healthcare & life sciences group - … · exposed sensitive personal information from asmany 80...

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HEALTHCARE & LIFE SCIENCES GROUP

0

INDUSTRY UPDATE │ FEBRUARY 2015


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WHATWE’RE READING

1

CONTENTS

PUBLIC MARKETS OVERVIEW

EQUITY MARKETS OVERVIEW

M&A OVERVIEW

DEBT CAPITAL MARKETS OVERVIEW

HEALTHCARE & LIFE SCIENCES TRADING STATISTICS

M&A ACTIVITY

CONTACTS

UNITED STATES

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

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

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

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

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

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

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

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

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

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

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

HEALTHCARE & LIFE SCIENCES

As many readers may be aware, on February 4th, the health insurer Anthemannounced that it had been the victim of a massive hacker attack. The attackexposed sensitive personal information from as many as 80 million of Anthem’sinsured individuals and represents the largest data breach of an Americanhealthcare company in history. In its announcement, Anthem stated thatinformation exposed in the breach included names, birthdays, addresses andSocial Security numbers, but did not appear to include medical information orfinancial details. Following the announcement, coverage in the media hasbeen extensive; below are links to several articles discussing the attack withfurther details.

− The Wall Street Journal (A subscription to The Wall Street Journal Online maybe required)

− Modern Healthcare (A free subscription to Modern Healthcare is required)

Healthy discussion surrounding the measurement of healthcare quality as itrelates to Medicare payments continued this month. The National QualityForum submitted performance measures as it relates to 20 federal programsgoverned by Health and Human Services. The debate on how to measurequality heightens as this year, many of the federal pay-for-performanceprograms carry financial penalties. Pay-for-performance programs currentlyrepresent approximately 80% of Medicare spending. A link to the article can befound here. (A subscription to The Wall Street Journal Online may be required)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ FEBRUARY 2015

HW&CO. HCLS GROUP INSIGHT

Home Health Industry Overview

http://www.harriswilliams.com/

mailto:[email protected]











http://www.wsj.com/articles/health-insurer-anthem-hit-by-hackers-1423103720?mod=WSJ_hp_LEFTTopStories

http://www.modernhealthcare.com/article/20150209/NEWS/150209958/anthems-data-hack-prompts-probe-by-national-insurance-group

http://www.harriswilliams.com/sites/default/files/content/home_health_update_us.pdf

http://www.harriswilliams.com/sites/default/files/content/home_health_update_us.pdf

PAGE |

PUBLICMARKETS OVERVIEW

2

INDUSTRY UPDATE

HEALTHCARE & LIFE SCIENCES GROUP │ FEBRUARY 2015

Key Trading Statistics (detail begins on page 6)

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 $26,996 12.0% 28.9% 1.9x 10.7x 1.8x 9.2x

Contract Pharma Manufacturing 3 9,940 (1.7%) 21.4% 2.5x 11.2x 2.5x 12.7x

Contract Research Organizations 8 27,253 7.3% 25.1% 2.3x 13.9x 2.2x 12.3x

Disease Management 2 8,340 17.3% 18.5% 2.1x 21.0x 2.0x 12.9x

Emergency Serv ices 1 2,283 (10.5%) (18.8%) 2.3x 9.3x 2.3x 9.0x

Health Care Staffing 4 7,986 8.0% 16.8% 1.1x 13.7x 1.1x 12.1x

HMO - Medical 9 273,504 11.9% 43.6% 0.7x 9.1x 0.7x 8.6x

Information Serv ices 11 37,499 4.7% 8.2% 6.0x 20.7x 4.8x 17.1x

Specialty Managed Care 3 5,999 (4.1%) (17.7%) 1.3x 7.2x 1.3x 4.4x

Specialty Pharmacy 1 1,451 13.7% NM 0.7x NA 0.5x 31.3x

Specialty Pharmacy Management 4 94,320 6.0% 4.5% 0.7x 12.0x 0.7x 11.9x

Dental Products 3 120,618 6.7% 24.3% 3.4x 14.3x 3.3x 13.5x

Durable Medical Equipment 3 11,906 8.1% 29.3% 1.8x 13.9x 1.6x 11.2x

Life Sciences Tools 4 109,426 7.8% 8.9% 2.5x 12.7x 3.2x 13.5x

Medical Devices and Products 14 728,180 4.0% 16.5% 3.4x 13.1x 3.3x 12.0x

Medical / Surgical / Dental Supplies & Distribution 6 127,439 9.2% 20.3% 0.3x 13.8x 0.3x 11.3x

Acute-Care Hospitals 4 103,405 (8.4%) 20.4% 1.2x 8.9x 1.1x 8.0x

Assisted Liv ing 3 13,907 2.1% 3.3% 3.6x 20.4x 2.5x 13.8x

Diagnostic Imaging 3 10,529 (10.3%) 12.4% 1.7x 8.2x 2.0x 10.4x

Dialysis Serv ices 2 54,885 (1.0%) 9.7% 1.9x 10.3x 1.9x 10.0x

Home Care, Hospice, and Home Infusion 6 4,915 4.0% 30.3% 1.0x 13.4x 1.0x 11.4x

Long-Term Care 3 4,459 4.0% (1.9%) 0.9x 9.0x 0.8x 7.5x

Physician Practice Management 2 8,072 9.1% 19.6% 2.8x 12.9x 2.6x 11.9x

Behavioral Health / Management 6 22,414 (0.0%) 20.4% 1.4x 10.4x 1.3x 9.1x

Surgicenters / Rehabilitation 5 16,158 6.3% 28.6% 2.4x 11.2x 2.2x 10.4x

Payer, Provider, & Pharmacy Support Serv ices 49 $495,572 9.1% 30.8% 1.6x 10.9x 1.4x 10.4x

Products & Devices 30 $1,097,571 2.4% 18.0% 4.1x 15.4x 3.9x 14.0x

Provider-Based Serv ices 34 $238,742 0.8% 21.8% 2.0x 11.0x 1.8x 10.0x

HW&Co. HCLS Composite Index 113 $1,831,885 4.2% 15.5% 3.3x 13.9x 3.1x 12.7x

S&P 500 0.0% 11.2%

Pro

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Pro

vid

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Ba

sed

Se

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Median TEV/

Forward MulitplesSectorNumber of

Companies

Aggregate

Enterprise Value

($ mm)

Median TEV/

LTM Multiples

Pa

ye

r, P

rov

ide

r, &

Ph

arm

ac

y

Su

pp

ort

Se

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es

HMO - Medical

Home Care, Hospice, and Home Infusion

Durable Medical Equipment

Clinical Laboratories

Surgicenters / Rehabilitation

Contract Research Organizations

Contract Pharma Manufacturing

Behavioral Health / Management

Acute-Care Hospitals

Medical / Surgical / Dental Supplies & Distribution

Physician Practice Management

Disease Management

Health Care Staffing

Medical Devices and Products

HW&Co. HCLS Composite Index

Diagnostic Imaging

S&P 500

Dialysis Services

Life Sciences Tools

Information Services

Specialty Pharmacy Management

Assisted Living

Specialty Pharmacy

Long-Term Care

Specialty Managed Care

Emergency Services

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

PAGE |

EQUITYMARKETS OVERVIEW

3

INDUSTRY UPDATE


Healthcare & Life Sciences Industry Stock Performance

Top 25 Equity Offerings(by proceeds)

197.7%

151.9%

165.6%

40

60

80

100

120

140

160

180

200

220

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15

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

Closing Date Issuer Ticker Transaction Type

Gross Proceeds

($ mm)

01/21/15 BioMarin Pharmaceutical Inc BMRN Follow-On 911.5

01/20/15 Alnylam Pharmaceuticals Inc ALNY Follow-On 450.0

01/07/15 The Medicines Co MDCO Convertible 400.0

01/06/15 Synageva BioPharma Corp GEVA Follow-On 325.0

01/23/15 Auspex Pharmaceuticals Inc ASPX Follow-On 226.0

01/21/15 Puma Biotechnology Inc PBYI Follow-On 218.5

01/08/15 Alder BioPharmaceuticals Inc ALDR Follow-On 177.0

01/22/15 Radius Health Inc RDUS Follow-On 169.1

01/07/15 Avalanche Biotechnologies Inc AAVL Follow-On 162.8

01/07/15 Cempra Inc CEMP Follow-On 147.9

01/22/15 Zafgen Inc ZFGN Follow-On 138.0

01/07/15 OvaScience Inc OVAS Follow-On 132.3

01/21/15 Intrexon Corp XON Follow-On 116.4

01/28/15 XenoPort Inc XNPT Convertible 115.0

01/21/15 Keryx Biopharmaceuticals Inc KERX Follow-On 110.0

01/21/15 Arena Pharmaceuticals Inc ARNA Follow-On 105.0

01/30/15 IASIS Healthcare Corp IAS IPO 100.0

01/06/15 Karyopharm Therapeutics Inc KPTI Follow-On 99.0

01/28/15 Entellus Medical Inc ENTL IPO 90.0

01/28/15 Flex Pharma Inc FLKS IPO 86.4

01/21/15 Versartis Inc VSAR Follow-On 86.3

01/22/15 Otonomy Inc OTIC Follow-On 85.8

01/06/15 Five Prime Therapeutics Inc FPRX Follow-On 84.3

01/06/15 Cerus Corp CERS Follow-On 70.0

01/28/15 Omeros Corp OMER Follow-On 69.0

PAGE |

M&A OVERVIEW

4

INDUSTRY UPDATE


Announced Healthcare & Life Sciences M&A

Healthcare & Life Sciences M&A Trends

Announced Private Equity M&A Activity

QUARTERLY M&A ACTIVITY

MIDDLE MARKET HEALTHCARE TRANSACTION HIGHLIGHTS

ANNOUNCED HEALTHCARE & LIFE SCIENCES TRANSACTIONS

MEDIAN HEALTHCARE & LIFE SCIENCES TRANSACTION MULTIPLES

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

Note: Transactions based on publicly available information

LTM DEAL STATISTICS

Aggregate Number Median Transaction Multiples

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

$264.5 1,205 2.40x 13.6x

HC&LS Industry Number of

Segment Companies

Biotechnology 3

Healthcare Technology 17

Healthcare Distributors 8

Healthcare Equipment 21

Healthcare Facilities 45

Healthcare Serv ices 48

Healthcare Supplies 10

Life Sciences Tools & Serv ices 17

Managed Healthcare 4

Pharmaceuticals 19

69

94

113

79

42

7165 65

61 62

4

60 62

95

49 50

80

120

139144 143

8

0

20

40

60

80

100

120

140

160

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

Nu

mb

er

of Tr

an

sac

tio

ns

Number of Investments Number of Exits

12.8x

11.1x 10.9x 10.0x

13.6x 14.3x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

0x

3x

6x

9x

12x

15x

18x

21x

2010 2011 2012 2013 2014 2015YTD

EV

/ LTM R

ev

en

ue

Mu

ltipleE

V /

LTM

EB

ITD

A M

ultip

le

TEV / LTM EBITDA TEV / LTM Sales

$110.6

$141.4

$101.6 $108.2

$236.6

$10.5 0

200

400

600

800

1,000

1,200

1,400

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2010 2011 2012 2013 2014 2015YTD

Nu

mb

er o

f Tran

sac

tion

sAg

gre

ga

te T

ran

sac

tio

n V

alu

e

($ in

billio

ns

Aggregate Deal Value Number of Transactions

219 229 221

291

200 209

304

248

304290 279

292

106

1120

12

22

1612

18

15

22

1411

15

4

0

50

100

150

200

250

300

350

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

Nu

mb

er

of Tr

an

sac

tio

ns

PEG Acquirer Strategic Acquirer

Announced Target Buyer

1/28/2015 Coastal Pharmaceutical Serv ices Corporation Amerita, Inc.

1/27/2015 Studer Group Huron Capital

1/26/2015 Qualcare Alliance Networks, Inc. Cigna Corp. (NYSE:CI)

1/23/2015 Strata Decision Technology, L.L.C. Roper Industries Inc. (NYSE:ROP)

1/20/2015 Walgreens Infusion Serv ices, Inc. Madison Dearborn Partners, LLC

1/12/2015 Lov ing Care Agency, Inc. Epic Health Serv ices, Inc.

1/11/2015 MWI Veterinary Supply, Inc. (NasdaqGS:MWIV) AmerisourceBergen Corporation (NYSE:ABC)

1/9/2015 NextCODE Health LLC WuXi PharmaTech (Cayman) Inc. (NYSE:WX)

1/5/2015 Traditions Home Care, Inc. Accelera Innov ations, Inc (OTCPK:ACNV)

1/5/2015 Priority Home Health Care, Inc. Addus HomeCare Corporation (NasdaqGS:ADUS)

1/5/2015 Health Through Friendship, Inc. Centene Corp. (NYSE:CNC)

PAGE |

DEBT CAPITALMARKETS OVERVIEW

5

INDUSTRY UPDATE


Key Credit Statistics

QUARTERLY HEALTHCARE LOAN VOLUME AVERAGE SPREAD ON HEALTHCARE LOANS

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

CREDIT STATISTICS AVERAGE SECONDARY SPREAD

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2008 2009 2010 2011 2012 2013 2014A

ve

rag

e S

pre

ad

Ov

er

LIB

OR

Revolving Credit / Term Loan A Weighted-Average Institutional

$0

$3

$6

$9

$12

$15

$18

$21

$24

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

Loa

n V

olu

me

by

Qu

art

er

($ in

billio

ns)

Pro Rata Institutional

L + 0

L + 200

L + 400

L + 600

L + 800

L + 1000

Av

era

ge

Sp

rea

d O

ve

r LI

BO

R

0.0x

2.0x

4.0x

6.0x

Debt/EBITDA Senior Debt/EBITDA EBITDA/Cash

Interest

EBITDA -

Capex/Cash

Interest

EB

ITD

A M

ultip

le

2008 2009 2010 2011 2012 2013 2014

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

01/14/15 Baylor Scott & White Holdings Specialty hospitals exc. psychiatric $400.0 Revolver/Line >= 1 Yr. NR / NR L+ 45

01/15/15 Superior Biologics Inc Home health care serv ices 17.5 Term Loan NR / NR L+ 525

01/16/15 Owasso LTC Land LLC Skilled nursing care facilities 16.8 Term Loan NR / NR N/A

01/08/15 Dental Care Alliance Inc Offices and clinics of dentists 4.0 Term Loan A NR / NR L+ 425

PAGE |


6

INDUSTRY UPDATE


Payer, Provider, & Pharmacy Support Services

As of January 30, 2015.

Stock Price

% Change 52 Week

1/30/2015 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical Laboratories

Bio-Reference Laboratories Inc. $33.53 12.0% 25.8% $34.00 $24.19 $930 $55 $18 $968 $832 $109 $83 Oct-14 Oct-14 $942 $125 $100 1.2x 8.9x 1.0x 7.7x

Laboratory Corp. of America Holdings 114.78 6.9% 28.9% 119.21 87.25 9,699 3,015 576 12,156 5,936 1,138 936 Sep-14 Dec-13 5,996 1,186 940 2.0x 10.7x 2.0x 10.3x

Quest Diagnostics Inc. 71.07 12.0% 35.7% 72.63 50.46 10,272 3,762 192 13,871 7,435 1,288 974 Dec-14 Dec-14 7,623 1,513 1,201 1.9x 10.8x 1.8x 9.2x

Number of Companies 3 Median: 12.0% 28.9% Total $20,901 $26,996 $14,203 $14,561 1.9x 10.7x 1.8x 9.2x

Market Cap. Weighted Average: 9.6% 32.1% 1.9x 10.6x 1.9x 9.6x

Contract Pharma Manufacturing

Akorn, Inc. $42.58 (2.4%) 87.7% $45.25 $20.52 $4,591 $1,157 $131 $5,606 $459 $140 $99 Sep-14 Dec-13 $630 $261 $216 12.2x NM 8.9x 21.5x

Cambrex Corporation. 22.43 7.5% 21.4% 24.45 15.76 695 60 46 729 374 82 59 Dec-14 Dec-14 392 84 64 1.9x 8.9x 1.9x 8.7x

West Pharmaceutical Serv ices, Inc. 49.31 (1.7%) 2.4% 55.29 39.11 3,504 347 247 3,604 1,414 267 176 Sep-14 Dec-13 1,420 284 187 2.5x 13.5x 2.5x 12.7x

Number of Companies 3 Median: (1.7%) 21.4% Total $8,791 $9,940 $2,248 $2,442 2.5x 11.2x 2.5x 12.7x

Market Cap. Weighted Average: (1.4%) 48.5% 7.5x 12.8x 5.8x 16.9x

Contract Research Organizations

Albany Molecular Research Inc. $16.33 (28.2%) 50.6% $23.95 $10.28 $532 $160 $47 $638 $277 $33 $16 Dec-14 Dec-14 $339 $66 $46 2.3x 19.2x 1.9x 9.7x

Charles River Laboratories International, Inc. 69.35 10.4% 20.5% 70.73 49.60 3,254 778 160 3,924 1,298 274 178 Dec-14 Dec-14 1,357 322 230 3.0x 14.3x 2.9x 12.2x

ICON Public Limited Company 56.40 7.0% 33.1% 59.81 35.33 3,473 0 154 3,224 1,458 240 189 Sep-14 Dec-13 1,504 259 208 2.2x 13.5x 2.1x 12.4x

INC Research Holdings, Inc. 23.30 NM NM 28.73 19.61 1,398 588 186 1,801 770 139 84 Sep-14 Dec-13 800 146 108 2.3x 12.9x 2.3x 12.3x

PAREXEL International Corporation 60.96 14.7% 23.4% 64.72 41.79 3,354 347 302 3,440 1,994 297 215 Dec-14 Jun-14 2,061 307 224 1.7x 11.6x 1.7x 11.2x

PRA Health Sciences, Inc. 26.13 NM NM 28.15 18.47 1,563 1,260 49 2,774 1,242 134 39 Sep-14 Dec-13 1,267 177 155 2.2x 20.7x 2.2x 15.7x

Quintiles Transnational Holdings Inc. 60.50 7.5% 26.8% 62.73 45.85 7,475 2,308 867 8,890 4,166 687 599 Dec-14 Dec-14 4,482 767 645 2.1x 12.9x 2.0x 11.6x

WuXi PharmaTech (Cayman) Inc. 40.10 6.2% 11.0% 41.34 29.84 2,808 137 157 2,563 641 156 109 Sep-14 Dec-13 673 171 128 4.0x 16.5x 3.8x 15.0x



Disease Management

Alere Inc. $40.69 1.7% 7.0% $43.13 $31.94 $3,400 $3,725 $378 $7,355 $2,587 $563 $175 Dec-14 Dec-14 $2,709 $553 $513 2.8x 13.1x 2.7x 13.3x

Healthways Inc. 20.62 32.9% 30.1% 22.25 11.50 730 257 2 985 712 34 7 Sep-14 Dec-13 742 78 22 1.4x 28.8x 1.3x 12.6x



Emergency Services

Air Methods Corp. $41.55 (10.5%) (18.8%) $60.74 $40.33 $1,629 $664 $17 $2,283 $983 $246 $165 Sep-14 Dec-13 $1,005 $255 $173 2.3x 9.3x 2.3x 9.0x

Number of Companies 1 Median: (10.5%) (18.8%) Total $1,629 $2,283 $983 $1,005 2.3x 9.3x 2.3x 9.0x

Market Cap. Weighted Average: (10.5%) (18.8%) 2.3x 9.3x 2.3x 9.0x

Health Care Staffing

AMN Healthcare Serv ices Inc. $18.82 9.6% 24.8% $20.33 $10.35 $878 $146 $10 $1,014 $1,005 $84 $68 Sep-14 Dec-13 $1,024 $85 $65 1.0x 12.1x 1.0x 12.0x

Cross Country Healthcare, Inc. 10.23 6.5% (6.7%) 13.51 5.26 320 65 8 378 539 11 4 Sep-14 Dec-13 620 17 9 0.7x 33.5x 0.6x 21.9x

On Assignment Inc. 35.13 25.2% 15.7% 39.86 25.97 1,839 404 30 2,213 1,809 179 143 Sep-14 Dec-13 1,858 200 151 1.2x 12.4x 1.2x 11.1x

Team Health Holdings, Inc. 51.70 (16.5%) 17.8% 63.13 41.37 3,676 805 20 4,381 2,820 292 215 Dec-14 Dec-14 3,135 355 256 1.6x 15.0x 1.4x 12.3x



TEV/ Fwd MultiplesForward Twelve Month

EstimateCompany NameLTM

Period

Latest

FYE Date

TEV/ LTM MultiplesEquity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)

Latest Twelve Months

(LTM)

PAGE |


7

INDUSTRY UPDATE




Stock Price

% Change 52 Week


HMO - Medical

Commercial:

Aetna Inc. 91.82 13.9% 33.4% 96.25 64.68 32,293 8,784 0 39,431 58,003 4,732 4,108 Dec-14 Dec-14 62,513 4,939 4,578 0.7x 8.3x 0.6x 8.0x

Anthem, Inc. 134.96 9.5% 53.8% 143.65 83.99 36,431 16,668 2,152 50,947 73,874 5,901 5,050 Dec-14 Dec-14 78,326 5,042 4,713 0.7x 8.6x 0.7x 10.1x

Cigna Corp. 106.83 10.0% 21.9% 112.95 73.47 27,944 5,152 1,420 31,581 34,914 4,157 3,569 Dec-14 Dec-14 37,971 3,979 3,449 0.9x 7.6x 0.8x 7.9x

Health Net, Inc. 54.17 14.0% 63.8% 56.72 30.39 4,221 500 869 3,606 14,009 349 320 Dec-14 Dec-14 17,460 571 NA 0.3x 10.3x 0.2x 6.3x

Humana Inc. 146.44 6.8% 49.2% 155.30 91.00 22,454 4,159 1,935 24,354 48,500 2,811 2,362 Dec-14 Dec-14 54,199 3,183 2,768 0.5x 8.7x 0.4x 7.7x

UnitedHealth Group Incorporated 106.25 13.2% 45.9% 114.32 69.57 101,978 17,461 7,495 113,277 130,474 11,330 10,274 Dec-14 Dec-14 141,586 12,564 10,973 0.9x 10.0x 0.8x 9.0x



Government:

Centene Corp. 109.16 21.3% 79.2% 112.80 55.11 6,404 893 1,546 5,985 15,695 581 492 Dec-14 Dec-14 21,179 741 649 0.4x 10.3x 0.3x 8.1x

Molina Healthcare, Inc. 50.91 9.4% 39.8% 54.57 32.41 2,464 905 1,539 1,774 9,372 327 193 Dec-14 Dec-14 13,511 459 353 0.2x 5.4x 0.1x 3.9x

WellCare Health Plans, Inc. 72.85 13.1% 10.8% 84.69 55.16 3,199 900 1,314 2,548 12,759 273 213 Dec-14 Dec-14 14,134 477 422 0.2x 9.3x 0.2x 5.3x



Information Services

Data/Analytics:

Castlight Health, Inc. 8.88 (31.7%) NM 41.95 8.25 802 0 25 620 36 (85) (86) Sep-14 Dec-13 44 (77) (76) 17.1x NM 14.0x NM

National Research Corp. 34.55 0.4% (11.1%) 44.95 30.20 410 2 40 380 99 32 28 Dec-14 Dec-14 107 37 32 3.8x 11.9x 3.6x 10.4x

Number of Companies 2 Median: (15.7%) (11.1%) Total $1,212 $500 $135 $151 10.5x 11.9x 8.8x 10.4x


eHealth:

WebMD Health Corp. 38.75 (6.9%) (19.7%) 53.30 34.48 1,401 952 700 1,653 564 108 90 Sep-14 Dec-13 579 156 94 2.9x 15.3x 2.9x 10.6x

Number of Companies 1 Median: (6.9%) (19.7%) Total $1,401 $1,653 $564 $579 2.9x 15.3x 2.9x 10.6x


Hospital/Physician:

Allscripts Healthcare Solutions, Inc. 11.91 (13.8%) (28.6%) 19.68 11.00 2,147 587 37 2,697 1,388 46 (56) Sep-14 Dec-13 1,398 202 106 1.9x NM 1.9x 13.3x

Athenahealth, Inc. 139.71 16.1% (3.8%) 206.70 97.30 5,322 209 74 5,430 753 62 1 Dec-14 Dec-14 919 165 88 7.2x NM 5.9x 32.9x

Cerner Corporation 66.35 5.9% 17.9% 68.37 48.39 22,657 130 635 21,472 3,313 962 763 Jan-15 Jan-15 4,328 1,409 1,075 6.5x 22.3x 5.0x 15.2x

Computer Programs & Systems Inc. 49.26 (24.0%) (13.3%) 71.89 47.40 552 0 24 518 205 53 50 Dec-14 Dec-14 206 51 46 2.5x 9.7x 2.5x 10.1x

HMS Holdings Corp. 19.79 (11.6%) (15.6%) 23.69 15.10 1,737 198 120 1,814 453 104 55 Sep-14 Dec-13 447 112 51 4.0x 17.5x 4.1x 16.3x

MedAssets, Inc. 18.51 (15.2%) (16.2%) 26.09 17.08 1,114 909 14 2,009 692 207 104 Sep-14 Dec-13 717 234 102 2.9x 9.7x 2.8x 8.6x

Merge Healthcare Incorporated 3.70 41.2% 75.4% 4.00 1.97 355 228 34 549 212 38 23 Sep-14 Dec-13 215 48 31 2.6x 14.4x 2.6x 11.5x

Quality Systems Inc. 16.29 9.0% (12.6%) 18.89 13.01 982 0 114 857 477 43 30 Dec-14 Mar-14 487 70 38 1.8x 19.9x 1.8x 12.2x

Number of Companies 8 Median: (2.9%) (13.0%) Total $34,866 $35,346 $7,493 $8,718 2.7x 15.9x 2.7x 12.8x


Forward Twelve Month

EstimateTEV/ LTM Multiples TEV/ Fwd Multiples

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE DateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

PAGE |


8

INDUSTRY UPDATE




Stock Price

% Change 52 Week


Specialty Managed Care

Assurant Inc. $63.51 (6.2%) (3.3%) $69.94 $59.17 $4,462 $1,171 $0 $4,318 $10,382 $927 $803 Dec-14 Dec-14 $10,611 $980 $834 0.4x 4.7x 0.4x 4.4x

CorVel Corporation 32.94 (4.1%) (32.2%) 53.35 28.08 680 0 31 652 491 67 49 Dec-14 Mar-14 502 NA NA 1.3x 9.8x 1.3x NA

HealthEquity, Inc. 20.77 2.7% NM 27.74 16.11 1,137 0 108 1,029 80 22 16 Oct-14 Jan-14 86 24 17 12.8x NM 11.9x NM

Number of Companies 3 Median: (4.1%) (17.7%) Total $6,279 $5,999 $10,952 $11,200 1.3x 7.2x 1.3x 4.4x


Specialty Pharmacy

Diplomat Pharmacy, Inc. 24.57 13.7% NM 32.60 15.45 1,264 96 16 1,451 2,015 23 19 Sep-14 Dec-13 2,796 46 22 0.7x NM 0.5x 31.3x

Number of Companies 1 Median: 13.7% NM Total $1,264 $1,451 $2,015 $2,796 0.7x NA 0.5x 31.3x

Market Cap. Weighted Average: 13.7% NM 0.7x NM 0.5x 31.3x

Specialty Pharmacy Management

Catamaran Corporation $50.00 5.1% 0.9% $51.76 $31.93 $10,373 $1,437 $907 $10,848 $20,371 $806 $526 Sep-14 Dec-13 $21,381 $786 $592 0.5x 13.5x 0.5x 13.8x

Express Scripts Holding Company 80.71 6.8% 8.1% 86.64 64.64 59,234 14,687 835 73,097 100,356 6,496 4,420 Sep-14 Dec-13 100,277 6,767 6,405 0.7x 11.3x 0.7x 10.8x

Omnicare Inc. 74.98 13.1% 20.0% 77.05 56.41 7,339 2,216 287 9,268 6,326 730 596 Sep-14 Dec-13 6,403 714 608 1.5x 12.7x 1.4x 13.0x

PharMerica Corporation 23.01 (16.8%) (5.7%) 30.48 19.42 753 361 7 1,107 1,822 115 79 Sep-14 Dec-13 1,861 128 86 0.6x 9.6x 0.6x 8.7x



Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


EstimateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

TEV/ LTM Multiples TEV/ Fwd Multiples

PAGE |


9

INDUSTRY UPDATE


Products & Devices


Stock Price

% Change 52 Week


Dental Products

3M Company $162.30 6.7% 26.7% $168.16 $123.61 $103,229 $6,896 $1,897 $107,543 $31,821 $8,543 $7,135 Dec-14 Dec-14 $32,324 $8,861 $7,437 3.4x 12.6x 3.3x 12.1x

DENTSPLY International Inc. 50.03 (0.1%) 7.3% 56.25 43.00 7,080 1,380 98 8,362 2,957 584 452 Sep-14 Dec-13 2,955 618 515 2.8x 14.3x 2.8x 13.5x

Sirona Dental Systems Inc. 90.22 14.9% 24.3% 93.23 67.22 5,014 80 368 4,713 1,165 269 230 Dec-14 Sep-14 1,208 347 293 4.0x 17.5x 3.9x 13.6x



Durable Medical Equipment

Hill-Rom Holdings, Inc. $47.76 8.1% 29.3% $49.33 $34.94 $2,698 $582 $114 $3,091 $1,758 $284 $188 Dec-14 Sep-14 $1,900 $307 $214 1.8x 10.9x 1.6x 10.1x

Invacare Corporation 14.65 (6.7%) (31.4%) 21.24 11.65 470 20 39 466 1,270 (1) (37) Dec-14 Dec-14 1,322 42 11 0.4x NM 0.4x 11.2x

ResMed Inc. 62.47 19.9% 42.2% 67.50 41.52 8,780 450 881 8,349 1,616 491 417 Dec-14 Jun-14 1,681 515 433 5.2x 17.0x 5.0x 16.2x



Life Sciences Tools

Agilent Technologies Inc. $37.77 (30.5%) (36.5%) $60.46 $37.68 $12,687 $2,762 $3,028 $12,424 $6,981 $1,279 $895 Oct-14 Oct-14 $4,118 $889 $759 1.8x 9.7x 3.0x 14.0x

Becton, Dickinson and Company 138.08 8.3% 27.9% 146.74 105.21 26,702 10,142 8,540 27,925 8,468 2,167 1,649 Dec-14 Sep-14 8,452 2,440 1,830 3.3x 12.9x 3.3x 11.4x

Thermo Fisher Scientific, Inc. 125.21 7.4% 8.9% 131.12 107.33 50,087 14,564 1,344 63,299 16,890 4,010 2,326 Dec-14 Dec-14 16,935 4,249 3,817 3.7x 15.8x 3.7x 14.9x

VWR Corporation 24.16 9.0% NM 27.14 20.60 3,174 2,739 135 5,778 4,333 462 331 Sep-14 Dec-13 4,351 444 367 1.3x 12.5x 1.3x 13.0x



Medical Devices and Products

Abbott Laboratories $44.76 2.9% 22.5% $46.50 $35.80 $67,399 $8,301 $0 $70,928 $20,247 $4,741 $3,204 Dec-14 Dec-14 $20,941 $5,170 $4,170 3.5x 15.0x 3.4x 13.7x

Baxter International Inc. 70.31 0.4% 1.5% 77.31 66.34 38,106 9,275 0 45,325 16,671 4,312 3,316 Dec-14 Dec-14 16,159 3,900 3,108 2.7x 10.5x 2.8x 11.6x

Boston Scientific Corporation 14.81 12.4% 9.2% 15.05 11.10 19,645 4,262 587 23,644 7,380 1,765 1,056 Dec-14 Dec-14 7,609 1,905 1,191 3.2x 13.4x 3.1x 12.4x

CR Bard Inc. 171.03 6.2% 30.5% 180.35 125.00 12,810 1,403 0 13,241 3,324 958 788 Dec-14 Dec-14 3,380 1,012 857 4.0x 13.8x 3.9x 13.1x

Danaher Corp. 82.38 3.3% 9.4% 87.49 70.12 57,888 3,473 3,006 58,427 19,914 4,370 3,431 Dec-14 Dec-14 20,791 4,869 3,879 2.9x 13.4x 2.8x 12.0x

Hanger, Inc. 21.58 (8.3%) (44.8%) 37.60 18.25 742 540 5 1,277 1,061 156 117 Jun-14 Dec-13 1,070 166 116 1.2x 8.2x 1.2x 7.7x

Hologic Inc. 30.37 17.1% 44.5% 31.20 19.91 8,501 3,955 544 11,912 2,549 914 397 Dec-14 Sep-14 2,601 1,007 850 4.7x 13.0x 4.6x 11.8x

Hospira Inc. 63.43 16.9% 45.1% 66.56 40.41 10,732 1,756 802 11,953 4,464 730 497 Dec-14 Dec-14 4,530 835 623 2.7x 16.4x 2.6x 14.3x

Johnson & Johnson 100.14 (6.4%) 11.9% 109.49 86.09 280,303 15,271 0 262,569 74,331 25,009 21,137 Dec-14 Dec-14 71,731 24,779 20,696 3.5x 10.5x 3.7x 10.6x

K2M Group Holdings, Inc. 18.90 21.1% NM 23.63 12.31 706 0 23 683 178 (15) (52) Sep-14 Dec-13 186 (10) (52) 3.8x NM 3.7x NM

Medtronic plc 71.40 5.9% 25.2% 77.39 53.33 172,271 13,708 1,287 171,495 17,255 5,682 4,830 Oct-14 Apr-14 19,859 6,922 5,998 9.9x 30.2x 8.6x 24.8x

Stryker Corporation 91.05 4.6% 16.5% 98.24 75.78 34,446 3,973 1,795 32,692 9,675 2,604 2,226 Dec-14 Dec-14 9,981 2,691 2,316 3.4x 12.6x 3.3x 12.1x

Teleflex Incorporated 109.56 (2.9%) 16.2% 119.99 90.15 4,537 1,065 286 5,318 1,802 405 295 Sep-14 Dec-13 1,838 445 348 3.0x 13.1x 2.9x 12.0x

Zimmer Holdings, Inc. 112.10 2.6% 20.5% 120.70 90.48 18,985 1,426 1,083 18,714 4,673 1,789 1,413 Dec-14 Dec-14 4,640 1,893 1,500 4.0x 10.5x 4.0x 9.9x



Medical / Surgical / Dental Supplies & Distribution

AmerisourceBergen Corporation $95.05 12.0% 40.3% $100.20 $62.55 $20,787 $1,996 $2,299 $20,484 $123,981 $1,407 $1,213 Dec-14 Sep-14 $133,238 $1,933 $1,747 0.2x 14.6x 0.2x 10.6x

Cardinal Health, Inc. 83.19 6.4% 20.6% 87.33 63.06 27,533 3,976 2,881 28,628 93,928 2,441 1,996 Dec-14 Jun-14 99,345 2,686 2,426 0.3x 11.7x 0.3x 10.7x

Henry Schein, Inc. 138.07 14.9% 20.0% 143.89 109.34 11,628 731 89 12,929 10,371 867 715 Dec-14 Dec-14 10,985 929 772 1.2x 14.9x 1.2x 13.9x

McKesson Corporation 212.65 4.5% 20.0% 222.93 162.90 49,310 10,394 4,587 57,673 173,870 3,921 2,969 Dec-14 Mar-14 177,627 4,806 4,074 0.3x 14.7x 0.3x 12.0x

Owens & Minor Inc. 34.23 3.6% (2.6%) 35.99 31.55 2,159 766 610 2,315 9,267 237 196 Sep-14 Dec-13 9,398 254 197 0.2x 9.8x 0.2x 9.1x

Patterson Companies, Inc. 50.09 17.5% 24.4% 51.49 37.03 5,028 726 285 5,411 4,348 418 366 Oct-14 Apr-14 4,416 432 382 1.2x 13.0x 1.2x 12.5x



TEV/ LTM Multiples TEV/ Fwd MultiplesCash and

Equiv.Company Name

Equity

Mkt.

Value

Total Debt

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


Estimate

PAGE |


10

INDUSTRY UPDATE


Provider-Based Services


Stock Price

% Change 52 Week


Acute-Care Hospitals

Community Health Systems, Inc. 47.07 (11.4%) 16.8% 57.72 34.55 5,473 17,069 221 23,104 17,129 2,241 1,394 Sep-14 Dec-13 18,717 2,779 1,627 1.3x 10.3x 1.2x 8.3x

HCA Holdings, Inc. 70.80 2.0% 43.1% 76.18 46.02 29,770 29,645 566 59,242 36,918 7,385 5,565 Dec-14 Dec-14 38,730 7,712 5,866 1.6x 8.0x 1.5x 7.7x

Lifepoint Hospitals Inc. 65.24 (5.3%) 24.0% 76.50 50.18 2,954 2,219 192 5,024 4,483 577 312 Dec-14 Dec-14 5,122 706 412 1.1x 8.7x 1.0x 7.1x

Tenet Healthcare Corp. 42.28 (23.7%) (6.7%) 63.61 37.95 4,155 11,553 200 16,035 16,032 1,750 950 Sep-14 Dec-13 17,237 1,929 1,082 1.0x 9.2x 0.9x 8.3x



Assisted Living

Brookdale Senior Liv ing Inc. 33.75 2.1% 21.5% 37.23 26.11 6,190 6,266 104 12,368 3,344 605 71 Dec-14 Dec-14 5,016 896 173 3.7x 20.4x 2.5x 13.8x

Capital Senior Liv ing Corp. 23.87 8.5% 3.3% 26.89 20.33 694 666 28 1,333 367 57 11 Sep-14 Dec-13 383 69 13 3.6x 23.4x 3.5x 19.3x

Five Star Quality Care Inc. 3.48 (13.9%) (38.2%) 6.09 3.23 169 77 25 206 1,103 20 (12) Sep-14 Dec-13 1,362 42 15 0.2x 10.2x 0.2x 4.9x



Long-Term Care

Kindred Healthcare Inc. 18.46 (13.1%) (5.4%) 26.81 16.94 1,285 1,497 82 2,648 5,081 291 132 Sep-14 Dec-13 5,085 368 207 0.5x 9.1x 0.5x 7.2x

National Healthcare Corp. 62.97 4.0% 18.7% 64.96 49.06 887 47 77 920 855 105 72 Sep-14 Dec-13 872 NA NA 1.1x 8.8x 1.1x NA

The Ensign Group, Inc. 41.50 9.6% (1.9%) 47.78 26.02 933 68 50 891 1,027 99 73 Dec-14 Dec-14 1,167 115 96 0.9x 9.0x 0.8x 7.7x

Number of Companies 3 Median: 4.0% (1.9%) Total $3,105 $4,459 $6,963 $7,124 0.9x 9.0x 0.8x 7.5x


Diagnostic Imaging

Alliance Healthcare Serv ices, Inc. 22.54 (10.3%) (19.7%) 35.40 18.92 238 505 39 749 437 127 60 Sep-14 Dec-13 NA NA NA 1.7x 5.9x NA NA

RadNet, Inc. 7.89 (14.2%) 315.3% 10.35 1.75 337 614 0 953 710 116 56 Sep-14 Dec-13 716 125 54 1.3x 8.2x 1.3x 7.7x

Varian Medical Systems, Inc. 92.56 10.2% 12.4% 95.70 76.73 9,273 525 904 8,827 3,076 658 594 Jan-15 Sep-14 3,200 672 609 2.9x 13.4x 2.8x 13.1x



Dialysis Services

DaVita HealthCare Partners Inc. 75.06 (3.3%) 15.6% 78.52 62.52 16,130 8,503 965 23,901 12,781 2,400 1,809 Dec-14 Dec-14 13,550 2,504 1,917 1.9x 10.0x 1.8x 9.5x

Fresenius Medical Care AG & Co. KGAA 74.11 1.2% 3.8% 75.37 52.83 22,466 9,073 588 30,984 15,666 2,902 2,220 Sep-14 Dec-13 15,733 2,938 2,261 2.0x 10.7x 2.0x 10.5x



Home Care, Hospice, and Home Infusion

Home Care / Hospice:

Addus HomeCare Corporation 22.18 14.9% (5.1%) 29.45 17.02 241 4 14 231 300 20 17 Sep-14 Dec-13 313 23 20 0.8x 11.5x 0.7x 10.1x

Almost Family Inc. 30.36 5.6% (2.8%) 32.18 19.74 288 53 5 338 466 22 18 Sep-14 Dec-13 493 36 30 0.7x 15.6x 0.7x 9.5x

Amedisys Inc. 28.18 11.5% 84.5% 30.48 12.86 941 114 6 1,049 1,191 52 21 Sep-14 Dec-13 1,206 74 38 0.9x 20.3x 0.9x 14.2x

Chemed Corp. 101.14 (4.7%) 26.7% 111.98 72.50 1,720 174 19 1,875 1,425 184 158 Sep-14 Dec-13 1,449 207 169 1.3x 10.2x 1.3x 9.1x

LHC Group, Inc. 29.72 22.2% 27.2% 32.01 19.69 529 65 5 603 690 56 47 Sep-14 Dec-13 731 55 46 0.9x 10.8x 0.8x 10.9x



Home Infusion:

BioScrip Inc. 5.75 (7.9%) (32.7%) 9.05 5.44 395 423 0 818 1,029 (3) (25) Sep-14 Dec-13 986 46 31 0.8x NM 0.8x 17.7x

Number of Companies 1 Median: (7.9%) (32.7%) Total $395 $818 $1,029 $986 0.8x NM 0.8x 17.7x

Market Cap. Weighted Average: (7.9%) (32.7%) 0.8x NM 0.8x 17.7x

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


EstimateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

TEV/ Fwd MultiplesTEV/ LTM Multiples

PAGE |


11

INDUSTRY UPDATE


Provider-Based Services

As of January 30, 2015.(1) EBITDA, EBIT, and Enterprise Value figures are adjusted for minority interest.

Stock Price

% Change 52 Week


Physician Practice Management

Multispecialty / Primary Care:

IPC Healthcare, Inc. 40.36 (3.1%) (24.8%) 56.69 36.12 695 70 25 740 676 71 66 Sep-14 Dec-13 694 72 66 1.1x 10.4x 1.1x 10.3x

Number of Companies 1 Median: (3.1%) (24.8%) Total $695 $740 $676 $694 1.1x 10.4x 1.1x 10.3x


Specialty:

MEDNAX, Inc. 67.89 10.4% 24.1% 69.20 49.82 6,817 569 48 7,333 2,439 559 513 Dec-14 Dec-14 2,694 605 551 3.0x 13.1x 2.7x 12.1x



Behavioral Health / Management

AAC Holdings, Inc. 25.52 20.4% NM 33.32 17.91 538 47 5 587 112 9 5 Sep-14 Dec-13 132 20 11 5.2x NM 4.5x 29.0x

Acadia Healthcare Company, Inc. 57.75 (2.3%) 14.1% 66.88 38.76 3,460 1,096 94 4,447 1,005 205 173 Dec-14 Dec-14 1,446 327 268 4.4x 21.6x 3.1x 13.6x

Civ itas Solutions, Inc. 18.99 19.7% NM 19.28 11.88 702 810 196 1,315 1,256 126 60 Sep-14 Sep-14 1,371 149 74 1.0x 10.4x 1.0x 8.8x

Magellan Health, Inc. 60.12 0.1% (0.8%) 63.81 52.37 1,641 274 368 1,531 3,786 196 143 Sep-14 Dec-13 3,758 247 127 0.4x 7.8x 0.4x 6.2x

Providence Serv ice Corp. 39.00 (10.4%) 47.7% 49.41 23.91 618 192 137 673 1,304 62 42 Sep-14 Dec-13 1,444 84 45 0.5x 10.8x 0.5x 8.0x

Universal Health Serv ices Inc. 102.53 (0.1%) 26.7% 115.64 73.06 10,147 3,466 40 13,859 7,759 1,386 1,020 Sep-14 Dec-13 8,718 1,469 1,093 1.8x 10.0x 1.6x 9.4x



Surgicenters / Rehabilitation

Surgery Centers1:

AmSurg Corp. 55.18 4.0% 30.2% 57.24 40.00 2,656 2,249 194 4,877 1,342 340 294 Sep-14 Dec-13 1,612 419 388 3.6x 14.3x 3.0x 11.6x

Surgical Care Affiliates, Inc. 32.25 5.9% (2.3%) 34.36 26.55 1,244 694 53 1,884 833 146 96 Sep-14 Dec-13 867 155 NA 2.3x 12.9x 2.2x 12.2x



Rehabilitation:

HEALTHSOUTH Corp. 44.10 11.3% 40.9% 44.80 29.82 3,870 1,650 272 5,496 2,336 584 479 Sep-14 Dec-13 2,400 582 473 2.4x 9.4x 2.3x 9.4x

Select Medical Holdings Corporation 13.52 3.2% 23.0% 16.17 10.15 1,770 1,558 11 3,364 2,997 362 295 Sep-14 Dec-13 3,062 370 294 1.1x 9.3x 1.1x 9.1x

US Physical Therapy Inc. 38.79 (9.7%) 20.1% 44.00 29.56 476 48 16 537 290 51 45 Sep-14 Dec-13 302 44 NA 1.8x 10.6x 1.8x 12.2x



Company Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


EstimateTEV/ LTM Multiples TEV/ Fwd Multiples

PAGE |

M&A ACTIVITY

12

INDUSTRY UPDATE


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

Enterprise Enterprise Value / LTM Private Equity

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

hoh18.75

1/31/2015 Advanced Medical Imaging, LLC And Olympic

Radiology, LLC

- Harrison Medical Center - - - - No

1/31/2015 LCA-Vision Inc. PhotoMedex, Inc. (NasdaqGS:PHMD) - $11.9 0.1x - - No

1/30/2015 MEMAC Associates, P.C. - MEDNAX, Inc. (NYSE:MD) - - - - No

1/30/2015 Hospitalists Now, Inc. Santé Ventures, LLC IPC Healthcare, Inc. (NasdaqGS:IPCM) - - - - No

1/30/2015 Charter Medical, Ltd. Lydall Inc. (NYSE:LDL) Solesis Medical Technologies $29.9 1.5x 9.1x - No

1/30/2015 Coventry Village Harris Webber, Ltd. Senior Housing Properties Trust $40.4 - - - No

1/29/2015 Aquarius Biotechnologies, Inc. - Matinas BioPharma Holdings, Inc.

(OTCPK:MTNB)

$3.5 - - - No

1/29/2015 Four Non-Core Communities Capital Senior Liv ing Corp. (NYSE:CSU) - $36.5 - - - No

1/29/2015 Dispensary Mobile, LLC - MJ Freeway - - - - No

1/29/2015 Dendreon Corp, Substantially All Assets Dendreon Corp. (OTCPK:DNDN.Q) Valeant Pharmaceuticals International, $400.0 - - - No

1/29/2015 Baxano Surgical, Inc., Certain Assets Baxano Surgical, Inc. (OTCPK:BAXS.Q) City Surgical LLC $0.3 - - - No

1/28/2015 Coastal Pharmaceutical Serv ices Corporation - Amerita, Inc. - - - - No

1/28/2015 Premier Healthcare Exchange, Inc. Edison Partners; LK Partners, LLC; Performant Financial Corporation $149.1 - - - Yes

1/27/2015 Studer Group JMI Equity Huron Capital $325.0 0.0x 0.0x 0.0x Yes

1/27/2015 Trillium Diagnostics, LLC - Viv ione Biosciences, LLC $15.0 - - - No

1/27/2015 American HealthCare Lending, LLC - Prosper Marketplace, Inc. $21.0 - - - No

1/26/2015 Quality Mobile X-Ray Serv ices, Inc. - Schryver Medical Sales And Marketing,

Inc.

- - - - No

1/26/2015 Clinical Serv ices of Rhode Island, Inc. - AAC Holdings, Inc. (NYSE:AAC) $2.0 1.7x 10.0x - No

1/26/2015 Global Neuro-Diagnostics, LP - Natus Medical Inc. (NasdaqGS:BABY) - - - - No

1/26/2015 Exemplar Genetics LLC - Intrexon Corporation (NYSE:XON) - - - - No

1/26/2015 Qualcare Alliance Networks, Inc. - Cigna Corp. (NYSE:CI) - - - - No

1/26/2015 Vitall, Inc. - CaerVision Global, Inc. (OTCPK:SUGO) $0.1 - - - No

1/26/2015 Sesame Communications, Inc. Kidron Corporate Advisors LLC,

Investment Arm

Internet Brands, Inc. - - - - No

1/26/2015 St. James Mercy Health System, McAuley Manor

at Mercycare

St. James Mercy Health System, Inc. Post Acute Partners, LLC - - - - No

1/23/2015 Strata Decision Technology, L.L.C. Veronis Suhler Stevenson Roper Industries Inc. (NYSE:ROP) - - - - No

1/23/2015 RemedyCity, LLC JumpStart, Inc., Investment Arm; Hatch

Partners, LLC

Breaking Media, LLC - - - - No

1/22/2015 Cardiac, Vascular and Thoracic Surgeons, Inc. - Mercy Medical Associates, LLC - - - - No

1/21/2015 Firefly BioWorks, Inc. - Abcam Plc (AIM:ABC) $28.0 - - - No

1/21/2015 Virtual Medical Sales, Inc. - BC Technical, Inc. - - - - No

1/21/2015 Radisphere National Radiology Group, Inc. Oak Investment Partners; Maverick

Capital, Ltd.; Horizon Technology

Finance Management, LLC

Sheridan Healthcare, Inc. - - - - Yes

1/20/2015 Stella Blu, Inc. - - $0.2 - - - No

1/20/2015 Real Time Enterprises, Inc. - Sparton Corp. (NYSE:SPA) $3.1 0.8x - - No

1/20/2015 MJ Biologics, Inc., Certain Assets MJ Biologics, Inc. Phibro Animal Health Corporation

(NasdaqGM:PAHC)

- - - - No

1/20/2015 Baxano Surgical, Inc., AxiaLIF Vectre Screw

Product

Baxano Surgical, Inc. (OTCPK:BAXS.Q) Quandary Medical LLC $0.9 - - - No

1/20/2015 IVR Care Transition Systems, Inc. - MDnetSolutions, LLC - - - - No

1/20/2015 Walgreens Infusion Serv ices, Inc. Walgreen Co. Madison Dearborn Partners, LLC - - - - Yes

1/20/2015 Hubble Telemedical Inc. MB Venture Partners Welch Allyn, Inc. - - - - No

1/19/2015 HSM, Inc. - National Imaging Associates, Inc. - - - - No

1/19/2015 VISTA Staffing Solutions, Inc. On Assignment Inc. (NYSE:ASGN) EmCare Inc. $123.0 - - - No

1/17/2015 PharmaLogic Inc. MCG Capital Corporation

(NasdaqGS:MCGC); RadioPharmacy

Investors, LLC

MedEquity Capital, LLC; Webster

Capital

- - - - Yes

1/16/2015 Coldstream Laboratories Inc. University Of Kentucky Research

Foundation

Piramal Enterprises Limited (BSE:500302) $25.0 - - - No

1/15/2015 One Liv ing Community In USA - Capital Senior Liv ing Corp. (NYSE:CSU) - - - - No

1/15/2015 nanoMR Inc. Dow Venture Capital; HealthCare

Ventures LLC; Sun Mountain Capital;

Excel Venture Management; Signal

Peak Ventures

DNA Electronics Limited $24.0 - - - No

1/15/2015 Five Oaks Pharm, LLC - Drug Safety Navigator, LLC - - - - No

1/15/2015 Associates In Adult Medicine and Pine Grove

Internal Medicine

- OSS Orthopaedic Hospital LLC - - - - No

1/14/2015 Saint Catherine Hospital of Indiana LLC - Rialto Capital Advisors, LLC $3.0 - - - No

1/14/2015 Razor Insights, LLC Bluff Point Associates athenahealth, Inc. (NasdaqGS:ATHN) - - - - No

PAGE |

M&A ACTIVITY

13

INDUSTRY UPDATE


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



1/14/2015 Regado Biosciences, Inc. (NasdaqCM:RGDO) The Aurora Funds, Inc.; Domain

Associates, L.L.C.; Edmond de

Rothschild Investment Partners, S.A.S.;

Quaker BioVentures; Caxton

Associates LP; BVF Inc.; HBM Partners

Ltd.; Stonepine Capital Management

LLC; Valence Life Sciences;

RusnanoMedInvest, LLC; Baxter

Ventures

Tobira Therapeutics, Inc. - - - - No

1/14/2015 Johnson Memorial Medical Center, Inc. - Saint Francis Care, Inc. $23.8 - - - No

1/13/2015 96% Interest in Portfolio of 7 Medical Office

Facilities in Minneapolis and 1 Facility in

Jamestown

The Davis Group, Inc. Physicians Realty Trust (NYSE:DOC) $122.1 - - - No

1/13/2015 Cassell & Associates, LLC - Civ itas Solutions, Inc. (NYSE:CIVI) - - - - No

1/13/2015 Panthera MedTech, Project Bengal Panthera MedTech Avantec Vascular Corporation - - - - No

1/12/2015 Health Directions, LLC - DNH Medical Management, Inc. - - - - No

1/12/2015 Exclusive Worldwide License To Develop &

Commercialize Therapies For Treatment Of Multiple

Myeloma

- Oxis Biotech, Inc. - - - - No

1/12/2015 Loving Care Agency, Inc. MTS Health Investors, LLC Epic Health Serv ices, Inc. - - - - Yes

1/12/2015 Podiatry Affiliates, PC - Buffalo Medical Group, P.C. - - - - No

1/11/2015 Foundation Medicine, Inc. (NasdaqGS:FMI) Kleiner Perkins Caufield & Byers; Third

Rock Ventures, LLC; Google Ventures

Roche Holdings, Inc. $1,582.5 30.4x - - No

1/11/2015 MWI Veterinary Supply, Inc. (NasdaqGS:MWIV) BlackRock Fund Advisors; Jennison

Associates LLC; Fidelity Management

& Research Company

AmerisourceBergen Corporation

(NYSE:ABC)

$2,522.5 0.8x 18.5x 20.4x No

1/11/2015 NPS Pharmaceuticals, Inc. (NasdaqGS:NPSP) Janus Capital Group, Inc. (NYSE:JNS);

Janus Global Life Sciences Fund

Shire Pharmaceutical Holdings I reland

Limited

$4,864.4 23.0x 270.7x - No

1/11/2015 OnCore Biopharma, Inc. Roivant Sciences, Inc. Tekmira Pharmaceuticals Corporation

(TSX:TKM)

- - - - No

1/9/2015 Alignlife Chiropractic Centers - - - - - - No

1/9/2015 Twenty/20 Management, English Meadows at

Christiansburg and English Meadows Elks' Home

Twenty/20 Management, Inc. CareTrust REIT, Inc. (NasdaqGS:CTRE) - - - - No

1/9/2015 Melanovus Oncology, Inc. - Cipher Pharmaceuticals Inc. (TSX:CPH) $0.5 - - - No

1/9/2015 SSCI, Inc. Aptuit LLC Albany Molecular Research Inc.

(NasdaqGS:AMRI)

$36.0 - - - No

1/9/2015 NextCODE Health LLC Arch Venture Partners, L.P.; Polaris

Partners

WuXi PharmaTech (Cayman) Inc.

(NYSE:WX)

$65.0 - - - Yes

1/9/2015 Advanced Surgery Center, LLC - Centers for Special Surgery, LLC $5.0 - - - No

1/9/2015 TrestleTree, Inc. - Health Plans, Inc. - - - - No

1/8/2015 DioGenix, Inc. Nerveda, Inc. Amarantus Diagnostics, Inc. $10.0 - - - No

1/8/2015 CRF Health, Inc. Verdane Capital Vitruv ian Partners LLP - - - - Yes

1/8/2015 The Benefit Planning Group, Inc. - Marsh & McLennan Agency LLC - - - - No

1/8/2015 Aeris Therapeutics, Inc. - Pulmonx Inc - - - - No

1/8/2015 The Mccullough-Hyde Memorial Hospital

Incorporated

- Trihealth, Inc. $28.3 - - - No

1/8/2015 Allied Medical, Inc. - A&D Healthcare, LLC - - - - No

1/8/2015 Women's Physician Group PLLC - Memphis Obstetrics and Gynecological

Association, P.C.

- - - - No

1/8/2015 DoctorsXL LLC - Etransmedia Technology, Inc. - - - - No

1/8/2015 Luitpold Pharmaceuticals, Inc., Sprix (Ketorolac

Tromethamine) Nasal Spray

Luitpold Pharmaceuticals, Inc. Egalet US, Inc. $7.0 - - - No

1/7/2015 Vintage Grandview LLC - Vintage Senior Housing, LLC - - - - No

1/7/2015 Acura Pharmaceuticals Inc., Exclusive Worldwide

Rights to Commercialize Oxaydo

Acura Pharmaceuticals, Inc.

(NasdaqCM:ACUR)

Egalet Limited; Egalet US, Inc. $20.0 - - - No

1/7/2015 Albany Dermatology Clinic, P.A. - Advanced Dermatology & Cosmetic

Surgery Inc.

- - - - No

1/7/2015 Integrity Urgent Care, PC - The Ensign Group, Inc.

(NasdaqGS:ENSG)

- - - - No

1/7/2015 Healthcare Observation Systems L.L.C. - Natus Medical Inc. (NasdaqGS:BABY) - - - - No

1/7/2015 EDCO Group Inc., SecureStore Business EDCO Group Inc. EvriChart, Inc. - - - - No

1/7/2015 Sequenta, Inc. Mohr Davidow Ventures; Index

Ventures; Celgene Corporation

(NasdaqGS:CELG); Foresite Capital

Management, L.L.C.

Adaptive Biotechnologies Corporation - - - - No

1/7/2015 Eastside Specialty Scribes, LLC - Essia Health Inc. - - - - No

1/7/2015 qPM,Inc. - PipelineRx, Inc. - - - - No

1/7/2015 MDS Consulting - VHA Inc. - - - - No

1/6/2015 Rasansky Physical Therapy, LLC - Good Shepherd Penn Partners - - - - No

1/6/2015 Celdara Medical, LLC, Immuno-Oncology Celdara Medical, LLC Cardio3 BioSciences SA (ENXTBR:CARD) $10.0 - - - No

1/6/2015 Crittenton Hospital Medical Center - Ascension Health, Michigan - - - - No

PAGE |

M&A ACTIVITY

14

INDUSTRY UPDATE


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



1/6/2015 Diagnovus, LLC TriStar Technology Ventures; Mountain

Group Capital LLC

Aegis Sciences Corporation - - - - Yes

1/6/2015 Siren Interactive Corporation - The F. Dohmen Co. - - - - No

1/6/2015 Infield Medical, LLC - EG GILERO - - - - No

1/6/2015 ValTech Holdings Inc., Medical Business ValTech Holdings, Inc. EG GILERO - - - - No

1/6/2015 Healthcare Management Solutions, Inc. - The Corridor Group, Inc. - - - - No

1/6/2015 Atlantic Anesthesia, P.A. - North American Partners in Anesthesia,

LLP

- - - - No

1/6/2015 Dermatology Associates of Northern Michigan,

P.C.

- Advanced Dermatology & Cosmetic

Surgery Inc.

- - - - No

1/5/2015 Traditions Home Care, Inc. - Accelera Innovations, Inc

(OTCPK:ACNV)

$6.0 1.0x - - No

1/5/2015 Priority Home Health Care, Inc. - Addus HomeCare Corporation

(NasdaqGS:ADUS)

- - - - No

1/5/2015 Home Health Operations in Phoenix - The Ensign Group, Inc.

(NasdaqGS:ENSG); Cornerstone

Healthcare, Inc.

- - - - No

1/5/2015 Repligen Corporation, Late-Stage Pancreatic

Imaging Assets

Repligen Corporation

(NasdaqGS:RGEN)

Innovate Biopharmaceuticals, Inc. - - - - No

1/5/2015 Health Through Friendship, Inc. - Centene Corp. (NYSE:CNC) - - - - No

1/5/2015 Optum, Inc., Select Optum Life Sciences Serv ices Optum, Inc. MAPI Developpement, SAS - - - - No

1/5/2015 ClinGenuity, LLC - Synchrogenix Information Strategies Inc. - - - - No

1/2/2015 Spencer Dermatology & Skin Surgery Center LLC - Advanced Dermatology & Cosmetic

Surgery Inc.

- - - - No

1/2/2015 24/7 Kid Doc, Inc. - Dale Jarrett Racing Adventure Inc.

(OTCPK:DJRT)

$0.3 - - - No

1/2/2015 Ambient Healthcare, Inc. Morgan Noble Healthcare Partners AxelaCare Health Solutions, LLC - - - - Yes

1/2/2015 Caring Partners Home Health, Inc. Glacier Hills, Inc. United Methodist Retirement

Communities, Inc.

$2.6 - - - No

1/1/2015 Scroggins Information Serv ices, LLC - The Consult, Inc - - - - No

1/1/2015 Metro Medical Equipment & Supply, Inc. - - - - - - No

1/1/2015 Lifecare Medical Associates, PC - Finger Lakes Health Systems Agency - - - - No

Energy & Power

IndustrialsHealthcare & Life Sciences

Transportation & Logistics

Aerospace, Defense & Government

Services

Business Services

Building Products & Materials

Technology, Media & Telecom

Specialty Distribution

Consumer

PAGE |

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Healthcare & Life Sciences

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

OUR FIRM

INDUSTRY UPDATE


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http://www.harriswilliams.com/industries

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HARRIS WILLIAMS & CO.

Company Filings.

Capital IQ.

Thomson Financial.

S&P.

Reuters.

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16

SOURCES

INDUSTRY UPDATE


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