healthcare & life sciences industry update

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Healthcare & Life Sciences Industry Update

September 2013

• According to Katherine Baicker of Harvard University and Helen Levy of the University of Michigan, while improved coordination of care between healthcare providers (through provider networks) may improve the allocation of healthcare resources, it is also likely to undermine competitive pressures and result in higher prices to payors and patients. In addition, their essay in the New England Journal of Medicine also cites merger activity in the hospital space as another threat to price competition for physician services. The authors point to these developments as unintended consequences resulting from healthcare reform that generally favors provider organizations with scale and the ability to concentrate leverage in negotiating payment rates with payors. A link to the full essay can be found here. Modern Healthcare also posted an online article that serves as a good summary of the full essay which can be found here.

• On August 27, the Treasury Department released the final rules requiring most individuals the carry health insurance, also known as the “Individual Mandate,” as well as penalties for non-compliance. Most Americans will be required to have health insurance starting in 2014 and will have to report coverage status on 2015 tax returns. For example, an individual who chooses not to carry insurance will be subject to a fine of $95 or 1% of income above a certain threshold (whichever is greater). This penalty increases to the greater of $695 per person or 2.5% of taxable annual income in 2016 and beyond. An article in the Wall Street Journal summarizing the release can be found here (a subscription to the Wall Street Journal Online may be required).

• An article in MedCity News discusses the explosion of smartphone and tablet apps that track vital health data from heart rate and blood sugar levels to frequency of sexual activity. These apps are part of a booming industry expected to reach $26 billion in 2017, by which time more than half of the world’s smartphone users will have downloaded at least one of these products. The article cautions that, while these apps have the potential to revolutionize the delivery of medicine and bring healthcare access to remote and poverty-stricken corners of the globe, little is known about the mechanisms these products have in place to safeguard the highly sensitive health data of their users.

What We’ve Been Reading

September 2013

1

http://www.nejm.org/doi/full/10.1056/NEJMp1306268

http://www.nejm.org/doi/full/10.1056/NEJMp1306268

http://www.modernhealthcare.com/article/20130829/NEWS/308299966/care-coordination-may-lead-to-less-competition-higher-prices-article

http://blogs.wsj.com/washwire/2013/08/27/final-rules-released-on-obamacares-individual-mandate/

http://medcitynews.com/2013/08/medical-apps-helping-you-get-healthy-or-helping-themselves-to-your-personal-data/

HW&Co. HCLS Group Insight

September 2013

Urgent Care Industry Overview

2

http://www.harriswilliams.com/sites/default/files/industry_reports/urgent_care_industry_overview_sept2013.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/urgent_care_industry_overview_sept2013.pdf

Change in Stock Price3 mos. 12 mos. Revenue EBITDA Revenue EBITDA

Clinical Laboratories 3 $8,053 (5.4%) 9.4% 1.7x 7.9x 1.7x 8.2xContract Pharma Manufacturing 5 1,301 8.5% 28.9% 1.8x 12.1x 1.8x 10.7xContract Research Organizations 5 2,467 8.5% 63.4% 1.7x 13.3x 1.5x 10.6xDisease Management 2 3,818 27.5% 77.4% 1.8x 15.4x 1.8x 10.4xEmergency Services 1 2,231 10.3% 5.6% 2.6x 10.4x 2.5x 10.5xHealth Care Staffing 4 1,495 5.7% 53.9% 1.0x 12.9x 1.0x 12.3xHMO - Medical 10 20,827 13.1% 36.3% 0.5x 7.3x 0.4x 7.6xInformation Services 11 2,783 11.5% 21.4% 2.7x 19.2x 2.9x 11.6xSpecialty Managed Care 2 2,561 19.2% 55.8% 1.0x 8.0x 1.0x NA Specialty Pharmacy Management 5 18,416 3.3% 33.3% 0.9x 10.0x 0.9x 9.9xDental Products 3 30,266 0.2% 23.6% 2.6x 12.7x 2.6x 11.2xDurable Medical Equipment 5 1,903 (3.8%) 11.9% 1.1x 10.5x 1.1x 7.3xLife Sciences Tools 3 17,270 0.4% 29.2% 2.6x 12.4x 2.6x 10.9xMedical Devices and Products 14 39,027 1.8% 21.9% 2.8x 10.6x 2.6x 9.9xMedical / Surgical / Dental Supplies 6 12,987 7.1% 31.1% 0.2x 9.9x 0.2x 8.9xAcute-Care Hospitals 6 15,142 (8.1%) 57.0% 1.1x 7.9x 1.0x 7.5xAssisted Living 6 2,205 (12.4%) 14.1% 1.7x 11.1x 2.0x 13.4xDiagnostic Imaging 3 2,812 6.2% 21.7% 1.8x 6.5x 1.8x 6.0xDialysis Services 2 20,892 (9.3%) (1.5%) 2.0x 9.8x 1.6x 7.9xHome Care / Hospice 6 632 5.5% 13.2% 0.7x 7.2x 0.6x 7.5xLong-Term Care 3 1,349 4.3% 33.0% 0.9x 5.6x 0.8x 6.6xPhysician Practice Management 3 2,211 6.3% 17.8% 2.0x 9.6x 2.3x 10.0xPsychiatric Hospitals / Management 3 3,043 2.2% 70.4% 0.4x 6.1x 0.4x 7.1xSurgicenters / Rehabilitation 4 2,471 5.5% 17.9% 1.7x 7.7x 1.7x 7.8x

Payer, Provider, & Pharmacy Support Services 48 $6,395 10.2% 38.5% 1.6x 11.7x 1.5x 10.2x

Products & Devices 31 $20,291 1.1% 23.5% 1.9x 11.2x 1.8x 9.6x

Provider-Based Services 36 $5,640 0.0% 27.1% 1.4x 7.9x 1.4x 8.2x

HW&Co. HCLS Composite Index 115 $9,007 4.5% 31.1% 1.6x 10.2x 1.5x 9.3x

S&P 500 0.5% 17.2%

Paye

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Supp

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Prod

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Median TEV/Forward MulitplesSector

Number of Companies

Average Enterprise

Value ($ mm)

Median TEV/LTM Multiples

3

Key Trading Statistics

(detail begins on page 7)

Equity Trading Overview

September 2013

Public Company Sector

Performance (12-month %

change in stock price)

Disease Management

Psychiatric Hospitals / Management

Contract Research Organizations

Acute-Care Hospitals

Specialty Managed Care

Health Care Staffing

HMO - Medical

Specialty Pharmacy Management

Long-Term Care

HW&Co. HCLS Composite Index

Medical / Surgical / Dental Supplies

Life Sciences Tools

Contract Pharma Manufacturing

Dental Products

Medical Devices and Products

Diagnostic Imaging

Information Services

Surgicenters / Rehabilitation

Physician Practice Management

S&P 500

Assisted Living

Home Care / Hospice

Durable Medical Equipment

Clinical Laboratories

Emergency Services

Dialysis Services

(10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 110.0% 120.0%

Closing Date Filing Date Issuer Ticker Transaction TypeGross Proceeds

($mm)

08/19/13 08/19/13 DARA Biosciences Inc DARA Follow-On $2,730.008/13/13 08/13/13 Envision Healthcare Holdings EVHC IPO 1,110.908/13/13 08/13/13 The Medicines Company MDCO Follow-On 201.308/07/13 08/07/13 Intrexon Corp XON IPO 184.008/29/13 08/29/13 Lipocine Inc MBARD Follow-On 126.708/26/13 08/26/13 Acucela Inc - IPO 101.608/13/13 08/13/13 BioScrip Inc BIOS Follow-On 94.108/15/13 08/15/13 Ophthotech Corp OPHT IPO 85.008/13/13 08/13/13 Bind Therapeutics Inc BIND IPO 80.508/13/13 08/13/13 GenMark Diagnostics Inc GNML Follow-On 75.008/07/13 08/07/13 Acceleron Pharma Inc XLRN IPO 74.808/20/13 08/20/13 Coronado Biosciences Inc CNDO Follow-On 70.008/26/13 08/26/13 LDR Holding Corp LDRH IPO 69.008/13/13 08/13/13 Fate Therapeutics Inc - IPO 69.008/16/13 08/16/13 Sophiris Bio Inc SHS Follow-On 65.008/09/13 08/09/13 GI Dynamics Inc GID Follow-On 54.608/07/13 08/07/13 Vanda Pharmaceuticals Inc VNDA Follow-On 52.108/22/13 08/22/13 Regado Biosciences Inc RGDO IPO 43.008/08/13 08/08/13 Hansen Medical Inc HNSN Follow-On 35.008/19/13 08/19/13 XOMA Corp XOMA Follow-On 31.608/06/13 08/06/13 Spectrum Pharmaceuticals Inc SPPI Follow-On 25.308/07/13 08/07/13 OXiGENE Inc OXGN Follow-On 23.708/07/13 08/07/13 Accelerate Diagnostics Inc AXDX Follow-On 20.008/08/13 08/08/13 Axogen Inc AXGN Follow-On 18.008/07/13 08/07/13 Opexa Therapeutics Inc OPXA Follow-On 18.0

4

Healthcare & Life Sciences

Industry Stock Performance

Top 25 Equity Offerings

(by proceeds)

Equity Markets Overview

September 2013

58.9%

79.3%

55.6%

40

60

80

100

120

140

160

180

200

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

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

Announced Target Buyer

8/30/2013 Physicians Endoscopy L.L.C. Pamlico Capital8/28/2013 Western Reserve Senior Care Kindred Healthcare Inc.8/20/2013 Optimum Outcomes, Inc. Adreima, Inc.8/20/2013 Design Clinicals, Inc. First Databank, Inc.8/19/2013 Development & Research, Inc. Hanger, Inc. 8/15/2013 Bracket Parthenon Capital Partners8/14/2013 Novella Clinical, Inc. Quintiles Transnational Corp.8/12/2013 6N Systems, Inc. eHealth Solutions, Inc.8/11/2013 Cardiocom, LLC Medtronic, Inc.8/6/2013 TJ Holdings, Inc. Ameritox, Ltd.

HC&LS Industry Number ofSegment Companies

Biotechnology 5Healthcare Technology 20Healthcare Distributors 6Healthcare Equipment 28Healthcare Facilit ies 35Healthcare Services 55Healthcare Supplies 8Life Sciences Tools & Services 18Managed Healthcare 5Pharmaceuticals 17

Aggregate Number Median Transaction MultiplesValue ($bn) of Deals TEV/Rev TEV/EBITDA

$106.4 1,153 2.12x 9.7x

40

58

69

94

113

79

42

7165 65

43

27

40

60 62

95

49 50

80

120

139

87

0

20

40

60

80

100

120

140

160

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

Tra

nsac

tion

Vol

ume'

Number of Investments Number of Exits

15.2x

7.7x

12.8x

11.1x 10.9x

9.0x

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

evenue Multiple__E

V /

LT

M E

BIT

DA

Mul

tiple

__

TEV / LTM EBITDA TEV / LTM Sales

$194.1 $174.6

$110.6

$141.4 $101.6

$77.2

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

Num

ber of Transactions__

Agg

rega

te T

rans

actio

n V

alue

($ in

bill

ions

)

Aggregate Deal Value # of deals

225242

256 267245 236

219 229 221

291

200 209223

1713

1816

13 18

1120

12

22

16 1215

0

50

100

150

200

250

300

350

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

Num

ber

of T

rans

actio

ns__

PEG Acquirer Strategic Acquirer

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

September 2013

Date Effective Borrower Name Description Tranche Amount ($mn) Type Rating Spread08/14/13 Community Health Systems General medical & surgical hospitals $4,580 Bridge Loan BB / NR N/A08/14/13 Community Health Systems General medical & surgical hospitals 2,260 Term Loan A BB / NR N/A08/12/13 ConvaTec Ltd Surgical appliances and supplies 1,316 Term Loan B B+ / Ba3 N/A08/02/13 Hologic Inc X-ray apparatus and tubes 1,289 Term Loan B BB / Ba2 L+ 27508/06/13 Boston Scientific Corp Surgical and medical instruments 400 Term Loan A BBB- / NR L+ 15008/15/13 Dialysis Newco Inc Kidney dialysis centers 227 Term Loan B NR / NR L+ 42508/15/13 Dialysis Newco Inc Kidney dialysis centers 40 Revolver/Line >= 1 Yr. NR / NR L+ 42508/15/13 Dialysis Newco Inc Kidney dialysis centers 13 Delay Draw Term Loan NR / NR L+ 42508/01/13 National Surgical Hospitals General medical & surgical hospitals 158 Term Loan B B / B2 L+ 45008/01/13 National Surgical Hospitals General medical & surgical hospitals 30 Revolver/Line >= 1 Yr. B / B2 L+ 45008/15/13 Bracket Holding Corp Pharmaceutical preparations 90 Term Loan B NR / NR L+ 40008/15/13 Bracket Holding Corp Pharmaceutical preparations 35 Delay Draw Term Loan NR / NR L+ 40008/15/13 Bracket Holding Corp Pharmaceutical preparations 25 Revolver/Line >= 1 Yr. NR / NR L+ 40008/12/13 Optimum Outcomes Inc Health and allied services 62 Term Loan A NR / NR L+ 52508/12/13 Optimum Outcomes Inc Health and allied services 5 Delay Draw Term Loan NR / NR L+ 52508/23/13 Embassy Management LLC Specialty outpatient clinics 48 Term Loan A NR / NR L+ 55008/23/13 Embassy Management LLC Specialty outpatient clinics 20 Delay Draw Term Loan NR / NR L+ 55008/23/13 Embassy Management LLC Specialty outpatient clinics 6 Revolver/Line >= 1 Yr. NR / NR L+ 55008/08/13 Avalon Laboratories LLC Surgical and medical instruments 40 Term Loan NR / NR L+ 42508/08/13 Avalon Laboratories LLC Surgical and medical instruments 5 Revolver/Line >= 1 Yr. NR / NR L+ 425

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__

2007 2008 2009 2010 2011 2012 2013YTD

L + 0

L + 200

L + 400

L + 600

L + 800

L + 1000

Ave

rage

Spr

ead

Ove

r L

IBO

R__

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2007 2008 2009 2010 2011 2012 2013YTD

Ave

rage

Spr

ead

Ove

r LIB

OR

__

Revolving Credit / Term Loan A Weighted-Average Institutional

$0

$3

$6

$9

$12

$15

$18

$21

$24

2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13

Loa

n V

olum

e by

Qua

rter

($ in

bill

ions

)___

Pro Rata Institutional

Key Credit Statistics

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

September 2013

6

1

(1) Not available for 2013YTD.

Healthcare & Life Sciences Trading Statistics

September 2013

As of September 3, 2013 7

Payer, Provider, & Pharmacy Support Services Stock Price% Change 52 Week

9/3/2013 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical LaboratoriesBio-Reference Laboratories Inc. $28.93 (6.9%) 11.0% $32.86 $23.36 $800 $35 $26 $806 $734 $104 $85 Jul-13 Oct-12 $712 $108 $89 1.1x 7.8x 1.1x 7.5xLaboratory Corp. of America Holdings 95.72 (3.7%) 9.4% 101.69 82.15 8,624 2,510 186 11,043 5,734 1,285 1,097 Jun-13 Dec-12 5,794 1,271 1,063 1.9x 8.5x 1.9x 8.7xQuest Diagnostics Inc. 58.62 (5.4%) (2.1%) 64.87 55.16 8,904 3,527 134 12,309 7,198 1,542 1,257 Jun-13 Dec-12 7,254 1,509 1,232 1.7x 7.9x 1.7x 8.2xNumber of Companies 3 Median: (5.4%) 9.4% Total $18,328 $8,053 $13,666 $13,760 1.7x 7.9x 1.7x 8.2x

Mean: (5.3%) 6.1% $8,053 1.6x 8.0x 1.6x 8.1x

Contract Pharma ManufacturingAkorn, Inc. $17.97 24.3% 28.9% $18.98 $11.73 $1,729 $107 $46 $1,777 $292 $96 $84 Jun-13 Dec-12 $316 $104 $95 6.1x 18.5x 5.6x 17.0xCambrex Corporation. 13.63 (2.4%) 13.2% 15.66 8.81 411 88 32 479 267 51 29 Jun-13 Dec-12 308 65 42 1.8x 9.8x 1.6x 7.4xIntegrated Biopharma Inc. 0.15 0.0% (23.1%) 0.26 0.11 3 15 0 18 32 (0) (1) Mar-13 Jun-12 NA NA NA 0.6x NM NA NA Patheon Inc. 6.37 15.6% 132.5% 6.80 2.60 898 603 57 1,448 881 117 75 Apr-13 Oct-12 1,028 143 67 1.6x 12.3x 1.4x 10.1xWest Pharmaceutical Services, Inc. 73.95 8.5% 58.5% 79.38 47.03 2,580 401 175 2,784 1,309 228 148 Jun-13 Dec-12 1,366 246 161 2.1x 12.0x 2.0x 11.3xNumber of Companies 5 Median: 8.5% 28.9% Total $5,621 $1,301 $2,781 $3,019 1.8x 12.1x 1.8x 10.7x

Mean: 9.2% 42.0% $1,301 2.4x 13.1x 2.7x 11.5x

Contract Research OrganizationsAlbany Molecular Research Inc. $11.01 8.5% 238.7% $13.90 $3.20 $348 $8 $29 $317 $242 $39 $22 Jun-13 Dec-12 $252 $43 $31 1.3x 8.1x 1.3x 7.4xCharles River Laboratories International, Inc. 46.05 9.7% 28.0% 48.73 35.54 2,259 636 100 2,789 1,143 250 168 Jun-13 Dec-12 1,169 268 200 2.4x 11.1x 2.4x 10.4xCovance Inc. 81.04 8.7% 69.0% 84.75 46.15 4,530 325 430 4,410 2,279 330 210 Jun-13 Dec-12 2,375 365 238 1.9x 13.4x 1.9x 12.1xICON Public Limited Company 36.54 5.7% 59.1% 40.98 22.43 2,224 0 137 2,042 1,237 148 104 Jun-13 Dec-12 1,320 167 119 1.7x 13.8x 1.5x 12.3xPAREXEL International Corporation 46.43 2.0% 63.4% 53.55 28.45 2,610 444 199 2,777 1,734 209 136 Jun-13 Jun-13 1,918 262 179 1.6x 13.3x 1.4x 10.6xNumber of Companies 5 Median: 8.5% 63.4% Total $11,971 $2,467 $6,635 $7,034 1.7x 13.3x 1.5x 10.6x

Mean: 6.9% 91.6% $2,467 1.8x 11.9x 1.7x 10.6x

Disease ManagementAlere Inc. $31.17 23.2% 68.1% $35.38 $17.20 $2,548 $3,876 $327 $6,714 $2,950 $617 $157 Jun-13 Dec-12 $3,023 $676 $543 2.3x 10.7x 2.2x 9.9xHealthways Inc. 19.08 31.8% 86.8% 19.74 8.58 656 268 2 922 669 46 17 Jun-13 Dec-12 718 85 30 1.4x 20.2x 1.3x 10.9xNumber of Companies 2 Median: 27.5% 77.4% Total $3,205 $3,818 $3,620 $3,741 1.8x 15.4x 1.8x 10.4x

Mean: 27.5% 77.4% $3,818 1.8x 15.4x 1.8x 10.4x

Emergency ServicesAir Methods Corp. $40.92 10.3% 5.6% $50.61 $32.24 $1,591 $645 $11 $2,231 $843 $214 $133 Jun-13 Dec-12 $882 $213 $137 2.6x 10.4x 2.5x 10.5xNumber of Companies 1 Median: 10.3% 5.6% Total $1,591 $2,231 $843 $882 2.6x 10.4x 2.5x 10.5x

Mean: 10.3% 5.6% $2,231 2.6x 10.4x 2.5x 10.5x

Health Care StaffingAMN Healthcare Services Inc. $13.60 5.3% 65.1% $16.20 $8.11 $625 $154 $2 $768 $998 $71 $58 Jun-13 Dec-12 $1,016 $77 $64 0.8x 10.8x 0.8x 9.9xCross Country Healthcare, Inc. 5.65 6.1% 42.7% 6.23 3.80 176 0 21 150 445 5 (3) Jun-13 Dec-12 446 7 (0) 0.3x 28.2x 0.3x 22.7xOn Assignment Inc. 30.17 20.5% 87.8% 32.93 15.77 1,617 369 12 1,972 1,624 167 135 Jun-13 Dec-12 1,669 164 126 1.2x 11.8x 1.2x 12.0xTeam Health Holdings, Inc. 38.43 0.1% 36.1% 42.42 24.09 2,675 510 65 3,091 2,240 222 171 Jun-13 Dec-12 2,365 248 187 1.4x 13.9x 1.3x 12.5xNumber of Companies 4 Median: 5.7% 53.9% Total $5,093 $1,495 $5,307 $5,496 1.0x 12.9x 1.0x 12.3x

Mean: 8.0% 57.9% $1,495 0.9x 16.2x 0.9x 14.3x

Company Name LTM Period

Lastest FYE Date

TEV/ LTM MultiplesEquity Mkt. Value

Total Debt Cash and Equiv.

Total Ent.

Value (TEV)

Lastest Twelve Months (LTM)

TEV/ Fwd MultiplesForward Estimate


September 2013

As of September 3, 2013

Stock Price% Change 52 Week


HMO - Medical

Commercial:Aetna Inc. $63.39 7.6% 67.1% $66.00 $37.10 $23,587 $9,297 $3,228 $30,678 $39,919 $3,819 $3,348 Jun-13 Dec-12 $46,936 $3,868 $3,551 0.8x 8.0x 0.7x 7.9xCigna Corp. 78.69 19.1% 74.2% 79.99 45.16 22,257 5,187 3,306 24,336 31,106 3,718 3,340 Jun-13 Dec-12 31,950 3,523 2,984 0.8x 6.5x 0.8x 6.9xCoventry Health Care Inc. 6.86 1.9% 16.3% 7.20 5.20 6,038 0 5 6,035 320 0 318 Jun-13 Jun-13 NA NA NA 18.8x 0.0x NA NA Health Net, Inc. 30.18 (4.7%) 30.2% 33.70 21.09 2,396 524 230 2,641 11,153 266 231 Jun-13 Dec-12 11,057 346 325 0.2x 9.9x 0.2x 7.6xHumana Inc. 92.08 16.1% 33.5% 94.67 63.93 14,407 2,852 1,398 15,740 40,015 2,848 2,464 Jun-13 Dec-12 41,137 2,618 2,336 0.4x 5.5x 0.4x 6.0xUnitedHealth Group Incorporated 71.74 14.9% 32.9% 73.67 51.09 72,938 16,717 10,038 82,770 116,819 10,202 9,251 Jun-13 Dec-12 122,648 10,578 9,314 0.7x 8.1x 0.7x 7.8xWellPoint Inc. 85.14 11.3% 44.1% 90.00 53.69 25,453 15,512 1,665 39,618 66,372 5,678 4,858 Jun-13 Dec-12 70,730 4,541 4,079 0.6x 7.0x 0.6x 8.7xNumber of Companies 7 Median: 11.3% 33.5% Total $167,076 $28,831 $305,705 $324,458 0.7x 7.0x 0.6x 7.7x

Mean: 9.5% 42.6% $28,831 3.2x 6.4x 0.5x 7.5x

Government:Centene Corp. 57.15 19.0% 43.2% 59.96 34.73 3,122 552 731 2,989 10,252 182 128 Jun-13 Dec-12 10,904 352 275 0.3x 16.4x 0.3x 8.5xMolina Healthcare, Inc. 33.39 (9.0%) 39.1% 40.90 21.62 1,525 761 1,170 1,544 6,429 209 163 Jun-13 Dec-12 6,668 251 181 0.2x 7.4x 0.2x 6.2xWellCare Health Plans, Inc. 63.67 24.0% 13.6% 68.17 44.75 2,773 346 1,378 1,924 8,395 268 245 Jun-13 Dec-12 9,346 391 348 0.2x 7.2x 0.2x 4.9xNumber of Companies 3 Median: 19.0% 39.1% Total $7,421 $2,152 $25,076 $26,918 0.2x 7.4x 0.2x 6.2x

Mean: 11.3% 32.0% $2,152 0.3x 10.3x 0.2x 6.5x

Information Services

Data/Analytics:Accelrys Inc. $9.04 12.5% 20.2% $9.98 $7.59 $502 $0 $73 $371 $166 $10 ($15) Jun-13 Dec-12 $174 $32 $23 2.2x 38.7x 2.1x 11.6xNational Research Corp. 0.52 210.2% 245.3% 0.52 0.15 3 1 0 4 6 0 (0) Jun-13 Dec-12 NA NA NA 0.7x 103.4x NA NA Number of Companies 2 Median: 111.4% 132.7% Total $505 $187 $172 $174 1.5x 71.0x 2.1x 11.6x

Mean: 111.4% 132.7% $187 1.5x 71.0x 2.1x 11.6x

eHealth:WebMD Health Corp. 31.42 4.9% 115.2% 35.28 13.13 1,558 800 999 1,332 488 53 30 Jun-13 Dec-12 $510 $113 $62 2.7x 24.9x NA NA Number of Companies 1 Median: 4.9% 115.2% Total $1,558 $1,332 $488 $510 2.7x 24.9x NA NA

Mean: 4.9% 115.2% $1,332 2.7x 24.9x NA NA

Hospital/Physician:Allscripts Healthcare Solutions, Inc. $14.54 6.9% 40.1% $16.43 $8.85 $2,567 $545 $92 $3,040 $1,404 $78 ($20) Jun-13 Dec-12 $1,418 $205 $102 2.2x 39.0x 2.1x 14.8xathenahealth, Inc. 105.49 26.2% 21.4% 117.54 56.33 3,887 246 48 4,100 494 43 9 Jun-13 Dec-12 595 112 71 8.3x 96.1x 6.9x 36.7xCerner Corporation 46.06 (4.0%) 29.7% 50.85 33.82 15,804 182 281 15,016 2,712 782 631 Jun-13 Dec-12 2,959 978 722 5.5x 19.2x 5.1x 15.4xComputer Programs & Systems Inc. 54.96 11.5% 11.1% 58.46 46.08 609 0 7 597 196 49 46 Jun-13 Dec-12 203 53 48 3.0x 12.2x 2.9x 11.3xHMS Holdings Corp. 24.99 (0.1%) (27.4%) 35.73 18.50 2,194 303 139 2,366 489 149 91 Jun-13 Dec-12 508 164 101 4.8x 15.8x 4.7x 14.4xMedAssets, Inc. 22.42 37.4% 33.1% 24.17 15.40 1,372 831 9 2,203 671 212 108 Jun-13 Dec-12 680 222 92 3.3x 10.4x 3.2x 9.9xMerge Healthcare Incorporated 2.65 (20.8%) (14.6%) 4.71 2.27 248 253 44 483 246 27 9 Jun-13 Dec-12 243 45 22 2.0x 17.9x 2.0x 10.7xQuality Systems Inc. 20.69 16.8% 20.6% 23.58 16.02 1,233 0 106 1,103 451 97 83 Jun-13 Mar-13 461 112 85 2.4x 11.3x 2.4x 9.9xNumber of Companies 8 Median: ` 21.0% Total $1,783 $3,613 $491 $551 3.2x 16.9x 3.1x 12.9x

Mean: 9.2% 14.3% $2,284 3.2x 16.9x 3.1x 12.9x

Forward Estimate TEV/ LTM Multiples TEV/ Fwd MultiplesCompany Name Equity

Mkt. ValueTotal Debt Cash and

Equiv.

Total Ent.

Value (TEV)

Lastest Twelve Months (LTM) LTM

PeriodLastest

FYE Date

Payer, Provider, & Pharmacy Support Services

8


September 2013


Payer, Provider, & Pharmacy Support Services

9



Specialty Managed CareAssurant Inc. 53.04 8.4% 52.5% 56.12 33.62 3,976 1,743 1,605 4,449 8,694 849 727 Jun-13 Dec-12 8,628 NA 811 0.5x 5.2x 0.5x NA CorVel Corporation 32.94 30.0% 59.1% 37.29 20.16 698 0 20 673 443 62 47 Jun-13 Mar-13 476 NA NA 1.5x 10.8x 1.4x NA Number of Companies 2 Median: 19.2% 55.8% Total $4,674 $2,561 $9,137 $9,104 1.0x 8.0x 1.0x NA

Mean: 19.2% 55.8% $2,561 1.0x 8.0x 1.0x NA

Specialty Pharmacy ManagementBioScrip Inc. $12.20 (19.9%) 33.3% $17.62 $8.05 $827 $225 $0 $971 $741 $35 $20 Jun-13 Dec-12 $845 $63 $28 1.3x 27.6x 1.1x 15.4xExpress Scripts Holding Company 63.88 3.3% 3.7% 67.66 49.79 52,011 14,280 1,990 64,959 106,709 6,472 4,187 Jun-13 Dec-12 102,454 6,752 6,337 0.6x 10.0x 0.6x 9.6xCatamaran Corporation 57.68 17.7% 35.9% 60.93 42.37 11,890 1,025 311 12,583 13,157 613 379 Jun-13 Dec-12 14,356 662 437 0.9x 19.5x 0.9x 19.0xOmnicare Inc. 54.37 18.5% 69.3% 56.39 32.03 5,625 2,035 510 7,125 6,126 711 574 Jun-13 Dec-12 6,219 701 592 1.2x 10.0x 1.1x 10.2xPharMerica Corporation 12.30 (20.0%) (0.8%) 16.45 11.75 366 257 8 611 1,746 118 85 Jun-13 Dec-12 1,659 124 90 0.3x 5.2x 0.4x 4.9xNumber of Companies 5 Median: 3.3% 33.3% Total $70,719 $18,416 $128,479 $125,534 0.9x 10.0x 0.9x 9.9x

Mean: (0.1%) 28.3% $18,416 0.9x 13.2x 0.8x 10.0x

Company Name Equity Mkt. Value

Total Debt Cash and Equiv.

Total Ent.

Value ( )


PeriodLastest

FYE DateForward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples


September 2013


Products & Devices

10



Dental Products3M Company $113.58 3.5% 23.6% $119.26 $86.74 $77,628 $5,946 $2,928 $79,765 $30,270 $7,794 $6,469 Jun-13 Dec-12 $30,947 $8,098 $6,774 2.6x 10.2x 2.6x 9.8xDENTSPLY International Inc. 41.99 0.2% 16.7% 44.21 35.83 5,975 1,641 56 7,596 2,942 551 425 Jun-13 Dec-12 2,979 593 479 2.6x 13.8x 2.6x 12.8xSirona Dental Systems Inc. 64.77 (8.7%) 23.9% 75.81 53.02 3,564 75 156 3,436 1,070 270 200 Jun-13 Sep-12 1,089 308 255 3.2x 12.7x 3.2x 11.2xNumber of Companies 3 Median: 0.2% 23.6% Total $87,167 $30,266 $34,282 $35,014 2.6x 12.7x 2.6x 11.2x

Mean: (1.7%) 21.4% $30,266 2.8x 12.3x 2.8x 11.3x

Durable Medical EquipmentHill-Rom Holdings, Inc. 34.14 (4.6%) 23.5% 38.84 26.29 2,003 325 87 2,236 1,710 276 177 Jun-13 Sep-12 1,717 308 185 1.3x 8.1x 1.3x 7.3xInvacare Corporation 15.01 (3.8%) 11.9% 18.27 10.26 480 115 25 574 1,417 30 (7) Jun-13 Dec-12 1,354 NA (30) 0.4x 19.1x 0.4x NA Prism Medical Ltd. 5.20 0.6% (14.9%) 6.50 4.50 44 22 2 63 72 6 4 May-13 Nov-12 76 9 NA 0.9x 10.5x 0.8x 6.8xResMed Inc. 47.24 0.7% 26.6% 51.40 37.74 6,711 301 1,013 6,135 1,514 458 380 Jun-13 Jun-13 1,656 514 434 4.1x 13.4x 3.7x 11.9xRotech Healthcare Inc. 0.01 (95.0%) (98.0%) 0.75 0.00 0 525 19 506 466 75 9 Sep-12 Dec-11 NA NA NA 1.1x 6.8x NA NA Number of Companies 5 Median: (3.8%) 11.9% Total $9,238 $1,903 $5,180 $4,804 1.1x 10.5x 1.1x 7.3x

Mean: (20.4%) (10.2%) $1,903 1.5x 11.6x 1.6x 8.7x

Life Sciences ToolsAgilent Technologies Inc. $46.64 3.8% 27.1% $48.33 $35.38 $16,066 $2,701 $2,519 $16,440 $6,831 $1,330 $959 Jul-13 Oct-12 $6,772 $1,507 $1,236 2.4x 12.4x 2.4x 10.9xBecton, Dickinson and Company 97.38 (1.0%) 29.2% 104.98 74.18 18,912 3,970 2,024 20,583 7,920 2,126 1,594 Jun-13 Sep-12 8,003 2,151 1,602 2.6x 9.7x 2.6x 9.6xLife Technologies Corporation 74.41 0.4% 56.3% 74.98 45.67 12,848 2,215 262 14,788 3,818 1,191 796 Jun-13 Dec-12 3,848 1,289 1,119 3.9x 12.4x 3.8x 11.5xNumber of Companies 3 Median: 0.4% 29.2% Total $47,827 $17,270 $18,570 $18,623 2.6x 12.4x 2.6x 10.9x

Mean: 1.1% 37.5% $17,270 3.0x 11.5x 2.9x 10.6x

Medical Devices and Products

Abbott Laboratories $33.33 (10.0%) (49.0%) $72.47 $31.64 $51,799 $7,935 $4,373 $50,432 $40,101 $11,541 $8,980 Jun-13 Dec-12 $22,163 $5,331 $4,147 1.3x 4.4x 2.3x 9.5xArthroCare Corporation 31.67 (7.3%) 8.4% 37.49 29.14 895 0 230 726 368 88 70 Jun-13 Dec-12 374 81 67 2.0x 8.3x 1.9x 9.0xBaxter International Inc. 69.56 (0.3%) 19.6% 74.60 57.95 37,756 9,035 2,689 40,835 14,347 4,100 3,377 Jun-13 Dec-12 15,257 4,209 3,403 2.8x 10.0x 2.7x 9.7xBoston Scientific Corporation 10.58 17.2% 104.3% 11.49 5.04 14,208 4,252 268 17,930 7,125 1,630 946 Jun-13 Dec-12 7,131 1,609 933 2.5x 11.0x 2.5x 11.1xCR Bard Inc. 114.87 10.7% 17.2% 117.54 93.79 9,092 1,483 879 9,716 2,986 887 755 Jun-13 Dec-12 3,036 850 709 3.3x 11.0x 3.2x 11.4xDanaher Corp. 65.52 6.6% 24.1% 69.02 50.63 45,574 4,155 2,151 47,472 18,573 4,145 3,279 Jun-13 Dec-12 18,950 4,168 3,302 2.6x 11.4x 2.5x 11.4xHanger, Inc. 30.71 (3.5%) 8.1% 37.39 22.38 1,061 504 15 1,560 1,023 169 132 Jun-13 Dec-12 1,070 189 145 1.5x 9.2x 1.5x 8.3xHologic Inc. 21.34 4.0% 9.4% 23.96 18.46 5,771 5,005 745 9,817 2,447 821 323 Jun-13 Sep-12 2,512 969 810 4.0x 12.0x 3.9x 10.1xHospira Inc. 39.03 10.6% 16.2% 42.60 28.62 6,465 1,761 727 7,543 4,003 253 21 Jun-13 Dec-12 4,054 673 464 1.9x 27.1x 1.9x 11.2xJohnson & Johnson 86.41 2.5% 28.8% 94.42 66.97 243,510 14,982 14,855 233,363 69,992 22,744 18,677 Jun-13 Dec-12 70,708 23,173 19,045 3.3x 10.3x 3.3x 10.1xMedtronic, Inc. 51.75 0.8% 29.1% 55.98 40.28 52,138 11,180 860 51,987 16,665 5,638 4,808 Jul-13 Apr-13 16,934 6,174 5,384 3.1x 9.2x 3.1x 8.4xStryker Corporation 66.89 0.5% 27.0% 71.55 51.60 25,293 2,771 1,913 23,412 8,792 1,932 1,645 Jun-13 Dec-12 8,984 2,453 2,126 2.7x 12.1x 2.6x 9.5xThermo Fisher Scientific, Inc. 88.83 1.9% 57.3% 92.72 56.64 32,025 7,114 1,004 37,715 12,777 2,683 1,684 Jun-13 Dec-12 12,910 2,742 2,505 3.0x 14.1x 2.9x 13.8xZimmer Holdings, Inc. 79.09 1.7% 29.8% 85.08 61.83 13,410 1,688 657 13,866 4,514 1,677 1,334 Jun-13 Dec-12 4,587 1,733 1,366 3.1x 8.3x 3.0x 8.0xNumber of Companies 14 Median: 1.8% 21.9% Total $538,996 $39,027 $203,713 $188,673 2.8x 10.6x 2.6x 9.9x

Mean: 2.5% 23.6% $39,027 2.6x 11.3x 2.7x 10.1x

Medical / Surgical / Dental SuppliesAmerisourceBergen Corporation $56.92 9.5% 49.7% $59.75 $37.12 $13,149 $1,396 $1,347 $12,977 $83,963 $1,274 $1,106 Jun-13 Sep-12 $87,304 $1,407 $1,244 0.2x 10.2x 0.1x 9.2xCardinal Health, Inc. 50.28 7.5% 28.4% 52.49 36.91 17,068 3,865 2,305 19,032 101,093 2,443 2,046 Jun-13 Jun-13 83,025 2,389 1,989 0.2x 7.8x 0.2x 8.0xHenry Schein, Inc. 101.05 6.6% 33.7% 107.75 73.35 8,740 468 91 9,597 9,325 789 661 Jun-13 Dec-12 9,581 814 688 1.0x 12.1x 1.0x 11.8xMcKesson Corporation 121.41 9.2% 41.3% 126.36 84.65 27,757 4,874 2,456 29,726 123,964 3,094 2,474 Jun-13 Mar-13 131,120 3,479 2,921 0.2x 9.6x 0.2x 8.5xOwens & Minor Inc. 34.11 0.2% 22.4% 36.40 26.97 2,159 215 219 2,167 9,047 250 203 Jun-13 Dec-12 9,111 260 210 0.2x 8.7x 0.2x 8.3xPatterson Companies, Inc. 39.88 2.4% 18.3% 42.69 31.36 4,163 860 505 4,420 3,628 399 353 Jul-13 Apr-13 4,054 429 376 1.2x 11.1x 1.1x 10.3xNumber of Companies 6 Median: 7.1% 31.1% Total $73,036 $12,987 $331,021 $324,196 0.2x 9.9x 0.2x 8.9x

Mean: 5.9% 32.3% $12,987 0.5x 9.9x 0.5x 9.4x

TEV/ Fwd MultiplesCash and Equiv.

Total Ent.

Value


PeriodLastest

FYE DateCompany NameEquity

Mkt. Value Total DebtTEV/ LTM MultiplesForward Estimate


September 2013


Provider-Based Services

11



Acute-Care HospitalsCommunity Health Systems, Inc. $39.26 (18.7%) 45.9% $51.29 $26.33 $3,659 $9,631 $285 $13,470 $13,037 $1,708 $1,074 Jun-13 Dec-12 $13,138 $1,902 $1,111 1.0x 7.7x 1.0x 7.1xHealth Management Associates Inc. 12.86 (7.4%) 68.1% 17.28 6.97 3,346 3,733 37 7,002 5,868 882 495 Jun-13 Dec-12 6,884 844 443 1.2x 7.9x 1.0x 8.3xHCA Holdings, Inc. 38.19 (1.8%) 35.1% 41.83 27.92 17,079 28,525 594 46,414 33,386 6,361 4,670 Jun-13 Dec-12 36,956 6,376 4,676 1.4x 7.3x 1.3x 7.3xLifepoint Hospitals Inc. 45.23 (8.8%) 12.3% 53.29 34.37 2,150 1,755 160 3,781 3,540 473 241 Jun-13 Dec-12 4,372 536 311 1.1x 8.0x 0.9x 7.1xTenet Healthcare Corp. 39.05 (16.1%) 90.1% 49.48 20.52 3,968 5,635 95 9,679 9,361 1,207 746 Jun-13 Dec-12 10,342 1,265 781 1.0x 8.0x 0.9x 7.6xUniversal Health Services Inc. 67.75 (1.5%) 70.4% 72.74 39.84 6,653 3,578 17 10,504 7,112 1,348 1,026 Jun-13 Dec-12 8,238 1,258 938 1.5x 7.8x 1.3x 8.4xNumber of Companies 6 Median: (8.1%) 57.0% Total $36,854 $15,142 $72,304 $79,930 1.1x 7.9x 1.0x 7.5x

Mean: (9.1%) 53.7% $15,142 1.2x 7.8x 1.1x 7.6x

Assisted LivingAssisted Living Concepts Inc. $14.15 (3.3%) 19.9% $16.00 $11.46 $551 $228 $7 $651 $542 $118 $73 Jun-13 Dec-12 NA NA NA 1.2x 5.5x NA NA Brookdale Senior Living Inc. 25.02 (10.4%) 16.0% 30.65 21.28 3,104 2,626 28 5,699 2,492 392 135 Jun-13 Dec-12 2,885 423 137 2.3x 14.7x 2.0x 13.5xCapital Senior Living Corp. 20.82 (21.7%) 73.7% 27.90 11.82 581 429 18 990 328 55 13 Jun-13 Dec-12 357 65 15 3.0x 18.0x 2.8x 15.3xEmeritus Corp. 21.81 (14.3%) 10.0% 30.95 19.64 1,040 4,060 114 4,974 1,673 306 135 Jun-13 Dec-12 1,921 371 187 3.0x 16.3x 2.6x 13.4xFive Star Quality Care Inc. 5.19 0.8% 12.3% 6.87 4.44 251 63 15 282 1,231 46 20 Jun-13 Dec-12 1,431 46 21 0.2x 6.1x 0.2x 6.1xSkilled Healthcare Group, Inc. 4.84 (34.4%) (15.6%) 8.01 4.79 190 446 5 633 868 82 56 Jun-13 Dec-12 864 82 54 0.7x 7.6x 0.7x 7.7xNumber of Companies 6 Median: (12.4%) 14.1% Total $5,716 $2,205 $7,135 $7,458 1.7x 11.1x 2.0x 13.4x

Mean: (13.9%) 19.4% $2,205 1.7x 11.4x 1.7x 11.2x

Diagnostic ImagingAlliance Healthcare Services, Inc. $24.30 57.4% 270.3% $25.44 $5.71 $252 $559 $31 $812 $456 $144 $59 Jun-13 Dec-12 $460 $148 NA 1.8x 5.4x 1.8x 5.5xRadNet, Inc. 2.58 2.0% (7.1%) 3.35 2.13 103 584 0 689 669 100 43 Jun-13 Dec-12 692 114 47 1.0x 6.5x 1.0x 6.0xVarian Medical Systems Inc. 70.45 6.2% 21.7% 75.78 57.00 7,584 174 740 6,934 2,929 692 625 Jun-13 Sep-12 2,959 684 618 2.4x 10.0x 2.3x 10.1xNumber of Companies 3 Median: 6.2% 21.7% Total $7,940 $2,812 $4,054 $4,112 1.8x 6.5x 1.8x 6.0x

Mean: 21.8% 94.9% $2,812 1.7x 7.3x 1.7x 7.2x

Dialysis ServicesDaVita HealthCare Partners Inc. $107.51 (13.7%) 11.3% $131.33 $96.23 $11,428 $8,490 $700 $20,051 $10,121 $2,101 $1,655 Jun-13 Dec-12 $11,536 $2,374 $1,864 2.0x 9.4x 1.7x 8.4xFresenius Medical Care AG & Co. KGAA 49.22 (5.0%) (14.4%) 59.52 46.58 15,137 8,350 535 21,732 14,475 2,760 2,136 Jun-13 Dec-12 14,621 2,920 2,288 2.0x 10.2x 1.5x 7.4xNumber of Companies 2 Median: (9.3%) (1.5%) Total $26,565 $20,892 $24,595 $26,157 2.0x 9.8x 1.6x 7.9x

Mean: (9.3%) (1.5%) $20,892 2.0x 9.8x 1.6x 7.9x

Home Care / HospiceAddus HomeCare Corporation $21.18 16.2% 327.5% $23.71 $4.70 $231 $0 $18 $192 $254 $19 $17 Jun-13 Dec-12 $262 $19 $16 0.8x 10.0x 0.7x 10.2xAlmost Family Inc. 18.87 (5.2%) (13.9%) 22.47 17.66 178 1 35 147 348 26 23 Jun-13 Dec-12 345 22 19 0.4x 5.7x 0.4x 6.6xAmedisys Inc. 16.29 34.0% 19.3% 18.70 8.81 524 75 7 570 1,388 74 34 Jun-13 Dec-12 1,282 69 26 0.4x 7.5x 0.4x 8.3xGentiva Health Services Inc. 11.47 8.9% 7.1% 13.85 8.47 360 910 160 1,087 1,679 170 149 Jun-13 Dec-12 1,671 156 137 0.6x 6.5x 0.7x 6.9xLHC Group, Inc. 22.63 2.1% 33.5% 26.90 16.18 398 26 3 431 635 61 53 Jun-13 Dec-12 666 53 47 0.7x 7.1x 0.6x 8.1xChemed Corp. 69.64 (1.6%) 5.6% 82.00 56.51 1,299 179 73 1,365 1,447 189 164 Jun-13 Dec-12 1,449 207 165 0.9x 7.2x 0.9x 6.6xNumber of Companies 6 Median: 5.5% 13.2% Total $379 $632 $1,012 $974 0.7x 7.2x 0.6x 7.5x

Mean: 9.1% 63.2% $632 0.6x 7.3x 0.6x 7.8x

Long-Term CareThe Ensign Group, Inc. $38.65 8.8% 33.0% $39.63 $24.97 $848 $216 $43 $1,034 $857 $87 $56 Jun-13 Dec-12 $924 $139 $105 1.2x 11.8x 1.1x 7.4xKindred Healthcare Inc. 14.70 4.3% 34.1% 16.63 9.68 796 1,672 43 2,372 6,186 427 222 Jun-13 Dec-12 5,800 409 218 0.4x 5.6x 0.4x 5.8xNational Healthcare Corp. 46.14 (4.1%) 3.3% 50.82 43.39 648 10 74 640 748 99 70 Jun-13 Dec-12 775 NA NA 0.9x 5.6x 0.8x NA Number of Companies 3 Median: 4.3% 33.0% Total $2,292 $1,349 $7,792 $7,498 0.9x 5.6x 0.8x 6.6x

Mean: 3.0% 23.5% $1,349 0.8x 7.7x 0.8x 6.6x

TEV/ LTM Multiples TEV/ Fwd MultiplesCompany Name

Equity Mkt. Value Total Debt

Cash and Equiv.

Total Ent.

Value


PeriodLastest

FYE DateForward Estimate


September 2013

As of September 3, 2013 12

Provider-Based Services Stock Price% Change 52 Week


Physician Practice Management

Multispecialty / Primary Care:IPC The Hospitalist Company, Inc. $51.44 6.3% 17.8% $55.49 $33.10 $867 $5 $21 $864 $564 $61 $57 Jun-13 Dec-12 $604 $68 $63 1.5x 14.1x 1.4x 12.8xNumber of Companies 1 Median: 6.3% 17.8% Total $867 $864 $564 $604 1.5x 14.1x 1.4x 12.8x

Mean: 6.3% 17.8% $864 1.5x 14.1x 1.4x 12.8x

Specialty:MEDNAX, Inc. 97.37 6.8% 41.0% 100.12 67.86 4,775 154 34 4,909 1,976 450 415 Jun-13 Dec-12 2,152 490 449 2.5x 10.9x 2.3x 10.0xNumber of Companies 1 Median: 6.8% 41.0% Total $4,775 $4,909 $1,976 $2,152 2.5x 10.9x 2.3x 10.0x

Mean: 6.8% 41.0% $4,909 2.5x 10.9x 2.3x 10.0x

Dental:Birner Dental Management Services Inc. $16.36 2.2% 3.8% $23.03 $16.21 $34 $6 $1 $39 $63 $5 $1 Jun-13 Dec-12 NA NA NA 0.6x 8.4x NA NA Number of Companies 1 Median: 2.2% 3.8% Total $34 $39 $63 $0 0.6x 8.4x NA NA

Mean: 2.2% 3.8% $39 0.6x 8.4x NA NA

Psychiatric Hospitals / ManagementMagellan Health Services Inc. $56.21 2.2% 13.6% $60.54 $46.00 $1,509 $28 $188 $1,255 $3,293 $244 $209 Jun-13 Dec-12 $3,290 $259 $183 0.4x 5.1x 0.4x 4.8xProvidence Service Corp. 26.84 3.6% 139.7% 31.31 9.70 359 124 83 416 1,136 58 43 Jun-13 Dec-12 1,132 58 43 0.4x 7.1x 0.4x 7.1xUniversal Health Services Inc. 67.75 (1.5%) 70.4% 72.74 39.84 6,653 3,578 17 10,504 7,112 1,348 1,026 Jun-13 Dec-12 8,238 1,258 938 1.5x 7.8x 1.3x 8.4xNumber of Companies 3 Median: 2.2% 70.4% Total $8,521 $3,043 $11,541 $12,660 0.4x 6.1x 0.4x 7.1x

Mean: 1.4% 74.6% $3,043 0.6x 5.0x 0.7x 6.8x

Surgicenters / Rehabilitation

Surgery Centers:AmSurg Corp. $37.29 5.4% 29.5% $41.00 $25.00 $1,205 $616 $42 $2,281 $999 $337 $305 Jun-13 Dec-12 $1,077 $364 $333 2.3x 6.7x 2.1x 6.3xNumber of Companies 1 Median: 5.4% 29.5% Total $1,205 $2,281 $999 $1,077 2.3x 6.7x 2.1x 6.3x

Mean: 5.4% 29.5% $2,281 2.3x 6.7x 2.1x 6.3x

Rehabilitation / Long Term Acute Care:HEALTHSOUTH Corp. $31.46 5.5% 38.9% $33.73 $19.85 $2,746 $1,320 $80 $4,472 $2,198 $525 $437 Jun-13 Dec-12 $2,263 $534 $444 2.0x 8.3x 2.0x 8.4xSelect Medical Holdings Corporation 8.47 10.3% (16.9%) 12.03 7.21 1,183 1,550 5 2,767 2,925 386 323 Jun-13 Dec-12 2,973 382 316 0.9x 7.1x 0.9x 7.2xUS Physical Therapy Inc. 27.53 (4.5%) 6.3% 32.15 22.69 333 17 10 363 251 42 36 Jun-13 Dec-12 264 38 39 1.4x 8.7x 1.4x 9.6xNumber of Companies 3 Median: 5.5% 6.3% Total $4,262 $2,534 $5,374 $5,500 1.4x 8.3x 1.4x 8.4x

Mean: 3.8% 9.4% $2,534 1.5x 8.0x 1.4x 8.4x

Company NameEquity

Mkt. Value Total DebtCash and

Equiv.

Total Ent.

Value


PeriodLastest

FYE DateForward Estimate TEV/ LTM Multiples TEV/ Fwd Multiples

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

8/31/2013 Dopps Chiropractic of Hutchinson, LLC - - - - - - No8/31/2013 Engineering and Research Associates, Inc. The Northwestern Mutual Life

Insurance Company; Atlantic Trust PWM; Sempra Energy Trading LLC; Tortoise Energy Infrastructure Corp.

Machine Solutions Inc. - - - - No

8/30/2013 Acton Pharmaceuticals, Inc. Sequoia Capital Meda AB (OM:MEDA A) $200.0 - - - Yes8/30/2013 Accriva Diagnostics Essex Woodlands Health Ventures;

KB Partners, LLC; Kaiser Permanente Ventures; Telegraph Hill Partners; PTV Sciences, L.P.

Nexus Dx, Inc. - - - - Yes

8/30/2013 Physicians Endoscopy L.L.C. Silver Oak Services Partners, LLC Pamlico Capital - - - - Yes8/29/2013 Vision Consulting, LLC - Parallon Business Solutions, LLC - - - - No8/29/2013 Life Stem Genetics Inc. Ben Franklin Technology Partners of

Southeastern Pennsylvania, Investment Arm; Vivo Ventures, LLC; Burrill Venture Capital

Miami Days Corp. - - - - No

8/29/2013 Freeman Medical Center, LLC - Baxter County Regional Hospital, Inc - - - - No8/28/2013 Boca Pharmacal, Inc. Boca Life Science Holdings, LLC Generics Bidco I, LLC $225.0 - - - No8/28/2013 InaVein, LLC - LeMaitre Vascular, Inc.

(NasdaqGM:LMAT)$3.9 1.1x - - No

8/28/2013 Western Reserve Senior Care - Kindred Healthcare Inc. (NYSE:KND) - - - - No8/28/2013 Glenwood, LLC - - - - - - No8/27/2013 BioBehavioral Diagnostics Company Sevin Rosen Funds Pearson plc (LSE:PSON) - - - - No8/27/2013 Acurian, Inc. J.P. Morgan Partners, LLC;

EuclidSR Partners; Flatiron Partners; ProQuest Investments; Merck Capital Ventures, LLC

Pharmaceutical Product Development, LLC

- - - - Yes

8/27/2013 Sharon Regional Health System Inc. - Community Health Systems, Inc. (NYSE:CYH)

- - - - No

8/26/2013 Hi-Tech Pharmacal Co., Inc. (NasdaqGS:HITK) - American Realty Capital Healthcare Trust, Inc.; AR Capital, LLC; American Realty Capital Global Trust, Inc.

$492.7 2.1x 10.1x 13.1x No

8/26/2013 Amplimmune, Inc. InterWest Partners LLC; Wellcome Trust, Investment Division

MedImmune, LLC $500.0 - - - Yes

8/26/2013 Longevity Logic, Inc. - Worldwide Food Services, Inc. (OTCPK:WFSV)

- - - - No

8/26/2013 Merus Labs International Inc., Factive Product Merus Labs International Inc. (TSX:MSL)

Vansen Pharma Inc $3.4 - - - No

8/26/2013 Cardiothoracic and Vascular Surgical Specialists Inc.

- OhioHealth Corporation - - - - No

8/26/2013 Valley Organics Inc. BlackRock, Inc. (NYSE:BLK); The Vanguard Group, Inc.; Wellington Management Company LLP; Glenview Capital Management, LLC

Latteno Food Corp. (OTCPK:LATF) - - - - No

8/24/2013 Onyx Pharmaceuticals, Inc. (NasdaqGS:ONXX) Samana Capital, L.P; Fidelity Management & Research Company; iNetworks, LLC; T. Rowe Price Associates, Inc.

Amgen Inc. (NasdaqGS:AMGN) $9,259.3 18.0x - - Yes

8/23/2013 Medtronic Vascular, Inc., Pioneer Plus Re-Entry Catheter Product Line

Medtronic Vascular, Inc. Volcano Corporation (NasdaqGS:VOLC)

$15.0 - - - No

8/23/2013 Ceregene, Inc. Hamilton BioVentures; Investor Growth Capital; California Technology Ventures, LLC

Sangamo Biosciences Inc. (NasdaqGS:SGMO)

- - - - Yes

8/23/2013 Pathwork Diagnostics, Inc. - Response Genetics, Inc (NasdaqCM:RGDX)

$1.2 - - - No

8/23/2013 S. June Smith Center Inc. - Excentia Corp. - - - - No8/22/2013 Viztek LLC, Two Imaging Centers Using Viztek

Opal-RISViztek, LLC The Radiology Group, LLC - - - - No

8/22/2013 PathCentral, Inc. Baird Venture Partners; Arboretum Ventures; Okapi Venture Capital, LLC

XIFIN, Inc. - - - - Yes

8/22/2013 Akron General Health System - Community Health Systems, Inc. (NYSE:CYH); The Cleveland Clinic Foundation

- - - - No

8/22/2013 Lamplighter Manufactured Home Community - American Land Lease Inc. - - - - No8/21/2013 6800 Preston Limited, 66-Bed Post-Acute Care

Specialty Hospital, Located In Plano, Texas6800 Preston Limited Physicians Realty L.P. $18.2 - - - No

8/21/2013 Vancouver Bridgewood, LLC, Bridgewood at Four Seasons Retirement & Assisted Living Community

Vancouver Bridgewood, LLC CHP Partners LP $22.1 - - - No

8/21/2013 MWSH Yelm, LLC, Rosemont Retirement & Assisted Living Community

MWSH Yelm, LLC CHP Partners LP $16.9 - - - No

8/21/2013 Sandy Assisted Living, LLC - CHP Partners LP $17.4 - - - No8/21/2013 Gibson Creek Retirement Cottages & Assisted

Living Community SalemJILAR Enterprises, LLC; JILAR Cottages, LLC

CHP Partners LP $12.4 - - - No

M&A Detail

September 2013

Announced U.S. Healthcare & Life Sciences

M&A

13


8/21/2013 Gresham Assisted Living, LLC, Huntington Terrace Assisted Living Community, Gresham

Gresham Assisted Living, LLC CHP Partners LP $15.0 - - - No

8/21/2013 MWSH Beaverton, LLC, Beaverton Hills Assisted Living Residence in Beaverton

MWSH Beaverton, LLC CHP Partners LP $12.9 - - - No

8/21/2013 MWSH Billings, LLC, Bonaventure of Billings Senior Living Community

MWSH Billings, LLC CHP Partners LP $48.3 - - - No

8/21/2013 Auburn Assisted Living, LLC, Auburn Meadows Senior Community, Assisted Living and Special Care

Auburn Assisted Living, LLC CHP Partners LP $21.9 - - - No

8/21/2013 Arbor Place Senior Living Community Medford, Oregon

MWSH Medford, LLC CHP Partners LP $15.8 - - - No

8/21/2013 MWSH Idaho Falls, LLC, Bonaventure of Idaho Falls Senior Living Community

MWSH Idaho Falls, LLC CHP Partners LP $44.4 - - - No

8/21/2013 Five Rivers Assisted Living and Retirement Community, LLC, Five Rivers Retirement & Assisted Living

Five Rivers Assisted Living and Retirement Community, LLC


8/21/2013 West Hills Assisted Living Community LLC, West Hills Retirement and Assisted Living Community Corval

West Hills Assisted Living Community, LLC


8/21/2013 Bonaventure Place Retirement & Assisted Living Community, LLC

MWSH Boise LLC CHP Partners LP $40.0 - - - No

8/21/2013 Roseburg Assisted Living, LLC, Oak Park Assisted Living Community Roseburg, OR

Roseburg Assisted Living, LLC CHP Partners LP $12.1 - - - No

8/21/2013 Orchard Heights Senior Community, LLC - CHP Partners LP $17.8 - - - No8/21/2013 Albany Assisted Living, LLC - CHP Partners LP $10.0 - - - No8/21/2013 MWSH BEND LLC, High Desert Assisted

Living Community BendKleinheinz Capital Partners, Inc.; AWM Investment Company Inc.; Boston Avenue Capital, L.L.C.; Greenwood Investments, Inc.


8/21/2013 Longview Monticello, LLC, Monticello Park Retirement & Assisted Living Community Longview

Longview Monticello, LLC CHP Partners LP $27.4 - - - No

8/21/2013 MWSH Sparks, LLC, Bonaventure of Sparks Senior Living Community Sparks

MWSH Sparks, LLC CHP Partners LP $55.2 - - - No

8/21/2013 Southern Hills Assisted Living Community, LLC, Southern Hills Assisted Living Community Salem

Southern Hills Assisted Living Community, LLC


8/21/2013 Tualatin Assisted Living, LLC Warburg Pincus LLC; OrbiMed Advisors, L.L.C.; Iroquois Capital, LP; Perceptive Advisors LLC; Deerfield Management Company


8/21/2013 Edge BioServ, LLC Edge Biosystems, Inc. BRLI No. 2 Acquisition Corp. - - - - No8/20/2013 Optimum Outcomes, Inc. Waud Capital Partners, L.L.C.; Fifth

Street Capital LLCAdreima, Inc. - - - - Yes

8/20/2013 Design Clinicals, Inc. - First Databank, Inc. - - - - No8/20/2013 Mitchell & McCormick, Inc., Behavioral Health

BusinessMitchell and McCormick, Inc. Qualifacts Systems Inc. - - - - No

8/19/2013 Medfusion, Inc. Intuit Inc. (NasdaqGS:INTU) - - - - - No8/19/2013 Keller's Limb & Brace, Inc. Snell Prosthetic & Orthotic

Laboratory, Inc.Hanger, Inc. (NYSE:HGR) - - - - No

8/19/2013 Medafor, Inc. RAIN Source Capital; CryoLife Inc. (NYSE:CRY)

Davol Inc. $280.0 - - - No

8/19/2013 Kirkegaard & Perry Laboratories, Inc. - SeraCare Life Sciences, Inc. - - - - No8/19/2013 Development & Research, Inc. - Hanger, Inc. (NYSE:HGR) - - - - No8/16/2013 Landauer- Metropolitan, Inc. Clairvest Group Inc. (TSX:CVG) Quadrant Management, Inc. $22.0 - - - No8/15/2013 Bracket United BioSource Corporation Parthenon Capital Partners - - - - Yes8/15/2013 Hooper Holmes Inc., Portamedic Brand and

Paramedical Exam Service LineHooper Holmes Inc. (AMEX:HH) American Para Professional Systems,

Inc.$8.4 - - - No

8/15/2013 Urgent Care Specialists, LLC, Three Centers in Northern Kentucky

Urgent Care Specialists, LLC St. Elizabeth Physicians - - - - No

8/15/2013 Cal Ceram Dental Lab, Inc. - Beacon Bay Holdings - - - - No8/15/2013 Axxiem Web Solutions, AxxiTRIALS Clinical

Trials Community Portal SolutionAxxiem Web Solutions Litéra Corp. - - - - No

8/14/2013 Novella Clinical, Inc. FHI 360 Quintiles Transnational Corp. - - - - No8/14/2013 Pathway Therapeutics Ltd., Anticancer Drug Pathway Therapeutics Ltd. VetDC, Inc - - - - No8/14/2013 Premier Orthopedics, LLC - The Center for Orthopedic Research

and Education, Inc.- - - - No

8/13/2013 Hedgepath, LLC - HedgePath Pharmaceuticals, Inc. (OTCPK:HPPI)

- - - - No

8/13/2013 SafeStitch Medical, Inc. (OTCBB:SFES) Frost Group, LLC; Brilliant Champion Resources Limited; Grandtime Associates Limited

TransEnterix, Inc. - - - - No

8/13/2013 PharmaBioSource Inc, Pharmaceutical Facility PharmaBioSource, Inc. Colliers International Property Consultants, Inc.

$100.0 - - - No

8/13/2013 Health Service Review, Inc. - HealthSmart Holdings, Inc. - - - - No8/13/2013 Johnston Healthcare Search - Stanton Chase International, Inc. - - - - No8/13/2013 ExtendMD LLC - Orange Health Solutions, Inc. - - - - No

M&A Detail

September 2013


M&A (Continued)

14


8/12/2013 6N Systems, Inc. - eHealth Solutions, Inc. - - - - No8/12/2013 P. J. Noyes Company, Inc. - Nipro Diagnostics, Inc. - - - - No8/12/2013 Wellbrooke of Avon Mainstreet Property Group, LLC HealthLease Properties Real Estate

Investment Trust (TSX:HLP.UN)$16.6 - - - No

8/12/2013 Great Lakes Drug Development, Inc. Calmedica Capital; Clal Gemel Ltd.; Beechwood Ventures, LLC; Wexford Capital LLC; Two River Group Holdings, LLC

Certara, L.P. - - - - Yes

8/12/2013 Radiation Oncology Services of America, Inc. Ambulatory Services of America, Inc.

Vantage Oncology, LLC - - - - No

8/11/2013 Cardiocom, LLC - Medtronic, Inc. (NYSE:MDT) $200.0 4.0x - - No8/9/2013 The Counseling Center, Inc. - La Frontera Center, Inc. - - - - No8/9/2013 Catholic Health Partners, Inc., Nursing Homes in

Mariemont, Hamilton, Dayton and Southern Indiana

Mercy Health Partners (Southwest Ohio Region)

- - - - - No

8/8/2013 Glenwood Regional Medical Center and Mountain Vista Medical Center and Southeast Texas Hospital

IASIS Healthcare LLC MPT Operating Partnership, L.P. $281.3 - - - Yes

8/8/2013 Animal Reference Pathology, Inc. ARUP Laboratories, Inc. Gardiner Smith Laboratories, LLC - - - - No8/8/2013 Exciton Technologies, US Operations Exciton Technologies Inc. Crawford Healthcare Ltd. - - - - No8/8/2013 Medical Center in Margate - CAC-Florida Medical Centers, LLC - - - - No8/8/2013 Eastern Connecticut Health Network, Inc. - Vanguard Health Systems Inc.

(NYSE:VHS); Yale-New Haven Health Services Corporation

- - - - No

8/8/2013 Friendship Ridge - - - - - - No8/8/2013 Okmulgee Memorial Hospital, Inc. Okmulgee Memorial Hospital

AuthorityMuscogee (Creek) Nation - - - - No

8/7/2013 Hunter Laboratories, Inc. - Bio-Reference Laboratories Inc. (NasdaqGS:BRLI)

- - - - No

8/7/2013 Chautauqua County Home Chautauqua County, Kansas - $16.5 - - - No8/7/2013 Arpeggi, Inc. EDF Ventures; Prism VentureWorks;

The Vertical Group; Aperture Venture Partners, LLC; Hercules Technology Growth Capital, Inc.

Gene By Gene, LTD. - - - - No

8/7/2013 Bayside Ob-Gyn & Infertility, Inc. - OB/GYN Associates of Erie, P.C. - - - - No8/7/2013 Champion Manufacturing, Inc. Invacare Corporation (NYSE:IVC) Levine Leichtman Capital Partners $45.0 2.0x 8.2x - Yes8/7/2013 Dental Practice Facility in Plymouth - PDHC, Ltd. - - - - No8/6/2013 Cramer Products, Inc. - Performance Health, Inc. - - - - No8/6/2013 Assisted Living Property in Round Rock, Texas - One Liberty Properties Inc.

(NYSE:OLP)$22.8 - - - No

8/6/2013 Upstate Linac Services, LLC - Oncology Services International, Inc. - - - - No8/6/2013 Palau Pharma S.A., Albaconazole Antifungal

AgentPalau Pharma S.A. Actavis, Inc. (NYSE:ACT) - - - - No

8/6/2013 TJ Holdings, Inc. - Ameritox, Ltd. - - - - No8/6/2013 C&G Technologies, Inc. - BC Technical, Inc. - - - - No8/6/2013 Mesilla Valley Sleep Lab, LLC - Quality Sleep Solutions, Inc. - - - - No8/6/2013 AMG Specialty Hospital-Tulsa - Acadiana Management Group, LLC - - - - Yes8/6/2013 Physicians Interactive, Inc. Perseus, L.L.C. Merck Global Health Innovation LLC - - - - No8/6/2013 The Optical Solution - Levin Eye Care LLC - - - - No8/5/2013 Cypress Pharmaceuticals, Inc., Certain Cypress

AssetsCypress Pharmaceutical, Inc. Breckenridge Pharmaceutical, Inc. $30.0 - - - No

8/5/2013 Holston Anesthesia Associates, P.C. - American Anesthesiology, Inc. - - - - No8/5/2013 Rocky Mountain Urgent Care, PC and Rocky

Mountain Medical Group, P.C.- Infinite Aegis Group, LLC - - - - No

8/2/2013 Two Senior Housing Facilities Located in Baldwinsville and Geneva

- Tiptree Financial Inc. (NasdaqCM:TIPT); Premier Senior Living Group, LLC

$21.9 - - - No

8/2/2013 Oakley, Inc., REVO Brand Oakley, Inc. Sequential Brands Group, Inc. (OTCPK:SQBG)

$20.0 - - - No

8/2/2013 AHC Media LLC Thompson Media Group LLC Lone Peak Capital Group LLC - - - - Yes8/2/2013 Three High Quality Senior Living Facilities in US - American Realty Capital Healthcare

Trust, Inc.- - - - No

8/1/2013 HarborChase of Jasper Emeritus Corp. (NYSE:ESC) CNL Healthcare Properties, Inc. $7.3 - - - No8/1/2013 Manhattan Diagnostic Radiology, Inc. - RadNet, Inc. (NasdaqGM:RDNT) $2.3 - - - No8/1/2013 3M Innovative Properties Company, Dry

Powder Inhaler Technology3M Innovative Properties Company Adamis Pharmaceuticals Corporation

(OTCPK:ADMP)$10.0 - - - No

8/1/2013 TJM Properties Inc., 15 Senior Housing Projects TJM Properties Inc. Fortress Investment Group LLC (NYSE:FIG)

$200.0 - - - No

8/1/2013 Angels of Mercy Home Health Care LLC - Oncologix Tech, Inc. $0.7 0.2x - - No8/1/2013 The Laurels of West Carrollton LLC Meditrust of Ohio, Inc. Laurel Health Care Company $2.5 - - - No8/1/2013 The Laurels of Huber Heights - Laurel Health Care Company $4.4 - - - No8/1/2013 Nentwick Care Center - Pritok Capital LLC - - - - Yes8/1/2013 Midwest Vein & Laser Center - - - - - - No8/1/2013 UAB School of Nursing Foundry Clinic - University of Alabama at Birmingham

School of Nursing, Endowment Arm- - - - No

8/1/2013 Laurel Surgical Center, LLC - Excela Health $10.8 - - - No

M&A Detail

September 2013

15


M&A (Continued)

16

M&A Detail

September 2013

Contacts Turner Bredrup Managing Director

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

Cheairs Porter Managing Director


James Clark Managing Director


Todd Morris Managing Director


Andy Dixon Director


Geoff Smith Director


Whit Knier Vice President


Paul Hepper Vice President


Andy Hewlett Vice President


mailto:[email protected]









17

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