HEALTHCARE & LIFE SCIENCES GROUP02/25/15 Celldex Therapeutics Inc CLDX Follow-On 200.1 02/04/15...

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HEALTHCARE & LIFE SCIENCES GROUP

0

INDUSTRY UPDATE │ MARCH 2015


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WHATWE’RE READING

1

CONTENTS

PUBLIC MARKETS OVERVIEW

EQUITY MARKETS OVERVIEW

M&A OVERVIEW

DEBT CAPITAL MARKETS OVERVIEW

HEALTHCARE & LIFE SCIENCES TRADING STATISTICS

M&A ACTIVITY

CONTACTS

UNITED STATES

Turner BredrupManaging [email protected]+1 (804) 915-0110

James ClarkManaging [email protected]+1 (804) 915-0119

Todd MorrisManaging [email protected]+1 (415) 217-3412

Cheairs PorterManaging [email protected]+1 (804) 915-0130

Geoff SmithManaging [email protected]+1 (804) 915-0195

Andy [email protected]+1 (415) 217-3419

Paul [email protected]+1 (804) 932-1326

Jacques FuVice [email protected]+1 (804) 915-0185

Andy HewlettVice [email protected]+1 (415) 217-3427

Bill KayserVice [email protected]+1 (804) 915-0180

Whit KnierVice [email protected]+1 (804) 932-1321

HEALTHCARE & LIFE SCIENCES

A new Gallup report released this month announced that the share ofAmericans without health insurance dropped to its lowest level in seven years.The report was released as the Affordable Care Act takes full effect and statesthat accepted the healthcare law’s Medicaid expansion significantlyoutperformed. In aggregate, Gallup data suggests a 3.5 percentage pointdrop in the share of Americans without health insurance from 2013 to 2014. It isimportant to further note that the five most populous states all experienceddeclines in the number of uninsured. The release of the Gallup report comes inadvance of the oral arguments of King v. Burwell, the United States SupremeCourt case in which the plaintiffs are challenging the IRS’ interpretation ofcertain statutory language in the Affordable Care Act regarding the availabilityof tax subsidies to purchase insurance coverage on federally-facilitatedinsurance marketplaces/exchanges. A link to the article can be found here. (Afree subscription to Modern Healthcare is required)

Data surrounding hospital discharges suggesting a troubling correlationbetween Medicare payments and the timing of the discharges. Under thecurrent Medicare rules, long-term acute-care hospitals generally receivesmaller payments for shorter stays. Once a patient hits a threshold length-of-stay, the corresponding payments jumps to a lump sum intended to cover thefull course of long-term treatment. The analysis by the WSJ charges that manylong-term hospitals discharge a disproportionate share of patients during thatwindow when hospitals stand to make the most. This data suggests dischargesare motivated by financial incentives rather than improvements in the patient’scondition. A link to the article can be found here. (A subscription to The WallStreet Journal Online may be required)

On Friday, February 20th, the Obama administration announced the extensionof the open enrollment period for people to sign up for health insurance planson HealthCare.gov through April. The purpose of the extension is to allowconsumers the chance to minimize tax penalties for going without coverage in2015. The temporary move aligns with many voices calling for a morepermanent change to a spring enrollment (the administration has alreadyformalized the next official enrollment period to start Nov. 1, 2015 and end Jan.31, 2016). In conjunction with the enrollment extension, federal officialsannounced that some 800,000 people had been sent incorrect tax statementabout their coverage in 2014. The announcement regarding inaccurate formsadds to the list of technical difficulties experienced during the first openenrollment. A link to the article can be found here. (A subscription to The WallStreet Journal Online may be required)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MARCH 2015

http://www.harriswilliams.com/

mailto:[email protected]











http://www.modernhealthcare.com/article/20150224/NEWS/302249969/uninsured-rate-hit-new-low-in-2014-survey

http://www.wsj.com/article_email/hospital-discharges-rise-at-lucrative-times-1424230201-lMyQjAxMTE1ODExODAxOTg3Wj

http://www.wsj.com/articles/obama-administration-extends-health-law-sign-up-through-tax-filing-season-1424444645

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PUBLICMARKETS OVERVIEW

2

INDUSTRY UPDATE

HEALTHCARE & LIFE SCIENCES GROUP │ MARCH 2015

Key Trading Statistics (detail begins on page 6)

Public Company Sector Performance(12-month % change in stock price)

Contract Pharma Manufacturing

HMO - Medical

Home Care, Hospice, and Home Infusion

Disease Management

Clinical Laboratories

Surgicenters / Rehabilitation

Health Care Staffing

Durable Medical Equipment

Dental Products

Acute-Care Hospitals

Medical / Surgical / Dental Supplies & Distribution

HW&Co. HCLS Composite Index

Contract Research Organizations

Medical Devices and Products

Dialysis Services

Physician Practice Management

S&P 500

Diagnostic Imaging

Long-Term Care

Specialty Pharmacy Management

Life Sciences Tools

Information Services

Emergency Services

Assisted Living

Specialty Pharmacy

Specialty Managed Care

(30.0%) (20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Change in Stock Price

3 mos. 12 mos. Revenue EBITDA Revenue EBITDA

Clinical Laboratories 3 $29,564 20.4% 32.9% 1.8x 9.8x 1.7x 8.9x

Contract Pharma Manufacturing 3 11,926 37.3% 62.8% 2.9x 14.7x 2.8x 13.4x

Contract Research Organizations 8 29,428 14.1% 20.0% 2.5x 15.0x 2.3x 12.7x

Disease Management 2 8,190 28.2% 34.0% 2.1x 13.8x 2.0x 12.3x

Emergency Serv ices 1 2,719 18.9% 2.2% 2.7x 10.3x 2.5x 9.3x

Healthcare Staffing 4 9,083 24.4% 27.8% 1.2x 15.9x 1.1x 12.8x

HMO - Medical 9 295,625 16.8% 53.0% 0.8x 10.1x 0.7x 9.2x

Information Serv ices 12 39,029 9.9% 3.9% 6.9x 22.4x 4.4x 16.6x

Specialty Managed Care 3 5,861 (9.4%) (13.7%) 1.4x 7.4x 1.4x 4.3x

Specialty Pharmacy 1 1,731 14.6% NM 0.8x NA 0.6x NM

Specialty Pharmacy Management 4 94,706 6.3% 11.1% 0.7x 11.8x 0.7x 11.0x

Dental Products 3 124,917 5.3% 25.5% 3.5x 14.5x 3.5x 13.7x

Durable Medical Equipment 3 12,382 20.0% 26.3% 1.8x 14.4x 1.7x 16.8x

Life Sciences Tools 4 114,008 (0.1%) 4.1% 2.7x 13.2x 3.4x 14.0x

Medical Devices and Products 14 690,287 6.3% 19.1% 3.6x 13.6x 3.6x 12.8x

Medical / Surgical / Dental Supplies & Distribution 6 134,154 6.4% 22.5% 0.3x 14.1x 0.3x 12.1x

Acute-Care Hospitals 4 105,479 2.8% 24.0% 1.2x 8.4x 1.1x 7.7x

Assisted Liv ing 3 14,621 (0.4%) 1.1% 3.6x 21.4x 2.5x 14.5x

Diagnostic Imaging 3 10,611 4.5% 11.5% 1.7x 8.5x 2.1x 10.6x

Dialysis Serv ices 2 58,621 4.0% 16.4% 2.0x 10.9x 1.9x 10.3x

Home Care, Hospice, and Home Infusion 6 5,356 13.2% 36.9% 1.1x 12.5x 1.1x 10.5x

Long-Term Care 3 6,358 6.6% 11.3% 1.0x 11.2x 0.9x 8.0x

Physician Practice Management 2 8,196 9.3% 15.4% 2.8x 13.0x 2.6x 12.0x

Behavioral Health / Management 6 24,475 10.7% 31.2% 1.4x 10.0x 1.3x 9.3x

Surgicenters / Rehabilitation 5 17,111 6.7% 28.9% 2.4x 11.9x 1.9x 9.5x

Payer, Provider, & Pharmacy Support Serv ices 50 $527,863 13.4% 38.2% 1.8x 12.0x 1.4x 10.4x

Products & Devices 30 $1,075,749 3.9% 20.5% 3.5x 13.8x 3.2x 12.5x

Provider-Based Serv ices 34 $250,828 5.3% 24.9% 2.1x 11.4x 1.8x 10.0x

HW&Co. HCLS Composite Index 114 $1,854,440 11.1% 21.2% 2.9x 13.1x 2.6x 11.7x

S&P 500 1.5% 13.5%

Pro

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&

De

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Pro

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Ba

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Se

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Median TEV/

Forward MulitplesSectorNumber of

Companies

Aggregate

Enterprise Value

($ mm)

Median TEV/

LTM Multiples

Pa

ye

r, P

rov

ide

r, &

Ph

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ac

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Su

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es

PAGE |

EQUITYMARKETS OVERVIEW

3

INDUSTRY UPDATE


Healthcare & Life Sciences Industry Stock Performance

Top 25 Equity Offerings(by proceeds)

203.3%

154.1%

170.5%

40

60

80

100

120

140

160

180

200

220

Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15

S&P 500 Dow Jones U.S. Health Care Index HW&Co. HCLS Index

Closing Date Issuer Ticker Transaction Type

Gross Proceeds

($ mm)

02/25/15 Actavis PLC ACT Convertible 5,060.0

02/10/15 Wright Medical Group Inc WMGI Convertible 632.5

02/12/15 Inovalon Holdings INOV IPO 600.0

02/18/15 Neurocrine Biosciences Inc NBIX Follow-On 287.5

02/04/15 Intercept Pharmaceuticals Inc ICPT Follow-On 202.4

02/25/15 AMAG Pharmaceuticals Inc AMAG Follow-On 201.3

02/25/15 Celldex Therapeutics Inc CLDX Follow-On 200.1

02/04/15 Ultragenyx Pharmaceutical Inc RARE Follow-On 186.3

02/25/15 Relypsa Inc RLYP Follow-On 172.7

02/11/15 Achillion Pharmaceuticals Inc ACHN Follow-On 141.5

02/02/15 K2M Group Holdings Inc KTWO Follow-On 130.3

02/24/15 Xencor Inc XNCR Follow-On 122.9

02/12/15 Inv itae Corp NVTA IPO 116.8

02/11/15 The Ensign Group Inc ENSG Follow-On 102.5

02/03/15 ZIOPHARM Oncology Inc ZIOP Follow-On 100.6

02/05/15 Immunomedics Inc IMMU Convertible 100.0

02/12/15 Idera Pharmaceuticals Inc IDRA Follow-On 86.3

02/11/15 Atara Biotherapeutics Inc ATRA Follow-On 74.7

02/26/15 Lion Biotechnologies Inc LBIO Follow-On 73.6

02/26/15 Tandem Diabetes Care Inc TNDM Follow-On 69.4

02/25/15 Curis Inc CRIS Follow-On 69.0

02/13/15 Bellerophon Therapeutics LLC BLPH IPO 60.0

02/11/15 TherapeuticsMD Inc TXMD Follow-On 55.0

02/17/15 Inotek Pharmaceuticals Corp ITEK IPO 40.0

02/27/15 Momenta Pharmaceuticals Inc MNTA Follow-On 38.7

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M&A OVERVIEW

4

INDUSTRY UPDATE


Announced Healthcare & Life Sciences M&A

Healthcare & Life Sciences M&A Trends

Announced Private Equity M&A Activity

QUARTERLY M&A ACTIVITY

MIDDLE MARKET HEALTHCARE TRANSACTION HIGHLIGHTS

ANNOUNCED HEALTHCARE & LIFE SCIENCES TRANSACTIONS

MEDIAN HEALTHCARE & LIFE SCIENCES TRANSACTION MULTIPLES

PEG INVESTMENTS BY SEGMENT (LAST 3 YEARS) PEG INVESTMENTS AND EXITS

Note: Transactions based on publicly available information

LTM DEAL STATISTICS

Aggregate Number Median Transaction Multiples

Value ($bn) of Deals TEV/Rev TEV/EBITDA

$258.2 1,204 2.27x 13.3x

HC&LS Industry Number of

Segment Companies

Biotechnology 3

Healthcare Technology 17

Healthcare Distributors 7

Healthcare Equipment 20

Healthcare Facilities 45

Healthcare Serv ices 46

Healthcare Supplies 10

Life Sciences Tools & Serv ices 16

Managed Healthcare 3

Pharmaceuticals 20

$110.6

$141.4

$101.6 $108.2

$236.6

$44.0

0

200

400

600

800

1,000

1,200

1,400

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2010 2011 2012 2013 2014 2015YTD

Nu

mb

er o

f Tran

sac

tion

sAg

gre

ga

te T

ran

sac

tio

n V

alu

e

($ in

billio

ns)

Aggregate Deal Value Number of Transactions

12.8x

11.1x 10.9x 10.0x

13.6x

16.9x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

0.0x

3.0x

6.0x

9.0x

12.0x

15.0x

18.0x

21.0x

2010 2011 2012 2013 2014 2015YTD

EV

/ LTM R

ev

en

ue

Mu

ltipleE

V /

LTM

EB

ITD

A M

ultip

le

TEV / LTM EBITDA TEV / LTM Sales

219 229 221

291

200 209

304

248

304290 279

292

195

1120

12

22

1612

18

15

22

1411

15

5

0

50

100

150

200

250

300

350

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

Nu

mb

er

of Tr

an

sac

tio

ns

PEG Acquirer Strategic Acquirer

69

94

113

79

42

7165 65

61 62

5

60 62

95

49 50

80

120

139144 143

16

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015YTD

Nu

mb

er

of Tr

an

sac

tio

ns

Number of Investments Number of Exits

Announced Target Buyer

2/26/2015 Healthcare Solutions, Inc. Catamaran Corporation (TSX:CCT)

2/26/2015 BioRx, LLC Diplomat Pharmacy, Inc. (NYSE:DPLO)

2/24/2015 Branch Medical Group, Inc. Globus Medical, Inc. (NYSE:GMED)

2/23/2015 Summit Medical, Inc. Shore Capital Partners, LLC

2/18/2015 Adv ancedCath Inc. TE Connectiv ity Ltd. (NYSE:TEL)

2/13/2015 Aptalis Pharmatech, Inc. TPG Capital, L.P.

2/10/2015 National Hospice Holdings, LLC Hospice Compassus, Inc.

2/10/2015 Community Allied Behav ioral Health, Inc. Lewis County Mental Health Association

2/5/2015 Hospira Inc. (NYSE:HSP) Pfizer Inc. (NYSE:PFE)

2/5/2015 SoftWriters, Inc. Roper Industries, Inc.

2/3/2015 Cardinal Hill Rehabilitation Hospital HEALTHSOUTH Corp. (NYSE:HLS)

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DEBT CAPITALMARKETS OVERVIEW

5

INDUSTRY UPDATE


Key Credit Statistics

QUARTERLY HEALTHCARE LOAN VOLUME AVERAGE SPREAD ON HEALTHCARE LOANS

Select Healthcare & Life Sciences Debt Offerings(by deal amount)

CREDIT STATISTICS AVERAGE SECONDARY SPREAD

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2008 2009 2010 2011 2012 2013 2014A

ve

rag

e S

pre

ad

Ov

er

LIB

OR

Revolving Credit / Term Loan A Weighted-Average Institutional

$0

$3

$6

$9

$12

$15

$18

$21

$24

4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14

Loa

n V

olu

me

by

Qu

art

er

($ in

billio

ns)

Pro Rata Institutional

0.0x

2.0x

4.0x

6.0x

Debt/EBITDA Senior Debt/EBITDA EBITDA/Cash

Interest

EBITDA -

Capex/Cash

Interest

EB

ITD

A M

ultip

le

2008 2009 2010 2011 2012 2013 2014

Date Effective Borrower Name Description Amount ($ mm) Tranche Rating Spread

02/02/15 Genesis Healthcare Corp Skilled nursing care facilit ies $550.0 Revolver/Line >= 1 Yr. NR / NR L+ 325

02/11/15 Acadia Healthcare Psychiatric hospitals 500.0 Term Loan B B- / B3 L+ 350

02/02/15 Curo Health Serv ices Inc General medical & surgical hospitals 380.0 Term Loan B B / B2 L+ 550

02/17/15 Epic Health Serv ices Inc Home health care serv ices 185.0 Term Loan B B / NR L+ 475

02/10/15 Hospice Compassus Intermediate care facilit ies 180.0 Term Loan B NR / NR L+ 475

02/12/15 Almost Family Inc Home health care serv ices 175.0 Revolver/Line >= 1 Yr. NR / NR L+ 225

02/24/15 National MENTOR Inc Intermediate care facilit ies 55.0 Term Loan B NR / B1 L+ 325

02/26/15 Presbyterian Intercommunity Health General medical & surgical hospitals 55.0 Revolver/Line >= 1 Yr. NR / NR L+ 75

02/27/15 Civ itas Solutions Inc Home health care serv ices 55.0 Term Loan B NR / NR L+ 325

02/04/15 Sterling Healthcare Holdings LLC Medical laboratories 49.5 Term Loan NR / NR L+ 475

02/02/15 Curo Health Serv ices Inc General medical & surgical hospitals 45.0 Revolver/Line >= 1 Yr. B / B2 N/A

02/17/15 Epic Health Serv ices Inc Home health care serv ices 45.0 Term Loan B / NR L+ 875

02/10/15 Hospice Compassus Intermediate care facilit ies 30.0 Revolver/Line >= 1 Yr. NR / NR L+ 475

02/17/15 Epic Health Serv ices Inc Home health care serv ices 25.0 Revolver/Line >= 1 Yr. B / NR L+ 475

02/02/15 MCNA Health Care Holdings LLC Offices & clinics of medical doctors 10.0 Term Loan A NR / NR L+ 175

02/04/15 Sterling Healthcare Holdings LLC Medical laboratories 8.5 Revolver/Line >= 1 Yr. NR / NR L+ 475

L + 0

L + 200

L + 400

L + 600

L + 800

L + 1000

4Q08 3Q09 2Q10 1Q11 4Q11 3Q12 2Q13 1Q14 4Q14

Av

era

ge

Sp

rea

d O

ve

r LI

BO

R

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6

INDUSTRY UPDATE


Payor, Provider, & Pharmacy Support Services

As of February 27, 2015.

Stock Price

% Change 52 Week

2/27/2015 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical Laboratories

Bio-Reference Laboratories Inc. $34.94 22.9% 36.8% $35.57 $24.19 $970 $55 $22 $1,008 $860 $115 $89 Jan-15 Oct-14 $939 $126 $101 1.2x 8.7x 1.1x 8.0x

Laboratory Corp. of America Holdings 123.03 20.4% 32.2% 124.57 92.50 12,340 3,030 580 14,807 6,012 1,168 961 Dec-14 Dec-14 8,529 1,664 1,236 2.5x 12.7x 1.7x 8.9x

Quest Diagnostics Inc. 70.14 8.9% 32.9% 72.86 51.86 10,122 3,790 192 13,749 7,435 1,409 1,095 Dec-14 Dec-14 7,625 1,518 1,200 1.8x 9.8x 1.8x 9.1x

Number of Companies 3 Median: 20.4% 32.9% Total $23,431 $29,564 $14,306 $17,092 1.8x 9.8x 1.7x 8.9x

Market Cap. Weighted Average: 15.5% 32.7% 2.1x 11.3x 1.7x 8.9x

Contract Pharma Manufacturing

Akorn, Inc. $53.81 37.3% 100.8% $55.86 $20.52 $5,802 $1,125 $71 $6,849 $602 $215 $156 Dec-14 Dec-14 $972 $455 $427 11.4x 31.9x 7.0x 15.1x

Cambrex Corporation. 34.25 47.8% 62.8% 34.93 15.76 1,065 60 46 1,080 374 82 59 Dec-14 Dec-14 427 105 80 2.9x 13.1x 2.5x 10.3x

West Pharmaceutical Serv ices, Inc. 54.72 5.0% 19.5% 55.29 39.11 3,912 340 255 3,997 1,421 272 182 Dec-14 Dec-14 1,448 299 194 2.8x 14.7x 2.8x 13.4x



Contract Research Organizations

Albany Molecular Research Inc. $16.22 2.3% 0.9% $23.95 $13.73 $529 $160 $47 $642 $277 $33 $16 Dec-14 Dec-14 $362 $66 $43 2.3x 19.3x 1.8x 9.8x

Charles River Laboratories International, Inc. 76.67 18.4% 26.7% 77.17 49.60 3,628 778 160 4,262 1,298 289 196 Dec-14 Dec-14 1,332 330 236 3.3x 14.8x 3.2x 12.9x

ICON Public Limited Company 69.01 25.4% 45.5% 70.03 35.33 4,249 0 0 4,000 1,503 262 211 Dec-14 Dec-14 1,652 317 262 2.7x 15.3x 2.4x 12.6x

INC Research Holdings, Inc. 29.93 NM NM 31.84 19.61 1,833 420 126 2,127 810 149 95 Dec-14 Dec-14 888 166 144 2.6x 14.2x 2.4x 12.8x

PAREXEL International Corporation 64.46 11.1% 18.6% 65.38 41.79 3,532 347 302 3,577 1,994 297 215 Dec-14 Jun-14 2,059 309 224 1.8x 12.0x 1.7x 11.6x

PRA Health Sciences, Inc. 31.52 NM NM 31.99 18.47 1,885 968 85 2,749 1,267 154 58 Dec-14 Dec-14 1,362 203 180 2.2x 17.8x 2.0x 13.5x

Quintiles Transnational Holdings Inc. 64.98 12.1% 21.5% 66.28 46.27 8,078 2,308 867 9,518 4,166 687 599 Dec-14 Dec-14 4,376 780 657 2.3x 13.8x 2.2x 12.2x

WuXi PharmaTech (Cayman) Inc. 39.95 16.2% 2.2% 42.31 29.84 2,797 214 211 2,553 674 148 104 Dec-14 Dec-14 780 200 150 3.8x 17.2x 3.3x 12.8x



Disease Management

Alere Inc. $45.47 14.2% 23.9% $45.65 $31.94 $3,799 $3,725 $378 $7,146 $2,577 $500 $164 Dec-14 Dec-14 $2,615 $557 $500 2.8x 14.3x 2.7x 12.8x

Healthways Inc. 22.38 42.1% 44.1% 23.30 13.99 795 252 2 1,045 742 79 25 Dec-14 Dec-14 810 88 35 1.4x 13.3x 1.3x 11.8x



Emergency Services

Air Methods Corp. $52.99 18.9% 2.2% $60.74 $40.31 $2,081 $645 $13 $2,719 $1,005 $265 $184 Dec-14 Dec-14 $1,074 $293 $211 2.7x 10.3x 2.5x 9.3x



Healthcare Staffing

AMN Healthcare Serv ices Inc. $22.56 30.6% 63.4% $23.23 $10.35 $1,063 $169 $13 $1,218 $1,036 $84 $68 Dec-14 Dec-14 $1,297 $112 $85 1.2x 14.5x 0.9x 10.9x

Cross Country Healthcare, Inc. 12.96 26.2% 25.1% 13.51 5.26 405 74 5 463 618 16 8 Dec-14 Dec-14 789 33 23 0.7x 29.4x 0.6x 14.0x

On Assignment Inc. 38.21 22.7% 12.3% 39.86 25.97 2,000 415 32 2,384 1,860 190 152 Dec-14 Dec-14 1,869 203 151 1.3x 12.5x 1.3x 11.7x

Team Health Holdings, Inc. 59.27 3.6% 30.5% 63.13 43.18 4,230 805 20 5,018 2,820 292 215 Dec-14 Dec-14 3,345 363 244 1.8x 17.2x 1.5x 13.8x



TEV/ Fwd MultiplesForward Twelve Month

EstimateCompany NameLTM

Period

Latest

FYE Date

TEV/ LTM MultiplesEquity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)

Latest Twelve Months

(LTM)

PAGE |


7

INDUSTRY UPDATE




Stock Price

% Change 52 Week


HMO - Medical

Commercial:

Aetna Inc. $99.55 14.5% 39.3% $101.98 $66.85 $35,012 $9,610 $1,420 $43,270 $58,003 $4,737 $4,108 Dec-14 Dec-14 $62,801 $5,092 $4,622 0.7x 9.1x 0.7x 8.5x

Anthem, Inc. 146.45 15.4% 64.0% 148.76 89.03 39,071 16,668 2,152 53,587 73,874 5,572 5,050 Dec-14 Dec-14 78,999 5,036 4,593 0.7x 9.6x 0.7x 10.6x

Cigna Corp. 121.63 19.2% 56.3% 122.42 73.47 31,434 5,152 1,420 35,271 34,914 3,885 3,569 Dec-14 Dec-14 38,078 3,904 3,480 1.0x 9.1x 0.9x 9.0x

Health Net, Inc. 57.35 11.6% 71.3% 58.91 30.39 4,410 500 869 4,041 14,009 349 320 Dec-14 Dec-14 17,220 578 575 0.3x 11.6x 0.2x 7.0x

Humana Inc. 164.38 19.6% 48.6% 166.20 103.89 24,593 4,159 1,935 26,817 48,500 2,620 2,362 Dec-14 Dec-14 54,650 3,190 2,831 0.6x 10.2x 0.5x 8.4x

UnitedHealth Group Incorporated 113.63 15.8% 49.5% 116.58 73.61 108,368 17,461 7,495 119,722 130,474 11,330 10,274 Dec-14 Dec-14 141,595 12,564 10,969 0.9x 10.6x 0.8x 9.5x



Government:

Centene Corp. $61.46 24.6% 95.6% $62.27 $27.56 $7,303 $893 $1,546 $6,797 $15,689 $575 $486 Dec-14 Dec-14 $21,727 $754 $646 0.4x 11.8x 0.3x 9.0x

Molina Healthcare, Inc. 63.69 25.2% 70.3% 64.33 32.86 3,176 905 1,539 2,543 9,372 269 193 Dec-14 Dec-14 14,283 464 355 0.3x 9.5x 0.2x 5.5x

WellCare Health Plans, Inc. 90.81 22.6% 48.0% 91.88 55.43 3,991 900 1,314 3,578 12,960 243 213 Dec-14 Dec-14 14,002 528 453 0.3x 14.7x 0.3x 6.8x



Information Services

Data/Analytics:

Castlight Health, Inc. $7.29 (42.0%) NM $41.95 $6.52 $658 $0 $17 $466 $46 ($85) ($86) Dec-14 Dec-14 $77 ($68) ($68) 10.2x NM 6.1x NM

Inovalon Holdings, Inc. 31.06 NM NM 33.75 25.89 4,488 300 132 4,656 336 114 94 Sep-14 Dec-13 NA NA NA 13.9x NM NA NA

National Research Corp. 32.75 (3.1%) (17.9%) 44.95 30.20 405 8 40 367 99 32 28 Dec-14 Dec-14 104 31 27 3.7x 11.4x 3.5x 11.7x

Number of Companies 3 Median: (22.6%) (17.9%) Total $5,551 $466 $481 $180 10.2x 11.4x 4.8x 11.7x

Market Cap. Weighted Average: (5.2%) (1.3%) 12.7x 11.4x 5.1x 11.7x

eHealth:

WebMD Health Corp. $44.05 19.2% (2.9%) $53.30 $34.48 $1,601 $952 $707 $1,847 $580 $113 $96 Dec-14 Dec-14 $627 $185 $112 3.2x 16.3x 2.9x 10.0x

Number of Companies 1 Median: 19.2% (2.9%) Total $1,601 $1,847 $580 $627 3.2x 16.3x 2.9x 10.0x

Market Cap. Weighted Average: 19.2% (2.9%) 3.2x 16.3x 2.9x 10.0x

Hospital/Physician:

Allscripts Healthcare Solutions, Inc. $12.01 (0.4%) (35.3%) $19.68 $11.00 $2,164 $576 $53 $2,687 $1,378 $57 ($35) Dec-14 Dec-14 $1,438 $239 $140 2.0x NM 1.9x 11.3x

Athenahealth, Inc. 127.07 8.4% (36.8%) 206.19 97.30 4,854 209 74 4,947 753 62 1 Dec-14 Dec-14 920 160 81 6.6x NM 5.4x 31.0x

Cerner Corporation 72.06 13.1% 17.7% 73.24 48.39 24,687 130 635 23,396 3,313 962 763 Jan-15 Jan-15 4,879 1,497 1,108 7.1x 24.3x 4.8x 15.6x

Computer Programs & Systems Inc. 52.60 (10.2%) (24.3%) 71.89 47.40 590 0 24 555 205 53 50 Dec-14 Dec-14 201 50 45 2.7x 10.4x 2.8x 11.1x

HMS Holdings Corp. 17.54 (16.1%) (14.3%) 23.69 15.10 1,540 198 133 1,604 443 88 34 Dec-14 Dec-14 475 119 60 3.6x 18.2x 3.4x 13.5x

MedAssets, Inc. 19.21 (1.8%) (23.3%) 26.09 17.00 1,156 890 12 2,034 720 215 107 Dec-14 Dec-14 759 229 83 2.8x 9.4x 2.7x 8.9x

Merge Healthcare Incorporated 4.00 25.8% 59.4% 4.73 1.97 386 225 42 570 212 36 25 Dec-14 Dec-14 249 55 41 2.7x 15.9x 2.3x 10.4x

Quality Systems Inc. 17.38 20.0% (0.8%) 18.89 13.01 1,048 0 114 923 477 43 30 Dec-14 Mar-14 487 69 38 1.9x 21.5x 1.9x 13.3x

Number of Companies 8 Median: 4.0% (18.8%) Total $36,424 $36,717 $7,501 $9,409 2.8x 17.1x 2.7x 12.3x


Forward Twelve Month

EstimateTEV/ LTM Multiples TEV/ Fwd Multiples

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE DateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

PAGE |


8

INDUSTRY UPDATE




Stock Price

% Change 52 Week


Specialty Managed Care

Assurant Inc. $61.27 (9.4%) (5.6%) $69.94 $59.82 $4,219 $1,267 $1,319 $4,168 $10,382 $935 $803 Dec-14 Dec-14 $10,313 $980 $636 0.4x 4.5x 0.4x 4.3x

CorVel Corporation 35.43 1.1% (21.7%) 53.35 28.08 722 0 31 691 491 67 49 Dec-14 Mar-14 494 NA NA 1.4x 10.3x 1.4x NA

HealthEquity, Inc. 20.27 (13.9%) NM 27.74 16.11 1,110 0 108 1,002 80 22 16 Oct-14 Jan-14 87 24 17 12.5x NM 11.6x NM

Number of Companies 3 Median: (9.4%) (13.7%) Total $6,052 $5,861 $10,952 $10,894 1.4x 7.4x 1.4x 4.3x


Specialty Pharmacy

Diplomat Pharmacy, Inc. $30.00 14.6% NM $32.60 $15.45 $1,543 $0 $18 $1,731 $2,215 $25 $20 Dec-14 Dec-14 $2,796 $46 $37 0.8x NM 0.6x NM

Number of Companies 1 Median: 14.6% NM Total $1,543 $1,731 $2,215 $2,796 0.8x NA 0.6x NM

Market Cap. Weighted Average: 14.6% NM 0.8x NM 0.6x NM

Specialty Pharmacy Management

Catamaran Corporation $49.88 (2.4%) 8.4% $54.19 $32.38 $10,349 $1,427 $1,012 $10,741 $21,582 $846 $569 Dec-14 Dec-14 $24,175 $931 $741 0.5x 12.7x 0.4x 11.5x

Express Scripts Holding Company 84.79 3.0% 13.7% 88.83 64.64 61,634 13,568 1,833 73,379 100,887 6,689 4,679 Dec-14 Dec-14 103,317 7,046 6,480 0.7x 11.0x 0.7x 10.4x

Omnicare Inc. 76.74 9.6% 29.8% 79.70 56.41 7,453 2,116 154 9,415 6,418 742 609 Dec-14 Dec-14 6,679 780 669 1.5x 12.7x 1.4x 12.1x

PharMerica Corporation 25.00 12.9% (1.2%) 30.48 19.42 818 351 33 1,172 1,895 123 83 Dec-14 Dec-14 1,983 144 98 0.6x 9.5x 0.6x 8.1x



TEV/ LTM Multiples TEV/ Fwd MultiplesCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


Estimate

PAGE |


9

INDUSTRY UPDATE


Products & Devices

As of February 27, 2015.(1) To be acquired by Pfizer in a $16.3 billion transaction announced February 5, 2015.

Stock Price

% Change 52 Week


Dental Products

3M Company $168.65 6.5% 25.5% $169.98 $129.70 $107,051 $6,896 $1,897 $111,457 $31,821 $8,543 $7,135 Dec-14 Dec-14 $32,265 $8,861 $7,430 3.5x 13.0x 3.5x 12.6x

DENTSPLY International Inc. 53.01 (2.8%) 16.8% 56.25 43.83 7,440 1,267 152 8,482 2,923 586 457 Dec-14 Dec-14 2,825 618 513 2.9x 14.5x 3.0x 13.7x

Sirona Dental Systems Inc. 90.82 5.3% 29.3% 93.51 69.82 5,266 80 368 4,979 1,165 269 230 Dec-14 Sep-14 1,165 346 292 4.3x 18.5x 4.3x 14.4x



Durable Medical Equipment

Hill-Rom Holdings, Inc. $47.92 4.0% 26.3% $49.33 $35.45 $2,708 $582 $114 $3,176 $1,758 $284 $188 Dec-14 Sep-14 $1,891 $297 $208 1.8x 11.2x 1.7x 10.7x

Invacare Corporation 18.97 23.8% (4.1%) 20.81 11.65 609 20 39 591 1,270 (4) (37) Dec-14 Dec-14 1,214 25 (0) 0.5x NM 0.5x 23.2x

ResMed Inc. 64.36 20.0% 45.6% 67.50 42.19 9,046 450 881 8,615 1,616 491 417 Dec-14 Jun-14 1,679 514 433 5.3x 17.5x 5.1x 16.8x



Life Sciences Tools

Agilent Technologies Inc. $42.21 (1.2%) (25.1%) $59.58 $37.68 $14,183 $1,658 $2,118 $13,726 $6,999 $1,242 $886 Jan-15 Oct-14 $4,087 $878 $751 2.0x 11.1x 3.4x 15.6x

Becton, Dickinson and Company 146.72 3.9% 27.5% 149.14 111.07 28,308 10,142 8,540 29,656 8,468 2,167 1,649 Dec-14 Sep-14 8,392 2,353 1,704 3.5x 13.7x 3.5x 12.6x

Thermo Fisher Scientific, Inc. 130.00 1.0% 4.1% 132.00 107.33 51,582 14,568 1,344 64,797 16,890 3,968 2,285 Dec-14 Dec-14 16,943 4,249 3,815 3.8x 16.3x 3.8x 15.2x

VWR Corporation 24.55 (5.8%) NM 27.14 20.60 3,225 2,112 121 5,829 4,375 459 329 Dec-14 Dec-14 4,428 459 374 1.3x 12.7x 1.3x 12.7x

Number of Companies 4 Median: (0.1%) 4.1% Total $97,297 $114,008 $36,732 $33,850 2.7x 13.2x 3.4x 14.0x


Medical Devices and Products

Abbott Laboratories $47.37 7.1% 19.1% $47.88 $36.65 $71,480 $7,845 $4,063 $74,978 $20,247 $4,397 $2,888 Dec-14 Dec-14 $20,919 $5,132 $4,095 3.7x 17.1x 3.6x 14.6x

Baxter International Inc. 69.15 (4.5%) 0.4% 77.31 65.95 37,519 9,305 2,925 43,934 16,671 4,276 3,271 Dec-14 Dec-14 16,083 3,823 3,053 2.6x 10.3x 2.7x 11.5x

Boston Scientific Corporation 16.90 31.9% 27.1% 17.01 11.10 22,486 4,262 587 26,158 7,308 1,675 950 Dec-14 Dec-14 7,429 1,878 1,200 3.6x 15.6x 3.5x 13.9x

CR Bard Inc. 169.14 1.2% 16.9% 180.35 132.81 12,561 1,480 960 13,080 3,324 979 813 Dec-14 Dec-14 3,379 1,011 841 3.9x 13.4x 3.9x 12.9x

Danaher Corp. 87.28 4.6% 13.3% 88.10 70.12 61,600 3,473 3,006 62,140 19,914 4,541 3,602 Dec-14 Dec-14 20,790 4,834 3,846 3.1x 13.7x 3.0x 12.9x

Hanger, Inc. 25.89 20.0% (27.1%) 37.60 18.25 890 540 5 1,425 1,061 156 117 Jun-14 Dec-13 1,071 162 116 1.3x 9.1x 1.3x 8.8x

Hologic Inc. 32.38 22.3% 48.9% 32.49 20.24 9,065 3,955 544 12,476 2,549 914 397 Dec-14 Sep-14 2,604 978 852 4.9x 13.6x 4.8x 12.8x

Hospira Inc.(1) 87.54 45.2% 103.2% 87.77 40.41 14,977 1,756 802 15,931 4,464 730 497 Dec-14 Dec-14 4,592 850 643 3.6x 21.8x 3.5x 18.7x

Johnson & Johnson 102.51 (4.4%) 12.2% 109.49 90.83 285,028 18,760 14,523 270,699 74,331 25,032 21,137 Dec-14 Dec-14 71,699 24,636 20,581 3.6x 10.8x 3.8x 11.0x

K2M Group Holdings, Inc. 20.49 7.7% NM 23.63 12.31 809 0 23 785 178 (15) (52) Sep-14 Dec-13 186 (10) (52) 4.4x NM 4.2x NM

Medtronic plc 77.59 5.6% 33.1% 79.45 55.85 110,087 28,826 17,231 107,765 17,410 5,703 4,859 Jan-15 Apr-14 28,167 9,061 8,033 6.2x 18.9x 3.8x 11.9x

Stryker Corporation 94.75 2.6% 16.7% 98.24 75.78 35,887 3,973 1,795 34,860 9,675 2,604 2,226 Dec-14 Dec-14 9,982 2,633 2,316 3.6x 13.4x 3.5x 13.2x

Teleflex Incorporated 121.69 2.3% 19.4% 123.09 99.56 5,043 1,068 303 5,811 1,827 411 300 Dec-14 Dec-14 1,836 487 391 3.2x 14.1x 3.2x 11.9x

Zimmer Holdings, Inc. 120.39 7.8% 26.4% 121.84 90.48 20,455 1,485 1,083 20,245 4,673 1,788 1,418 Dec-14 Dec-14 4,640 1,856 1,501 4.3x 11.3x 4.4x 10.9x



Medical / Surgical / Dental Supplies & Distribution

AmerisourceBergen Corporation $102.76 14.1% 51.1% $103.71 $62.55 $22,567 $1,996 $2,299 $22,264 $123,981 $1,407 $1,213 Dec-14 Sep-14 $133,995 $1,958 $1,776 0.2x 15.8x 0.2x 11.4x

Cardinal Health, Inc. 87.99 8.0% 22.5% 89.43 63.06 29,048 3,976 2,881 30,143 93,928 2,441 1,996 Dec-14 Jun-14 99,366 2,693 2,431 0.3x 12.3x 0.3x 11.2x

Henry Schein, Inc. 140.05 3.2% 17.9% 143.89 109.34 11,736 731 89 12,946 10,371 867 715 Dec-14 Dec-14 10,896 928 765 1.2x 14.9x 1.2x 13.9x

McKesson Corporation 228.70 9.8% 31.1% 231.55 162.90 53,252 10,394 4,587 60,592 173,870 3,921 2,969 Dec-14 Mar-14 180,459 4,738 4,066 0.3x 15.5x 0.3x 12.8x

Owens & Minor Inc. 35.66 4.3% 2.6% 36.35 31.55 2,249 609 57 2,800 9,440 238 197 Dec-14 Dec-14 9,884 282 221 0.3x 11.8x 0.3x 9.9x

Patterson Companies, Inc. 50.08 4.8% 22.6% 51.49 37.03 5,027 727 290 5,409 4,328 410 360 Jan-15 Apr-14 4,362 423 373 1.2x 13.2x 1.2x 12.8x



TEV/ LTM Multiples TEV/ Fwd MultiplesCash and

Equiv.Company Name

Equity

Mkt.

Value

Total Debt

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


Estimate

PAGE |


10

INDUSTRY UPDATE


Provider-Based Services


Stock Price

% Change 52 Week


Acute-Care Hospitals

Community Health Systems, Inc. $48.52 2.6% 14.8% $57.72 $34.55 $5,664 $16,984 $509 $22,750 $18,639 $2,737 $1,632 Dec-14 Dec-14 $20,249 $3,085 $1,856 1.2x 8.3x 1.1x 7.4x

HCA Holdings, Inc. 71.54 3.0% 38.9% 76.18 47.17 30,088 29,844 566 60,698 36,918 7,385 5,565 Dec-14 Dec-14 39,074 7,642 5,747 1.6x 8.2x 1.6x 7.9x

Lifepoint Hospitals Inc. 71.96 4.9% 33.2% 76.50 50.51 3,181 2,219 192 5,322 4,483 577 312 Dec-14 Dec-14 5,186 705 424 1.2x 9.2x 1.0x 7.6x

Tenet Healthcare Corp. 46.30 (4.0%) 5.1% 63.61 37.95 4,560 11,807 193 16,709 16,615 1,952 1,103 Dec-14 Dec-14 17,648 2,134 1,248 1.0x 8.6x 0.9x 7.8x



Assisted Living

Brookdale Senior Liv ing Inc. $37.51 6.1% 14.3% $37.54 $29.50 $6,883 $6,266 $104 $13,046 $3,344 $605 $71 Dec-14 Dec-14 $5,161 $898 $220 3.9x 21.6x 2.5x 14.5x

Capital Senior Liv ing Corp. 25.00 (0.4%) 1.1% 26.89 20.33 727 673 39 1,361 380 64 14 Dec-14 Dec-14 417 88 25 3.6x 21.4x 3.3x 15.4x

Five Star Quality Care Inc. 3.64 (17.3%) (37.6%) 6.09 3.23 177 77 25 214 1,103 20 (12) Sep-14 Dec-13 1,362 42 15 0.2x 10.6x 0.2x 5.1x

Number of Companies 3 Median: (0.4%) 1.1% Total $7,788 $14,621 $4,827 $6,940 3.6x 21.4x 2.5x 14.5x


Long-Term Care

Kindred Healthcare Inc. $21.22 6.6% (2.6%) $26.81 $16.94 $1,681 $2,877 $164 $4,338 $5,028 $343 $187 Dec-14 Dec-14 $7,261 $649 $471 0.9x 12.7x 0.6x 6.7x

National Healthcare Corp. 63.01 3.3% 24.8% 65.14 50.06 889 47 70 904 872 105 70 Dec-14 Dec-14 968 NA NA 1.0x 8.6x 0.9x NA

The Ensign Group, Inc. 44.07 10.2% 11.3% 47.78 26.02 1,106 68 50 1,117 1,027 99 73 Dec-14 Dec-14 1,198 120 99 1.1x 11.2x 0.9x 9.3x



Diagnostic Imaging

Alliance Healthcare Serv ices, Inc. $23.91 5.8% (22.4%) $35.40 $18.92 $253 $505 $39 $764 $437 $127 $60 Sep-14 Dec-13 NA NA NA 1.7x 6.0x NA NA

RadNet, Inc. 8.76 2.2% 358.6% 10.35 1.90 374 614 0 990 710 116 56 Sep-14 Dec-13 716 125 54 1.4x 8.5x 1.4x 8.0x

Varian Medical Systems, Inc. 92.97 4.5% 11.5% 95.70 76.73 9,304 525 904 8,858 3,076 658 594 Jan-15 Sep-14 3,196 672 606 2.9x 13.5x 2.8x 13.2x



Dialysis Services

DaVita HealthCare Partners Inc. $74.60 (2.0%) 9.7% $78.52 $66.60 $16,099 $8,505 $965 $24,321 $12,781 $2,400 $1,809 Dec-14 Dec-14 $13,600 $2,512 $1,899 1.9x 10.1x 1.8x 9.7x

Fresenius Medical Care AG & Co. KGAA 82.08 10.0% 23.1% 82.10 52.46 24,921 9,537 634 34,301 16,134 2,928 2,229 Dec-14 Dec-14 16,810 3,171 2,445 2.1x 11.7x 2.0x 10.8x



Home Care, Hospice, and Home Infusion

Home Care / Hospice:

Addus HomeCare Corporation $21.90 (4.5%) (21.9%) $29.45 $17.02 $238 $4 $13 $228 $313 $22 $18 Dec-14 Dec-14 $345 $27 $23 0.7x 10.4x 0.7x 8.3x

Almost Family Inc. 35.62 28.1% 28.4% 36.18 19.74 338 46 7 381 496 28 24 Dec-14 Dec-14 522 38 33 0.8x 13.7x 0.7x 9.9x

Amedisys Inc. 30.17 17.0% 73.2% 31.27 12.86 1,007 116 8 1,115 1,188 66 38 Dec-14 Dec-14 1,227 94 64 0.9x 16.8x 0.9x 11.9x

Chemed Corp. 116.48 6.3% 37.0% 117.36 80.94 1,980 148 14 2,113 1,456 197 171 Dec-14 Dec-14 1,513 222 186 1.5x 10.7x 1.4x 9.5x

LHC Group, Inc. 33.80 41.1% 41.9% 35.01 19.69 602 61 1 677 718 59 49 Dec-14 Dec-14 777 66 56 0.9x 11.5x 0.9x 10.2x



Home Infusion:

BioScrip, Inc. $6.11 (5.4%) (17.4%) $8.75 $5.26 $419 $424 $1 $843 $984 ($44) ($65) Dec-14 Dec-14 $1,088 $61 $27 0.9x NM 0.8x 13.9x

Number of Companies 1 Median: (5.4%) (17.4%) Total $419 $843 $984 $1,088 0.9x NM 0.8x 13.9x

Market Cap. Weighted Average: (5.4%) (17.4%) 0.9x NM 0.8x 13.9x

TEV/ Fwd MultiplesTEV/ LTM MultiplesCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


Estimate

PAGE |


11

INDUSTRY UPDATE


Provider-Based Services

As of February 27, 2015.(1) Figures are adjusted for minority interest.

Stock Price

% Change 52 Week


Physician Practice Management

Multispecialty / Primary Care:

IPC Healthcare, Inc. $43.24 (1.5%) (15.8%) $52.60 $36.12 $747 $80 $15 $812 $694 $73 $67 Dec-14 Dec-14 $755 $72 $65 1.2x 11.2x 1.1x 11.3x

Number of Companies 1 Median: (1.5%) (15.8%) Total $747 $812 $694 $755 1.2x 11.2x 1.1x 11.3x


Specialty:

MEDNAX, Inc. $71.47 10.5% 18.8% $72.39 $49.82 $6,867 $569 $48 $7,383 $2,439 $559 $513 Dec-14 Dec-14 $2,706 $611 $549 3.0x 13.2x 2.7x 12.1x



Behavioral Health / Management

AAC Holdings, Inc. $35.99 25.1% NM $38.43 $17.91 $759 $29 $49 $745 $122 $17 $12 Dec-14 Dec-14 $172 $35 $25 6.1x NM 4.3x 21.2x

Acadia Healthcare Company, Inc. 63.23 1.8% 24.5% 66.88 38.76 4,202 1,096 94 5,204 1,005 205 173 Dec-14 Dec-14 1,607 365 301 5.2x 25.3x 3.2x 14.3x

Civ itas Solutions, Inc. 18.99 12.4% NM 20.00 11.88 702 650 5 1,346 1,286 134 67 Dec-14 Sep-14 1,371 151 71 1.0x 10.0x 1.0x 8.9x

Magellan Health, Inc. 64.07 4.1% 5.6% 64.43 52.37 1,708 272 255 1,639 3,760 220 170 Dec-14 Dec-14 4,441 279 136 0.4x 7.4x 0.4x 5.9x

Providence Serv ice Corp. 46.00 24.1% 73.6% 49.41 23.91 729 192 137 784 1,304 62 42 Sep-14 Dec-13 1,444 84 45 0.6x 12.6x 0.5x 9.4x

Universal Health Serv ices Inc. 113.35 9.0% 37.9% 115.64 73.06 11,215 3,279 32 14,756 8,065 1,475 1,099 Dec-14 Dec-14 9,323 1,605 1,220 1.8x 10.0x 1.6x 9.2x



Surgicenters / Rehabilitation

Surgery Centers1:

AmSurg Corp. $60.10 15.9% 37.7% $60.97 $40.00 $2,851 $2,251 $208 $5,061 $1,622 $340 $294 Dec-14 Dec-14 $2,446 $537 NA 3.1x 14.9x 2.1x 9.4x

Surgical Care Affiliates, Inc. 32.48 (0.4%) 5.3% 34.36 26.55 1,252 692 9 1,868 851 146 96 Dec-14 Dec-14 929 171 NA 2.2x 12.8x 2.0x 10.9x



Rehabilitation:

HEALTHSOUTH Corp. $43.46 7.1% 33.3% $46.45 $31.56 $3,814 $2,132 $67 $6,203 $2,374 $583 $475 Dec-14 Dec-14 $2,922 $683 $547 2.6x 10.6x 2.1x 9.1x

Select Medical Holdings Corporation 13.56 (4.4%) 22.2% 16.17 10.95 1,779 1,575 3 3,398 3,020 353 284 Dec-14 Dec-14 3,147 374 289 1.1x 9.6x 1.1x 9.1x

US Physical Therapy Inc. 42.39 9.3% 28.6% 44.00 29.56 520 36 14 581 301 53 46 Dec-14 Dec-14 324 49 NA 1.9x 11.0x 1.8x 11.8x



TEV/ LTM Multiples TEV/ Fwd MultiplesTotal Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


EstimateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

PAGE |

M&A ACTIVITY

12

INDUSTRY UPDATE


Announced U.S. Healthcare & Life Sciences M&A

Enterprise Enterprise Value / LTM Private Equity

Announced Target Seller Buyer Value ($mm) Sales EBITDA EBIT Involvement

hoh18.75

2/28/2015 Lancaster General Health - University of Pennsylvania - School of

Medicine, Endowment Arm

- - - - No

2/27/2015 Samaritan Regional Health System - University Hospitals Cleveland Medical

Center Inc.

- - - - No

2/27/2015 PHT Corporation Rho Capital Partners, Inc. eResearchTechnology, Inc. - - - - Yes

2/27/2015 MGT Capital Investments, Inc. (AMEX:MGT) Hudson Bay Capital Management LP Tera Group, Inc. - - - - Yes

2/27/2015 IO Practiceware, Inc. - Eli Global, LLC - - - - No

2/26/2015 Bionik Laboratories Corp. - Bionik Laboratories Inc. - - - - No

2/26/2015 Healthcare Solutions, Inc., Delaware Lovett Miller & Co.; Audax Group, Inc.;

Brazos Private Equity Partners, LLC;

C&B Capital, L.P.

Catamaran Corporation (TSX:CCT) $405.0 - - - No

2/26/2015 BioRx, LLC PCR Holdings, Inc.; Symmetric Capital,

LLC

Diplomat Pharmacy, Inc. (NYSE:DPLO) $350.0 1.5x 15.2x - No

2/26/2015 Hospital Associates Inc. Almon Company Inc. Claflin Serv ice Company - - - - No

2/26/2015 American Peptide Company, Inc. ILS Inc. Bachem Americas, Inc. - - - - No

2/25/2015 Reflectance Medical Inc. - Sotera Wireless, Inc. - - - - No

2/25/2015 Ty Cobb Regional Medical Center, LLC Ty Cobb Healthcare System, Inc. St. Mary's Health Care System Inc. - - - - No

2/25/2015 Mineral Area Osteopathic Hospital, Inc. Capella Healthcare, Inc. Parkland Health Center, Farmington

Community

- - - - No

2/25/2015 DR Systems, Inc. Blue Sea L.L.C. Merge Healthcare Incorporated

(NasdaqGS:MRGE)

$76.2 - - - No

2/24/2015 Abeking Associates, L.P. and Westrum Hanover,

L.P. and One Boyertown Properties LP

Heritage Senior Liv ing, LLC Griffin-American Healthcare REIT I I I , Inc. $87.5 - - - No

2/24/2015 Bracor, Inc. Summer Street Capital Partners, L.L.C. National Health Industries, Inc. $50.9 0.7x - - Yes

2/24/2015 Branch Medical Group, Inc. - Globus Medical, Inc. (NYSE:GMED) $52.9 2.3x 5.8x - No

2/24/2015 ECI-LATAM Inc. - NGFC Equities Inc. $0.8 5.5x - - No

2/24/2015 ProNerve LLC Waud Capital Partners, L.L.C.; Boulder

Intraoperative Monitoring, LLC;

Colorado Intraoperative Monitoring,

LLC; Denver South Intraoperative

Monitoring, LLC; Eugene

Intraoperative Monitoring, LLC;

ProNerve Technologies, LLC; Riverside

Intraoperative Monitoring, LLC

Specialty Care Serv ices Group, LLC $35.0 - - - Yes

2/24/2015 Community Hospitals in McCall and Mountain

Home

- St. Luke's Health System Ltd. - - - - No

2/23/2015 El Paso Children's Hospital Corporation - El Paso County Hospital District - - - - No

2/23/2015 Midwest Medical Transport Company, LLC - Panorama Point Partners Limited - - - - No

2/23/2015 Polypore International Inc., Separations Media

Segment

Polypore International Inc. (NYSE:PPO) 3M Company (NYSE:MMM) $1,037.0 4.9x - - No

2/23/2015 Summit Medical, Inc. - Shore Capital Partners, LLC - - - - No

2/23/2015 MRLB International, Inc. - Crosstex International, Inc. $10.0 - - - No

2/23/2015 Flexus Biosciences, Inc. Kleiner Perkins Caufield & Byers;

Celgene Corporation

(NasdaqGS:CELG); The Column Group

LLC

Bristol-Myers Squibb Company

(NYSE:BMY)

$1,250.0 - - - No

2/23/2015 RevenueMed, Inc. - Navigant Healthcare Cymetrix

Corporation

$26.0 - - - No

2/23/2015 Optimal Health Strategies, PC - ATI Physical Therapy Holdings, LLC - - - - No

2/20/2015 Salix Pharmaceuticals Ltd. (NasdaqGS:SLXP) Franklin Resources, Inc. (NYSE:BEN);

Paulson & Co. Inc.; Fidelity

Management & Research Company;

HealthCor Management L.P.; Visium

Asset Management, LLC

Valeant Pharmaceuticals International $12,792.2 11.3x 82.7x - No

2/19/2015 Capital Internal Medicine, LLC - IPC Healthcare, Inc. (NasdaqGS:IPCM) - - - - No

2/19/2015 TransEngen, Inc. - VirMedica, Inc. - - - - No

2/19/2015 Ivera Medical Corporation - 3M Company (NYSE:MMM) - - - - No

2/18/2015 Meritage Pharma, Inc. Domain Associates, L.L.C.; The Vertical

Group; Latterell Venture Partners

Shire plc (LSE:SHP) $244.9 - - - Yes

2/18/2015 Warm Springs Specialty Hospital Post Acute Medical, LLC Citizens Medical Center - - - - No

2/18/2015 AdvancedCath Inc. - TE Connectiv ity Ltd. (NYSE:TEL) $190.0 - - - No

2/18/2015 The Pain Center of Arizona, PC - Alliance Healthcare Serv ices, Inc.

(NasdaqGM:AIQ)

$48.7 1.6x - - No

2/18/2015 Planned Parenthood of Hawaii, Inc. - Planned Parenthood Of The Great

Northwest

- - - - No

2/18/2015 BioSET, Inc. The Vertical Group; PTV Healthcare

Capital

Ferring Pharmaceuticals Inc. - - - - Yes

2/18/2015 Dermatology Clinic in Livonia, Michigan - Steven K. Grekin , D.O., P.C. - - - - No

2/17/2015 Heartland Rehabilitation Hospital property Medistar Corporation; Cobalt Medical

Development

Carter Validus Mission Critical REIT I I ,

Inc.

$24.6 - - - No

PAGE |

M&A ACTIVITY

13

INDUSTRY UPDATE


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

2/17/2015 Overland Park Rehab, Heartland Rehabilitation

Hospital

Overland Park Rehab, LP Carter Validus Operating Partnership I I ,

LP

$24.6 - - - No

2/17/2015 Executive Care - Greystone Healthcare Management

Corp.

- - - - No

2/17/2015 Four AMI Free-Standing Imaging Centers Located

in Denver, Golden, Louisv ille and Thornton

- Centura Health, Inc.; Env ision

Radiology, LLC

- - - - No

2/16/2015 LightTouch Vein & Laser, Inc. (OTCPK:LTVL) - Grow Solutions, Inc. - - - - No

2/13/2015 Aptalis Pharmatech, Inc. Actavis plc (NYSE:ACT) TPG Capital, L.P. - - - - Yes

2/13/2015 Therapy Staff, LLC Orion International Consulting Group,

LLC

Aequor Healthcare Serv ices, LLC. - - - - No

2/12/2015 Greenwich Woods Limited Partnership - - $15.0 - - - No

2/12/2015 HealthLine Systems, Inc. - Sy.Med Development, Inc. $88.0 - - - No

2/12/2015 Molecular Response, LLC, PDX Business Unit Molecular Response, LLC Crown Bioscience, Inc. - - - - No

2/12/2015 Ruby Crest Emergency Medicine Inc. - Team Health Holdings, Inc. (NYSE:TMH) - - - - No

2/12/2015 Litho of America, LLC - United Medical Systems (DE), Inc. - - - - No

2/11/2015 BrightWhistle, Inc. Advanced Technology Development

Center; Atlanta Technology Angels;

Eastside Partners; Hamilton Ventures

LLC

Influence Health, Inc. - - - - No

2/10/2015 Extended Hand Home Care, LLC - Home Instead, Inc. - - - - No

2/10/2015 Actavis plc, Doryx Brand and Related Assets Actavis plc (NYSE:ACT) Mayne Pharma Group Limited

(ASX:MYX)

$50.0 0.8x - - No

2/10/2015 Deland Dermatology & Surgery - Advanced Dermatology & Cosmetic

Surgery Inc.

- - - - No

2/10/2015 Jaysec Technologies, LLC - ResMed Inc. (NYSE:RMD) - - - - No

2/10/2015 National Hospice Holdings, LLC TridentUSA Health Serv ices, LLC Hospice Compassus, Inc. - - - - No

2/10/2015 CORVA Kidney Center-Webster - ISD Renal, Inc. - - - - No

2/10/2015 Surgical Site Solutions, Inc. - CareFusion Corporation (NYSE:CFN) - - - - No

2/10/2015 Olive Medical Corporation Tech Coast Angels Inc. DePuy Synthes, Inc. - - - - No

2/10/2015 Community Allied Behavioral Health, Inc. - Lewis County Mental Health Association - - - - No

2/10/2015 Shin Wellness, L.L.C. - Flores Chiropractic Group, Inc. - - - - No

2/9/2015 On Call Consulting, Inc. - MiraMed Global Serv ices, Inc. - - - - No

2/9/2015 Capitol Emergency Associates and Central Texas

Hospitalists

- Team Health Holdings, Inc. (NYSE:TMH) - - - - No

2/9/2015 Formed Polymer Solutions LLC - Venta Medical, LLC - - - - No

2/9/2015 Omni Diagnostics, LLC - The Tomayko Group, LLC - - - - No

2/6/2015 Forest Haven Nursing Home, Inc. - Mid-Atlantic Health Care, LLC $8.6 - - - No

2/5/2015 Muir Wood Adolescent & Family Serv ices, LLC Constellation Behavioral Health, LLC - - - - - No

2/5/2015 Hospira Inc. (NYSE:HSP) NovaQuest Capital Management,

L.L.C.; T. Rowe Price Associates, Inc.

Pfizer Inc. (NYSE:PFE) $16,323.0 3.7x 21.9x 31.7x Yes

2/5/2015 Reynolds Rehabilitation Enterprises, Inc. - Orthology, Inc. - - - - No

2/5/2015 Data Innovations, LLC Battery Ventures Sunquest Information Systems, Inc. - - - - No

2/5/2015 SoftWriters, Inc. TA Associates Management, L.P. Roper Industries Inc. (NYSE:ROP) - - - - Yes

2/5/2015 CareSTAT Urgent Care Centers - MNR Industries LLC - - - - No

2/5/2015 Four Suburban Healthcare Clinics in Indiana,

Georgia and Pennsylvania

- The Sanders Trust $11.9 - - - No

2/5/2015 Pinehurst Senior Liv ing Conifer Realty, LLC Episcopal Seniorlife Communities, Inc. - - - - No

2/4/2015 Nutricap Labs, LLC - Twinlab Consolidated Holdings, Inc. $12.0 - - - No

2/4/2015 Annovation BioPharma, Inc. Atlas Venture L.P. The Medicines Company

(NasdaqGS:MDCO)

- - - - No

2/4/2015 APS Healthcare Puerto Rico, Inc. APS Healthcare, Inc. - $26.5 - - - No

2/4/2015 A Property Near Glen Lake - Ecumen Home Care, Inc.; Lifestyle

Communities, LLC

- - - - No

2/3/2015 Cardinal Hill Rehabilitation Hospital Kentucky Easter Seal Society, Inc. HEALTHSOUTH Corp. (NYSE:HLS) - - - - No

2/3/2015 Delaware Outpatient Center for Surgery, LLC - Surgery Partners LLC - - - - No

2/3/2015 University HealthSystem Consortium, Inc. - VHA Inc. - - - - No

2/2/2015 Southland Industrial Supply, Inc. - Northern Safety Co., Inc. - - - - No

2/2/2015 MediMedia Pharma Solutions MediMedia USA, Inc. ICON Public Limited Company

(NasdaqGS:ICLR)

$120.0 - - - No

2/2/2015 Nine-Clinic Physical Therapy Practice - US Physical Therapy Inc. (NYSE:USPH) $12.0 1.6x - - No

2/2/2015 Barren County Health Care Center, Inc. - Diversicare Healthcare Serv ices Inc.

(NasdaqCM:DVCR)

$7.0 - - - No

2/2/2015 Celleration, Inc. Affinity Capital Management; CID

Equity; Venture Investors, LLC; Prism

Capital Corporation; Aavin; Seneca

Partners Inc., Investment Arm; Triathlon

Medical Ventures; New Science

Ventures, LLC; CHV Capital, Inc.; HMA

Capital Partners; Heron Capital Equity

Partners; Tyco Sigma Limited; Cascade

Partners LLC

Alliqua BioMedical, Inc.

(NasdaqCM:ALQA)

$49.5 5.7x - - No

2/2/2015 Live Injury Free - TRIARQ Network, LLC - - - - No

2/1/2015 Alexian Brothers Medical Care Group, NFP - Alexian Brothers Health System - - - - No

2/1/2015 Emergency Physicians of St. Louis, P.C. - CEP America LLC - - - - No

Energy & Power

IndustrialsHealthcare & Life Sciences

Transportation & Logistics

Aerospace, Defense & Government

Services

Business Services

Building Products & Materials

Technology, Media & Telecom

Specialty Distribution

Consumer

PAGE |

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Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website at www.harriswilliams.com/industries

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INDUSTRY UPDATE


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PAGE |

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Reuters.

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15

SOURCES

INDUSTRY UPDATE


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HEALTHCARE & LIFE SCIENCES GROUP02/25/15 Celldex Therapeutics Inc CLDX Follow-On 200.1 02/04/15...

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