Healthcare & Life Sciences Industry Update · 2013-05-03 · Healthcare & Life Sciences Industry...

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Healthcare & Life Sciences

Industry Update March 2013

• The Wall Street Journal published an article by a research group led by Clay Christensen,

Harvard Business School professor and co-founder of Innosight Institute, that discusses

why ACOs may not be successful. The article cites the inability of ACOs to change

physician behavior or to enforce patient accountability as fundamental reasons why ACOs

will not be able to align quality of outcomes with interests of multiple healthcare

participants. As a result, the authors assert that ACOs are not likely to deliver the

significant savings or improvements in quality for which they were created. You can find

the article here (a subscription to The Wall Street Journal Online may be required).

• As many readers are already aware, on March 1st, $85 billion in automatic spending cuts,

known as Sequestration, went into effect as part of the Budget Control Act of 2011. As part

of the current plan by the Obama Administration to implement Sequestration, a 2% cut to

Medicare reimbursement is set to take place on April 1st. We have chosen to highlight two

articles that go into greater detail about the impact of this significant development on the

healthcare landscape.

− The Medicare News Group posted an article on their website that concisely

summarizes the projected impacts of Sequestration. The piece provides good detail on

the breakdown of Medicare spending subject to reductions as well as spending which

would be exempt. Additionally, the article cites $11 billion in total cuts to Medicare in

2013 as the result of Sequestration with a potential total reduction of $123 billion

through 2021.

− Becker’s Hospital Review published insights from seven healthcare leaders with

backgrounds in providers, business, academia, and law on the potential effects of

Sequestration. With most providers and hospitals operating on thin margins, there is

broad concern around the ability of hospitals to sustain operations, especially those

reliant on a higher mix of Medicare reimbursement, and the resulting impact on

patient access. The contributors also discuss the potential long term impacts of other

cuts to healthcare-related discretionary spending that are part of Sequestration such as

funding for the FDA and NIH grants.

What We’ve Been

Reading

March 2013

1

http://online.wsj.com/article/SB10001424127887324880504578296902005944398.html?mod=rss_mobile_uber_feed&mg=reno64-wsj











http://medicarenewsgroup.com/news/medicare-faqs/individual-faq?faqId=2ec7b6bb-c68b-433e-830e-035b9d930e4d

http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/7-healthcare-leaders-share-thoughts-on-sequestration.html









HW&Co. HCLS

Group Insights

March 2013

Durable Medical Equipment

Contract Manufacturing

2

Home Health

http://www.harriswilliams.com/sites/default/files/industry_reports/DME Industry Update.pdf

http://medcitynews.com/2013/01/what-are-the-seven-megatrends-that-will-redefinethe-healthcare-industry-in-2013-and-beyond/

http://www.harriswilliams.com/sites/default/files/industry_reports/Contract Manufacturing Industry Overview.pdf


http://www.harriswilliams.com/sites/default/files/industry_reports/Home Health Industry Update.pdf


3

Key Trading

Statistics

(detail begins

on page 7)

Equity Trading

Overview

March 2013

Public Company

Sector

Performance

(12-month %

change in stock

price)

Change in Stock Price

3 mos. 12 mos. Revenue EBITDA Revenue EBITDA

Clinical Laboratories 3 $7,723 2.3% (2.4%) 1.6x 7.7x 1.6x 7.6x

Contract Pharma Manufacturing 5 964 4.5% 62.8% 1.4x 10.3x 1.5x 9.6x

Contract Research Organizations 5 2,010 12.7% 38.6% 1.5x 11.5x 1.3x 10.2x

Disease Management 2 2,972 26.9% 23.5% 1.5x 9.1x 1.4x 8.5x

Emergency Services 1 2,378 24.0% 46.7% 2.8x 9.4x 2.6x 9.1x

Health Care Staffing 4 1,332 24.4% 56.5% 1.1x 14.2x 0.9x 10.9x

HMO - Medical 10 16,114 11.8% (5.2%) 0.4x 6.2x 0.4x 6.0x

Information Services 11 2,577 8.2% (10.1%) 3.0x 14.4x 2.9x 10.7x

Specialty Managed Care 2 1,983 17.9% 0.3% 0.8x 6.3x 0.8x NA

Specialty Pharmacy Management 5 16,679 8.5% 10.4% 0.5x 9.6x 0.7x 8.4x

Dental Products 3 28,449 14.4% 18.5% 2.6x 14.3x 2.5x 12.2x

Durable Medical Equipment 5 1,835 5.1% (6.9%) 1.1x 7.6x 1.0x 7.3x

Life Sciences Tools 3 15,035 13.5% 14.0% 2.4x 10.1x 2.3x 8.7x

Medical Devices and Products 14 36,783 11.6% 16.3% 2.6x 9.8x 2.5x 9.1x

Medical / Surgical / Dental Supplies 6 11,611 12.8% 15.7% 0.2x 8.8x 0.2x 8.3x

Acute-Care Hospitals 6 14,800 35.8% 43.2% 1.1x 7.2x 0.9x 6.8x

Assisted Living 6 2,272 32.1% 48.7% 2.2x 12.3x 2.1x 12.5x

Diagnostic Imaging 3 2,813 15.4% (2.9%) 1.4x 5.6x 1.4x 5.7x

Dialysis Services 2 25,428 5.9% 17.1% 2.4x 11.4x 1.9x 9.3x

Home Care / Hospice 6 628 10.1% 20.2% 0.5x 6.1x 0.5x 6.2x

Long-Term Care 3 1,224 2.6% 5.5% 0.9x 6.0x 0.8x 5.6x

Physician Practice Management 3 1,871 9.2% 11.5% 1.9x 9.3x 1.6x 9.7x

Psychiatric Hospitals / Management 3 2,771 29.4% 11.3% 0.3x 6.2x 0.3x 7.0x

Surgicenters / Rehabilitation 4 2,255 1.9% 13.4% 1.5x 7.1x 1.5x 7.2x

Payer, Provider, & Pharmacy Support Services 48 $5,473 14.1% 22.1% 1.5x 9.9x 1.4x 9.0x

Products & Devices 31 $18,743 11.5% 11.5% 1.8x 10.1x 1.7x 9.1x

Provider-Based Services 36 $6,007 15.8% 18.7% 1.4x 7.9x 1.2x 7.8x

HW&Co. HCLS Composite Index 115 $8,438 14.2% 18.6% 1.5x 9.2x 1.4x 8.5x

S&P 500 7.4% 10.4%

Payer

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Median TEV/

Forward MulitplesSectorNumber of

Companies

Average

Enterprise

Value ($ mm)

Median TEV/

LTM Multiples

Contract Pharma Manufacturing

Health Care Staffing

Assisted Living

Emergency Services

Acute-Care Hospitals

Contract Research Organizations

Disease Management

Home Care / Hospice

HW&Co. HCLS Composite Index

Dental Products

Dialysis Services

Medical Devices and Products

Medical / Surgical / Dental Supplies

Life Sciences Tools

Surgicenters / Rehabilitation

Physician Practice Management

Psychiatric Hospitals / Management

Specialty Pharmacy Management

S&P 500

Long-Term Care

Specialty Managed Care

Clinical Laboratories

Diagnostic Imaging

HMO - Medical


Information Services

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

Closing Date Filing Date Issuer Ticker Transaction Type

Gross Proceeds

($mm)

02/11/13 12/10/10 HCA Holdings Inc HCA Follow-On $1,800.0

02/11/13 02/11/13 Molina Healthcare Inc MOH Convertible 550.0

02/21/13 11/08/12 Achillion Pharmaceuticals Inc ACHN Follow-On 141.9

02/07/13 02/07/13 Accuray Inc ARAY Convertible 115.0

02/05/13 12/21/12 Celldex Therapeutics Inc CLDX Follow-On 103.5

02/27/13 02/20/13 Tesaro Inc TSRO Follow-On 97.7

02/11/13 02/11/13 Tetraphase Pharmaceuticals Inc TTPH IPO 75.0

02/15/13 02/15/13 Sophiris Bio Inc SHS IPO 74.8

02/20/13 02/20/13 Ambit Biosciences Corp AMBI IPO 57.5

02/08/13 10/16/12 Medgenics Inc MDGN Follow-On 29.4

02/13/13 02/13/13 Discovery Laboratories Inc DSCO Follow-On 25.0

02/01/13 02/01/13 Celsion Corp CLSN Follow-On 25.0

02/22/13 10/11/12 Immunomedics Inc IMMU Follow-On 16.1

02/22/13 02/22/13 Celsion Corp CLSN Convertible 15.0

02/08/13 02/08/13 Brainstorm Cell Therapeutics BCLI Follow-On 15.0

02/11/13 02/11/13 MRI Interventions Inc MRIC Follow-On 14.3

02/22/13 08/14/12 EnteroMedics Inc ETRM Follow-On 13.1

02/20/13 02/20/13 BioNeutral Group Inc BONU Follow-On 10.0

02/11/13 03/31/11 Unilife Corp UNS Follow-On 10.0

02/01/13 02/01/13 iBio Inc IBIO Follow-On 10.0

02/07/13 07/25/12 Imprimis Pharmaceuticals Inc IMMY Follow-On 9.7

02/11/13 02/11/13 Legal Life Plans Inc LLFP Follow-On 9.5

02/12/13 02/11/13 Mela Sciences Inc MELA Follow-On 7.9

02/21/13 02/21/13 Advanced Cell Technology Inc ACTC Follow-On 7.4

02/15/13 02/15/13 AquaBounty Technologies Inc ABTX Follow-On 6.0

4

Healthcare &

Life Sciences

Industry Stock

Performance

Top 25 Equity

Offerings

(by proceeds)

Equity Markets

Overview

March 2013

35.8%

39.6%

23.5%

40

60

80

100

120

140

160

Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13

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

5

Announced

Healthcare &

Life Sciences

M&A

Announced Healthcare & Life Sciences Transactions Median Healthcare & Life Sciences Transaction Multiples

PEG Investments and Exits PEG Investments by Segment (Last 3 Years)

Healthcare &

Life Sciences

M&A Trends

Announced

Private Equity

M&A Activity

Middle Market Healthcare Transaction Highlights Quarterly M&A Activity

LTM Deal Statistics

Note: Transactions based on publicly available information

M&A Overview

March 2013

Announced Target Buyer

2/28/2013 Nine Clinic Physical Therapy Group US Physical Therapy Inc. (NYSE:USPH)

2/25/2013 Assisted Living Concepts Inc. (NYSE:ALC) TPG Capital, L.P.

2/25/2013 PureWellness, Inc. Cerner Corporation (NasdaqGS:CERN)

2/19/2013 Kova International, Inc. StoneCreek Capital, Inc

2/13/2013 AssuraMed Holding, Inc. Cardinal Health, Inc. (NYSE:CAH)

2/7/2013 Addus HealthCare, Inc., Home Health Business LHC Group, Inc. (NasdaqGS:LHCG)

2/6/2013 JAWOOD Business Process Solutions, LLC Genpact Ltd. (NYSE:G)

2/5/2013 TYSABRI Biogen Idec International Holding Ltd

2/5/2013 Biomedical Structures, LLC Modified Polymer Components, Inc.

2/4/2013 Massive Health, Inc. AliphCom, Inc.

Aggregate Number Median Transaction Multiples

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

$104.8 1,044 2.13x 10.5x

HC&LS Industry Number of

Segment Companies

Biotechnology 5

Healthcare Technology 18

Healthcare Distributors 8

Healthcare Equipment 26

Healthcare Facilities 33

Healthcare Services 62

Healthcare Supplies 8

Life Sciences Tools & Services 13

Managed Healthcare 6

Pharmaceuticals 17

$194.1 $174.6

$110.6

$141.4

$101.6

$12.4 0

200

400

600

800

1000

1200

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2008 2009 2010 2011 2012 2013 YTD

Nu

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Ag

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ate

Tra

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$ i

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Aggregate Deal Value # of deals

279

255

225242

256267

245 236219

229 221

291

152

18

19

17

13

1816

1318

11

20

12

22

10

0

50

100

150

200

250

300

350

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

Nu

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PEG Acquirer Strategic Acquirer

15.2x

7.7x

12.8x

11.1x 10.9x

9.3x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

0x

3x

6x

9x

12x

15x

18x

21x

2008 2009 2010 2011 2012 2013 YTD

EV

/ LT

M R

ev

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ultip

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_EV

/ L

TM

EB

ITD

A M

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__

TEV / LTM EBITDA TEV / LTM Sales

40

58

69

94

113

79

42

7165 65

10

27

40

60 62

95

49 50

80

120

139

17

0

20

40

60

80

100

120

140

160

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD

Tra

nsa

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on

Vo

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Number of Investments Number of Exits

Key Credit

Statistics

Top 20 Recent

Healthcare &

Life Sciences

Debt Offerings

(by deal amount)

Average Secondary Spread

Average Spread on Healthcare Loans

Credit Statistics

Quarterly Healthcare Loan Volume

Debt Markets

Overview

March 2013

6

$0

$3

$6

$9

$12

$15

$18

$21

$24

4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12

Lo

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$ i

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Pro Rata Institutional

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2006 2007 2008 2009 2010 2011 2012

Aver

age

Sp

read

Over

LIB

OR

__

Revolving Credit / Term Loan A Weighted-Average Institutional

L + 0

L + 200

L + 400

L + 600

L + 800

L + 1000

Aver

age

Sp

read

Over

LIB

OR

__

0.0x

2.0x

4.0x

6.0x

Debt/EBITDA Senior Debt/EBITDA EBITDA/Cash Interest EBITDA - Capex/Cash Interest

EB

ITD

A M

ult

iple

__

2006 2007 2008 2009 2010 2011 2012

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

02/20/13 Valeant Pharmaceuticals International Pharmaceutical preparations $2,300 Term Loan B BB- / B1 L+ 275

02/11/13 NBTY Inc Pharmaceutical preparations 1,508 Term Loan B / WR N/A

02/11/13 Catalent Pharma Solutions Pharmaceutical preparations 799 Term Loan B NR / B2 L+ 350

02/11/13 Catalent Pharma Solutions Pharmaceutical preparations 665 Term Loan NR / B2 L+ 325

02/19/13 United Surgical Partners International Inc General medical & surgical hospitals 672 Term Loan B CCC+ / Caa1 L+ 375

02/19/13 United Surgical Partners International Inc General medical & surgical hospitals 310 Term Loan B CCC+ / Caa1 L+ 350

02/19/13 United Surgical Partners International Inc General medical & surgical hospitals 125 Revolver/Line >= 1 Yr. CCC+ / Caa1 L+ 350

02/06/13 Par Pharmaceutical Pharmaceutical preparations 1,066 Term Loan B B- / B1 L+ 325

02/15/13 MultiPlan Inc Medical and hospital equipment 1,030 Term Loan B CCC+ / Caa1 L+ 300

02/21/13 Iasis Healthcare Corp General medical & surgical hospitals 1,007 Term Loan B NR / WR L+ 325

02/19/13 Immucor Inc Diagnostic substances 663 Term Loan B B- / Caa1 L+ 375

02/19/13 Immucor Inc Diagnostic substances 100 Revolver/Line >= 1 Yr. B- / Caa1 L+ 375

02/20/13 American Renal Associates Kidney dialysis centers 50 Revolver/Line >= 1 Yr. NR / Ba3 L+ 325

02/20/13 American Renal Associates Kidney dialysis centers 400 Term Loan B NR / Ba3 L+ 325

02/20/13 American Renal Associates Kidney dialysis centers 240 Term Loan NR / Caa1 L+ 725

02/12/13 Sheridan Healthcare Inc General medical & surgical hospitals 672 Term Loan B NR / WR L+ 350

02/21/13 Prestige Brands Inc Pharmaceutical preparations 455 Term Loan B B- / B3 L+ 275

02/05/13 Healogics Specialty outpatient clinics 30 Revolver/Line >= 1 Yr. B / B1 N/A

02/05/13 Healogics Specialty outpatient clinics 290 Term Loan B B / B1 L+ 400

02/05/13 Healogics Specialty outpatient clinics 125 Term Loan B / B1 L+ 800

Healthcare & Life Sciences Trading Statistics

March 2013

As of February 28, 2013 7

Payer, Provider, & Pharmacy Support Services

Stock Price

% Change 52 Week

2/28/2013 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical Laboratories

Bio-Reference Laboratories Inc. $26.48 2.3% 25.2% $32.86 $18.29 $734 $24 $26 $732 $673 $96 $79 Jan-13 Oct-12 $706 $105 $88 1.1x 7.7x 1.0x 7.0x

Laboratory Corp. of America Holdings 88.60 6.2% (2.4%) 95.30 81.56 8,249 2,655 467 10,458 5,671 1,303 1,114 Dec-12 Dec-12 5,788 1,303 1,083 1.8x 7.9x 1.8x 8.0x

Quest Diagnostics Inc. 56.17 (2.2%) (4.0%) 64.87 53.25 8,887 3,367 296 11,981 7,383 1,605 1,319 Dec-12 Dec-12 7,388 1,580 1,305 1.6x 7.3x 1.6x 7.6x

Number of Companies 3 Median: 2.3% (2.4%) Total $17,869 $7,723 $13,727 $13,882 1.6x 7.7x 1.6x 7.6x

Mean: 2.1% 6.3% $7,723 1.5x 7.6x 1.5x 7.5x

Contract Pharma Manufacturing

Akorn, Inc. $13.81 4.5% 7.5% $16.87 $10.53 $1,324 $105 $41 $1,387 $256 $89 $78 Dec-12 Dec-12 $333 $116 $108 6.1x 17.6x 4.2x 11.9x

Cambrex Corporation. 11.51 17.9% 62.8% 14.33 5.87 345 64 24 385 277 58 36 Dec-12 Dec-12 309 NA 43 1.4x 6.9x 1.2x NA

Integrated Biopharma Inc. 0.19 (13.6%) 287.8% 0.33 0.02 4 15 0 19 31 (1) (1) Dec-12 Jun-12 NA NA NA 0.6x NM NA NA

Patheon Inc. 3.16 (15.0%) 65.6% 3.89 1.57 442 313 39 708 749 72 31 Oct-12 Oct-12 1,026 127 74 1.0x 10.2x 0.7x 5.6x

West Pharmaceutical Services, Inc. 60.42 12.1% 43.9% 60.99 39.30 2,076 420 162 2,322 1,266 220 143 Dec-12 Dec-12 1,376 241 159 1.8x 10.3x 1.7x 9.6x

Number of Companies 5 Median: 4.5% 62.8% Total $4,190 $964 $2,580 $3,044 1.4x 10.3x 1.5x 9.6x

Mean: 1.2% 93.5% $964 2.2x 11.2x 1.9x 9.1x

Contract Research Organizations

Albany Molecular Research Inc. $8.08 71.9% 192.8% $8.48 $2.25 $250 $8 $23 $235 $227 $31 $14 Dec-12 Dec-12 $244 $37 $21 1.0x 7.5x 1.0x 6.4x

Charles River Laboratories International, Inc. 40.74 5.2% 13.9% 43.30 31.48 1,963 667 110 2,515 1,130 257 176 Dec-12 Dec-12 1,179 277 203 2.2x 9.8x 2.1x 9.1x

Covance Inc. 66.59 18.2% 36.9% 69.80 44.19 3,670 320 493 3,497 2,181 303 189 Dec-12 Dec-12 2,345 344 220 1.6x 11.5x 1.5x 10.2x

ICON Public Limited Company 31.16 12.7% 47.8% 31.72 20.02 1,879 0 0 1,699 1,115 117 74 Dec-12 Dec-12 1,275 158 115 1.5x 14.6x 1.3x 10.8x

PAREXEL International Corporation 34.69 8.6% 38.6% 35.10 23.75 2,017 382 204 2,102 1,565 183 117 Dec-12 Jun-12 1,705 206 136 1.3x 11.5x 1.2x 10.2x

Number of Companies 5 Median: 12.7% 38.6% Total $9,778 $2,010 $6,217 $6,748 1.5x 11.5x 1.3x 10.2x

Mean: 23.3% 66.0% $2,010 1.5x 11.0x 1.4x 9.3x

Disease Management

Alere Inc. $22.76 27.6% (11.2%) $26.50 $17.13 $1,840 $3,709 $328 $5,220 $2,819 $539 $109 Dec-12 Dec-12 $2,934 $619 $521 1.9x 9.5x 1.8x 8.4x

Healthways Inc. 12.85 26.2% 58.3% 13.20 6.21 436 290 2 724 677 82 31 Dec-12 Dec-12 727 85 30 1.1x 8.8x 1.0x 8.5x


Mean: 26.9% 23.5% $2,972 1.5x 9.1x 1.4x 8.5x

Emergency Services

Air Methods Corp. $44.79 24.0% 46.7% $45.08 $26.97 $1,734 $648 $4 $2,378 $851 $254 $170 Dec-12 Dec-12 $918 $260 $169 2.8x 9.4x 2.6x 9.1x

Number of Companies 1 Median: 24.0% 46.7% Total $1,734 $2,378 $851 $918 2.8x 9.4x 2.6x 9.1x

Mean: 24.0% 46.7% $2,378 2.8x 9.4x 2.6x 9.1x

Health Care Staffing

AMN Healthcare Services Inc. $14.10 28.8% 156.4% $14.43 $4.85 $646 $159 $6 $799 $954 $67 $53 Dec-12 Dec-12 $1,020 $76 $60 0.8x 11.8x 0.8x 10.5x

Cross Country Healthcare, Inc. 5.69 41.5% (1.6%) 5.98 3.80 176 35 5 203 507 10 1 Sep-12 Dec-11 493 10 (2) 0.4x 19.7x 0.4x 20.8x

On Assignment Inc. 21.86 11.1% 55.5% 25.10 13.13 1,148 440 0 1,574 1,240 107 93 Dec-12 Dec-12 1,630 159 123 1.3x 14.7x 1.0x 9.9x

Team Health Holdings, Inc. 33.49 20.1% 57.6% 35.39 19.90 2,277 518 41 2,754 2,069 202 157 Dec-12 Dec-12 2,359 243 194 1.3x 13.7x 1.2x 11.3x


Mean: 25.4% 67.0% $1,332 1.0x 15.0x 0.8x 13.1x

TEV/ LTM MultiplesEquity

Mkt. ValueTotal Debt

Cash and

Equiv.

Total

Ent.

Value

(TEV)

Lastest Twelve Months

(LTM)TEV/ Fwd MultiplesForward Estimate

Company NameLTM

Period

Lastest

FYE Date


March 2013



Stock Price

% Change 52 Week


HMO - Medical

Commercial:

Aetna Inc. $47.19 11.5% 1.2% $51.14 $34.58 $15,478 $6,528 $2,579 $19,428 $36,596 $3,522 $3,072 Dec-12 Dec-12 $40,032 $3,334 $2,977 0.5x 5.5x 0.5x 5.8x

Cigna Corp. 58.46 12.5% 31.8% 62.22 39.01 16,717 5,200 2,978 19,053 29,119 3,224 2,875 Dec-12 Dec-12 31,905 3,384 2,828 0.7x 5.9x 0.6x 5.6x

Coventry Health Care Inc. 45.36 5.1% 40.7% 46.92 27.72 6,106 1,585 1,399 6,292 14,154 928 808 Dec-12 Dec-12 14,738 828 702 0.4x 6.8x 0.4x 7.6x

Health Net, Inc. 25.74 12.2% (32.8%) 41.22 16.65 2,092 499 340 2,251 11,278 95 64 Dec-12 Dec-12 11,466 311 304 0.2x 23.8x 0.2x 7.2x

Humana Inc. 68.26 4.8% (22.9%) 93.36 59.92 10,809 2,935 1,306 12,438 39,126 2,354 2,016 Dec-12 Dec-12 41,181 2,489 2,198 0.3x 5.3x 0.3x 5.0x

UnitedHealth Group Incorporated 53.45 1.3% (4.3%) 60.75 50.32 54,782 16,754 8,406 65,251 110,618 10,151 9,254 Dec-12 Dec-12 123,669 10,667 9,573 0.6x 6.4x 0.5x 6.1x

WellPoint Inc. 62.18 13.5% (5.1%) 74.73 52.52 18,905 15,543 2,485 31,963 61,712 5,387 4,646 Dec-12 Dec-12 71,773 4,514 4,010 0.5x 5.9x 0.4x 7.1x


Mean: 8.7% 1.2% $22,382 0.5x 8.5x 0.4x 6.4x

Government:

Centene Corp. 45.02 4.9% (8.6%) 50.98 24.26 2,356 539 844 2,052 8,704 92 37 Dec-12 Dec-12 10,353 311 245 0.2x 22.4x 0.2x 6.6x

Molina Healthcare, Inc. 31.91 16.8% (5.3%) 35.37 17.63 1,441 263 796 908 6,029 78 35 Dec-12 Dec-12 7,154 235 150 0.2x 11.6x 0.1x 3.9x

WellCare Health Plans, Inc. 57.19 20.5% (16.0%) 74.41 44.75 2,472 135 1,100 1,506 7,409 317 301 Dec-12 Dec-12 8,938 389 353 0.2x 4.8x 0.2x 3.9x


Mean: 14.1% (10.0%) $1,489 0.2x 12.9x 0.2x 4.8x

Information Services

Data/Analytics:

Accelrys Inc. $9.46 8.2% 18.1% $9.97 $7.42 $526 $0 $116 $411 $163 $11 ($11) Dec-12 Dec-12 $187 $37 $27 2.5x 37.7x 2.2x 11.1x

National Research Corp. 56.88 4.4% 49.4% 61.58 37.45 391 13 8 395 86 27 23 Dec-12 Dec-12 100 32 28 4.6x 14.4x 4.0x 12.5x

Number of Companies 2 Median: 6.3% 33.8% Total $917 $403 $249 $287 3.5x 26.0x 3.1x 11.8x

Mean: 6.3% 33.8% $403 3.5x 26.0x 3.1x 11.8x

eHealth:

WebMD Health Corp. 22.10 58.8% (11.5%) 26.08 13.13 1,083 800 992 892 470 28 (0) Dec-12 Dec-12 $448 $74 $44 1.9x 31.6x NA NA

Number of Companies 1 Median: 58.8% (11.5%) Total $1,083 $892 $470 $448 1.9x 31.6x NA NA

Mean: 58.8% (11.5%) $892 1.9x 31.6x NA NA

Hospital/Physician:

Allscripts Healthcare Solutions, Inc. $12.71 2.3% (34.1%) $19.57 $8.84 $2,179 $442 $104 $2,517 $1,446 $175 $24 Dec-12 Dec-12 $1,509 $273 $190 1.7x 14.4x 1.7x 9.2x

athenahealth, Inc. 93.79 48.3% 30.8% 97.37 56.33 3,408 0 155 3,214 422 51 31 Dec-12 Dec-12 545 113 81 7.6x 63.0x 5.9x 28.4x

Cerner Corporation 87.46 12.5% 16.9% 88.92 67.64 15,061 196 317 14,221 2,610 713 572 Dec-12 Dec-12 3,010 972 739 5.4x 20.0x 4.7x 14.6x

Computer Programs & Systems Inc. 52.14 2.5% (15.4%) 62.59 44.95 578 0 9 558 183 44 41 Dec-12 Dec-12 200 54 50 3.0x 12.6x 2.8x 10.3x

HMS Holdings Corp. 29.05 32.2% (10.1%) 37.19 18.50 2,526 333 135 2,723 474 154 100 Dec-12 Dec-12 571 175 114 5.7x 17.6x 4.8x 15.6x

MedAssets, Inc. 18.47 13.5% 28.0% 19.99 10.73 1,098 894 14 1,979 640 195 92 Dec-12 Dec-12 680 221 88 3.1x 10.2x 2.9x 9.0x

Merge Healthcare Incorporated 2.45 (28.6%) (63.8%) 6.72 2.20 228 250 35 444 249 31 11 Dec-12 Dec-12 265 59 31 1.8x 14.2x 1.7x 7.5x

Quality Systems Inc. 18.52 (0.4%) (57.9%) 44.69 15.04 1,103 0 102 996 458 108 95 Dec-12 Mar-12 467 121 97 2.2x 9.2x 2.1x 8.3x

Number of Companies 8 Median: 7.5% (12.7%) Total $1,641 $3,331 $466 $558 3.1x 14.3x 2.9x 9.8x

Mean: 7.5% (12.7%) $2,248 3.1x 14.3x 2.9x 9.8x

Company NameEquity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period

Lastest

FYE Date

Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples


March 2013



Stock Price

% Change 52 Week


Specialty Managed Care

Assurant Inc. 41.99 23.5% (1.2%) 43.63 32.41 3,309 1,067 909 3,467 8,508 942 818 Dec-12 Dec-12 8,401 NA 755 0.4x 3.7x 0.4x NA

CorVel Corporation 48.04 12.2% 1.7% 51.36 39.46 520 0 21 499 422 56 40 Dec-12 Mar-12 426 NA NA 1.2x 8.9x 1.2x NA

Number of Companies 2 Median: 17.9% 0.3% Total $3,829 $1,983 $8,930 $8,827 0.8x 6.3x 0.8x NA

Mean: 17.9% 0.3% $1,983 0.8x 6.3x 0.8x NA

Specialty Pharmacy Management

BioScrip Inc. $10.95 10.7% 69.8% $11.99 $6.14 $623 $226 $67 $782 $1,904 $60 $45 Sep-12 Dec-11 $655 $40 $20 0.4x 13.1x 1.2x 19.8x

Express Scripts Holding Company 56.93 8.4% 5.9% 66.06 49.79 46,597 15,915 2,794 59,729 93,858 5,275 3,540 Dec-12 Dec-12 100,898 6,774 6,316 0.6x 11.3x 0.6x 8.8x

Catamaran Corporation 54.04 16.8% 52.0% 56.00 33.84 11,086 1,173 371 11,866 9,940 412 261 Dec-12 Dec-12 14,499 673 453 1.2x 29.7x 0.8x 17.6x

Omnicare Inc. 37.26 8.6% 5.3% 40.00 29.24 3,899 2,058 454 5,477 6,160 700 564 Dec-12 Dec-12 6,144 683 573 0.9x 7.8x 0.9x 8.0x

PharMerica Corporation 14.33 2.4% 14.9% 15.42 9.03 423 316 12 727 1,833 104 73 Dec-12 Dec-12 1,663 114 80 0.4x 7.0x 0.4x 6.4x


Mean: 7.5% 24.0% $16,679 0.6x 9.8x 0.8x 10.8x

TEV/ LTM Multiples TEV/ Fwd MultiplesTotal

Ent.

Value

(TEV)


(LTM)LTM

Period

Lastest

FYE Date

Forward EstimateCompany Name

Equity


Cash and

Equiv.


March 2013


Products & Devices Stock Price

% Change 52 Week


Dental Products

3M Company $104.00 14.4% 18.5% $104.56 $81.99 $71,759 $6,072 $2,883 $73,765 $29,904 $7,771 $6,483 Dec-12 Dec-12 $31,530 $8,337 $6,977 2.5x 9.5x 2.3x 8.8x

DENTSPLY International Inc. 41.42 5.0% 6.4% 43.51 35.04 5,917 1,718 80 7,593 2,928 534 405 Dec-12 Dec-12 3,050 622 498 2.6x 14.3x 2.5x 12.2x

Sirona Dental Systems Inc. 71.02 14.9% 41.8% 73.98 40.59 4,036 75 124 3,990 994 255 183 Dec-12 Sep-12 1,088 296 260 4.0x 15.7x 3.7x 13.5x


Mean: 11.4% 22.2% $28,449 3.0x 13.2x 2.8x 11.5x


Hill-Rom Holdings, Inc. 32.78 20.0% (6.9%) 36.13 24.69 1,978 350 108 2,220 1,682 291 195 Dec-12 Sep-12 1,759 319 191 1.3x 7.6x 1.3x 7.0x

Invacare Corporation 14.51 5.1% (15.2%) 18.27 12.87 463 235 39 659 1,455 70 31 Dec-12 Dec-12 1,345 NA 37 0.5x 9.5x 0.5x NA

Prism Medical Ltd. 5.45 3.4% (5.7%) 6.47 4.72 46 14 2 58 79 9 6 Aug-12 Nov-11 78 8 NA 0.8x 6.9x 0.7x 7.3x

ResMed Inc. 44.49 8.1% 51.1% 48.47 28.94 6,384 301 958 5,727 1,437 420 340 Dec-12 Jun-12 1,520 454 373 4.0x 13.6x 3.8x 12.6x

Rotech Healthcare Inc. 0.21 (28.3%) (86.6%) 1.80 0.18 5 525 19 511 466 75 9 Sep-12 Dec-11 NA NA NA 1.1x 6.8x NA NA


Mean: 1.7% (12.7%) $1,835 1.5x 8.9x 1.6x 9.0x

Life Sciences Tools

Agilent Technologies Inc. $41.48 9.2% (4.9%) $46.28 $35.32 $14,392 $2,361 $2,450 $14,306 $6,903 $1,398 $1,080 Jan-13 Oct-12 $7,030 $1,543 $1,298 2.1x 10.2x 2.0x 9.3x

Becton, Dickinson and Company 88.06 13.5% 14.0% 89.16 71.56 17,080 4,170 1,917 18,737 7,777 2,125 1,618 Dec-12 Sep-12 8,011 2,151 1,605 2.4x 8.8x 2.3x 8.7x

Life Technologies Corporation 58.16 18.5% 21.2% 65.84 39.73 9,910 2,414 256 12,063 3,799 1,199 800 Dec-12 Dec-12 3,927 1,395 1,153 3.2x 10.1x 3.1x 8.6x


Mean: 13.7% 10.1% $15,035 2.6x 9.7x 2.5x 8.9x

Medical Devices and Products

Abbott Laboratories $33.79 (47.7%) (40.8%) $72.47 $31.64 $53,073 $20,476 $10,802 $58,467 $39,874 $11,595 $8,812 Dec-12 Dec-12 $22,749 $5,478 $3,754 1.5x 5.0x 2.6x 10.7x

ArthroCare Corporation 34.92 6.5% 33.1% 36.99 24.13 979 0 219 841 368 95 74 Dec-12 Dec-12 380 94 71 2.3x 8.9x 2.2x 9.0x

Baxter International Inc. 67.60 2.4% 16.1% 69.34 48.98 36,905 5,930 3,270 39,605 14,190 3,958 3,246 Dec-12 Dec-12 15,534 4,214 3,457 2.8x 10.0x 2.5x 9.4x

Boston Scientific Corporation 7.39 29.9% 16.2% 7.73 4.79 10,031 4,256 207 14,080 7,249 1,638 955 Dec-12 Dec-12 7,203 1,658 904 1.9x 8.6x 2.0x 8.5x

CR Bard Inc. 98.85 1.3% 5.0% 108.31 91.91 8,085 1,410 896 8,599 2,958 943 814 Dec-12 Dec-12 3,065 896 761 2.9x 9.1x 2.8x 9.6x

Danaher Corp. 61.60 16.7% 15.4% 62.14 49.18 42,519 5,343 1,679 46,251 18,260 4,058 3,218 Dec-12 Dec-12 19,103 4,203 3,350 2.5x 11.2x 2.4x 11.0x

Hanger, Inc. 29.66 17.9% 43.2% 31.95 20.04 1,008 509 0 1,461 986 166 131 Dec-12 Dec-12 1,070 185 146 1.5x 8.8x 1.4x 7.9x

Hologic Inc. 21.82 15.0% 1.5% 23.96 16.18 5,841 5,036 718 10,159 2,161 720 323 Dec-12 Sep-12 2,625 1,043 833 4.7x 14.1x 3.9x 9.7x

Hospira Inc. 29.43 (0.7%) (19.2%) 38.49 28.62 4,868 1,736 772 5,831 4,092 383 155 Dec-12 Dec-12 4,116 659 487 1.4x 14.0x 1.4x 8.9x

Johnson & Johnson 76.11 9.8% 16.8% 77.02 61.71 212,752 16,165 14,911 207,828 67,224 21,098 17,432 Dec-12 Dec-12 71,302 22,803 18,899 3.1x 9.9x 2.9x 9.1x

Medtronic, Inc. 44.96 5.6% 16.5% 47.41 35.67 45,471 11,418 1,298 54,425 16,427 5,632 4,822 Jan-13 Apr-12 16,527 6,015 5,191 3.3x 9.7x 3.3x 9.0x

Stryker Corporation 63.88 17.0% 17.1% 64.46 49.43 24,307 1,762 1,395 21,784 8,657 2,161 1,884 Dec-12 Dec-12 8,995 2,663 2,168 2.5x 10.1x 2.4x 8.2x

Thermo Fisher Scientific, Inc. 73.80 17.6% 28.9% 75.79 48.14 26,393 7,124 851 32,662 12,510 2,616 1,633 Dec-12 Dec-12 12,970 2,820 2,519 2.6x 12.5x 2.5x 11.6x

Zimmer Holdings, Inc. 74.96 13.4% 22.0% 76.75 57.46 12,695 1,821 884 12,965 4,472 1,677 1,319 Dec-12 Dec-12 4,615 1,761 1,392 2.9x 7.7x 2.8x 7.4x


Mean: 7.5% 12.3% $36,783 2.6x 10.0x 2.5x 9.3x

Medical / Surgical / Dental Supplies

AmerisourceBergen Corporation $47.20 14.6% 25.2% $47.51 $35.48 $10,864 $1,396 $417 $11,843 $80,644 $1,429 $1,276 Dec-12 Sep-12 $85,119 $1,449 $1,281 0.1x 8.3x 0.1x 8.2x

Cardinal Health, Inc. 46.21 15.9% 9.8% 46.87 36.91 15,751 2,897 2,255 16,393 104,803 2,290 1,945 Dec-12 Jun-12 100,429 2,297 1,977 0.2x 7.2x 0.2x 7.1x

Henry Schein, Inc. 89.22 11.4% 18.8% 91.11 71.72 7,813 533 122 8,662 8,940 759 634 Dec-12 Dec-12 9,486 796 675 1.0x 11.3x 0.9x 10.9x

McKesson Corporation 106.13 14.2% 28.7% 107.03 81.53 24,717 4,479 2,726 26,470 123,534 2,846 2,275 Dec-12 Mar-12 123,701 3,131 2,656 0.2x 9.3x 0.2x 8.5x

Owens & Minor Inc. 30.45 6.9% 0.0% 32.26 26.97 1,927 215 98 2,046 8,908 247 208 Dec-12 Dec-12 9,195 266 213 0.2x 8.3x 0.2x 7.7x

Patterson Companies, Inc. 36.34 7.9% 12.6% 37.66 30.45 3,948 775 472 4,250 3,609 398 353 Jan-13 Apr-12 3,642 400 356 1.2x 10.7x 1.2x 10.6x


Mean: 11.8% 15.9% $11,611 0.5x 9.2x 0.5x 8.8x

Forward EstimateCompany Name

Equity


TEV/ LTM Multiples TEV/ Fwd MultiplesCash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period

Lastest

FYE Date


March 2013


Provider-Based Services Stock Price

% Change 52 Week


Acute-Care Hospitals

Community Health Systems, Inc. $42.26 46.1% 65.7% $42.98 $20.71 $3,812 $9,723 $388 $13,580 $13,029 $1,845 $1,220 Dec-12 Dec-12 $13,587 $2,013 $1,220 1.0x 7.2x 1.0x 6.7x

Health Management Associates Inc. 10.99 38.8% 48.7% 11.15 5.92 2,827 3,652 59 6,316 5,878 972 614 Dec-12 Dec-12 7,105 980 619 1.1x 6.5x 0.9x 6.4x

HCA Holdings, Inc. 37.09 20.8% 37.7% 39.60 22.95 16,453 29,359 705 46,371 33,013 6,492 4,813 Dec-12 Dec-12 37,608 6,391 4,690 1.4x 7.1x 1.2x 7.3x

Lifepoint Hospitals Inc. 44.09 24.3% 12.4% 46.25 34.32 2,070 1,726 85 3,763 3,392 537 324 Dec-12 Dec-12 4,326 555 328 1.1x 7.0x 0.9x 6.8x

Tenet Healthcare Corp. 39.31 38.5% 72.1% 40.94 17.24 4,099 5,252 364 9,078 9,119 1,200 770 Dec-12 Dec-12 10,548 1,343 887 1.0x 7.6x 0.9x 6.8x

Universal Health Services Inc. 57.89 33.0% 29.3% 58.57 36.90 5,657 3,771 23 9,692 6,961 1,286 977 Dec-12 Dec-12 7,922 1,228 931 1.4x 7.5x 1.2x 7.9x


Mean: 33.6% 44.3% $14,800 1.2x 7.2x 1.0x 7.0x

Assisted Living

Assisted Living Concepts Inc. $11.84 41.3% (28.4%) $20.33 $6.93 $275 $180 $3 $450 $230 $53 $30 Sep-12 Dec-11 $228 $43 ($32) 2.0x 8.4x 2.0x 10.4x

Brookdale Senior Living Inc. 27.68 11.3% 47.3% 29.25 14.99 3,397 2,681 69 6,009 2,445 375 122 Dec-12 Dec-12 2,795 414 153 2.5x 16.2x 2.2x 14.5x

Capital Senior Living Corp. 23.00 33.0% 159.6% 23.38 7.87 630 333 48 915 294 47 15 Sep-12 Dec-11 308 52 15 3.1x 19.8x 3.0x 17.4x

Emeritus Corp. 28.49 31.4% 50.0% 28.78 14.24 1,286 4,019 60 5,254 1,388 252 105 Dec-12 Dec-12 1,865 307 135 3.8x 20.9x 2.8x 17.1x

Five Star Quality Care Inc. 6.34 32.9% 69.5% 6.49 2.98 306 64 25 336 1,224 46 21 Dec-12 Dec-12 1,453 55 30 0.3x 7.3x 0.2x 6.1x

Skilled Healthcare Group, Inc. 5.82 (13.4%) (12.7%) 8.41 4.97 224 449 2 671 873 99 73 Dec-12 Dec-12 888 102 76 0.8x 6.7x 0.8x 6.6x


Mean: 22.8% 47.6% $2,272 2.1x 13.2x 1.8x 12.0x

Diagnostic Imaging

Alliance Healthcare Services, Inc. $7.04 15.4% (2.9%) $7.43 $6.62 $72 $631 $79 $673 $478 $153 $48 Sep-12 Dec-11 $474 $143 NA 1.4x 4.3x 1.4x 4.7x

RadNet, Inc. 2.83 23.6% (3.7%) 3.64 2.13 109 552 0 661 681 113 54 Sep-12 Dec-11 654 117 51 1.0x 5.6x 1.0x 5.7x

Varian Medical Systems Inc. 70.63 2.2% 6.4% 75.78 52.90 7,707 206 755 7,106 2,860 674 610 Dec-12 Sep-12 3,044 703 637 2.5x 10.5x 2.3x 10.1x


Mean: 13.7% (0.1%) $2,813 1.6x 6.8x 1.6x 6.8x

Dialysis Services

DaVita HealthCare Partners Inc. $119.62 10.4% 37.9% $120.10 $77.81 $12,620 $8,573 $534 $21,379 $8,186 $1,741 $1,397 Dec-12 Dec-12 $11,300 $2,374 $1,854 2.6x 12.2x 1.9x 9.0x

Fresenius Medical Care AG & Co. KGAA 69.13 1.5% (3.8%) 78.82 62.78 21,157 8,305 688 29,477 13,800 2,768 2,165 Dec-12 Dec-12 14,716 3,085 2,431 2.2x 10.7x 2.0x 9.6x


Mean: 5.9% 17.1% $25,428 2.4x 11.4x 1.9x 9.3x

Home Care / Hospice

Addus HomeCare Corporation $8.81 32.3% 143.4% $10.00 $3.50 $95 $22 $2 $116 $278 $13 $10 Sep-12 Dec-11 $281 $14 $12 0.4x 9.0x 0.4x 8.2x

Almost Family Inc. 20.59 6.7% (12.5%) 26.87 17.87 193 1 26 168 349 31 29 Dec-12 Dec-12 350 29 26 0.5x 5.4x 0.5x 5.7x

Amedisys Inc. 11.30 10.6% (9.2%) 15.95 9.51 350 122 39 450 1,497 105 65 Sep-12 Dec-11 1,498 96 55 0.3x 4.2x 0.3x 4.7x

Gentiva Health Services Inc. 10.52 4.7% 26.6% 12.85 5.13 324 935 207 1,052 1,713 175 148 Dec-12 Dec-12 1,725 175 152 0.6x 6.1x 0.6x 6.0x

LHC Group, Inc. 20.32 9.7% 16.8% 22.42 15.69 358 25 0 397 633 64 57 Sep-12 Dec-11 637 61 54 0.6x 6.2x 0.6x 6.5x

Chemed Corp. 77.19 13.9% 23.7% 80.68 54.06 1,479 175 70 1,584 1,430 181 158 Dec-12 Dec-12 1,486 205 167 1.1x 8.8x 1.1x 7.7x

Number of Companies 6 Median: 10.1% 20.2% Total $337 $628 $1,032 $1,061 0.5x 6.1x 0.5x 6.2x

Mean: 13.0% 31.5% $628 0.6x 6.6x 0.6x 6.5x

Long-Term Care

The Ensign Group, Inc. $31.32 22.9% 9.7% $33.43 $23.40 $681 $211 $41 $847 $825 $122 $93 Dec-12 Dec-12 $916 $145 $114 1.0x 7.0x 0.9x 5.8x

Kindred Healthcare Inc. 11.27 2.5% 5.5% 12.76 7.60 600 1,660 50 2,161 6,181 434 233 Dec-12 Dec-12 5,871 407 215 0.3x 5.2x 0.4x 5.3x

National Healthcare Corp. 46.37 2.6% (1.3%) 50.17 40.75 656 10 67 662 742 96 66 Dec-12 Dec-12 803 NA NA 0.9x 6.0x 0.8x NA


Mean: 9.3% 4.6% $1,224 0.8x 6.0x 0.7x 5.6x

TEV/ Fwd MultiplesCompany Name

Equity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period

Lastest

FYE Date

Forward Estimate TEV/ LTM Multiples


March 2013


Provider-Based Services Stock Price

% Change 52 Week


Physician Practice Management

Multispecialty / Primary Care:

IPC The Hospitalist Company, Inc. $41.70 9.2% 11.5% $48.42 $33.10 $698 $20 $16 $702 $523 $57 $53 Dec-12 Dec-12 $599 $67 $61 1.3x 12.3x 1.2x 10.5x

Number of Companies 1 Median: 9.2% 11.5% Total $698 $702 $523 $599 1.3x 12.3x 1.2x 10.5x

Mean: 9.2% 11.5% $702 1.3x 12.3x 1.2x 10.5x

Specialty:

MEDNAX, Inc. 85.62 9.9% 14.8% 88.41 59.24 4,199 144 21 4,315 1,817 420 390 Dec-12 Dec-12 2,144 489 457 2.4x 10.3x 2.0x 8.8x


Mean: 9.9% 14.8% $4,315 2.4x 10.3x 2.0x 8.8x

Dental:

Birner Dental Management Services Inc. $16.36 3.5% (6.8%) $18.95 $16.21 $32 $5 $1 $36 $62 $4 $1 Sep-12 Dec-11 NA NA NA 0.6x 8.4x NA NA

Number of Companies 1 Median: 3.5% (6.8%) Total $32 $36 $62 $0 0.6x 8.4x NA NA

Mean: 3.5% (6.8%) $36 0.6x 8.4x NA NA

Psychiatric Hospitals / Management

Magellan Health Services Inc. $51.56 2.9% 5.8% $56.58 $40.24 $1,392 $0 $189 $1,090 $3,207 $223 $191 Dec-12 Dec-12 $3,624 $256 $205 0.3x 4.9x 0.3x 4.3x

Providence Service Corp. 17.08 29.4% 11.3% 19.67 9.56 219 141 64 302 1,064 40 26 Sep-12 Dec-11 1,103 43 25 0.3x 7.5x 0.3x 7.0x

Universal Health Services Inc. 57.89 33.0% 29.3% 58.57 36.90 5,657 3,771 23 9,692 6,961 1,286 977 Dec-12 Dec-12 7,922 1,228 931 1.4x 7.5x 1.2x 7.9x


Mean: 21.8% 15.5% $2,771 0.5x 5.0x 0.6x 6.4x

Surgicenters / Rehabilitation

Surgery Centers:

AmSurg Corp. $30.20 11.0% 12.0% $32.77 $24.80 $970 $638 $46 $2,039 $929 $311 $281 Dec-12 Dec-12 $1,072 $359 $326 2.2x 6.5x 1.9x 5.7x

Number of Companies 1 Median: 11.0% 12.0% Total $970 $2,039 $929 $1,072 2.2x 6.5x 1.9x 5.7x

Mean: 11.0% 12.0% $2,039 2.2x 6.5x 1.9x 5.7x

Rehabilitation / Long Term Acute Care:

HEALTHSOUTH Corp. $24.12 13.5% 14.9% $24.99 $18.44 $2,303 $1,254 $133 $3,879 $2,162 $497 $415 Dec-12 Dec-12 $2,252 $519 $429 1.8x 7.6x 1.7x 7.5x

Select Medical Holdings Corporation 9.24 (17.1%) 9.6% 14.89 6.94 1,299 1,488 40 2,786 2,910 400 337 Dec-12 Dec-12 2,995 397 325 1.0x 6.8x 0.9x 7.0x

US Physical Therapy Inc. 24.62 (7.2%) 27.0% 28.40 18.66 292 17 11 315 250 43 38 Sep-12 Dec-11 252 39 39 1.3x 7.3x 1.2x 8.2x

Number of Companies 3 Median: (7.2%) 14.9% Total $3,894 $2,327 $5,322 $5,500 1.3x 7.3x 1.2x 7.5x

Mean: (3.6%) 17.2% $2,327 1.3x 7.3x 1.3x 7.6x

Company NameEquity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period

Lastest

FYE Date

Forward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples

13

M&A Detail

March 2013

Announced U.S.

Healthcare &

Life Sciences

M&A

Enterprise Enterprise Value / LTM Private Equity

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

2/28/2013 Nine Clinic Physical Therapy Group - US Physical Therapy Inc.

(NYSE:USPH)

- - - - No

2/28/2013 Audrain Health Care, Inc. - SSM Health Care Corporation - - - - No

2/28/2013 Partners for Medical Education, Inc. - The WeissComm Group Limited - - - - No

2/28/2013 Genmab, Inc., 215,000 Square Foot Antibody

Manufacturing Facility in Brooklyn Park

Genmab, Inc. Baxter Healthcare Corporation $10.0 - - - No

2/27/2013 100Plus Greylock Partners; Band of Angels;

The Founders Fund; Felicis Ventures

Practice Fusion, Inc. - - - - Yes

2/26/2013 Pamlab, L.L.C. - Nestlé Health Science S.A. - - - - No

2/26/2013 CareClarity, Inc. Kramer Healthcare Technologies,

Inc.

Cymetrix Corporation - - - - No

2/25/2013 Assisted Living Concepts Inc. (NYSE:ALC) Bandera Partners LLC; 683 Capital

Management, LLC; Thornridge

Holdings Limited; Newtyn

Management, LLC

TPG Capital, L.P. $453.9 2.0x 8.5x 15.2x Yes

2/25/2013 Provitro Biosciences LLC - Pendrell Corporation

(NasdaqGS:PCO)

- - - - No

2/25/2013 PureWellness, Inc. - Cerner Corporation

(NasdaqGS:CERN)

- - - - No

2/22/2013 Heska Imaging US, LLC - Heska Corporation

(NasdaqCM:HSKA)

$13.9 - - - No

2/22/2013 Freedom Home Healthcare, Inc., Pennsylvania

Operations and Nursing Services in New Jersey

Freedom Home Healthcare, Inc. Epic Health Services, Inc. - - - - No

2/21/2013 Emanuel Medical Center, Inc. The Evangelical Covenant Church,

Investment Arm

Tenet Healthcare Corp. (NYSE:THC) - - - - No

2/20/2013 KRU Medical Ventures, LLC, New Smyrna

Beach Artificial Kidney Center

KRU Medical Ventures, LLC DSI Renal, Inc. - - - - No

2/20/2013 Restorix Health LLLP - The Center For Wound Healing, Inc. - - - - No

2/19/2013 Kova International, Inc. Hycor Biomedical Inc. StoneCreek Capital, Inc.; Laurel

Crown Partners, LLC; One Rock

Capital Partners, LLC

- - - - Yes

2/19/2013 HITS Consulting Group LLC and ClariDIS

Corporation

- iMedicor, Inc. (OTCPK:VMCI) - - - - No

2/19/2013 Family Behavioral Resources, Inc. - South Bay Mental Health Center, Inc. - - - - No

2/19/2013 Liaison Healthcare Informatics - Liaison Technologies, LLC - - - - No

2/19/2013 Hayes Pharmacy Inc., Rights to a

Pharmaceutical/Pharmacy Platform

Hayes Pharmacy Inc. Endexx Corp. (OTCPK:EDXC) - - - - No

2/15/2013 Leonard Street LLC, E. Leonard Medical

Complex

Leonard Street LLC MB Real Estate Healthcare Group $8.4 - - - No

2/14/2013 MediVista Media, LLC, Everwell Waiting Room

Television Network Division

MediVista Media, LLC AccentHealth, LLC - - - - No

2/14/2013 Internal Medicine Consultants, P.A. - IPC The Hospitalist Company, Inc.

(NasdaqGS:IPCM)

- - - - No

2/13/2013 AssuraMed Holding, Inc. Clayton, Dubilier & Rice, Inc.;

Goldman Sachs Group, Merchant

Banking Division; PNC Erieview

Capital

Cardinal Health, Inc. (NYSE:CAH) $2,070.0 - - - Yes

2/13/2013 San Diego Hospice Corporation, Certain Assets - Scripps Health, Inc. $10.7 - - - No

2/12/2013 OA Nurse Travel, LLC On Assignment Inc. (NYSE:ASGN) Medical Solutions L.L.C. $31.0 - - - No

2/8/2013 Ashland Community Hospital City Of Ashland Asante Health Systems, Inc. - - - - No

2/8/2013 Prospector Capital Partners II, LLC, Portfolio

of Nine US Prescription Products

Prospector Capital Partners II, LLC Innovus Pharmaceuticals, Inc.

(OTCPK:INNV)

- - - - Yes

2/7/2013 Two Senior Apartment Communities Calamar Enterprises, Inc. Care Investment Trust Inc.

(OTCPK:CVTR)

- - - - No

2/7/2013 Addus HealthCare, Inc., Home Health Business Addus HealthCare, Inc. LHC Group, Inc. (NasdaqGS:LHCG) - - - - No

2/7/2013 Basin Healthcare Center, LLC - Nueterra Holdings LLC - - - - No

2/7/2013 Advanced Surgery Institute, LLC - Santa Rosa Memorial Hospital Inc - - - - No

2/7/2013 Verdugo Hills Hospital, Inc. - University of Southern California - - - - No

2/6/2013 T&K Inspection Inc. - Desert Industrial X-Ray LP - - - - No

2/6/2013 SureScreen Medical, Inc. Novation Holdings, Inc.

(OTCBB:NOHO)

AVM Licensing Corp. - - - - No

2/6/2013 JAWOOD Business Process Solutions, LLC - Genpact Ltd. (NYSE:G) - - - - No

2/5/2013 TYSABRI Elan Pharma International Ltd. Biogen Idec International Holding Ltd $6,498.0 - - - No

2/5/2013 Hemophilia Compound IB1001 and Related

Assets

Ipsen S.A. (ENXTPA:IPN);

Inspiration Biopharmaceuticals, Inc.

Cangene Corp. (TSX:CNJ) $300.0 - - - No

2/5/2013 Perioperative Nurses Inc. - Alliant, Inc. - - - - No

2/5/2013 Emergency Physicians, PA and Valley

Emergency Physicians Medical Group, Inc.

- Team Health Holdings, Inc.

(NYSE:TMH)

- - - - No

2/5/2013 Biomedical Structures, LLC Ampersand Capital Partners Modified Polymer Components, Inc. - - - - Yes

2/5/2013 Integrative Stem Cell Institute - YaFarm Technologies Inc.

(OTCPK:YFRM)

- - - - No

14

M&A Detail

March 2013

Announced U.S.

Healthcare &

Life Sciences

M&A

(Continued)

Enterprise Enterprise Value / LTM Private Equity

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

Turner Bredrup Managing Director

[email protected]

+1 (804) 915-0110

Cheairs Porter Managing Director

[email protected]

+1 (804) 915-0130

James Clark Managing Director

[email protected]

+1 (804) 915-0119

Todd Morris Managing Director

[email protected]

+1 (415) 217-3412

Andy Dixon Director

[email protected]

+1 (415) 217-3419

Geoff Smith Director

[email protected]

+1 (804) 915-0195

Whit Knier Vice President

[email protected]

+1 (804) 932-1321

Paul Hepper Vice President

[email protected]

+1 (804) 932-1326

Andy Hewlett Vice President

[email protected]

+1 (415) 217-3427

Contacts

2/4/2013 Horizon Hospice, Inc. - Scripps Health, Inc. - - - - No

2/4/2013 Massive Health, Inc. Charles River Ventures; Greylock

Partners; Mohr Davidow Ventures;

Felicis Ventures; Andreessen

Horowitz; Collaborative Fund

AliphCom, Inc. - - - - No

2/3/2013 Alnylam Pharmaceuticals, Inc., Worldwide

Rights For PCSK-9

Alnylam Pharmaceuticals, Inc.

(NasdaqGS:ALNY)

The Medicines Company

(NasdaqGS:MDCO)

$205.0 - - - No

2/2/2013 ClinForce, LLC and Akos Limited Cross Country Healthcare, Inc.

(NasdaqGS:CCRN)

ICON Public Limited Company

(NasdaqGS:ICLR)

$55.8 - - - No

2/1/2013 Prasco, LLC, Econazole Nitrate Cream 1% Prasco, LLC IGI, Laboratories, Inc. (AMEX:IG) $1.8 - - - No

2/1/2013 Velcera Inc. (OTCPK:VLCR) Essex Woodlands Health Ventures;

Two River Group Holdings, LLC;

HealthCor Partners Management,

L.P.

Perrigo Co. (NasdaqGS:PRGO) $160.0 2.7x - - Yes

2/1/2013 Willamette Valley Treatment Center Inc - CRC Health Group, Inc. - - - - No

2/1/2013 Dmc-Memphis, Inc. - Acadia Healthcare Company, Inc.

(NasdaqGS:ACHC)

- - - - No

mailto:[email protected]









15

Sources:

Capital IQ.

Thomson Financial.

S&P.

Reuters.

Bloomberg.

Irving Levin Associates.

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