OMERS Private Equity AthletiCo Ltd. - - - - Yes 11/6/2014 eclinical Insights, Inc. - eresearchtechnology, Inc. - - - - No 11/6/2014 erad Image Medical, Inc. RadNet, Inc. (NasdaqGM:RDNT) The Jackson Clinic - - - - No 11/6/2014 RAWCAR Group LLC - TIDI Products, LLC - - - - No 11/6/2014 Carroll Hospital Center, Inc. - LifeBridge Health, Inc. - - - - No 11/6/2014 Homestead Long Term Care Management LLC - Trinity Healthcare, LLC - - - - No 11/5/2014 Ximedica, LLC - SV Life Sciences Advisers, LLC - - - - Yes 11/5/2014 CorQuest Medical Inc. - Cardio3 BioSciences SA (ENXTBR:CARD) - - - - No 11/5/2014 Teplick Custom Vision - NVISION Laser Eye Centers Inc. - - - - No 11/5/2014 Neogenix LLC - CornerWorld Corporation - - - - No (OTCPK:CWRL) 11/5/2014 Central Jersey Blood Center, Inc. - Miller-Keystone Blood Center Inc. - - - - No 11/4/2014 CyVek, Inc. Connecticut Innovations, Inc. Research And Diagnostic Systems, Inc. 110.0 - - - No 11/4/2014 Shelby Elastics Of North Carolina, LLC - BeoCare Group, Inc. - - - - No 11/4/2014 Supna Technologies Corporation - HealthPort Incorporated - - - - No 11/4/2014 O&P Enterprises, Inc. - Curbell Plastics, Inc. - - - - No 11/4/2014 Hudson Seating & Mobility - National Seating & Mobility, Inc. - - - - No 11/3/2014 Desert Neonatology Associates, P.C. - AmSurg Corp. (NasdaqGS:AMSG) - - - - No 11/3/2014 25 Unit Assisted Living Community in Greater Portland - National Health Investors Inc. (NYSE:NHI) 5.7 - - - No Insert Footnote Here PAGE 13
M&A DETAIL Announced U.S. Healthcare & Life Sciences M&A cont. Enterprise Enterprise Value / LTM Private Equity Announced Target Seller Buyer Value ($mm) Sales EBITDA EBIT Involvement 11/3/2014 23 US Generic Drug Products - IDT Australia Limited (ASX:IDT) 18.0 - - - No 11/3/2014 101 Unit Assisted Living and Memory Care - National Health Investors Inc. 18.1 - - - No Community in Middleton, Ohio (NYSE:NHI); Bickford Senior Living, L.L.C. 11/3/2014 LDM Group, LLC - PDR Network, LLC - - - - No 11/3/2014 Mountain Home Medical, Inc. - American Medical Alert Corp. - - - - No 11/3/2014 Oral-B Laboratories, Minute-Foam, Centrays, Oral-B Laboratories Young Dental Manufacturing, LLC - - - - No Centwins Trays and SUPA Disposable Prophy Angles 11/3/2014 Micron Technologies, Inc. Arlington Capital Partners Catalent, Inc. (NYSE:CTLT) - - - - Yes 11/3/2014 OrthoCarolina Mooresville - OrthoCarolina, P.A. - - - - No 11/2/2014 Covance Inc. (NYSE:CVD) - Laboratory Corp. of America Holdings 5,677.4 2.3x 13.6x 20.0x No (NYSE:LH) 11/1/2014 Advance Medical Staffing, Inc. - Advantage Home Care, Inc. - - - - No Insert Footnote Here PAGE 14
OUR GROUP Harris Williams & Co. has a broad range of industry expertise, which create powerful opportunities. Our clients benefit form our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website at www.harriswilliams.com/industries Aerospace, Defense & Government Services Building Products & Materials Business Services Consumer Industrials Energy & Power Healthcare & Lifesciences Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston Two International Place 24th Floor Boston, Massachusetts 02110 Phone: +1 (617) 482-7501 Fax: +1 (617) 482-7503 Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio 44114 Phone: +1 (216) 689-2400 Fax: +1 (216) 689-2401 Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota 55402 Phone: +1 (612) 359-2700 Fax: +1 (612) 359-2701 UNITED STATES Philadelphia 1600 Market Street 21st Floor Philadelphia, Pennsylvania 19103 Phone: +1 (267) 675-5900 Fax: +1 (267) 675-5901 Richmond (U.S. Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia 23219 Phone: +1 (804) 648-0072 Fax: +1 (804) 648-0073 San Francisco 575 Market Street 31st Floor San Francisco, California 94105, USA Phone: +1 (415) 288-4260 Fax: +1 (415) 288-4269 EUROPE Frankfurt Bockenheimer Landstrasse 33-35 60325 Frankfurt Germany Phone: +49 069 3650638 00 Fax: +49 069 3650638 01 London 63 Brook Street London W1K 4HS, England Phone: +44 (0) 20 7518 8900 Fax: +44 (0) 20 7526 2187 Beijing Hong Kong Mumbai NETWORK OFFICES Shanghai New Delhi PAGE 15
HARRIS WILLIAMS & CO. HEALTHCARE & LIFE SCIENCES SOURCES Capital IQ. Thomson Financial. S&P. Reuters. Bloomberg. Irving Levin Associates. DISCLOSURES Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS 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 AT THE ABOVE ADDRESSES OR NUMBERS. The information and views contained in this report were prepared by Harris Williams & Co. ( Harris Williams ). 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. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 2014 Harris Williams & Co., all rights reserved. PAGE 16