Healthcare & Life Sciences Industry Update

Member FINRA/SIPC

Industry UpdateMarch 2012

www.harriswilliams.com

What We’ve Been

Reading

March 2012

1

• Ezra Klein contributed an interesting article to this month’s Washington Post linking the

high cost of U.S. healthcare to the high price of services relative to other industrialized and

developing countries. He links this disconnect to multiple potential causes, while noting

that 2010 healthcare reform initiatives do little to address pricing. Read the article here.

• The Atlantic’s Megan McArdle commented on an interesting study that indicates the

expansion of Medicaid coverage to 16 million Americans (a critical component of the

Patient Protection and Affordable Care Act) may actually reduce those individuals’ access

to healthcare services. The study cites a number of contributing factors, including low

reimbursement rates and lack of physician access.

• HealthcareIT News published an interesting article noting that ICD-10 implementation will

almost surely be delayed, which could lead to ICD-11 leapfrogging this interim initiative.

As providers continue to struggle with the pending changes, many are beginning to

question the value of ICD-10. Additionally, ICD-11 offers a number of advantages, both in

terms of data and functionality, which make it a superior solution. It remains to be seen,

however, whether the government and providers are willing to write-off the time that has

already been spent on the ICD-10 conversion.

• Iltifat Husain contributed reviews of three free healthcare apps to technology blog

Techcrunch. He looked at Cancer.net, a cancer information website with an iOS app, Carb

Counting with Lenny, an app made by Medtronic that allows diabetes patients to estimate

their carbohydrate intake, and Hello Baby Pregnancy Calendar, an app made by Pampers

that enables expecting parents to better prepare for the various stages of pregnancy. Read

the reviews here.

2

Key Trading

Statistics

(detail begins

on page 6)

Equity Trading

Overview

March 2012

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 $8,156 7.7% (0.3%) 1.7x 8.1x 1.7x 7.9x

Contract Pharma Manufacturing 5 718 20.9% 1.2% 1.0x 8.2x 1.2x 7.9x

Contract Research Organizations 5 1,504 28.1% (3.6%) 1.2x 11.2x 1.1x 8.9x

Disease Management 3 2,134 13.2% (34.2%) 2.5x 7.5x 2.2x 7.6x

Emergency Services 1 1,713 21.8% 55.5% 2.6x 10.0x 2.2x 8.6x

Health Care Staffing 4 769 22.6% (5.6%) 0.5x 10.2x 0.7x 8.3x

HMO - Medical 11 14,175 19.7% 28.3% 0.4x 6.0x 0.4x 6.4x

Information Services 14 2,178 25.7% 4.2% 3.1x 14.8x 2.8x 10.9x

Specialty Managed Care 2 2,061 8.2% (1.9%) 0.8x 6.0x 0.8x NA

Specialty Pharmacy Management 5 7,604 11.7% 22.9% 0.6x 10.9x 0.5x 9.2x

Dental Products 5 22,914 13.5% (1.1%) 2.6x 11.6x 2.2x 10.3x

Durable Medical Equipment 4 2,087 11.4% (9.0%) 1.3x 7.1x 1.3x 7.0x

Life Sciences Tools 3 13,826 24.6% (4.7%) 2.2x 8.6x 2.2x 7.7x

Medical Devices and Products 13 33,764 15.1% (4.2%) 2.5x 8.6x 2.4x 7.9x

Medical / Surgical / Dental Supplies 7 8,438 6.1% (1.4%) 0.2x 8.0x 0.2x 7.5x

Acute-Care Hospitals 5 7,144 16.3% (21.3%) 0.9x 6.4x 0.9x 6.1x

Assisted Living 7 1,500 30.0% (30.7%) 1.6x 12.1x 1.6x 11.5x

Diagnostic Imaging 3 2,766 18.3% (10.1%) 1.5x 5.8x 1.5x 6.0x

Dialysis Services 2 20,939 11.7% 7.7% 2.0x 9.8x 1.9x 8.9x

Home Care / Hospice 7 908 22.7% (41.3%) 0.6x 4.9x 0.6x 5.8x

Long-Term Care 4 887 20.8% (34.3%) 0.6x 5.6x 0.6x 5.0x

Physician Practice Management 4 1,070 13.8% 2.3% 0.9x 8.6x 1.1x 8.3x

Psychiatric Hospitals / Management 3 2,412 16.3% (2.4%) 0.4x 5.4x 0.3x 6.0x

Surgicenters / Rehabilitation 5 2,289 5.1% (0.0%) 1.1x 6.4x 1.1x 6.6x

Payer, Provider, & Pharmacy Support Services 53 $4,101 18.0% 6.6% 1.4x 9.3x 1.3x 8.4x

Products & Devices 32 $16,206 14.1% (4.1%) 1.8x 8.8x 1.7x 8.1x

Provider-Based Services 40 $4,435 17.2% (14.5%) 1.1x 7.2x 1.1x 7.1x

HC&LS Composite Index 125 $6,748 16.9% (3.5%) 1.4x 8.4x 1.3x 7.8x

S&P 500 14.3% 2.9%

Median TEV/

Forward MulitplesSectorNumber of

Companies

Average

Enterprise

Value ($ mm)

Median TEV/

LTM Multiples

Emergency Services

HMO - Medical

Specialty Pharmacy Management

Dialysis Services

Information Services

S&P 500

Physician Practice Management

Contract Pharma Manufacturing

Surgicenters / Rehabilitation

Clinical Laboratories

Dental Products

Medical / Surgical / Dental Supplies

Specialty Managed Care

Psychiatric Hospitals / Management

HC&LS Composite Index

Contract Research Organizations

Medical Devices and Products

Life Sciences Tools

Health Care Staffing

Durable Medical Equipment

Diagnostic Imaging

Acute-Care Hospitals

Assisted Living

Disease Management

Long-Term Care

Home Care / Hospice

(60.0%) (45.0%) (30.0%) (15.0%) 0.0% 15.0% 30.0% 45.0% 60.0% 75.0%

3

Healthcare and

Life Sciences

Industry Stock

Performance

Top 25 Equity

Offerings

(by proceeds)

Equity Markets

Overview

March 2012

40

60

80

100

120

140

160

180

200

Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12

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

Closing Date Filing Date Issuer Ticker Transaction Type

Gross Proceeds

($mm)

02/20/12 02/20/12 Pfizer Animal Health - IPO $3,000.0

02/29/12 09/16/09 VIVUS Inc VVUS Follow-On 202.5

02/01/12 12/23/11 Ardea Biosciences Inc RDEA Follow-On 166.2

02/01/12 02/01/12 MannKind Corp MNKD Convertible 161.0

02/14/12 07/21/11 Alnylam Pharmaceuticals Inc ALNY Follow-On 92.7

02/10/12 02/08/12 Ironwood Pharmaceuticals Inc IRWD Follow-On 91.1

02/06/12 02/06/12 Radius Health Inc RDUS Follow-On 86.3

02/02/12 04/30/10 MannKind Corp MNKD Follow-On 86.3

02/09/12 04/24/09 Exelixis Inc EXEL Follow-On 69.6

02/09/12 11/23/11 Array Biopharma Inc ARRY Follow-On 59.8

02/02/12 10/12/11 Cempra Holdings LLC CEMP IPO 58.0

02/08/12 10/14/11 ChemoCentryx Inc CCXI IPO 51.8

02/28/12 02/28/12 Horizon Pharma Inc HZNP Follow-On 50.8

02/03/12 02/03/12 Oncothyreon Inc ONY Follow-On 50.0

02/23/12 04/05/10 Celldex Therapeutics Inc CLDX Follow-On 40.4

02/24/12 02/24/12 Fuse Science Inc DROP Follow-On 37.7

02/10/12 02/10/12 Pernix Therapeutics Hldg Inc PTX Follow-On 25.0

02/08/12 02/08/12 Bionovo Inc BNVI Convertible 25.0

02/17/12 05/04/10 Alexza Pharmaceuticals Inc ALXA Follow-On 22.0

02/16/12 01/09/12 InVivo Therapeutics Holdings NVIV Follow-On 20.0

02/09/12 12/30/11 Apricus Biosciences Inc APRI Follow-On 20.0

02/03/12 02/03/12 Transgenomic Inc TBIO Follow-On 19.0

02/09/12 07/24/09 Rockwell Medical Technologies RMTI Follow-On 17.5

02/08/12 12/15/10 Cardica Inc CRDC Follow-On 15.0

02/21/12 02/21/12 Access Pharmaceuticals Inc ACCP Follow-On 10.0

4

Announced

Healthcare &

Life Sciences

M&A

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

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

Healthcare and

Life Sciences

M&A Trends

Announced

Private Equity

M&A Activity

Top 10 Middle Market Healthcare Deals Quarterly M&A Activity

LTM Deal Statistics

Note: Transactions based on publicly available information

M&A

Overview

March 2012

198179

223

278 279

255

225242

256267

245 236

135

9

5

11

17 18

17

21

13

1816

1318

8

0

50

100

150

200

250

300

350

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Nu

mb

er o

f T

ra

nsa

cti

on

s__

PEG Acquirer Strategic Acquirer

$389.4

$194.1 $174.6

$110.6

$141.4

$15.1 0

200

400

600

800

1000

1200

1400

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2007 2008 2009 2010 2011 2012 YTD

Nu

mb

er o

f Tra

nsa

ctio

ns_

_

Ag

greg

ate

Tra

nsa

cti

on

Va

lue (

$ i

n b

illi

on

s)

Aggregate Deal Value # of deals

15.5x 15.2x

7.7x

12.8x 11.1x

13.4x

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

2007 2008 2009 2010 2011 2012 YTD

EV

/ LT

M R

ev

en

ue M

ultip

le_

_EV

/ L

TM

EB

ITD

A M

ult

iple

__

TEV / LTM EBITDA TEV / LTM Sales

31

40

58

69

94

113

79

42

71

65

8

2327

40

60 62

95

49 50

80

120

17

0

20

40

60

80

100

120

140

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD

Nu

mb

er o

f In

vest

men

ts'

Number of Investments Number of Exits

HC&LS Industry Number of

Segment Companies

Biotechnology 4

Healthcare Technology 17

Healthcare Distributors 7

Healthcare Equipment 23

Healthcare Facilities 32

Healthcare Services 51

Healthcare Supplies 9

Life Sciences Tools & Services 9

Managed Healthcare 5

Pharmaceuticals 21

Aggregate Number Median Transaction Multiples

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

$158.6 332 1.76x 11.11x

Announced Target Buyer

2/29/2012 Western Institutional Review Board, Inc. Arsenal Capital Partners, Inc.

2/28/2012 eScreen, Inc. Alere Inc. (NYSE:ALR)

2/28/2012 Preferred Care Partners, Inc. United HealthCare Services, Inc.

2/22/2012 Freedom Innovations, LLC Health Evolution Partners

2/14/2012 Crescent Healthcare, Inc. Walgreen Co. (NYSE:WAG)

2/12/2012 SeraCare Life Sciences, Inc. (NasdaqCM:SRLS) Linden LLC

2/6/2012 DMS Health Technologies, Inc. Platinum Equity, LLC

2/1/2012 Advanced Dermatology & Cosmetic Surgery Audax Group

2/1/2012 Paradigm Management Services, LLC Lightyear Capital LLC

2/1/2012 Ostial Solutions, LLC Merit Medical Systems, Inc.

(NasdaqGS:MMSI)

5

Key Credit

Statistics

Top 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 2012

$0

$3

$6

$9

$12

$15

$18

$21

$24

4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11

Lo

an

Vo

lum

e b

y Q

ua

rte

r (

$ i

n b

illi

on

s)_

__

Pro Rata Institutional

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2005 2006 2007 2008 2009 2010 2011

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

__

2005 2006 2007 2008 2009 2010 2011

Date Effective Borrower Name Description Deal Amount Tranche Amount Type Rating Spread

02/22/12 Community Health Systems General medical & surgical hospitals $1,200,000,000 $700,000,000 Revolver/Line >= 1 Yr. 250 / BB 250

02/22/12 Community Health Systems General medical & surgical hospitals 1,200,000,000 500,000,000 Term Loan A BB / WR 250

02/14/12 Valeant Pharmaceuticals International Pharmaceutical preparations 600,000,000 600,000,000 Term Loan B 275 / BB- 275

02/07/12 Alexion Pharmaceuticals Inc Pharmaceutical preparations 440,000,000 240,000,000 Term Loan A 137.5 / NR 137.5

02/07/12 Alexion Pharmaceuticals Inc Pharmaceutical preparations 440,000,000 200,000,000 Revolver/Line >= 1 Yr. 137.5 / NR 137.5

02/22/12 Catalent Pharma Pharmaceutical preparations 400,000,000 400,000,000 Term Loan B 400 / B 400

02/14/12 AngioDynamics Surgical and medical instruments 150,000,000 150,000,000 Other Loan N/A / NR N/A

02/24/12 Exactech Inc Surgical appliances and supplies 100,000,000 70,000,000 Revolver/Line >= 1 Yr. 200 / NR 200

02/24/12 Exactech Inc Surgical appliances and supplies 100,000,000 30,000,000 Term Loan A NR / NR 200

02/01/12 Paradigm Management Services LLC Specialty outpatient clinics 65,000,000 55,000,000 Term Loan A 600 / NR 600

02/01/12 Paradigm Management Services LLC Specialty outpatient clinics 65,000,000 10,000,000 Revolver/Line >= 1 Yr. 600 / NR 600

02/01/12 Willow Valley Retirement Nursing and personal care 59,297,260 59,297,260 Standby Letter of Credit N/A / NR N/A

02/01/12 Ohio Masonic Home Nursing and personal care 50,100,000 50,100,000 Term Loan 230 / NR 230

02/17/12 Jordan Reses Supply Co Medical and hospital equipment 50,000,000 45,000,000 Term Loan 425 / NR 425

02/17/12 Jordan Reses Supply Co Medical and hospital equipment 50,000,000 5,000,000 Revolver/Line >= 1 Yr. 375 / NR 375

02/08/12 Petersen Health Care II Skilled nursing care facilities 40,005,000 17,255,000 Term Loan NR / NR N/A

02/08/12 Petersen Health Care II Skilled nursing care facilities 40,005,000 13,750,000 Term Loan N/A / NR N/A

02/08/12 Petersen Health Care II Skilled nursing care facilities 40,005,000 9,000,000 Revolver/Line < 1 Yr. N/A / NR N/A

Healthcare and Life Sciences Industry Update

March 2012March 2012

Payer, Provider, & Pharmacy Support ServicesStock Price

% Change 52 Week TEV/ LTM Multiples (5)Equity Total Debt Cash and Total Ent

Lastest Twelve Months (LTM)

TEV/ Fwd MultiplesForward EstimateCompany Name

LTM Lastest FYE% Change 52 Week

2/29/2012 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical LaboratoriesBio-Reference Laboratories Inc. $20.14 65.5% (3.7%) $25.99 $11.41 $563 $34 $22 $575 $587 $80 $64 Jan-12 Oct-11 $651 $88 $71 1.0x 7.7x 0.9x 6.5xLaboratory Corp. of America Holdings 89.89 7.7% (0.3%) 100.94 74.57 8,737 2,221 159 10,819 5,542 1,244 1,046 Dec-11 Dec-11 5,714 1,365 1,139 2.0x 8.6x 1.9x 7.9xQuest Diagnostics Inc. 58.05 2.7% 2.3% 61.47 45.13 9,191 4,025 165 13,074 7,510 1,589 1,308 Dec-11 Dec-11 7,679 1,654 1,365 1.7x 8.1x 1.7x 7.9xNumber of Companies 3 Median: 7.7% (0.3%) Total $18,492 $8,156 $13,640 $14,044 1.7x 8.1x 1.7x 7.9x

Mean: 25.3% (0.6%) $8,156 1.6x 8.1x 1.5x 7.5x

Contract Pharma ManufacturingAkorn Inc $12 53 20 9% 124 2% $13 00 $4 97 $1 188 $100 $127 $1 162 $118 $31 $26 Sep 11 Dec 10 $246 $98 $85 9 8x 17 3x 4 7x 11 9x

pMkt. Value

Total DebtEquiv.

Ent. Value (TEV)

(LTM)Company NamePeriod (3) FYE

Date(3)

Akorn, Inc. $12.53 20.9% 124.2% $13.00 $4.97 $1,188 $100 $127 $1,162 $118 $31 $26 Sep-11 Dec-10 $246 $98 $85 9.8x 17.3x 4.7x 11.9xCambrex Corporation. 6.66 0.9% 21.5% 8.44 3.87 197 98 32 263 256 47 24 Dec-11 Dec-11 265 NA 29 1.0x 5.8x 1.0x NA Integrated Biopharma Inc. 0.05 60.0% (74.1%) 0.28 0.02 1 13 1 13 27 1 1 Sep-11 Jun-11 NA NA NA 0.5x 9.5x NA NA Patheon Inc. 2.01 76.5% (27.1%) 2.73 1.09 259 282 33 510 700 71 18 Oct-11 Oct-11 739 84 16 0.7x 7.1x 0.7x 6.1xWest Pharmaceutical Services, Inc. 41.60 13.3% 1.2% 47.96 35.50 1,405 358 92 1,645 1,192 195 119 Dec-11 Dec-11 1,223 210 127 1.4x 8.2x 1.3x 7.9xNumber of Companies 5 Median: 20.9% 1.2% Total $3,051 $718 $2,293 $2,473 1.0x 8.2x 1.2x 7.9x

Mean: 34.3% 9.2% $718 2.7x 9.6x 1.9x 8.6x

Contract Research OrganizationsAlbany Molecular Research Inc. $2.74 31.1% (39.4%) $6.37 $2.08 $84 $6 $20 $69 $208 $5 ($13) Dec-11 Dec-11 $216 $19 $4 0.3x 15.3x 0.3x 3.6xCharles River Laboratories International, Inc. 35.13 28.7% (3.6%) 42.84 25.52 1,717 718 69 2,363 1,143 271 186 Dec-11 Dec-11 1,154 266 199 2.1x 8.7x 2.0x 8.9xCovance Inc. 47.73 5.8% (15.4%) 63.86 42.02 2,793 30 389 2,433 2,096 308 205 Dec-11 Dec-11 2,184 313 200 1.2x 7.9x 1.1x 7.8xICON plc 21.18 28.1% 6.5% 21.87 18.13 1,272 0 119 1,106 946 78 39 Dec-11 Dec-11 1,092 116 73 1.2x 14.4x 1.0x 9.6xPAREXEL International Corporation 24.48 25.9% 4.3% 27.91 15.26 1,457 247 134 1,551 1,260 138 71 Dec-11 Jun-11 1,362 172 105 1.2x 11.2x 1.1x 9.0xNumber of Companies 5 Median: 28.1% (3.6%) Total $7,322 $1,504 $5,652 $6,008 1.2x 11.2x 1.1x 8.9x

Mean: 23.9% (9.5%) $1,504 1.2x 11.5x 1.1x 7.8x

Disease ManagementAlere Inc. $25.43 13.2% (34.2%) $41.18 $17.82 $2,187 $3,353 $299 $5,852 $2,387 $560 $162 Dec-11 Dec-11 $2,683 $627 $550 2.5x 10.3x 2.2x 9.3xCorac Group plc 0.20 (3.4%) (23.1%) 0.33 0.14 49 0 31 18 1 (7) (7) Jun-11 Dec-10 1 (9) (9) 13.7x NM 32.4x NM Healthways Inc. 7.95 33.2% (43.1%) 17.62 5.59 265 270 1 534 689 113 63 Dec-11 Dec-11 674 91 39 0.8x 4.7x 0.8x 5.9xNumber of Companies 3 Median: 13 2% (34 2%) Total $2 501 $2 134 $3 077 $3 358 2 5x 7 5x 2 2x 7 6xNumber of Companies 3 Median: 13.2% (34.2%) Total $2,501 $2,134 $3,077 $3,358 2.5x 7.5x 2.2x 7.6x

Mean: 14.3% (33.5%) $2,134 5.7x 7.5x 11.8x 7.6x

Emergency ServicesAir Methods Corp. $90.23 21.8% 55.5% $92.97 $56.17 $1,137 $580 $4 $1,713 $661 $171 $98 Dec-11 Dec-11 $795 $200 $129 2.6x 10.0x 2.2x 8.6xNumber of Companies 1 Median: 21.8% 55.5% Total $1,137 $1,713 $661 $795 2.6x 10.0x 2.2x 8.6x

Mean: 21.8% 55.5% $1,713 2.6x 10.0x 2.2x 8.6x

Health Care StaffingAMN Healthcare Services Inc. $5.34 27.8% (28.5%) $9.33 $3.60 $216 $214 $5 $450 $927 $59 $41 Sep-11 Dec-10 $927 $59 $41 0.5x 7.7x 0.5x 7.6xCross Country Healthcare, Inc. 5.66 17.4% (32.0%) 8.10 3.76 177 42 11 207 504 21 11 Dec-11 Dec-11 538 28 17 0.4x 9.9x 0.4x 7.4xy ( )On Assignment Inc. 13.88 40.5% 32.2% 14.34 6.27 512 88 0 587 597 53 44 Dec-11 Dec-11 685 64 54 1.0x 11.0x 0.9x 9.2xTeam Health Holdings, Inc. 21.69 8.0% 17.3% 24.13 14.53 1,423 420 10 1,833 3,142 176 146 Dec-11 Dec-11 1,964 205 159 0.6x 10.4x 0.9x 9.0xNumber of Companies 4 Median: 22.6% (5.6%) Total $2,327 $769 $5,170 $4,114 0.5x 10.2x 0.7x 8.3x

Mean: 23.4% (2.7%) $769 0.6x 9.8x 0.7x 8.3x

As of February 29, 2012 6

Healthcare and Life Sciences Industry Update

March 2012March 2012

Payer, Provider, & Pharmacy Support ServicesStock Price

% Change 52 WeekCompany Name Equity Total Debt Cash and Total Ent

Lastest Twelve Months (LTM)

LTM Lastest FYE Forward Estimate TEV/ LTM Multiples (5) TEV/ Fwd Multiples

% Change 52 Week2/29/2012 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

HMO - Medical

Commercial:Aetna Inc. $46.76 17.1% 25.2% $47.71 $33.43 $16,385 $4,404 $680 $20,109 $33,780 $3,909 $3,462 Dec-11 Dec-11 $35,170 $3,400 $3,033 0.6x 5.1x 0.6x 5.9xCigna Corp. 44.11 4.9% 4.8% 52.95 35.63 12,638 5,105 4,690 13,053 21,998 2,328 2,170 Dec-11 Dec-11 28,390 2,672 2,374 0.6x 5.6x 0.5x 4.9xCoventry Health Care Inc. 32.69 7.5% 8.2% 37.86 25.78 4,616 1,819 1,579 4,855 12,204 841 726 Dec-11 Dec-11 14,073 878 755 0.4x 5.8x 0.3x 5.5xHealth Net, Inc. 37.74 27.5% 28.3% 40.22 20.51 3,126 511 230 3,407 11,901 381 349 Dec-11 Dec-11 11,571 478 446 0.3x 8.9x 0.3x 7.1xHumana Inc. 87.10 1.9% 34.0% 96.46 60.66 14,289 1,965 1,377 14,877 36,832 2,647 2,344 Dec-11 Dec-11 39,591 2,510 2,200 0.4x 5.6x 0.4x 5.9xUnitedhealth Group, Inc. 55.75 21.5% 30.9% 56.16 41.27 58,257 11,714 9,429 60,542 101,862 9,211 8,464 Dec-11 Dec-11 109,088 9,410 8,367 0.6x 6.6x 0.6x 6.4x

Company NameMkt. Value

Total DebtEquiv.

Ent. Value (TEV)

(LTM)Period (3) FYE

Date(3)

p

WellPoint Inc. 65.63 (2.7%) (1.3%) 81.92 55.56 21,970 10,668 2,202 30,436 60,711 5,079 4,442 Dec-11 Dec-11 62,332 4,633 4,150 0.5x 6.0x 0.5x 6.6xNumber of Companies 7 Median: 7.5% 25.2% Total $131,280 $21,040 $279,287 $300,214 0.5x 5.8x 0.5x 5.9x

Mean: 11.1% 18.6% $21,040 0.5x 6.2x 0.4x 6.1x

Government:AMERIGROUP Corporation $67.93 23.2% 18.4% $75.74 $37.57 $3,268 $657 $547 $3,379 $6,318 $344 $330 Dec-11 Dec-11 $8,758 $382 $346 0.5x 9.8x 0.4x 8.8xCentene Corp. 48.80 32.1% 60.2% 50.36 25.28 2,485 352 574 2,263 5,354 252 204 Dec-11 Dec-11 7,527 306 245 0.4x 9.0x 0.3x 7.4xMolina Healthcare Inc. 33.96 62.5% 45.4% 36.83 13.93 1,556 218 494 1,280 4,770 190 145 Dec-11 Dec-11 5,937 198 148 0.3x 6.8x 0.2x 6.5xWellCare Health Plans, Inc. 67.86 19.7% 80.7% 71.54 33.29 2,908 146 1,325 1,729 6,107 429 414 Dec-11 Dec-11 7,026 356 332 0.3x 4.0x 0.2x 4.9xNumber of Companies 4 Median: 27.6% 52.8% Total $10,217 $2,163 $22,549 $29,248 0.4x 7.9x 0.3x 6.9x

Mean: 34.4% 51.2% $2,163 0.4x 7.4x 0.3x 6.9xMean: 34.4% 51.2% $2,163 0.4x 7.4x 0.3x 6.9x

Information Services

Data/Analytics:Accelrys Inc. $7.94 17.6% (8.3%) $8.90 $5.68 $440 $0 $59 $324 $142 $2 ($25) Sep-11 Dec-10 $150 $33 $22 2.3x 172.0x 2.2x 9.9xeResearchTechnology, Inc. 6.38 55.6% 0.5% 7.86 3.86 314 21 39 296 185 41 20 Dec-11 Dec-11 199 61 31 1.6x 6.4x 1.5x 4.8xNational Research Corp. 38.63 22.2% 18.1% 44.44 26.35 260 2 8 254 76 24 19 Dec-11 Dec-11 88 NA NA 3.3x 10.7x 2.9x NA Number of Companies 3 Median: 22.2% 0.5% Total $1,014 $291 $403 $150 2.3x 10.7x 2.2x 7.4x

Mean: 31.8% 3.4% $291 2.4x 63.0x 2.2x 7.4x

eHealth:WebMD Health Corp. 24.85 (29.5%) (57.2%) 58.55 24.51 1,385 800 1,121 1,064 559 130 115 Dec-11 Dec-11 $507 $108 $35 1.9x 8.2x NA NA Number of Companies 1 Median: (29.5%) (57.2%) Total $1,385 $1,064 $559 $507 1.9x 8.2x NA NA

Mean: (29.5%) (57.2%) $1,064 1.9x 8.2x NA NA

Hospital/Physician:Allscripts Healthcare Solutions, Inc. $19.32 2.3% (9.5%) $23.13 $13.85 $3,678 $371 $158 $3,892 $1,444 $254 $173 Dec-11 Dec-11 $1,630 $430 $350 2.7x 15.3x 2.4x 9.1xathenahealth, Inc. 70.67 25.9% 55.9% 72.70 38.08 2,506 0 58 2,386 324 49 34 Dec-11 Dec-11 426 85 63 7.4x 49.1x 5.6x 28.2xCerner Corporation 73.83 26.9% 47.0% 75.50 49.98 12,528 127 243 11,880 2,203 593 460 Dec-11 Dec-11 2,503 822 580 5.4x 20.0x 4.7x 14.4xComputer Programs & Systems Inc. 60.84 43.8% 12.6% 79.06 41.80 667 0 7 644 173 44 41 Dec-11 Dec-11 194 51 48 3.7x 14.7x 3.3x 12.7xHMS Holdings Corp. 32.22 11.2% 27.9% 34.98 19.78 2,758 350 97 3,011 364 109 86 Dec-11 Dec-11 510 168 110 8.3x 27.7x 5.9x 17.9xM dA t I 14 28 54 7% 0 8% 16 87 8 52 826 920 63 1 682 578 170 67 D 11 D 11 607 197 88 2 9 9 9 2 8 8 5MedAssets, Inc. 14.28 54.7% 0.8% 16.87 8.52 826 920 63 1,682 578 170 67 Dec-11 Dec-11 607 197 88 2.9x 9.9x 2.8x 8.5xMerge Healthcare Incorporated 6.53 26.2% 30.2% 7.23 3.39 594 250 39 806 232 54 35 Dec-11 Dec-11 289 67 55 3.5x 14.9x 2.8x 12.0xQuality Systems Inc. 42.91 26.1% 7.4% 50.70 30.81 2,531 0 129 2,401 418 130 121 Dec-11 Mar-11 437 144 128 5.7x 18.4x 5.5x 16.6xSunCoke Energy Inc. 14.33 25.5% 0.0% 18.00 9.20 1,003 726 128 1,637 1,528 141 83 Dec-11 Dec-11 1,863 260 185 1.1x 11.6x 0.9x 6.3xTranscend Services, Inc. 21.50 (16.6%) 1.0% 30.25 15.27 230 0 12 216 125 26 23 Dec-11 Dec-11 145 28 25 1.7x 8.3x 1.5x 7.8xNumber of Companies 10 Median: 26.0% 10.0% Total $27,320 $2,855 $7,390 $8,603 3.6x 15.1x 3.1x 12.4x

Mean: 22.6% 17.3% $2,855 4.2x 19.0x 3.5x 13.4x

As of February 29, 2012 7

Healthcare and Life Sciences Industry Update

March 2012March 2012

Payer, Provider, & Pharmacy Support ServicesStock Price

% Change 52 Week TEV/ LTM Multiples (5) TEV/ Fwd MultiplesTotal Ent

Lastest Twelve Months (LTM)

LTM Lastest FYE Forward Estimate

Company Name Equity Total Debt Cash and % Change 52 Week

2/29/2012 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Specialty Managed CareAssurant Inc. 42.47 14.0% 4.5% 44.54 30.65 3,716 1,068 1,167 3,617 8,273 905 775 Dec-11 Dec-11 8,456 NA 829 0.4x 4.0x 0.4x NA CorVel Corporation 45.34 2.5% (8.4%) 54.64 38.04 515 0 10 504 409 63 49 Dec-11 Mar-11 413 NA NA 1.2x 8.1x 1.2x NA Number of Companies 2 Median: 8.2% (1.9%) Total $4,231 $2,061 $8,682 $8,869 0.8x 6.0x 0.8x NA

Mean: 8.2% (1.9%) $2,061 0.8x 6.0x 0.8x NA

Specialty Pharmacy ManagementBioScrip Inc. $6.34 8.4% 50.2% $7.85 $4.00 $365 $279 $0 $644 $1,785 $54 $41 Sep-11 Dec-10 $1,793 $70 $44 0.4x 12.0x 0.4x 9.2xExpress Scripts Inc 53 33 23 4% (5 1%) 60 89 34 47 25 853 8 076 5 620 28 309 46 128 2 601 2 374 Dec 11 Dec 11 46 802 3 052 2 911 0 6x 10 9x 0 6x 9 3x

pEnt. Value (TEV)

(LTM)Period (3) FYE

Date(3)Company Name

Mkt. ValueTotal Debt

Equiv.

Express Scripts Inc. 53.33 23.4% (5.1%) 60.89 34.47 25,853 8,076 5,620 28,309 46,128 2,601 2,374 Dec-11 Dec-11 46,802 3,052 2,911 0.6x 10.9x 0.6x 9.3xCatalyst Health Solutions, Inc. 62.02 24.2% 37.2% 67.58 43.31 2,789 271 49 3,014 5,330 202 162 Dec-11 Dec-11 6,077 241 187 0.6x 14.9x 0.5x 12.5xOmnicare Inc. 35.18 11.7% 22.9% 35.87 20.36 3,997 1,995 580 5,411 6,183 638 505 Dec-11 Dec-11 6,177 656 541 0.9x 8.5x 0.9x 8.2xPharMerica Corporation 12.26 (21.2%) 4.3% 16.45 10.43 361 300 17 644 2,081 99 67 Dec-11 Dec-11 1,940 100 69 0.3x 6.5x 0.3x 6.4xNumber of Companies 5 Median: 11.7% 22.9% Total $33,366 $7,604 $61,507 $62,789 0.6x 10.9x 0.5x 9.2x

Mean: 9.3% 21.9% $7,604 0.5x 10.6x 0.5x 9.1x

As of February 29, 2012 8

Healthcare and Life Sciences Industry Update

March 2012March 2012

Products & DevicesStock Price

% Change 52 WeekForward Estimate

Company NameEquity

Total Debt TEV/ LTM Multiples (5) TEV/ Fwd MultiplesCash and Total Ent

Lastest Twelve Months (LTM)

LTM Lastest FYE% Change 52 Week

2/29/2012 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Dental Products3M Co. $87.60 13.4% (5.0%) $98.19 $68.63 $60,842 $5,245 $2,219 $62,849 $29,611 $7,414 $6,178 Dec-11 Dec-11 $30,582 $7,731 $6,447 2.1x 8.5x 2.1x 8.1xDanaher Corp. 52.83 13.5% 4.4% 56.09 39.34 36,415 5,305 537 41,251 16,091 3,482 2,847 Dec-11 Dec-11 18,587 4,004 3,239 2.6x 11.6x 2.2x 10.3xDENTSPLY International Inc. 38.71 14.6% 3.6% 40.37 28.35 5,498 1,968 77 7,423 2,538 422 337 Dec-11 Dec-11 2,968 588 475 2.9x 17.5x 2.5x 12.6xSirona Dental Systems Inc. 49.90 16.5% (1.1%) 57.87 35.64 2,781 130 106 2,808 936 232 156 Dec-11 Sep-11 970 258 228 3.0x 12.1x 2.9x 10.9xYoung Innovations Inc. 30.25 5.0% (4.5%) 33.40 25.06 241 1 1 241 106 28 24 Dec-11 Dec-11 109 30 26 2.3x 8.5x 2.2x 8.0xNumber of Companies 5 Median: 13.5% (1.1%) Total $105,778 $22,914 $49,282 $53,216 2.6x 11.6x 2.2x 10.3x

Mean: 12.6% (0.5%) $22,914 2.6x 11.6x 2.4x 10.0x

Company Name Mkt. Value Total Debt Equiv.Ent.

Value (LTM)

Period (3) FYE Date(3)

Durable Medical EquipmentHill-Rom Holdings, Inc. $33.97 12.5% (10.8%) $48.80 $26.90 $2,104 $99 $214 $1,989 $1,599 $301 $215 Dec-11 Sep-11 $1,659 $328 $232 1.2x 6.6x 1.2x 6.1xInvacare Corporation 16.51 (15.3%) (44.2%) 34.52 14.54 525 265 35 756 1,801 136 97 Dec-11 Dec-11 1,690 NA NA 0.4x 5.6x 0.4x NA ResMed Inc. 29.30 15.4% (7.3%) 35.90 23.37 4,225 226 723 3,728 1,303 342 261 Dec-11 Jun-11 1,356 363 277 2.9x 10.9x 2.7x 10.3xSteris Corp. 31.38 10.3% (7.3%) 38.00 27.08 1,809 210 144 1,876 1,394 249 188 Dec-11 Mar-11 1,389 268 205 1.3x 7.5x 1.4x 7.0xNumber of Companies 4 Median: 11.4% (9.0%) Total $8,662 $2,087 $6,097 $6,095 1.3x 7.1x 1.3x 7.0x

Mean: 5.7% (17.4%) $2,087 1.5x 7.7x 1.4x 7.8x

Life Sciences ToolsAgilent Technologies Inc. $43.62 24.6% 3.7% $55.33 $28.67 $15,151 $2,181 $3,662 $13,673 $6,731 $1,385 $1,133 Jan-12 Oct-11 $6,944 $1,623 $1,426 2.0x 9.9x 2.0x 8.4xBecton, Dickinson and Company 76.22 6.2% (4.7%) 89.75 69.59 16,014 4,176 2,196 17,492 7,875 2,231 1,715 Dec-11 Sep-11 7,893 2,265 1,693 2.2x 7.8x 2.2x 7.7xLife Technologies Corporation 47.31 26.0% (11.4%) 56.71 35.30 8,431 2,748 839 10,314 3,776 1,197 787 Dec-11 Dec-11 3,823 1,367 1,146 2.7x 8.6x 2.7x 7.5xNumber of Companies 3 Median: 24.6% (4.7%) Total $39,596 $13,826 $18,381 $18,660 2.2x 8.6x 2.2x 7.7x

Mean: 18.9% (4.1%) $13,826 2.3x 8.8x 2.3x 7.9x

Medical Devices and Products

Abbott Laboratories $56.61 6.7% 17.7% $57.20 $46.29 $89,011 $15,415 $6,813 $96,415 $38,851 $11,162 $8,118 Dec-11 Dec-11 $39,953 $12,269 $9,625 2.5x 8.6x 2.4x 7.9xArthroCare Corporation 26.10 (8.2%) (24.3%) 36.00 23.54 720 0 220 578 355 21 (3) Dec-11 Dec-11 361 95 68 1.6x 27.2x 1.6x 6.1xBaxter International Inc. 58.13 17.6% 9.4% 62.50 47.55 32,573 5,195 2,905 35,106 13,893 3,887 3,217 Dec-11 Dec-11 14,189 4,032 3,327 2.5x 9.0x 2.5x 8.7xBoston Scientific Corporation 6.22 12.1% (13.1%) 7.96 5.01 9,027 4,261 267 13,021 7,622 1,745 1,028 Dec-11 Dec-11 7,506 1,732 1,052 1.7x 7.5x 1.7x 7.5xCR B d I 93 62 11 8% (4 2%) 113 84 80 80 7 870 1 213 596 8 486 2 896 935 828 D 11 D 11 3 036 941 833 2 9 9 1 2 8 9 0CR Bard Inc. 93.62 11.8% (4.2%) 113.84 80.80 7,870 1,213 596 8,486 2,896 935 828 Dec-11 Dec-11 3,036 941 833 2.9x 9.1x 2.8x 9.0xHanger Orthopedic Group Inc. 20.69 35.3% (23.1%) 21.51 20.01 703 508 43 1,168 919 162 131 Dec-11 Dec-11 975 163 127 1.3x 7.2x 1.2x 7.2xHologic Inc. 20.73 25.3% 2.7% 23.24 13.90 5,468 1,508 793 6,183 1,829 624 316 Dec-11 Sep-11 1,921 684 596 3.4x 9.9x 3.2x 9.0xHospira Inc. 35.62 26.4% (32.6%) 59.20 26.92 5,868 1,749 598 7,019 4,057 768 512 Dec-11 Dec-11 4,021 713 502 1.7x 8.6x 1.7x 9.8xJohnson & Johnson 65.08 3.7% 5.9% 68.05 57.50 178,650 19,627 24,542 166,016 65,030 19,398 16,240 Jan-12 Jan-12 67,348 21,240 17,583 2.6x 8.6x 2.5x 7.8xMedtronic, Inc. 38.12 9.2% (4.5%) 43.33 30.18 40,230 10,220 1,190 48,105 16,479 5,384 4,509 Jan-12 Apr-11 16,296 6,117 5,246 2.9x 8.9x 3.0x 7.9xStryker Corp. 53.64 15.1% (15.2%) 65.21 43.73 20,438 1,768 905 18,788 8,307 2,452 1,971 Dec-11 Dec-11 8,673 2,545 2,118 2.3x 7.7x 2.2x 7.4xThermo Fisher Scientific, Inc. 56.62 22.8% 1.4% 65.86 43.06 20,715 7,028 1,016 26,722 11,726 2,334 1,470 Dec-11 Dec-11 12,333 2,714 2,327 2.3x 11.5x 2.2x 9.8xZimmer Holdings, Inc. 60.75 26.5% (2.6%) 69.93 47.00 10,821 1,719 768 11,324 4,452 1,471 1,111 Dec-11 Dec-11 4,534 1,670 1,335 2.5x 7.7x 2.5x 6.8xNumber of Companies 13 Median: 15.1% (4.2%) Total $422,093 $33,764 $176,416 $181,146 2.5x 8.6x 2.4x 7.9x

Mean: 15.7% (6.3%) $33,764 2.3x 10.1x 2.3x 8.1x5.7% (6.3%) $33,76 .3 0. .3 8.

Medical / Surgical / Dental SuppliesAmerisourceBergen Corporation $37.37 2.7% (1.4%) $43.47 $30.51 $9,635 $1,929 $2,370 $9,194 $80,690 $1,369 $1,242 Dec-11 Sep-11 $80,841 $1,399 $1,278 0.1x 6.7x 0.1x 6.6xCardinal Health, Inc. 41.55 1.6% (0.2%) 47.06 35.07 14,363 2,553 1,798 14,814 106,705 2,042 1,715 Dec-11 Jun-11 107,823 2,153 1,843 0.1x 7.3x 0.1x 6.9xHenry Schein, Inc. 74.02 18.6% 7.3% 75.98 58.50 6,645 441 147 7,343 8,530 698 582 Dec-11 Dec-11 8,786 726 613 0.9x 10.3x 0.8x 10.1xMcKesson Corporation 83.51 6.1% 5.3% 87.32 63.32 20,552 3,987 4,191 20,348 119,888 2,731 2,254 Dec-11 Mar-11 120,929 2,992 2,500 0.2x 7.5x 0.2x 6.8xOwens & Minor Inc. 29.96 2.0% (4.0%) 35.71 25.87 1,904 215 136 1,983 8,628 248 214 Dec-11 Dec-11 9,046 264 230 0.2x 8.0x 0.2x 7.5xPatterson Companies Inc. 31.92 11.1% (4.4%) 36.93 26.19 3,538 850 538 3,849 3,483 400 359 Jan-12 Apr-11 3,513 400 359 1.1x 9.6x 1.1x 9.6xPSS World Medical Inc. 24.24 6.1% (6.8%) 29.47 18.51 1,243 319 32 1,533 2,113 171 136 Dec-11 Apr-11 2,119 171 136 0.7x 9.0x 0.7x 9.0xNumber of Companies 7 Median: 6.1% (1.4%) Total $57,880 $8,438 $330,037 $333,057 0.2x 8.0x 0.2x 7.5x

M $

As of February 29, 2012 9

Mean: 6.9% (0.6%) $8,438 0.5x 8.3x 0.5x 8.1x

Healthcare and Life Sciences Industry Update

March 2012March 2012

Provider-Based ServicesStock Price

% Change 52 WeekTEV/ Fwd Multiples

Company NameEquity

Total DebtCash and

Total Ent

Lastest Twelve Months (LTM)

LTM Lastest FYE Forward Estimate TEV/ LTM Multiples (5)

% Change 52 Week2/29/2012 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Acute-Care HospitalsCommunity Health Systems, Inc. $25.24 36.5% (38.2%) $42.50 $14.61 $2,230 $9,101 $130 $11,664 $13,626 $1,787 $1,134 Dec-11 Dec-11 $14,180 $1,913 $1,188 0.9x 6.4x 0.8x 6.1xHealth Management Associates Inc. 7.38 (4.8%) (26.2%) 11.74 4.81 1,878 3,737 64 5,445 5,804 838 563 Dec-11 Dec-11 6,403 946 643 0.9x 6.5x 0.9x 5.8xLifepoint Hospitals Inc. 38.97 3.8% (0.0%) 43.45 28.95 1,877 1,597 126 3,388 3,545 529 344 Dec-11 Dec-11 3,654 556 369 1.0x 6.4x 0.9x 6.1xTenet Healthcare Corp. 5.65 29.6% (21.3%) 7.70 3.46 2,316 4,360 113 6,982 9,584 1,145 732 Dec-11 Dec-11 9,851 1,240 815 0.7x 6.1x 0.7x 5.6xUniversal Health Services Inc. 44.61 16.3% (2.4%) 56.46 31.35 4,315 3,698 41 8,241 7,500 1,193 897 Dec-11 Dec-11 7,661 1,245 937 1.1x 6.9x 1.1x 6.6xNumber of Companies 5 Median: 16.3% (21.3%) Total $12,616 $7,144 $40,059 $41,748 0.9x 6.4x 0.9x 6.1x

Mean: 16.3% (17.6%) $7,144 0.9x 6.5x 0.9x 6.0x

Company Name Mkt. Value Total Debt Equiv.Ent.

Value (LTM)

Period (3) FYE Date(3)

Assisted LivingAssisted Living Concepts Inc. $16.05 25.7% (10.7%) $19.61 $11.16 $372 $95 $3 $463 $234 $64 $42 Sep-11 Dec-10 $234 $65 $43 2.0x 7.2x 2.0x 7.1xBrookdale Senior Living Inc. 18.64 27.8% (30.7%) 28.30 10.98 2,258 2,466 31 4,694 2,305 388 119 Dec-11 Dec-11 2,545 407 149 2.0x 12.1x 1.8x 11.5xCapital Senior Living Corp. 8.57 30.0% 2.1% 10.91 5.44 232 209 31 410 252 35 20 Sep-11 Dec-10 262 35 NA 1.6x 12.1x 1.6x 11.6xEmeritus Corp. 18.46 25.1% (21.5%) 26.35 13.36 819 2,270 61 3,030 1,214 196 73 Sep-11 Dec-10 1,257 219 83 2.5x 15.6x 2.4x 13.8xFive Star Quality Care Inc. 3.54 53.9% (49.6%) 8.95 2.15 170 115 28 253 1,282 42 21 Dec-11 Dec-11 1,385 46 9 0.2x 5.9x 0.2x 5.5xSkilled Healthcare Group, Inc. 6.53 66.6% (52.4%) 15.93 3.30 248 475 16 707 870 128 103 Dec-11 Dec-11 873 113 86 0.8x 5.4x 0.8x 6.2xSunrise Senior Living Inc. 7.74 60.6% (32.0%) 12.44 3.53 446 594 50 947 1,312 34 (4) Dec-11 Dec-11 1,365 72 NA 0.7x 28.8x 0.7x 13.2xNumber of Companies 7 Median: 30.0% (30.7%) Total $4,545 $1,500 $7,470 $7,922 1.6x 12.1x 1.6x 11.5x

Mean: 41.4% (27.8%) $1,500 1.4x 12.4x 1.4x 9.9x

Diagnostic ImagingAlliance Healthcare Services, Inc. $1.36 18.3% (67.1%) $4.74 $0.93 $70 $647 $40 $727 $491 $139 $33 Sep-11 Dec-10 $494 $142 $28 1.5x 5.1x 1.5x 5.1xRadNet, Inc. 3.01 39.4% (10.1%) 5.19 1.87 113 531 0 643 598 102 46 Sep-11 Dec-10 609 108 44 1.1x 5.8x 1.1x 6.0xVarian Medical Systems Inc. 65.25 10.6% (5.8%) 72.19 48.72 7,372 188 606 6,928 2,642 635 580 Dec-11 Sep-11 2,835 694 643 2.6x 10.9x 2.4x 10.0xNumber of Companies 3 Median: 18.3% (10.1%) Total $7,555 $2,766 $3,731 $3,938 1.5x 5.8x 1.5x 6.0x

Mean: 22.7% (27.7%) $2,766 1.7x 7.3x 1.7x 7.0x

Dialysis ServicesDaVita, Inc. $86.55 16.7% 9.0% $89.76 $59.14 $8,110 $4,528 $394 $12,832 $6,982 $1,435 $1,168 Dec-11 Dec-11 $7,680 $1,608 $1,316 1.8x 8.9x 1.7x 8.0xFresenius Medical Care AG & Co KGAA 70 44 6 7% 6 3% 76 17 57 03 21 383 7 343 457 29 047 12 795 2 601 2 044 Dec-11 Dec-11 14 298 2 956 2 396 2 2x 10 7x 2 0x 9 8xFresenius Medical Care AG & Co. KGAA 70.44 6.7% 6.3% 76.17 57.03 21,383 7,343 457 29,047 12,795 2,601 2,044 Dec-11 Dec-11 14,298 2,956 2,396 2.2x 10.7x 2.0x 9.8xNumber of Companies 2 Median: 11.7% 7.7% Total $29,493 $20,939 $19,777 $21,978 2.0x 9.8x 1.9x 8.9x

Mean: 11.7% 7.7% $20,939 2.0x 9.8x 1.9x 8.9x

Home Care / HospiceAddus HomeCare Corporation $3.60 (2.4%) (19.8%) $6.38 $3.00 $39 $32 $2 $72 $273 $15 $11 Dec-11 Dec-11 $281 $17 $13 0.3x 4.7x 0.3x 4.2xAlmost Family Inc. 22.88 67.3% (41.3%) 39.39 12.50 214 2 34 183 340 37 35 Dec-11 Dec-11 361 33 29 0.5x 4.9x 0.5x 5.5xAmedisys Inc. 12.85 22.7% (64.2%) 37.24 9.12 386 145 48 484 1,470 150 111 Dec-11 Dec-11 1,496 101 60 0.3x 3.2x 0.3x 4.8xGentiva Health Services Inc. 7.85 43.5% (72.2%) 29.21 2.81 242 988 165 1,065 1,799 150 120 Dec-11 Dec-11 1,755 172 142 0.6x 4.9x 0.6x 6.2xLHC Group, Inc. 17.02 33.3% (43.0%) 30.61 12.34 320 35 0 369 634 66 59 Dec-11 Dec-11 642 63 58 0.6x 5.6x 0.6x 5.9xLincare Holdings Inc. 26.86 17.2% (8.5%) 31.79 19.65 2,269 654 15 2,868 1,848 454 328 Dec-11 Dec-11 2,051 496 358 1.6x 6.3x 1.4x 5.8xChemed Corp. 61.82 20.3% (5.5%) 72.25 47.66 1,184 167 38 1,312 1,356 178 154 Dec-11 Dec-11 1,427 208 169 1.0x 7.4x 0.9x 6.3xNumber of Companies 7 Median: 22.7% (41.3%) Total $4,653 $908 $7,719 $8,014 0.6x 4.9x 0.6x 5.8x

Mean: 28.8% (36.4%) $908 0.7x 5.3x 0.7x 5.5x

Long-Term CareThe Ensign Group, Inc. $27.41 24.1% (9.9%) $34.85 $19.61 $581 $190 $30 $742 $758 $114 $91 Dec-11 Dec-11 $842 $125 $99 1.0x 6.5x 0.9x 5.9xKindred Healthcare Inc. 10.29 (9.6%) (58.7%) 28.99 7.67 536 1,543 42 2,008 5,522 354 189 Dec-11 Dec-11 6,306 437 239 0.4x 5.7x 0.3x 4.6xNational Healthcare Corp. 44.82 17.6% (5.8%) 53.08 29.97 620 10 61 655 754 107 78 Dec-11 Dec-11 769 122 51 0.9x 5.6x 0.9x 5.4xSun Healthcare Group, Inc. 4.46 50.7% (69.7%) 14.99 2.06 112 92 58 144 1,930 93 63 Dec-11 Dec-11 1,914 74 40 0.1x 1.5x 0.1x 2.0xNumber of Companies 4 Median: 20.8% (34.3%) Total $1,850 $887 $8,965 $9,832 0.6x 5.6x 0.6x 5.0x

Mean: 20 7% (36 0%) $887 0 6x 4 8x 0 5x 4 5x

As of February 29, 2012 10

Mean: 20.7% (36.0%) $887 0.6x 4.8x 0.5x 4.5x

Healthcare and Life Sciences Industry Update

March 2012March 2012

Provider-Based ServicesStock Price

% Change 52 WeekCompany NameEquity

Total DebtCash and

Total Ent

Lastest Twelve Months (LTM)

LTM Lastest FYE Forward Estimate TEV/ LTM Multiples (5) TEV/ Fwd Multiples

% Change 52 Week2/29/2012 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Physician Practice Management

Multispecialty / Primary Care:IPC The Hospitalist Company, Inc. $36.37 (14.2%) (10.9%) $52.25 $29.70 $601 $0 $18 $583 $457 $49 $46 Dec-11 Dec-11 $523 $58 $54 1.3x 11.8x 1.1x 10.0xNumber of Companies 1 Median: (14.2%) (10.9%) Total $601 $583 $457 $523 1.3x 11.8x 1.1x 10.0x

Mean: (14.2%) (10.9%) $583 1.3x 11.8x 1.1x 10.0x

Specialty:Integramed America Inc. $11.01 36.8% 8.4% $11.48 $6.70 $130 $11 $58 $83 $274 $18 $10 Dec-11 Dec-11 $302 $22 $12 0.3x 4.6x 0.3x 3.9xMEDNAX I 74 39 13 7% 14 6% 75 68 58 48 3 567 29 19 3 574 1 588 381 355 D 11 D 11 1 777 431 403 2 3 9 4 2 0 8 3

Company Name Mkt. Value Total Debt Equiv.Ent.

Value (LTM)

Period (3) FYE Date(3)

MEDNAX, Inc. 74.39 13.7% 14.6% 75.68 58.48 3,567 29 19 3,574 1,588 381 355 Dec-11 Dec-11 1,777 431 403 2.3x 9.4x 2.0x 8.3xNumber of Companies 2 Median: 25.3% 11.5% Total $3,698 $1,829 $1,862 $2,080 1.3x 7.0x 1.1x 6.1x

Mean: 25.3% 11.5% $1,829 1.3x 7.0x 1.1x 6.1x

Dental:Birner Dental Management Services Inc. $18.51 13.9% (3.7%) $21.99 $14.75 $34 $4 $1 $37 $65 $5 $2 Sep-11 Dec-10 NA NA NA 0.6x 7.7x NA NA Number of Companies 1 Median: 13.9% (3.7%) Total $34 $37 $65 $0 0.6x 7.7x NA NA

Mean: 13.9% (3.7%) $37 0.6x 7.7x NA NA

Psychiatric Hospitals / ManagementMagellan Health Services Inc. $47.26 (3.1%) (1.5%) $56.76 $41.10 $1,285 $0 $120 $1,102 $2,799 $224 $194 Dec-11 Dec-11 $3,285 $247 $179 0.4x 4.9x 0.3x 4.5xg ( ) ( ) , , , ,Providence Service Corp. 15.05 34.4% (8.3%) 16.16 8.35 196 153 49 307 918 53 40 Sep-11 Dec-10 943 51 38 0.3x 5.8x 0.3x 6.0xUniversal Health Services Inc. 44.61 16.3% (2.4%) 56.46 31.35 4,315 3,698 41 8,241 7,500 1,193 897 Dec-11 Dec-11 7,661 1,245 937 1.1x 6.9x 1.1x 6.6xNumber of Companies 3 Median: 16.3% (2.4%) Total $5,796 $2,412 $11,218 $11,888 0.4x 5.4x 0.3x 6.0x

Mean: 15.8% (4.1%) $2,412 0.5x 4.4x 0.6x 5.7x

Surgicenters / Rehabilitation

Surgery Centers:AmSurg Corp. $26.13 7.2% 10.6% $28.00 $18.18 $823 $459 $41 $1,537 $787 $272 $246 Dec-11 Dec-11 $913 $311 $278 2.0x 5.6x 1.7x 5.0xLifepoint Hospitals Inc. 38.97 3.8% (0.0%) 43.45 28.95 1,877 1,597 126 3,388 3,545 529 344 Dec-11 Dec-11 3,654 556 369 1.0x 6.4x 0.9x 6.1xNumber of Companies 2 Median: 5.5% 5.3% Total $2,700 $2,463 $4,331 $4,567 1.5x 6.0x 1.3x 5.5x

Mean: 5.5% 5.3% $2,463 1.5x 6.0x 1.3x 5.5x

Rehabilitation / Long Term Acute Care:HEALTHSOUTH Corp. $20.36 25.3% (15.9%) $28.50 $13.65 $1,928 $1,255 $30 $3,624 $2,027 $462 $384 Dec-11 Dec-11 $2,122 $486 $406 1.8x 7.6x 1.7x 7.5xSelect Medical Holdings Corporation 8.42 5.1% 7.9% 9.66 5.48 1,247 1,413 12 2,632 2,805 382 311 Dec-11 Dec-11 2,892 399 321 0.9x 6.8x 0.9x 6.6xUS Physical Therapy Inc. 19.01 0.5% (3.8%) 26.23 16.58 225 27 9 262 230 42 36 Sep-11 Dec-10 235 36 36 1.1x 6.3x 1.1x 7.2xNumber of Companies 3 Median: 5.1% (3.8%) Total $3,400 $2,173 $5,061 $5,249 1.1x 6.8x 1.1x 7.2x

Mean: 10.3% (3.9%) $2,173 1.3x 6.9x 1.2x 7.1x

As of February 29, 2012 11

M&A Detail

March 2012

Announced U.S. Healthcare and

Life Sciences M&A

Enterprise Enterprise Value Private EquityAnnounced Target Seller Buyer Value ($mm) Sales EBITDA EBIT Involvement

2/29/2012 Boston Biomedical, Inc. Mitsui & Co. Global Investment, Inc. Dainippon Sumitomo Pharma Co., Ltd. (TSE:4506)

$2,630.0 - - - No

2/29/2012 Western Institutional Review Board, Inc. BV Investment Partners Arsenal Capital Partners, Inc. - - - - Yes2/29/2012 Vascular Associates, P.C. - Holy Spirit Health System - - - - No2/28/2012 Santa Monica AL LLC Sunrise Senior Living Inc $19 1 NoM&A 2/28/2012 Santa Monica AL, LLC - Sunrise Senior Living Inc.

(NYSE:SRZ)$19.1 - - - No

2/28/2012 eScreen, Inc. The Carlyle Group LP Alere Inc. (NYSE:ALR) $340.0 2.8x - - Yes2/28/2012 NantCare, LLC - NantWorks LLC - - - - No2/28/2012 Clinical Coding Solutions, Inc. - T-System, Inc. - - - - No2/28/2012 Nautilus Healthcare Management Group, LLC - Memorial Health Services - - - - No2/28/2012 Preferred Care Partners, Inc. Ferrer Freeman & Company, LLC United HealthCare Services, Inc. - - - - Yes2/28/2012 Medica HealthCare Plans, Inc. - United HealthCare Services, Inc. - - - - No2/27/2012 Biozone Pharmaceuticals, Inc., Worldwide

License Of QuSomesBiozone Pharmaceuticals, Inc. (OTCBB:BZNE)

Opko Health, Inc. (NYSE:OPK) - - - - No

2/27/2012 MetaStat, Inc. - Photovoltaic Solar Cells, Inc. (OTCPK:PVSO)

- - - - No

2/27/2012 PrimeCare Services, Inc., Certain Assets PrimeCare Services, Inc. TwinMed, LLC - - - - No2/27/2012 H.Eric Richard Inc., Certain Assets H.Eric Richard Inc. TwinMed, LLC - - - - No2/27/2012 Red River Medical Center - North Texas Medical Center

Foundation, Inc.- - - - No

2/27/2012 DermSEO.com - TastyPlacement Inc. - - - - No2/26/2012 Alacer Corp. - Pfizer Inc. (NYSE:PFE) - - - - No2/24/2012 Brennen Medical, LLC, Burn and Wound Care

BusinessBrennen Medical, LLC Molnlycke Health Care US, LLC - - - - No

2/24/2012 Access Plans, Inc. (OTCBB:APNC) RENN Capital Group, Inc. Affinity Insurance Services, Inc. $55.3 1.1x 4.4x 4.9x No2/23/2012 Gilead Sciences Inc., DaunoXome Gilead Sciences Inc.

(NasdaqGS:GILD)Galen Limited - - - - No

2/23/2012 DiaKine Therapeutics, Inc. BlueTree Capital Group Islet Sciences, Inc. - - - - Yes2/22/2012 PatientWorks Corporation Stonewood Capital Management,

Inc ; Newbold CorporationSalePoint, Inc. - - - - Yes

Inc.; Newbold Corporation2/22/2012 Freedom Innovations, LLC - Health Evolution Partners - - - - Yes2/22/2012 Roxborough Memorial Hospital Solis Healthcare Prime Healthcare Services, Inc. - - - - No2/21/2012 SweetSpot Diabetes Care, Inc. - DexCom, Inc. (NasdaqGS:DXCM) $8.5 - - - No2/21/2012 Six Additional High Quality Seniors Housing

Communities- Health Care REIT, Inc. (NYSE:HCN) $210.0 - - - No

2/21/2012 PatientPoint, Inc. - Healthy Advice Networks, LLC - - - - No2/17/2012 Doctors Hospital-Grand Forks LLC - Altru Health System - - - - No2/17/2012 Dormir Clinical Trials, Inc. Dormir, Inc. Advanced Sleep Medicine Services,

Inc.- - - - No

2/17/2012 Core Oncology, Inc., Prostate Brachytherapy Customer Base

Core Oncology, Inc. Theragenics Corp. (NYSE:TGX) - - - - No

2/17/2012 Life Management, Inc. - Magnolia Creek, LLC - - - - No2/16/2012 Wilson Cardiology Associates PA - Wake Heart & Vascular Associates

PA- - - - No

2/16/2012 Lionel J. Gatien, D.O., P.A. - IPC The Hospitalist Company, Inc. (NasdaqGS:IPCM)

- - - - No

2/16/2012 NeuroNexus Technologies, Inc. 21st Century Jobs Fund QiG Group, LLC $12.0 - - - No2/16/2012 Collectaway, LLC - Medytox Diagnostics, Inc. $0.4 - - - No2/16/2012 Intego Systems Inc. - Critical Alert Systems, LLC - - - - No2/15/2012 Neuronex, Inc. - Acorda Therapeutics, Inc.

(NasdaqGS:ACOR)$131.8 - - - No

2/14/2012 Eye Center South, Albany - Eye Center South, P.C. - - - - No2/14/2012 Stromedix, Inc. Atlas Venture L.P.; Bessemer

Venture Partners; Frazier Healthcare Ventures

Biogen Idec Inc. (NasdaqGS:BIIB) $562.5 - - - Yes

Ventures2/14/2012 NaviNet, Inc. Atlas Venture L.P.; GE Equity;

North Bridge Venture PartnersHighmark Inc.; Independence Blue Cross, Inc.; Horizon Healthcare Services, Inc.

- - - - Yes

2/14/2012 Nine Communities - Brookdale Senior Living Inc. (NYSE:BKD)

$121.3 - - - No

2/14/2012 Crescent Healthcare, Inc. Frontenac Company Walgreen Co. (NYSE:WAG) - - - - Yes2/13/2012 Cutanea Life Sciences, Inc. NMT Capital Maruho Co., Ltd. - - - - Yes2/13/2012 Chromosomal Labs Bode Technology - The Bode Technology Group, Inc. - - - - No2/13/2012 Inpatient Clinical Solutions, Inc., Substantially

All AssetsInpatient Clinical Solutions, Inc. (OTCPK:INPT)

IPC The Hospitalist Company, Inc. (NasdaqGS:IPCM)

- - - - No

2/12/2012 SeraCare Life Sciences, Inc. (NasdaqCM:SRLS)

Wellington Management Company LLP; Ashford Capital Management

Linden LLC $62.6 1.4x 13.4x 18.3x Yes

12

Inc.; Black Horse Capital 2/11/2012 Eyetech Inc. - Valeant Pharmaceuticals International,

Inc. (TSX:VRX)- - - - No

2/10/2012 Connected Home Health - Cornerstone Healthcare, Inc. - - - - No2/10/2012 ECG Scanning & Medical Services Inc. - CardioNet, Inc. (NasdaqGM:BEAT) $6.4 - - - No2/10/2012 Planned Parenthood of Central Ohio, Inc. - Planned Parenthood Of Northeast

Ohio, Inc.- - - - No

M&A Detail

March 2012

Enterprise Enterprise Value Private EquityAnnounced Target Seller Buyer Value ($mm) Sales EBITDA EBIT InvolvementAnnounced U.S.

Healthcare and Life Sciences

M&A

2/9/2012 Benchmark Revenue Management, Inc. Tech Coast Angels Inc.; NLM Capital Partners, L.P.; Express Ventures

Avadyne Health - - - - No

2/9/2012 Mid America Medical Associates And Garcia, Rosenberg & Associates

- Concentra, Inc. - - - - NoM&A

(Continued)Rosenberg & Associates

2/9/2012 Adirondack Cardiology Associates, P.C. - Glens Falls Hospital - - - - No2/8/2012 Eisai Machinery U.S.A., Inc. Eisai Corporation of North America Robert Bosch North America, Inc. - - - - No2/8/2012 Concerro, Incorporated Himalaya Capital Ventures, L.P.;

Kaiser Permanente Ventures; Carrot Capital Healthcare Ventures

API Healthcare Corporation - - - - No

2/8/2012 peerVue, Inc. - McKesson Corporation (NYSE:MCK) - - - - No2/8/2012 EZJR Inc - Idea Marketing, LLC $0.6 - - - No2/8/2012 Aldagen, Inc. The Aurora Funds, Inc.; Intersouth

Partners; Tullis Health Investors; Harbert Venture Partners, LLC

Cytomedix Inc. (OTCBB:CMXI) $42.6 - - - No

2/8/2012 SeniorMetrix Inc. - Navihealth, Inc. - - - - No2/7/2012 Scarista Limited - Prismic Pharmaceuticals, Inc. - - - - No2/7/2012 Trilogi, Inc. - Recondo Technology, Inc. - - - - No2/6/2012 DMS Health Technologies, Inc. Varistar Corp. Platinum Equity, LLC $30.0 0.3x - - Yes2/6/2012 United Physicians Management Services, Inc. - Medical Transcription Billing, Corp. - - - - No2/2/2012 Proventys, Inc., CDS Oncology Assets Proventys, Inc. McKesson Corporation (NYSE:MCK) - - - - No2/2/2012 ChipDX LLC - Signal Genetics LLC - - - - No2/2/2012 Cincinnati Hematology-Oncology, Inc. - The Christ Hospital Corporation - - - - No2/1/2012 Park Place Assisted Living - Bridgestone Living, Inc. $2.1 - - - No2/1/2012 Advanced Dermatology & Cosmetic Surgery

Inc.- Audax Group; Brentwood Capital

Advisors LLC, Investment Arm- - - - Yes

2/1/2012 Tenex Health, Inc. - Direct Pet Health Holdings, Inc. (OTCPK:DPHG)

- - - - No

2/1/2012 Galichia Heart Hospital LLC - Wesley Medical Center - - - - No2/1/2012 Paradigm Management Services LLC Sterling Partners Lightyear Capital LLC Yes

Turner Bredrup Cheairs Porter James ClarkTodd MorrisContacts

2/1/2012 Paradigm Management Services, LLC Sterling Partners Lightyear Capital LLC - - - - Yes2/1/2012 Merit Mountainside, LLC Merit Health Systems, LLC Hackensack University Medical

Center; LHP Hospital Group, Inc.- - - - No

2/1/2012 Lathian Health, Inc. - D&R LATHIAN, LLC - - - - No2/1/2012 Ostial Solutions, LLC - Merit Medical Systems, Inc.

(NasdaqGS:MMSI)- - - - No

2/1/2012 Trilogy Healthcare of Darke LLC - Trilogy Health Services, LLC - - - - No

Turner BredrupManaging Director

tbredrup@harriswilliams.com+1 (804) 915-0110

Cheairs PorterManaging Director

cporter@harriswilliams.com+1 (804) 915-0130

James ClarkManaging Director

jclark@harriswilliams.com+1 (804) 915-0119

Todd MorrisManaging Director

tmorris@harriswilliams.com+1 (415) 217-3412

Geoff SmithDirector

gsmith@harriswilliams.com+1 (804) 915-0195

Andy DixonVice President

adixon@harriswilliams.com+1 (415) 217-3419

Contacts

Whit KnierVice President

wknier@harriswilliams.com+1 (804) 932-1321

13

Sources: Capital IQ.Thomson Financial.S&P.R t

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