industry update │ october 2016 - harris williams & co. · report showed average plan premium...

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HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ OCTOBER 2016


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WHATWE’RE READING

1

CONTENTS

PUBLIC MARKETS OVERVIEW

EQUITY MARKETS OVERVIEW

M&A OVERVIEW

DEBT MARKETS OVERVIEW

HEALTHCARE & LIFE SCIENCES PUBLIC COMPARABLES

M&A TRANSACTIONS

CONTACTS

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

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

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

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

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

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

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

Ricky NgVice [email protected]+1 (415) 217-3437

Nick OwensVice [email protected]+1 (804) 887-6027

CMS | CONTINUED PUSH TOWARD ALTERNATIVE PAYMENT MODELS

HHS Secretary Sylvia Mathews Burwell announced CMS set to give providers moreopportunities to become involved in alternative payment models (APMs) underMedicare. This announcement is geared towards reaching the Obamaadministration’s goal of tying half of all healthcare spending to alternativepayment models by the end of 2018. The two new opportunities come in the formof Next Generation ACO and Comprehensive Primary Care Plus (CPC+) modelswhich will be available during the 2018 performance year and both qualify asAPMs. For context, approximately 25% of 2016 healthcare payments are throughAPMs. This compares to the 44% or 128 million covered Americans in MedicareAdvantage, Medicaid and commercial plans. However, some provider groupsand lawmakers have expressed concerns over the strong push for APMs. They citeoverly complex value-based performance designs with conflicting incentives aswell CMS pushing for too many experiments too quickly. A link to the article canbe found here.



ACA | INSULATION FROM DOUBLE-DIGIT PREMIUM HIKES

ObamaCare premiums rippled across news headlines this month as the latest HHSreport showed average plan premium of $302 in 2017 vs. $242 in 2016. Thisequates to nearly a 25% increase, or more than 3x last year’s increase. Thepremium measurement is based on the second-lowest cost silver premium for a 27-year-old before tax credits, which is the most popular plan on the exchanges. Atthe same time, actual out-of-pocket costs are likely to not feel this impact ascorresponding increases in subsidies for many shoppers will mitigate this increase.This news renewed partisan debates over the long-term success of the health law,with Republicans calling for refreshed estimates of total government spendingdirectly tied to the exchanges. The viability of the exchanges has been in questionsince large carries such as Aetna and UnitedHealth have pulled out of certainmarkets citing major losses and an imbalance caused by young, healthy enrolleesopting not to purchase insurance through the ACA exchanges. A link to the articlecan be found here.

HOSPITALS | NOT JUST CONSUMERS FEELING DRUG PRICE HIKES

Valeant’s 300% and 700% hikes on two crucial drug medications followed by TuringPharmaceutical’s nearly 6,000% increase on anti-parasitic medicine followed byMylan’s 548% price hike of EpiPens. The familiar headlines of drug price hikes haveput pharmaceutical companies on the defense as public outcry and Congressweigh in on the topic. The topic hasn’t evaded the presidential campaign trail.Hospitals too are feeling the pain. In a recent report by the National OpinionResearch Center, inpatient drug spending increased by 23.4% annually from 2013to 2015, compares to 9.9% corresponding increases in retail drugs during the sameperiod. Further, this spend was driven by increases in per unit prices rather thanthe drug volume. Approximately 50% of the increases occurred in drugs with nogeneric competitors. Because reimbursement changes lag the price hikes,hospitals are increasingly footing the bill and being forced to find cost savingselsewhere to manage this spend. Chip Kahn, CEO of the Federation of AmericanHospitals noted that the prices increases seemingly are not correlated to clinicalimprovements. A link to the article can be found here.

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http://www.modernhealthcare.com/article/20161025/NEWS/161029951/cms-gives-providers-more-ways-to-enroll-in-alternative-payment-models

http://khn.org/morning-breakout/majority-of-aca-customers-will-be-insulated-from-dramatic-increases/

http://khn.org/news/hospitals-say-theyre-being-slammed-by-drug-price-hikes/

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Acute-Care Hospitals

Behavioral Health / Management

Assisted Living

Physician Practice Management

Healthcare Staffing

Emergency Services

Specialty Pharmacy Management

Long-Term Care

Retail Pharmacy

Specialty Pharmacy

Dialysis Services

Medical / Surgical / Dental Supplies & Distribution

HW&Co. HCLS Composite Index

Information Services

Home Care, Hospice, and Home Infusion

HMO - Medical

Surgicenters / Rehabilitation

Contract Research Organizations

S&P 500

Specialty Managed Care

Durable Medical Equipment

Dental Products

Medical Devices and Products

Contract Pharma Manufacturing

Life Sciences Tools

Clinical Laboratories

Diagnostic Imaging

Disease Management

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

PUBLICMARKETS OVERVIEW

2

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 $42,425 4.0% 32.9% 2.1x 10.7x 2.1x 10.2x

Contract Pharma Manufacturing 2 7,013 (7.9%) 24.9% 3.5x 16.2x 3.1x 12.2x

Contract Research Organizations 8 38,441 14.7% 11.8% 2.3x 13.4x 2.5x 11.1x

Disease Management 2 8,032 66.4% 63.9% 2.3x 16.9x 2.5x 12.3x

Emergency Serv ices 1 2,140 (12.1%) (7.6%) 1.9x 13.4x 1.7x 6.1x

Healthcare Staffing 5 16,974 (15.4%) (13.4%) 1.1x 11.3x 1.0x 8.5x

HMO - Medical 9 339,432 (1.5%) 10.1% 0.8x 10.4x 0.7x 8.9x

Information Serv ices 12 46,618 4.6% 8.8% 4.4x 15.8x 3.8x 12.8x

Specialty Managed Care 3 8,549 6.9% 18.9% 1.4x 9.4x 5.5x 28.6x

Specialty Pharmacy 1 2,028 (20.0%) (2.5%) 0.5x 16.7x 0.4x 13.8x

Retail Pharmacy 3 236,727 (3.2%) (3.0%) 0.7x 12.2x 0.6x 10.0x

Specialty Pharmacy Management 2 60,765 3.4% (7.1%) 0.6x 8.9x 0.6x 8.3x

Dental Products 2 134,331 (1.8%) 20.9% 4.4x 19.9x 3.8x 13.8x

Durable Medical Equipment 3 16,082 2.5% 19.2% 2.4x 16.7x 2.2x 15.3x

Life Sciences Tools 4 146,672 6.1% 32.8% 3.8x 15.9x 3.7x 14.0x

Medical Devices and Products 13 742,891 2.4% 23.7% 4.6x 16.3x 4.2x 13.3x

Medical / Surgical / Dental Supplies & Distribution 6 115,639 (5.6%) 3.7% 0.2x 10.2x 0.2x 9.2x

Acute-Care Hospitals 4 103,647 (6.8%) (27.5%) 0.9x 8.0x 1.0x 7.2x

Assisted Liv ing 2 10,856 4.0% (20.1%) 2.5x 14.9x 2.3x 11.8x

Diagnostic Imaging 3 11,053 21.0% 33.3% 1.4x 9.4x 2.0x 10.1x

Dialysis Serv ices 3 59,351 (14.5%) 0.0% 1.9x 8.8x 1.6x 9.4x

Home Care, Hospice, and Home Infusion 6 6,432 0.5% 9.2% 1.3x 13.8x 1.2x 10.5x

Long-Term Care 3 6,300 (4.2%) (5.6%) 0.8x 8.9x 0.6x 5.4x

Physician Practice Management 1 7,535 (8.5%) (13.7%) 2.5x 11.6x 2.2x 10.2x

Behavioral Health / Management 5 26,733 (12.3%) (20.3%) 1.7x 9.9x 1.4x 8.7x

Surgicenters / Rehabilitation 6 24,517 2.4% 11.1% 2.1x 10.1x 1.8x 10.3x

Payor, Provider, & Pharmacy Support Serv ices 51 $809,145 (0.9%) 5.7% 1.2x 11.2x 1.1x 9.6x

Products & Devices 28 $1,155,615 0.3% 23.4% 3.9x 14.8x 3.7x 12.8x

Provider-Based Serv ices 33 $256,425 (2.3%) 0.6% 1.9x 10.4x 1.7x 9.2x

HW&Co. HCLS Composite Index 112 $2,221,185 1.0% 7.9% 2.8x 13.2x 2.6x 11.4x

S&P 500 3.3% 12.9%

Pro

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Pro

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Median TEV/

Forward MulitplesSectorNumber of

Companies

Aggregate

Enterprise Value

($ mm)

Median TEV/

LTM Multiples

Pa

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Ph

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40%

60%

80%

100%

120%

140%

160%

180%

Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

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

EQUITYMARKETS OVERVIEW

3

Healthcare & Life Sciences Industry Stock Performance

Top Equity Offerings

(by proceeds)

136.5%

125.6%

142.0%



Closing Date Issuer Ticker Transaction Type Gross Proceeds ($ mm)

09/12/16 Avexis, Inc. NASDAQ:AVXS Follow-On $146.6

09/27/16 Array BioPharma, Inc. NASDAQ:ARRY Follow-On 132.3

09/20/16 Aquinox Pharmaceuticals, Inc. NASDAQ:AQXP Follow-On 66.5

09/23/16 AC Immune SA NASDAQ:ACIU IPO 66.0

09/09/16 Colucid Pharmaceuticals, Inc. NASDAQ:CLCD Follow-On 65.0

09/09/16 Proteostasis Therapeutics, Inc. NASDAQ:PTI Follow-On 65.0

09/28/16 Myokardia, Inc. NASDAQ:MYOK Follow-On 57.0

09/08/16 Lantheus Holdings, Inc. NASDAQ:LNTH Follow-On 49.7

09/21/16 Novan NASDAQ:NOVN IPO 45.1

09/08/16 Lantheus Holdings, Inc. NASDAQ:LNTH Follow-On 40.4

09/29/16 Fulgent Genetics NASDAQ:FLGT IPO 37.8

09/16/16 Immune Design Corp. NASDAQ:IMDZ Follow-On 30.0

09/09/16 Xenon Pharmaceuticals, Inc. NASDAQ:XENE Follow-On 22.5

09/23/16 Catabasis Pharmaceuticals, Inc. NASDAQ:CATB Follow-On 10.0

09/22/16 CareDx, Inc. NASDAQ:CDNA Follow-On 9.0

09/16/16 Capricor Therapeutics, Inc. NASDAQ:CAPR Follow-On 8.6

PAGE |

HC&LS Industry Number of

Segment Companies

Healthcare Facilities 49

Healthcare Serv ices 47

Healthcare Equipment 27

Pharmaceuticals 16

Healthcare Technology 13

Life Sciences Tools & Serv ices 5

Healthcare Supplies 3

Healthcare Distributors 6

Biotechnology 10

Managed Healthcare 6

M&A OVERVIEW

4

Announced Healthcare & Life Sciences M&A

Healthcare & Life Sciences M&A Trends

Announced Private Equity M&A Activity

QUARTERLY M&A ACTIVITY

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



$141.4

$101.6 $108.2

$236.6

$576.0

$248.4

0

200

400

600

800

1,000

1,200

1,400

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

$600

2011 2012 2013 2014 2015 2016YTD

Nu

mb

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f Tran

sac

tion

sAg

gre

ga

te T

ran

sac

tio

n V

alu

e

($ in

billio

ns)

Volume Total Deals

Aggregate Number Median Transaction Multiples

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

$328.7 1,226 2.7x 8.1x

11.1x 10.9x 10.0x

13.6x 14.2x

12.7x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

5.0x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2011 2012 2013 2014 2015 2016YTD

EV

/ LTM S

ale

s Mu

ltiple

EV

/ L

TM E

BIT

DA

Mu

ltip

le

EBITDA Multiple Revenue Multiple

304

248

304 290 280 291 303 313

368

309 306

250225

18

15

2214

1016

1112

15

18 21

48

49

0

50

100

150

200

250

300

350

400

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Nu

mb

er

of Tr

an

sac

tio

ns

PE Buyer Strategic Buyer

93

116

77

44

68 67 6661 62

56

118

63

93

5248

78

124

139143 144

130

40

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD

Nu

mb

er

of Tr

an

sac

tio

ns

Number of Investments Number of Exits

Announced Target Buyer

9/28/2016 Great Expressions Roark Capital Group, Inc.

9/26/2016 PharmaCore, Inc. Cambrex Corp.

9/26/2016 Execupharm, Inc. PAREXEL International Corp.

9/21/2016 Kurt Salmon US, Inc. Accenture Plc

9/20/2016 Pharmaceutical Specialties, Inc. Beecken Petty; Maxor National Pharmacy Serv ices LLC

9/16/2016 Medical Anesthesia Consultants LLC MEDNAX, Inc.

9/15/2016 Woodridge Behav ioral Care LLC Ridgemont Partners; Perimeter Healthcare LLC

9/14/2016 Vitae Pharmaceuticals, Inc. Allergan Plc

9/13/2016 Vantage Mobility International LLC Nautic Partners

9/13/2016 Red Riv er Behav ioral Health System LLC Meridian Behav ioral Health LLC

9/12/2016 Anthelio Healthcare Solutions, Inc. ATOS SE

9/7/2016 d3 Medicine LLC Arsenal Capital Partners, Inc.; Certara USA, Inc.

9/2/2016 Xeridiem Medical Dev ices, Inc. Kohlberg & Co. LLC; PPC Industries, Inc.

PAGE |

DEBTMARKETS OVERVIEW

5

Key Credit Statistics

QUARTERLY HEALTHCARE LOAN VOLUME AVERAGE SPREAD ON HEALTHCARE LOANS

Select Healthcare & Life Sciences Debt Offerings

(by deal amount)

CREDIT METRICS AVERAGE SECONDARY SPREAD



$0

$3

$6

$9

$12

$15

$18

$21

$24

3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

Loa

n V

olu

me

by

Qu

art

er

($ in

billio

ns)

Pro Rata Institutional

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2011 2012 2013 2014 2015 2016YTD

Av

era

ge

Sp

rea

d O

ve

r LI

BO

RRevolving Credit / Term Loan A Weighted-Average Institutional

L + 0

L + 200

L + 400

L + 600

L + 800

3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

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

2011 2012 2013 2014 2015 2016YTD

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

09/28/16 Providence Health & Serv ices General med'l/surgical hospitals $550.0 Revolver/Line >= 1 Yr. NR / NR L+ 55

09/13/16 Cleveland Clinic Foundation General med'l/surgical hospitals 300.0 Revolver/Line >= 1 Yr. NR / NR L+ 50

09/27/16 Matrix Medical Network Skilled nursing care facilities 238.0 Term Loan B NR / NR NA

09/30/16 Select Rehabilitation Inc Specialty outpatient clinics, nec 156.0 Term Loan A NR / NR NA

PAGE |

Stock Price

% Change 52 Week

9/30/2016 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical Laboratories

Laboratory Corporation of America Holdings $137.48 5.5% 26.7% $141.32 $97.79 $14,064 $6,055 $640 $19,715 $9,417 $1,835 $1,352 Jun-16 Dec-15 $9,769 $2,049 $1,722 2.1x 10.7x 2.0x 9.6x

Quest Diagnostics Incorporated 84.63 4.0% 37.7% 86.85 59.66 11,765 3,842 283 15,682 7,498 1,482 1,208 Jun-16 Dec-15 7,614 1,534 1,282 2.1x 10.6x 2.1x 10.2x

VCA Inc. 69.98 3.5% 32.9% 73.69 44.00 5,659 1,305 110 7,027 2,302 451 363 Jun-16 Dec-15 2,740 538 453 3.1x 15.6x 2.6x 13.1x

Number of Companies 3 Median: 4.0% 32.9% Total $31,488 $42,425 $19,217 $20,122 2.1x 10.7x 2.1x 10.2x

Market Cap. Weighted Average: 4.6% 31.9% 2.3x 11.6x 2.1x 10.5x

Contract Pharma Manufacturing

Cambrex Corporation $44.46 (14.1%) 12.0% $59.41 $29.50 $1,429 $0 $52 $1,411 $463 $140 $117 Jun-16 Dec-15 $519 $158 $132 3.1x 10.1x 2.7x 8.9x

West Pharmaceutical Serv ices, Inc. 74.50 (1.8%) 37.7% 84.33 52.79 5,455 231 203 5,601 1,454 250 159 Jun-16 Dec-15 1,604 363 260 3.9x 22.4x 3.5x 15.4x

Number of Companies 2 Median: (7.9%) 24.9% Total $6,884 $7,013 $1,917 $2,122 3.5x 16.2x 3.1x 12.2x

Market Cap. Weighted Average: (4.4%) 32.3% 3.7x 19.8x 3.3x 14.1x

Contract Research Organizations

Albany Molecular Research, Inc. $16.51 22.8% (5.2%) $20.65 $12.45 $708 $384 $31 $929 $457 $47 $16 Jun-16 Dec-15 $658 $123 $97 2.0x 19.6x 1.4x 7.5x

Catalent Inc 25.84 12.4% 6.3% 32.24 18.92 3,223 1,861 132 4,981 1,848 370 230 Jun-16 Jun-16 1,979 448 279 2.7x 13.5x 2.5x 11.1x

Charles River Laboratories International, Inc. 83.34 1.1% 31.2% 89.18 59.99 3,941 1,365 180 5,209 1,492 340 234 Jun-16 Dec-15 1,807 445 354 3.5x 15.3x 2.9x 11.7x

ICON Plc 77.37 10.5% 9.0% 79.61 62.31 4,291 348 251 4,475 1,609 360 301 Jun-16 Dec-15 1,771 404 340 2.8x 12.4x 2.5x 11.1x

INC Research Holdings, Inc. 44.58 16.9% 11.5% 57.11 34.19 2,380 472 93 2,880 1,566 223 166 Jun-16 Dec-15 1,115 264 230 1.8x 12.9x 2.6x 10.9x

PAREXEL International Corporation 69.45 10.4% 12.2% 71.13 56.00 3,693 501 249 4,017 2,429 365 268 Jun-16 Jun-16 2,224 414 311 1.7x 11.0x 1.8x 9.7x

PRA Health Sciences, Inc. 56.51 35.3% 45.5% 56.77 33.00 3,443 882 101 4,420 1,719 269 195 Jun-16 Dec-15 1,699 317 289 2.6x 16.4x 2.6x 14.0x

Quintiles Transnational Holdings, Inc.(1) 81.06 24.1% 16.5% 81.26 55.01 19,934 2,446 997 11,529 5,998 864 733 Jun-16 Dec-15 4,855 940 810 1.9x 13.3x 2.4x 12.3x



Disease Management

Alere Inc. $43.24 3.7% (10.2%) $54.13 $31.47 $3,751 $2,975 $512 $6,824 $2,415 $406 $101 Jun-16 Dec-15 $2,500 $505 $457 2.8x 16.8x 2.7x 13.5x

Healthways, Inc. 26.46 129.1% 137.9% 27.30 9.18 972 226 5 1,207 697 71 31 Jun-16 Dec-15 534 110 96 1.7x 17.0x 2.3x 11.0x



Emergency Services

Air Methods Corporation $31.49 (12.1%) (7.6%) $46.50 $30.57 $1,199 $936 $7 $2,140 $1,146 $160 $71 Jun-16 Dec-15 $1,255 $353 $256 1.9x 13.4x 1.7x 6.1x

Number of Companies 1 Median: (12.1%) (7.6%) Total $1,199 $2,140 $1,146 $1,255 1.9x 13.4x 1.7x 6.1x

Market Cap. Weighted Average: (12.1%) (7.6%) 1.9x 13.4x 1.7x 6.1x

Healthcare Staffing

AMN Healthcare Serv ices, Inc. $31.87 (20.3%) 6.2% $44.99 $21.24 $1,531 $412 $33 $1,951 $1,727 $194 $169 Jun-16 Dec-15 $2,006 $248 $210 1.1x 10.1x 1.0x 7.9x

Envision Healthcare Holdings, Inc.(2) 22.27 (12.2%) (39.5%) 38.64 18.31 4,168 3,083 272 7,150 6,088 604 383 Jun-16 Dec-15 7,129 793 522 1.2x 11.8x 1.0x 9.0x

Cross Country Healthcare, Inc. 11.78 (15.4%) (13.4%) 18.76 9.72 389 80 10 448 785 40 31 Jun-16 Dec-15 855 53 41 0.6x 11.3x 0.5x 8.4x

On Assignment, Inc. 36.29 (1.8%) (1.7%) 51.00 29.34 1,936 692 35 2,614 2,340 254 192 Jun-16 Dec-15 2,573 306 229 1.1x 10.3x 1.0x 8.5x

Team Health Holdings, Inc. 32.56 (19.9%) (39.7%) 63.56 30.83 2,415 2,373 18 4,811 4,137 389 269 Jun-16 Dec-15 5,032 534 340 1.2x 12.4x 1.0x 9.0x



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)

PUBLIC COMPARABLES

6

Payor, Provider, & Pharmacy Support Services



As of September 30, 2016.

(1) To be combined with IMS Health Holdings, Inc. (NYSE:IMS) in a $23.1 billion merger of equals announced May 3, 2016.

(2) To be combined with AmSurg (NYSE:AMSG) in an all-stock merger of equals announced June 15, 2016.

PAGE |

PUBLIC COMPARABLES

7





(1) To be acquired by Anthem (NYSE:ANTM) in a $54.2 billion transaction announced July 24, 2015.

(2) To be acquired by Aetna (NYSE:AET) in a $37.0 billion transaction announced July 3, 2015.

Stock Price

% Change 52 Week


HMO - Medical

Commercial:

Aetna Inc. $115.45 (5.5%) 5.5% $123.57 $92.42 $40,500 $20,663 $2,524 $44,492 $61,678 $5,366 $4,668 Jun-16 Dec-15 $65,051 $5,881 $5,331 0.7x 8.3x 0.7x 7.6x

Anthem, Inc. 125.31 (4.6%) (10.5%) 149.87 115.63 32,978 15,653 2,114 47,678 82,190 5,749 5,105 Jun-16 Dec-15 85,824 5,652 5,023 0.6x 8.3x 0.6x 8.4x

Cigna Corp(1) 130.32 1.8% (3.5%) 148.99 121.87 33,436 5,089 1,968 36,532 38,890 4,011 3,621 Jun-16 Dec-15 41,222 4,428 3,768 0.9x 9.1x 0.9x 8.2x

Humana Inc.(2) 176.89 (1.7%) (1.2%) 191.65 150.00 26,368 4,093 2,571 28,340 54,531 2,667 2,275 Jun-16 Dec-15 55,290 3,526 3,066 0.5x 10.6x 0.5x 8.0x

UnitedHealth Group Incorporated 140.00 (0.8%) 20.7% 144.48 107.51 133,335 33,198 10,923 162,006 176,126 13,598 11,689 Jun-16 Dec-15 193,522 16,127 14,162 0.9x 11.9x 0.8x 10.0x



Government:

Centene Corporation $66.96 (6.2%) 23.5% $75.57 $47.36 $11,433 $4,494 $1,875 $13,441 $29,973 $1,032 $1,045 Jun-16 Dec-15 $44,113 $1,825 $1,572 0.4x 13.0x 0.3x 7.4x

Molina Healthcare, Inc. 58.32 16.9% (15.3%) 70.82 44.50 3,313 1,627 2,329 2,490 16,078 538 386 Jun-16 Dec-15 18,291 617 466 0.2x 4.6x 0.1x 4.0x

Universal American Corp. 7.65 0.9% 11.8% 8.55 5.55 498 130 73 725 1,553 44 33 Jun-16 Dec-15 1,508 50 NA 0.5x 16.4x 0.5x 14.5x

WellCare Health Plans, Inc. 117.09 9.1% 35.9% 117.62 69.16 5,183 1,097 2,410 3,729 14,073 578 515 Jun-16 Dec-15 14,951 676 545 0.3x 6.5x 0.2x 5.5x



Information Services

Data/Analytics:

Castlight Health, Inc. $4.16 5.1% (1.0%) $5.39 $2.54 $201 $0 $126 $289 $87 ($72) ($75) Jun-16 Dec-15 $121 ($13) ($17) 3.3x NM 2.4x NM

Inovalon Holdings, Inc. 14.71 (18.3%) (29.4%) 23.87 13.85 997 274 744 1,777 453 117 87 Jun-16 Dec-15 514 152 111 3.9x 15.2x 3.5x 11.7x

National Research Corporation 31.99 6.1% 6.7% 44.60 31.51 465 5 27 668 106 33 29 Jun-16 Dec-15 118 39 32 6.3x 20.0x 5.7x 17.2x

Number of Companies 3 Median: 5.1% (1.0%) Total $1,663 $668 $645 $753 3.9x 17.6x 3.5x 14.4x


eHealth:

WebMD Health Corp. $49.70 (14.5%) 24.7% $67.55 $39.67 $1,938 $1,042 $1,018 $2,606 $671 $176 $146 Jun-16 Dec-15 $747 $250 $180 3.9x 14.8x 3.5x 10.4x

Number of Companies 1 Median: (14.5%) 24.7% Total $1,938 $2,606 $671 $747 3.9x 14.8x 3.5x 10.4x


Hospital/Physician:

Allscripts Healthcare Solutions, Inc. $13.17 3.7% 6.2% $15.78 $11.47 $2,457 $1,197 $91 $3,945 $1,432 $223 $69 Jun-16 Dec-15 $1,690 $320 $258 2.8x 17.7x 2.3x 12.3x

Athenahealth, Inc. 126.12 (8.6%) (5.4%) 170.42 114.59 4,962 295 134 5,113 1,012 133 9 Jun-16 Dec-15 1,264 274 153 5.1x NM 4.0x 18.6x

Cerner Corporation 61.75 5.4% 3.0% 68.31 49.59 20,854 585 630 21,198 4,657 1,392 909 Jul-16 Jan-16 5,297 1,815 1,303 4.6x 15.2x 4.0x 11.7x

Computer Programs and Systems, Inc. 26.06 (34.7%) (38.1%) 59.16 24.18 353 155 4 500 227 31 23 Jun-16 Dec-15 283 63 32 2.2x 16.1x 1.8x 8.0x

HMS Holdings Corp. 22.17 25.9% 152.8% 24.00 8.57 1,872 198 188 1,884 490 109 54 Jun-16 Dec-15 526 135 79 3.8x 17.2x 3.6x 14.0x

Premier Inc. 32.34 (1.1%) (5.9%) 37.24 29.68 1,533 19 267 7,589 1,163 354 270 Jun-16 Jun-16 1,524 502 337 6.5x 21.4x 5.0x 15.1x

Quality Systems, Inc. 11.32 (5.0%) (9.3%) 17.50 11.10 696 88 31 749 493 74 40 Jun-16 Mar-16 511 91 69 1.5x 10.2x 1.5x 8.3x

Advisory Board Company 44.74 26.4% (1.8%) 54.84 18.87 1,801 568 17 2,366 804 152 77 Jun-16 Dec-15 869 207 92 2.9x 15.5x 2.7x 11.4x

Number of Companies 8 Median: 1.3% (3.6%) Total $34,528 $43,345 $10,278 $11,964 3.4x 16.1x 3.2x 12.0x


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 |

PUBLIC COMPARABLES

8




Stock Price

% Change 52 Week


Specialty Managed Care

Assurant, Inc. $92.25 6.9% 16.8% $92.63 $64.37 $5,554 $1,165 $0 $5,719 $8,903 $708 $0 Jun-16 Dec-15 $6,793 NA $1,109 0.6x 8.1x 0.8x NA

CorVel Corporation 38.40 (11.1%) 18.9% 53.19 30.61 753 0 36 722 505 67 47 Jun-16 Mar-16 NA NA NA 1.4x 10.8x NA NA

HealthEquity Inc 37.85 24.6% 28.1% 38.00 15.80 2,220 0 149 2,108 155 48 37 Jul-16 Jan-16 208 74 52 13.6x NM 10.1x 28.6x



Retail Pharmacy

CVS Health Corporation $88.99 (7.1%) (7.8%) $106.67 $86.50 $94,882 $28,636 $1,207 $123,099 $166,729 $12,265 $9,915 Jun-16 Dec-15 $190,522 $13,862 $11,312 0.7x 10.0x 0.6x 8.9x

Walgreens Boots Alliance Inc 80.62 (3.2%) (3.0%) 95.74 71.50 87,256 13,525 3,326 98,363 117,237 7,635 5,886 May-16 Aug-15 128,455 9,845 8,107 0.8x 12.9x 0.8x 10.0x

Rite Aid Corporation(1) 7.69 2.7% 26.7% 8.74 5.92 8,067 7,245 142 15,265 32,638 1,249 696 Aug-16 Feb-16 33,332 1,377 744 0.5x 12.2x 0.5x 11.1x



Specialty Pharmacy

Diplomat Pharmacy, Inc. $28.01 (20.0%) (2.5%) $38.94 $22.41 $1,859 $127 $8 $2,028 $4,018 $121 $79 Jun-16 Dec-15 $5,569 $147 $132 0.5x 16.7x 0.4x 13.8x


Market Cap. Weighted Average: (20.0%) NM 0.5x 16.7x 0.4x 13.8x

Specialty Pharmacy Management

Express Scripts Holding Company $70.53 (7.0%) (12.9%) $89.20 $65.55 $44,449 $15,984 $1,324 $59,503 $101,412 $7,313 $5,025 Jun-16 Dec-15 $103,836 $7,458 $6,975 0.6x 8.1x 0.6x 8.0x

PharMerica Corporation 28.07 13.8% (1.4%) 35.81 19.79 864 418 27 1,262 2,064 131 77 Jun-16 Dec-15 2,241 146 107 0.6x 9.6x 0.6x 8.7x



TEV/ LTM Multiples TEV/ Fwd MultiplesCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


Estimate


(1) To be acquired by Walgreens (NYSE:WBA) in a $17.2 billion transaction announced October 27, 2015.

PAGE |

PUBLIC COMPARABLES

9

Products & Devices




Stock Price

% Change 52 Week


Dental Products

3M Company $176.23 0.6% 24.3% $182.27 $134.64 $106,513 $11,749 $1,865 $119,348 $30,081 $8,447 $6,973 Jun-16 Dec-15 $30,863 $9,080 $7,587 4.0x 14.1x 3.9x 13.1x

DENTSPLY SIRONA, Inc. 59.43 (4.2%) 17.5% 65.83 49.48 13,848 1,182 312 14,983 3,115 584 401 Jun-16 Dec-15 4,123 1,037 925 4.8x 25.7x 3.6x 14.4x



Durable Medical Equipment

Hill-Rom Holdings, Inc. $61.98 22.9% 19.2% $62.17 $42.99 $4,058 $2,131 $200 $6,066 $2,523 $396 $206 Jun-16 Sep-15 $2,715 $598 $442 2.4x 15.3x 2.2x 10.1x

Invacare Corporation 11.17 (7.9%) (22.8%) 20.41 9.89 355 158 128 394 1,099 9 (8) Jun-16 Dec-15 1,083 22 (3) 0.4x NM 0.4x 17.8x

ResMed Inc. 64.79 2.5% 27.1% 70.90 50.48 9,128 1,175 731 9,622 1,839 532 445 Jun-16 Jun-16 2,129 627 517 5.2x 18.1x 4.5x 15.3x



Life Sciences Tools

Agilent Technologies, Inc. $47.09 6.2% 37.2% $48.63 $33.12 $15,275 $1,887 $2,199 $15,137 $4,126 $901 $651 Jul-16 Oct-15 $4,343 $1,029 $937 3.7x 16.8x 3.5x 14.7x

Becton, Dickinson and Company 179.73 6.0% 35.5% 181.76 129.50 38,269 11,912 1,701 49,279 12,310 3,287 2,131 Jun-16 Sep-15 12,366 3,732 2,951 4.0x 15.0x 4.0x 13.2x

Thermo Fisher Scientific Inc. 159.06 7.6% 30.1% 160.68 119.75 62,711 14,148 663 76,584 17,606 4,365 2,662 Jul-16 Dec-15 19,263 4,887 4,463 4.3x 17.5x 4.0x 15.7x

VWR Corp. 28.36 (1.9%) 10.4% 31.75 21.56 3,729 2,025 113 5,673 4,456 458 331 Jun-16 Dec-15 4,695 504 461 1.3x 12.4x 1.2x 11.2x



Medical Devices and Products

Abbott Laboratories $42.29 7.6% 5.1% $46.38 $36.00 $62,166 $8,912 $4,438 $67,204 $20,556 $4,366 $2,923 Jun-16 Dec-15 $21,739 $5,427 $4,472 3.3x 15.4x 3.1x 12.4x

Baxter International Inc. 47.60 5.3% 44.9% 49.49 32.18 25,889 3,168 2,630 26,862 10,050 1,526 869 Jun-16 Dec-15 10,438 2,100 1,362 2.7x 17.6x 2.6x 12.8x

Boston Scientific Corporation 23.80 1.8% 45.0% 24.79 15.67 32,386 5,427 438 37,295 7,956 1,833 1,026 Jun-16 Dec-15 8,654 2,466 1,662 4.7x 20.3x 4.3x 15.1x

ConforMIS Inc 9.92 41.3% (45.1%) 23.62 4.80 418 0 83 328 73 (57) (60) Jun-16 Dec-15 97 (57) NA 4.5x NM 3.4x NM

C. R. Bard, Inc. 224.28 (4.6%) 20.4% 239.43 172.21 16,474 1,641 1,018 17,489 3,542 1,075 868 Jun-16 Dec-15 3,833 1,335 1,149 4.9x 16.3x 4.6x 13.1x

Danaher Corporation 78.39 2.4% 21.4% 102.79 76.15 54,131 14,652 4,098 65,417 22,080 4,930 3,722 Jul-16 Dec-15 17,360 4,122 3,005 3.0x 13.3x 3.8x 15.9x

Hologic, Inc. 38.83 12.2% (0.8%) 41.66 31.84 10,772 3,422 442 13,942 2,809 1,020 547 Jun-16 Sep-15 2,940 1,105 1,014 5.0x 13.7x 4.7x 12.6x

Johnson & Johnson 118.13 (2.6%) 26.5% 126.07 91.76 323,189 26,243 42,584 313,738 70,922 23,218 19,465 Jul-16 Jan-16 74,764 26,508 22,518 4.4x 13.5x 4.2x 11.8x

K2M Group Holdings, Inc. 17.78 14.6% (4.4%) 21.67 10.10 749 55 22 773 225 (10) (37) Jun-16 Dec-15 258 10 (25) 3.4x NM 3.0x NM

Medtronic plc 86.40 (0.4%) 29.1% 89.27 66.35 119,399 32,071 12,810 140,902 28,725 8,643 5,787 Jul-16 Apr-16 30,750 10,403 8,869 4.9x 16.3x 4.6x 13.5x

Penumbra, Inc. 75.99 27.7% 89.5% 79.49 35.32 2,360 0 140 2,345 228 8 5 Jun-16 Dec-15 298 2 (0) 10.3x NM 7.9x NM

Stryker Corporation 116.41 (2.9%) 23.7% 123.55 86.68 43,572 7,644 3,656 48,049 10,470 2,801 2,345 Jun-16 Dec-15 11,974 3,373 2,783 4.6x 17.2x 4.0x 14.2x

Teleflex Incorporated 168.05 (5.2%) 35.3% 188.79 122.14 7,400 1,082 476 8,547 1,823 479 365 Jun-16 Dec-15 1,949 583 496 4.7x 17.8x 4.4x 14.7x



Medical / Surgical / Dental Supplies & Distribution

AmerisourceBergen Corporation $80.78 1.8% (15.0%) $105.81 $73.31 $19,217 $4,407 $1,865 $20,702 $144,759 $1,875 $1,525 Jun-16 Sep-15 $159,093 $2,218 $2,049 0.1x 11.0x 0.1x 9.3x

Cardinal Health, Inc. 77.70 (0.4%) 1.1% 91.23 73.25 24,860 5,539 2,356 28,958 121,545 3,183 2,542 Jun-16 Jun-16 133,014 3,494 3,042 0.2x 9.1x 0.2x 8.3x

Henry Schein, Inc. 162.98 (7.8%) 22.8% 183.00 131.71 13,331 955 64 14,897 11,122 958 792 Jun-16 Dec-15 12,009 1,054 879 1.3x 15.5x 1.2x 14.1x

McKesson Corporation 166.75 (10.7%) (9.9%) 202.20 148.29 37,636 8,110 4,659 43,052 193,071 4,586 3,688 Jun-16 Mar-16 206,236 5,405 4,787 0.2x 9.4x 0.2x 8.0x

Owens & Minor, Inc. 34.73 (7.1%) 8.7% 41.48 31.89 2,167 567 139 2,564 9,899 289 231 Jun-16 Dec-15 9,763 281 224 0.3x 8.9x 0.3x 9.1x

Patterson Companies, Inc. 45.94 (4.1%) 6.2% 50.40 38.51 4,551 1,143 90 5,467 5,576 440 352 Jul-16 Apr-16 5,861 493 431 1.0x 12.4x 0.9x 11.1x



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 |

PUBLIC COMPARABLES

10

Provider-Based Services



Stock Price

% Change 52 Week


Acute-Care Hospitals

Community Health Systems, Inc. $11.54 (4.2%) (67.2%) $45.45 $9.67 $1,311 $15,363 $461 $16,835 $19,233 $2,175 $1,016 Jun-16 Dec-15 $17,327 $2,369 $1,292 0.9x 7.7x 1.0x 7.1x

HCA Holdings, Inc. 75.63 (1.8%) (2.2%) 83.69 60.07 28,637 31,452 817 62,395 40,684 7,943 6,013 Jun-16 Dec-15 43,211 8,510 6,491 1.5x 7.9x 1.4x 7.3x

LifePoint Health, Inc. 59.23 (9.4%) (16.5%) 76.39 54.82 2,450 2,915 274 5,418 5,853 662 341 Jun-16 Dec-15 6,680 794 446 0.9x 8.2x 0.8x 6.8x

Tenet Healthcare Corporation 22.66 (18.0%) (38.6%) 39.75 20.93 2,255 14,501 656 19,000 19,630 2,222 1,402 Jun-16 Dec-15 20,141 2,563 1,710 1.0x 8.6x 0.9x 7.4x



Assisted Living

Brookdale Senior Liv ing Inc. $17.45 13.0% (24.0%) $25.48 $11.28 $3,244 $6,388 $71 $9,559 $4,997 $708 $162 Jun-16 Dec-15 $5,059 $887 $327 1.9x 13.5x 1.9x 10.8x

Capital Senior Liv ing Corporation 16.80 (4.9%) (16.2%) 24.55 14.58 504 869 58 1,298 432 79 22 Jun-16 Dec-15 477 101 28 3.0x 16.4x 2.7x 12.9x


Market Cap. Weighted Average: 10.6% (23.0%) 2.1x 13.9x 2.0x 11.1x

Long-Term Care

Kindred Healthcare, Inc. $10.22 (9.5%) (35.1%) $15.75 $7.96 $871 $3,246 $196 $4,153 $7,226 $568 $407 Jun-16 Dec-15 $7,319 $601 $434 0.6x 7.3x 0.6x 6.9x

National HealthCare Corporation 65.99 1.9% 8.4% 69.40 57.16 1,008 152 207 954 917 107 70 Jun-16 Dec-15 NA NA NA 1.0x 8.9x NA NA

Ensign Group, Inc. 20.13 (4.2%) (5.6%) 25.10 17.60 1,016 184 37 1,193 1,518 123 90 Jun-16 Dec-15 1,777 299 133 0.8x 9.7x 0.7x 4.0x



Diagnostic Imaging

Alliance HealthCare Serv ices, Inc. $6.86 9.9% (29.7%) $10.92 $5.73 $74 $543 $24 $688 $494 $123 $62 Jun-16 Dec-15 NA NA NA 1.4x 5.6x NA NA

RadNet, Inc. 7.40 38.6% 33.3% 7.50 4.66 344 637 0 987 859 105 41 Jun-16 Dec-15 909 140 54 1.1x 9.4x 1.1x 7.0x

Varian Medical Systems, Inc. 99.53 21.0% 34.9% 100.07 72.74 9,294 701 836 9,378 3,124 596 521 Jul-16 Oct-15 3,254 712 612 3.0x 15.7x 2.9x 13.2x



Dialysis Services

American Renal Associates Holdings, Inc. $18.27 (36.9%) 0.0% $29.65 $17.64 $564 $558 $93 $1,301 $700 $189 $156 Jun-16 Dec-15 $809 $138 NA 1.9x 6.9x 1.6x 9.4x

DaVita Inc. 66.07 (14.5%) (8.7%) 78.94 61.36 13,670 9,101 1,678 22,319 14,358 2,546 1,870 Jun-16 Dec-15 15,362 2,638 1,943 1.6x 8.8x 1.5x 8.5x

Fresenius Medical Care AG & Co. KGaA 87.39 (0.3%) 11.4% 95.79 76.98 26,836 9,190 731 35,731 17,388 3,177 2,432 Jun-16 Dec-15 19,110 3,683 2,875 2.1x 11.2x 1.9x 9.7x



Home Care, Hospice, and Home Infusion

Home Care / Hospice:

Addus HomeCare Corporation $26.16 50.1% (16.0%) $38.08 $15.33 $300 $42 $8 $332 $363 $23 $17 Jun-16 Dec-15 $419 $33 $24 0.9x 14.4x 0.8x 10.2x

Almost Family, Inc. 36.77 (13.7%) (8.2%) 45.17 34.08 382 148 6 524 586 47 42 Jul-16 Jan-16 647 54 50 0.9x 11.3x 0.8x 9.7x

Amedisys, Inc. 47.44 (6.0%) 24.9% 55.16 31.16 1,591 95 10 1,685 1,374 83 65 Jun-16 Dec-15 1,498 141 117 1.2x 20.2x 1.1x 12.0x

Chemed Corporation 141.07 3.5% 5.7% 160.12 124.77 2,284 148 17 2,504 1,566 224 189 Jun-16 Dec-15 1,636 244 202 1.6x 11.2x 1.5x 10.2x

LHC Group, Inc. 36.88 (14.8%) (17.6%) 49.34 32.77 669 111 20 760 872 80 68 Jun-16 Dec-15 937 85 77 0.9x 9.5x 0.8x 8.9x



Home Infusion:

BioScrip, Inc. $2.89 13.3% 54.5% $3.09 $1.19 $329 $399 $51 $627 $962 $49 $29 Jun-16 Dec-15 $974 $61 $29 0.7x 12.9x 0.6x 10.3x

Number of Companies 1 Median: 13.3% 54.5% Total $329 $627 $962 $974 0.7x 12.9x 0.6x 10.3x


TEV/ Fwd MultiplesTEV/ LTM MultiplesCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


Estimate


PAGE |

Stock Price

% Change 52 Week


Physician Practice Management

Specialty:

MEDNAX, Inc. $66.25 (8.5%) (13.7%) $83.20 $61.40 $6,199 $1,439 $62 $7,535 $2,988 $649 $574 Jun-16 Dec-15 $3,457 $739 $637 2.5x 11.6x 2.2x 10.2x



Behavioral Health / Management

AAC Holdings, Inc. $17.39 (23.8%) (21.8%) $28.72 $14.36 $412 $168 $7 $550 $253 $22 $9 Jun-16 Dec-15 $302 $59 $33 2.2x 24.8x 1.8x 9.4x

Acadia Healthcare Company, Inc. 49.55 (10.6%) (25.2%) 74.77 46.99 4,332 3,652 31 7,939 2,348 498 398 Jun-16 Dec-15 3,096 699 529 3.4x 15.9x 2.6x 11.4x

Civ itas Solutions, Inc. 18.26 (12.3%) (20.3%) 30.23 15.19 678 645 20 1,305 1,397 132 60 Jun-16 Sep-15 1,488 168 84 0.9x 9.9x 0.9x 7.8x

Magellan Health, Inc. 53.73 (18.3%) (3.1%) 72.31 45.40 1,321 477 596 1,204 4,740 233 128 Jun-16 Dec-15 5,010 292 149 0.3x 5.2x 0.2x 4.1x

Universal Health Serv ices, Inc. 123.22 (8.1%) (1.3%) 139.77 100.82 11,105 3,594 56 15,735 9,424 1,680 1,272 Jun-16 Dec-15 11,063 1,818 1,406 1.7x 9.4x 1.4x 8.7x



Surgicenters / Rehabilitation

Surgery Centers(1):

AmSurg Corp.(2) $67.05 (13.5%) (13.7%) $87.29 $58.37 $3,675 $2,602 $87 $6,525 $2,838 $720 $610 Jun-16 Dec-15 $3,368 $652 NA 2.3x 9.1x 1.9x 10.0x

Surgery Partners, Inc. 20.24 13.1% 0.0% 22.32 11.76 982 1,411 61 2,324 1,060 223 186 Jun-16 Dec-15 1,263 218 NA 2.2x 10.4x 1.8x 10.7x

Surgical Care Affiliates, Inc. 48.76 2.3% 49.2% 52.79 27.88 1,960 904 58 2,847 1,143 266 188 Jun-16 Dec-15 1,354 215 NA 2.5x 10.7x 2.1x 13.2x



Rehabilitation:

HealthSouth Corporation $40.57 4.5% 5.7% $43.38 $30.26 $3,642 $3,087 $155 $7,261 $3,432 $775 $614 Jun-16 Dec-15 $3,837 $819 $650 2.1x 9.4x 1.9x 8.9x

Select Medical Holdings Corporation 13.50 24.2% 25.1% 14.30 7.33 1,775 2,744 78 4,698 4,246 438 302 Jun-16 Dec-15 4,414 549 384 1.1x 10.7x 1.1x 8.5x

U.S. Physical Therapy, Inc. 62.70 4.1% 39.7% 64.89 43.18 785 48 20 861 348 60 51 Jun-16 Dec-15 377 59 56 2.5x 14.4x 2.3x 14.6x



TEV/ LTM Multiples TEV/ Fwd MultiplesTotal Ent.

Value

(TEV)


(LTM)LTM

Period

Latest

FYE Date


EstimateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

PUBLIC COMPARABLES

11



Provider-Based Services


(1) Figures are adjusted for minority interest.

(2) To be combined with Envision Healthcare (NYSE:EVHC) in an all-stock merger of equals announced June 15, 2016.

PAGE |

Enterprise Enterprise Value / LTM Private Equity

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

9/30/2016 vCareConnect LLC - Gary Comer, Inc.; Safety Net Connect

Inc; vCareConnect LLC /Private

Group/

- - - - No

9/30/2016 Arcoma North America, Inc. Arcoma AB Stille AB $1.0 - - 1.0x No

9/30/2016 Garden City Medical, Inc. Invacare Corp. Compass Health Brands, Inc. $13.8 - - 13.8x No

9/30/2016 MSI International, Inc. - CorTech LLC - - - - No

9/30/2016 Etransmedia Technology, Inc. - Pamplona Capital Management LLP - - - - Yes

9/29/2016 Genomas, Inc. - Rennova Health, Inc. $2.1 - - 2.6x No

9/29/2016 The Episcopal Church Home Inc - Episcopal Retirement Serv ices, Inc. - - - - No

9/28/2016 Bella Monte Recovery LLC - Alanco Behavioral Health, Inc. - - - - No

9/28/2016 Great Expressions - Roark Capital Group, Inc. - - - - Yes

9/28/2016 Suburban Radiologic Consultants Ltd. - MedQuest Associates, Inc.; MedQuest,

Inc.; Mobile Open MRI LLC

- - - - No

9/28/2016 Marquette Adult Day Serv ices Inc. - Lake Superior Hospice Association - - - - No

9/28/2016 Adaptive Geriatrics LLC - Linxx Global Solutions, Inc.; Mosaic

Capital Partners LLC (North Carolina)

- - - - No

9/27/2016 EndoChoice Holdings, Inc. - Boston Scientific Corp. $193.8 - - - No

9/27/2016 Alliance Eca LLC - Alliance Nursing Staffing of New York,

Inc.

- - - - Yes

9/26/2016 PharmaCore, Inc. - Cambrex Corp. $25.0 - - 25.0x No

9/26/2016 Execupharm, Inc. - PAREXEL International Corp. - - - - No

9/26/2016 Travelex Insurance Serv ices, Inc. Travelex Holdings Ltd. Cover-More Group Ltd. $105.0 11.1x - - No

9/25/2016 BioQuest LLC - Diversified Search, Inc. - - - - No

9/23/2016 Vega Medical Professionals LLC - Constellation Healthcare Technologies,

Inc.

$17.8 - - 17.8x No

9/23/2016 Immediate Clinic Seattle, Inc. - MultiCare Health System - - - - No

9/22/2016 OSKO, Inc. - Rayence Co., Ltd. $2.1 - - 2.1x No

9/22/2016 Access Foot Care, Inc. - KG Health Partners, Inc. - - - - No

9/22/2016 Ioa Re, Inc. - ELMC Group LLC - - - - No

9/22/2016 ELMC Group LLC - J.C. Flowers & Co. LLC - - - - No

9/21/2016 Healthcare Revenue Technologies, Inc. - TransUnion $58.1 - - - No

9/21/2016 Kurt Salmon US, Inc. Management Consulting Group Plc Accenture Plc $165.0 - - - No

9/21/2016 Anodyne Medical Device, Inc. - Comfort Holdings, Inc. $25.0 - - 25.0x No

9/20/2016 The Imaging Center at Gloster Creek Village LLC - North Mississippi Health Serv ices, Inc. - - - - No

9/20/2016 Predixion Software, Inc. - Greenwave Systems, Inc. - - - - No

9/20/2016 Tobira Therapeutics, Inc. - Allergan Plc $1,447.1 - - - No

9/20/2016 The Orthodontic Store, Inc. - Young Innovations, Inc.; Linden

Manager LLC

- - - - No

9/20/2016 Pharmaceutical Specialties, Inc. - Beecken Petty; Maxor National

Pharmacy Serv ices LLC

- - - - No

9/20/2016 Carter Tom P. DDS - CPF Dental LLC - - - - Yes

9/20/2016 Digital Collaboration Solutions LLC - Primaris, Inc. - - - - No

9/19/2016 TechLab, Inc. - Pharos Capital Group LLC - - - - No

9/19/2016 schwa-medico GmbH - Tech Power Electronics SAS - - - - Yes

9/17/2016 Dawson Thomas, Inc. - Pediatric Serv ices of America, Inc.; J. H.

Whitney Capital Partners LLC

- - - - No

9/16/2016 Medical Anesthesia Consultants LLC - MEDNAX, Inc. - - - - No

9/16/2016 Anesthesia Associates of Naples, Inc. - MEDNAX, Inc. - - - - No

9/16/2016 Embryotech Laboratories, Inc. - Hamilton Thorne Ltd. $7.2 - - 7.2x No

9/16/2016 Abbott Medical Optics, Inc. Abbott Laboratories Chace LLC $4,325.0 - - - No

9/16/2016 Hospice & Palliative Care Charlotte Region - Hospice of Laurens County, Inc. - - - - No

9/16/2016 Parkell, Inc. - Lifco AB - - - - No

9/15/2016 Emmed PC - Team Health Holdings, Inc. - - - - No

9/15/2016 Symphony Post Acute Network /Post Acute

Facility/

Symphony Post Acute Network Mainstreet Health Investments, Inc. $22.9 - - 22.9x No

9/15/2016 Woodridge Behavioral Care LLC - Ridgemont Partners; Perimeter

Healthcare LLC

- - - - Yes

9/14/2016 Next Wave Health Advisors LLC - The Huntzinger Management Group,

Inc.

- - - - Yes

9/14/2016 Vitae Pharmaceuticals, Inc. - Allergan Plc $528.3 - - - No

M&A TRANSACTIONS

12

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



PAGE |

M&A TRANSACTIONS

13

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



Enterprise Enterprise Value / LTM Private Equity

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

9/14/2016 Restore Surgical LLC - Stryker Corp. - - - - No

9/14/2016 ProtaTek International, Inc. - Pharmgate LLC - - - 20.0x No

9/14/2016 All Points EAP & Organizational Serv ices, Inc. - AllOne Health Resources, Inc.; Allone

Charities, Inc.

- - - - No

9/14/2016 ISI Telemanagement Solutions, Inc. - Valent Capital Partners LLC - - - - No

9/13/2016 Vantage Mobility International LLC - Nautic Partners - - - - Yes

9/13/2016 Pharmatek Laboratories, Inc. - Catalent Pharma Solutions, Inc.; PTS

Intermediate Holdings LLC

- - - - Yes

9/13/2016 Red River Behavioral Health System LLC - Meridian Behavioral Health LLC - - - - No

9/13/2016 Gary Rosenbluth - Post Acute Recovery LLC - - - - No

9/13/2016 Mid Tennessee Dentistry - CPF Dental LLC - - - - No

9/13/2016 Precision Medicine Network, Inc. - Inspirata, Inc. - - - - No

9/13/2016 Scientific Advantage LLC - SSI Strategy - - - - No

9/12/2016 Kimble Chase Life Science & Research Products

LLC

Chase Scientific Glass, Inc.;

Gerresheimer AG

One Equity Partners LLC; DURAN Group

GmbH

$131.0 - - - No

9/12/2016 Anthelio Healthcare Solutions, Inc. - ATOS SE $275.0 - - - Yes

9/12/2016 Raptor Pharmaceutical Corp. - Horizon Pharma Plc $747.7 - - - No

9/12/2016 Innovative Placements, Inc. - Clearv iew Capital LLC; Advanced

Medical Personnel Serv ices, Inc.

- - - - No

9/11/2016 Marshall Physical Therapy, Inc. - PhyNet Corp.; Merge Healthcare

Solutions, Inc.

- - - - Yes

9/8/2016 XrayTrax LLC - IntelliCentrics, Inc. - - - - No

9/8/2016 Opportune IT Healthcare Solutions, Inc. - Streamline Health Solutions, Inc. $1.4 - - 1.4x No

9/8/2016 Apollo Endosurgery, Inc. - Lpath, Inc. - - - - No

9/8/2016 Ambulatory Anesthesia Associates, Inc. - Sheridan Healthcare, Inc. - - - - No

9/8/2016 Genesis Anesthesia Serv ices, Inc. - Sheridan Healthcare, Inc. - - - - No

9/8/2016 QOLPOM, Inc. - Parallax Health Sciences, Inc. $2.3 - - 2.3x No

9/7/2016 Essette, Inc. - HMS Holdings Corp. $20.0 - - 20.0x No

9/7/2016 Oncovision Inc/Preclinical Imaging Business/ Oncovision, Inc. Bruker Corp. - - - - No

9/7/2016 d3 Medicine LLC - Arsenal Capital Partners, Inc.; Certara

USA, Inc.

- - - - No

9/7/2016 Modern HEALTHcare, Inc. Modern HC Pharmacy, Inc. The Kroger Co. - - - - Yes

9/7/2016 Accuratus Lab Serv ices, Inc. - Thompson Street Capital Managers LLC;

Microbiology Research Associates, Inc.

- - - - No

9/6/2016 Cepheid - Danaher Corp. $3,840.5 - - - Yes

9/6/2016 RetroSense Therapeutics LLC - Allergan Plc $60.0 - - - No

9/6/2016 Mobile Heartbeat LLC - HCA Holdings, Inc. - - - - No

9/6/2016 Kinder Hearts Home Health LLC - Cornerstone Healthcare, Inc. - - - - No

9/6/2016 Dermatology Clinic (Beaver) - Audax Private Equity; Harvest Partners

LP; ADCS Clinics LLC

- - - - No

9/6/2016 Dermatology Clinic (Pittsburgh) - ADCS Clinics LLC - - - - Yes

9/2/2016 Lifeline Scientific, Inc. - Shanghai Genext Medical Technology

Co. Ltd.

$72.8 - - - Yes

9/2/2016 Xeridiem Medical Devices, Inc. Fenner Plc Kohlberg & Co. LLC; PPC Industries, Inc. $10.5 - - 10.5x No

9/2/2016 Blockade Medical LLC - Bridgepoint Advisers Ltd.; Balt Extrusion

SAS

- - - - Yes

9/2/2016 Insurance Revolution, Inc. - Integro USA, Inc. - - - - No

9/2/2016 Mid Dakota Clinic, PC - Sanford Health Corp. - - - - No

9/2/2016 MAIDA Custom Vision - Florida Eye Specialists PA - - - - No

9/1/2016 Balfour Resource Group Balfour Beatty Plc Covalus LLC - - - - No

9/1/2016 Benefits Advisory Group LLC - Marsh LLC; Marsh & McLennan Agency

LLC

- - - - No

9/1/2016 Ivy Sports Medicine LLC - Stryker Endoscopy - - - - No

9/1/2016 Linktech Quick Couplings, Inc. - Nordson Corp. - - - - No

Energy, Power& Infrastructure

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

14


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HARRIS WILLIAMS & CO.

Company Filings.

FactSet.

Thomson Financial.

S&P.

Reuters.

Bloomberg.

15

SOURCES

Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide.The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.

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