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Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. HEALTHCARE & LIFE SCIENCES INDUSTRY UPDATE MAY 2017 www.harriswilliams.com

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Page 1: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

www.harriswilliams.com

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

www.harriswilliams.com

Page 2: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

www.harriswilliams.com

WHATWE’RE READING

1

CONTENTS

PUBLIC MARKETS OVERVIEW

EQUITY MARKETS OVERVIEW

M&A OVERVIEW

DEBT MARKETS OVERVIEW

HEALTHCARE & LIFE SCIENCESPUBLIC COMPARABLES

M&A TRANSACTIONS

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

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

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

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

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

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

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

Eugene BordVice [email protected]+1 (804) 915-0180

Tyler BradshawVice [email protected]+1 (804) 887-6121

Mervyn HanVice [email protected]+1 (804) 887-6087

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

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

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

GOVERNMENT | ASSESSING THE IMPACT OF THE HOUSE GOP BILL

The House Republican health bill is driven by one big idea: insurers and markets,

rather than government, should be empowered to find ways to provide health

insurance to a broad set of people at affordable prices.

The recent bill to pass the House creates a mechanism to free insurers to sell a wider

variety of products and to price them in new ways, which could potentially raise

premiums for older and sicker Americans. If passed into law, this would end the

requirement that individuals carry insurance or pay a penalty, and instead adds a

price increase for those who choose to go without coverage and buy it later.

Additionally, it gives states more freedom to experiment with their Medicaid

programs.

Republicans are betting that these changes will engender competition, draw

healthier people into the pool, and cut premium prices overall.

Democrats, who uniformly opposed the bill Thursday, said many participants and

providers in the health system will face higher cost and be worse off than under the

Affordable Care Act.

A link to the original article can be found here.

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

ECONOMY | HEALTHCARE HIRING JUMPS BY 19,500 IN APRIL

Healthcare hiring rebounded in April with 19,500 jobs added to the industry, in step

with a solid national jobs gain for the month, and a big lift over March.

The healthcare industry was again among the top national jobs generators in a

month that saw the U.S. economy create 211,000 jobs, which drove the

unemployment rate to a 10-year low of 4.4%, and was a healthy boost over the

disappointing 79,000 gain in March.

Healthcare hiring is on the rise, despite the overhang of the proposed American

Health Care Act, which would replace the Affordable Care Act. Analysts had stated

in March that the newly announced legislation had been the catalyst for the

dampened March numbers, as a January report by the Commonwealth Fund found

that repealing key provisions of the ACA could lead to a reduction in the healthcare

workforce of 2.6 million.

Today analysts are saying that despite the uncertainties surrounding the ACA repeal,

the industry still needs more workers to care for patients thanks to an aging

population and a growing emphasis on early and preventative care.

A link to the original article can be found here.

Page 3: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

Specialty Pharmacy

Acute-Care Hospitals

Assisted Living

Long-Term Care

Retail Pharmacy

Physician Practice Management

Behavioral Health / Management

Specialty Pharmacy Management

Dialysis Services

Medical / Surgical / Dental Supplies & Distribution

HW&Co. HCLS Composite Index

Contract Research Organizations

Information Services

Surgicenters / Rehabilitation

Dental Products

Healthcare Staffing

Specialty Managed Care

Life Sciences Tools

S&P 500

Diagnostic Imaging

Medical Devices and Products

HMO - Medical

Contract Pharma Manufacturing

Home Care, Hospice, and Home Infusion

Durable Medical Equipment

Clinical Laboratories

Disease Management

(70.0%) (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% 90.0% 100.0% 110.0%

PUBLICMARKETS OVERVIEW(1)

2

Key Trading Statistics (detail begins on page 6)

Public Company Sector Performance

(12-month % change in stock price)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

Change in Stock Price

3 mos. 12 mos. Revenue EBITDA Revenue EBITDA

Clinical Laboratories 3 $47,470 4.9% 40.1% 2.4x 12.3x 2.4x 11.7x

Contract Pharma Manufacturing 2 8,833 10.7% 30.4% 4.1x 16.6x 3.8x 14.7x

Contract Research Organizations 8 55,742 6.0% 8.7% 2.7x 13.8x 2.6x 11.6x

Disease Management 2 8,806 32.5% 94.9% 3.0x 17.2x 2.8x 13.2x

Healthcare Staffing 4 19,268 5.3% 11.5% 1.3x 13.2x 1.2x 9.5x

HMO - Medical 8 391,206 9.7% 26.0% 0.9x 11.2x 0.8x 9.8x

Information Serv ices 12 43,810 13.6% 8.8% 4.0x 15.9x 3.7x 12.4x

Specialty Managed Care 3 9,032 (1.7%) 13.8% 1.6x 9.9x 5.9x 29.8x

Specialty Pharmacy 1 1,178 18.2% (50.4%) 0.3x 12.9x 0.2x 11.5x

Retail Pharmacy 3 223,163 6.0% (18.5%) 0.6x 10.3x 0.6x 10.4x

Specialty Pharmacy Management 2 50,675 (8.8%) (9.8%) 0.5x 8.0x 0.5x 7.4x

Dental Products 2 145,293 11.1% 11.0% 4.2x 17.7x 4.0x 15.0x

Durable Medical Equipment 3 17,865 26.8% 33.5% 2.7x 15.1x 2.6x 13.1x

Life Sciences Tools 4 155,473 12.1% 14.6% 4.1x 16.3x 4.0x 14.6x

Medical Devices and Products 13 811,398 10.6% 24.5% 4.6x 17.1x 4.4x 14.8x

Medical / Surgical / Dental Supplies & Distribution 6 110,173 0.6% (5.1%) 0.2x 9.3x 0.2x 9.5x

Acute-Care Hospitals 4 105,806 4.7% (31.3%) 1.0x 8.0x 1.0x 7.5x

Assisted Liv ing 2 8,887 (14.8%) (30.5%) 2.3x 13.7x 2.2x 12.3x

Diagnostic Imaging 3 10,055 15.4% 24.3% 1.6x 8.1x 2.0x 10.4x

Dialysis Serv ices 3 59,190 6.6% (7.7%) 1.8x 8.9x 1.6x 9.3x

Home Care, Hospice, and Home Infusion 6 8,327 15.4% 33.3% 1.6x 16.1x 1.5x 12.7x

Long-Term Care 3 6,444 (2.3%) (22.5%) 0.7x 9.8x 0.6x 5.9x

Physician Practice Management 1 7,471 (11.9%) (14.7%) 2.3x 11.4x 2.1x 10.6x

Behavioral Health / Management 5 26,022 (8.7%) (10.6%) 1.2x 9.4x 1.1x 7.5x

Surgicenters / Rehabilitation 4 16,013 8.6% 10.6% 1.9x 10.4x 1.8x 10.1x

Payor, Provider, & Pharmacy Support Serv ices 48 $859,184 7.3% 14.1% 1.3x 11.8x 1.2x 10.2x

Products & Devices 28 $1,240,202 9.5% 12.3% 4.1x 15.2x 3.9x 13.4x

Provider-Based Serv ices 31 $248,215 6.2% 0.0% 1.7x 10.1x 1.6x 9.3x

HW&Co. HCLS Composite Index 107 $2,347,601 6.8% 7.4% 2.9x 13.6x 2.8x 11.9x

S&P 500 3.9% 14.9%

Pro

du

cts

&

De

vic

es

Pro

vid

er-

Ba

sed

Se

rvic

es

Median TEV/

Forward MulitplesSectorNumber of

Companies

Aggregate

Enterprise Value

($ mm)

Median TEV/

LTM Multiples

Pa

yo

r, P

rov

ide

r, &

Ph

arm

ac

y

Su

pp

ort

Se

rvic

es

Page 4: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

126.5%

130.0%

141.1%

40%

60%

80%

100%

120%

140%

160%

180%

May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17

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

EQUITYMARKETS OVERVIEW

3

Healthcare & Life Sciences Industry Stock Performance(1)

Top Equity Offerings(2)

(by proceeds)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

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

04/11/17 Axovant Sciences NYSE:AXON Follow-On $125.0

04/06/17 Fibrogen NASDAQ:FGEN Follow-On 120.0

04/12/17 Wave Life Sciences NASDAQ:WVE Follow-On 100.0

04/13/17 Tocagen NASDAQ:TOCA Initial Public Offering 85.0

04/19/17 Audentes Therapeutics NASDAQ:BOLD Follow-On 75.4

04/18/17 Arena Pharmaceuticals NASDAQ:ARNA Follow-On 69.0

04/28/17 Zymeworks NYSE:ZYME Initial Public Offering 58.5

04/14/17 Sorrento Therapeutics NASDAQ:SRNE Follow-On 47.3

04/26/17 Karyopharm Therapeutics NASDAQ:KPTI Follow-On 40.0

04/10/17 Codexis NASDAQ:CBXS Follow-On 22.0

04/28/17 Cormedix NYSE:CRMD Follow-On 12.1

04/03/17 Cytosorbents Corp. NASDAQ:CTSO Follow-On 10.0

04/14/17 Delmar Pharmaceuticals NASDAQ:DMPI Follow-On 9.0

04/24/17 Apricus Biosciences NASDAQ:APRI Follow-On 7.0

04/24/17 Onconova Therapeutics NASDAQ:ONTX Follow-On 5.2

Page 5: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

HC&LS Industry Number of

Segment Companies

Healthcare Facilities 33

Healthcare Serv ices 117

Healthcare Equipment 38

Pharmaceuticals 23

Healthcare Technology 10

Life Sciences Tools & Serv ices 4

Healthcare Supplies 8

Healthcare Distributors 5

Biotechnology 15

Managed Healthcare 5

M&A OVERVIEW(1)

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

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

$101.6 $108.2

$236.6

$576.0

$277.9

$69.8

0

200

400

600

800

1,000

1,200

1,400

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

$600

2012 2013 2014 2015 2016 2017YTD

Nu

mb

er o

f Tran

sac

tion

sAg

gre

ga

te T

ran

sac

tio

n V

alu

e

($ in

billio

ns)

Volume Total Deals

10.9x 10.0x

13.6x 14.2x

13.0x 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

2012 2013 2014 2015 2016 2017YTD

EV

/ LTM S

ale

s Mu

ltiple

EV

/ L

TM E

BIT

DA

Mu

ltip

le

EBITDA Multiple Revenue Multiple

304 290 280 291 303 313

368

309 306

250225

182 175

2214

1016

1112

15

18 21

48

49

45 52

0

50

100

150

200

250

300

350

400

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Nu

mb

er

of Tr

an

sac

tio

ns

PE Buyer Strategic Buyer

116

77

44

68 67 6661 62

56

163

62

93

52 48

78

124

139 143 144

130

41

10

20

40

60

80

100

120

140

160

180

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017YTD

Nu

mb

er

of Tr

an

sac

tio

ns

Number of Investments Number of Exits

Announced Target Buyer

4/26/2017 Wound Care Technologies, Inc. Baxter International, Inc.

4/19/2017 Medicalis Corp. Siemens Healthcare GmbH

4/18/2017 Medtronic Plc /Medical Supplies Bus/ Cardinal Health, Inc.

4/18/2017 ArroHealth New Mountain Capital LLC; CIOX Health LLC

4/18/2017 CityMD Warburg Pincus LLC

4/18/2017 Air Medical Resource Group Kohlberg Krav is Roberts & Co. LP

4/17/2017 Las Cruces Dermatology Associates PC Epiphany Dermatology PA

4/10/2017 JDC Healthcare Management LLC Brentwood Associates

4/7/2017 Akorn, Inc. Fresenius Kabi AG

4/6/2017 Medical Arts Dermatology PC CI Capital Partners LLC; Epiphany Dermatology PA

4/4/2017 Kissito Pace of Roanoke LLC Welsh, Carson, Anderson & Stowe

4/4/2017 WPC Healthcare, Inc. Thomas H. Lee Partners LP

4/3/2017 Accelerated Hand Therapy & Rehabilitation, Inc. Thomas H. Lee Partners LP

Aggregate Number Median Transaction Multiples

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

$243.0 970 5.6x 12.9x

Page 6: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

DEBTMARKETS OVERVIEW

Key Credit Statistics(3)

QUARTERLY HEALTHCARE LOAN VOLUME AVERAGE SPREAD ON HEALTHCARE LOANS

Select Healthcare & Life Sciences Debt Offerings(4)

(by deal amount)

CREDIT METRICS AVERAGE SECONDARY SPREAD

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

$0

$3

$6

$9

$12

$15

$18

$21

$24

1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17

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 2016 1Q17

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

1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17

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 2016 1Q17

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

04/23/17 Becton Dickinson & Co Surgical and medical instruments $15,700.0 Bridge Loan NR / NR L+ 113

04/19/17 Tecomet Inc Surgical appliances and supplies 835.0 Term Loan B B2 / B L+ 375

04/01/17 Tolmar Holding Inc Pharmaceutical preparations 160.0 Term Loan A NR / NR L+ 275

04/28/17 Lyo Lux Inc Biological products 62.5 Term Loan NR / NR L+ 425

5

Page 7: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

Stock Price

% Change 52 Week

4/30/2017 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical Laboratories

Laboratory Corporation of America Holdings $140.15 4.9% 11.6% $146.63 $119.51 $14,365 $5,921 $366 $20,189 $9,721 $1,927 $1,422 Mar-17 Dec-16 $10,015 $2,046 $1,710 2.1x 10.5x 2.0x 9.9x

Quest Diagnostics Incorporated 105.51 13.8% 40.1% 106.59 74.04 14,437 3,731 367 18,352 7,551 1,498 1,249 Mar-17 Dec-16 7,740 1,567 1,314 2.4x 12.3x 2.4x 11.7x

VCA Inc.(*) 91.57 0.9% 45.1% 91.96 59.51 7,439 1,386 90 8,929 2,632 509 397 Mar-17 Dec-16 2,926 568 457 3.4x 17.5x 3.1x 15.7x

Number of Companies 3 Median: 4.9% 40.1% Total $36,241 $47,470 $19,903 $20,681 2.4x 12.3x 2.4x 11.7x

Market Cap. Weighted Average: 7.6% 29.8% 2.5x 12.6x 2.4x 11.8x

Contract Pharma Manufacturing

Cambrex Corporation $59.35 11.4% 33.5% $62.50 $38.30 $2,017 $0 $99 $1,881 $501 $163 $136 Mar-17 Dec-16 $548 $170 $144 3.8x 11.6x 3.4x 11.1x

West Pharmaceutical Serv ices, Inc. 92.03 10.0% 27.3% 93.78 69.60 6,748 229 169 6,952 1,535 322 231 Mar-17 Dec-16 1,647 378 274 4.5x 21.6x 4.2x 18.4x

Number of Companies 2 Median: 10.7% 30.4% Total $8,765 $8,833 $2,036 $2,195 4.1x 16.6x 3.8x 14.7x

Market Cap. Weighted Average: 10.3% 28.7% 4.4x 19.3x 4.0x 16.7x

Contract Research Organizations

Albany Molecular Research, Inc. $16.01 (12.4%) 3.8% $19.35 $12.45 $687 $641 $35 $1,285 $629 $60 $1 Mar-17 Dec-16 $739 $146 $83 2.0x 21.4x 1.7x 8.8x

Catalent Inc 29.28 8.9% (1.5%) 30.22 20.94 3,659 2,049 269 5,493 1,991 387 244 Mar-17 Jun-16 2,054 473 286 2.8x 14.2x 2.7x 11.6x

Charles River Laboratories International, Inc. 89.70 13.5% 12.1% 91.57 67.20 4,272 1,197 136 5,422 1,772 405 270 Apr-17 Dec-16 1,868 464 376 3.1x 13.4x 2.9x 11.7x

ICON Plc 84.49 3.1% 25.8% 88.90 62.31 4,607 349 319 4,708 1,698 388 330 Mar-17 Dec-16 1,753 409 347 2.8x 12.1x 2.7x 11.5x

INC Research Holdings, Inc. 45.00 (13.5%) (7.6%) 56.88 36.70 2,434 488 165 2,803 1,579 230 170 Mar-17 Dec-16 1,091 264 236 1.8x 12.2x 2.6x 10.6x

PAREXEL International Corporation 63.83 (8.9%) 5.4% 72.32 51.16 3,252 700 284 3,684 2,428 345 241 Mar-17 Jun-16 2,196 385 277 1.5x 10.7x 1.7x 9.6x

PRA Health Sciences, Inc. 63.96 13.1% 31.6% 66.47 39.25 3,996 821 125 4,881 1,869 278 210 Mar-17 Dec-16 1,899 356 329 2.6x 17.6x 2.6x 13.7x

Quintiles IMS Holdings, Inc. 84.28 10.4% 20.4% 84.49 61.21 19,880 8,345 905 27,466 7,724 1,327 838 Mar-17 Dec-16 8,202 2,083 1,567 3.6x 20.7x 3.3x 13.2x

Number of Companies 8 Median: 6.0% 8.7% Total $42,787 $55,742 $19,691 $19,803 2.7x 13.8x 2.6x 11.6x

Market Cap. Weighted Average: 6.8% 16.3% 3.0x 17.0x 2.9x 12.3x

Disease Management

Alere Inc. $49.17 29.1% 13.0% $49.42 $31.47 $4,278 $2,958 $571 $7,319 $2,395 $351 $61 Sep-16 Dec-15 $2,426 $508 $414 3.1x 20.9x 3.0x 14.4x

Tiv ity Health, Inc. 33.60 36.0% 176.8% 34.75 10.31 1,317 207 83 1,486 516 109 106 Mar-17 Dec-16 571 125 121 2.9x 13.6x 2.6x 11.9x

Number of Companies 2 Median: 32.5% 94.9% Total $5,595 $8,806 $2,911 $2,997 3.0x 17.2x 2.8x 13.2x

Market Cap. Weighted Average: 30.7% 51.6% 3.0x 19.2x 2.9x 13.8x

Healthcare Staffing

AMN Healthcare Serv ices, Inc. $40.85 12.2% 12.1% $44.99 $26.00 $1,955 $362 $55 $2,330 $1,929 $227 $196 Mar-17 Dec-16 $2,063 $263 $221 1.2x 10.3x 1.1x 8.9x

Envision Healthcare Holdings, Inc. 56.03 (17.8%) (31.2%) 82.66 53.12 6,581 5,833 312 13,055 4,850 882 690 Mar-17 Dec-16 10,815 1,434 1,208 2.7x 14.8x 1.2x 9.1x

Cross Country Healthcare, Inc. 13.97 (1.6%) 11.0% 16.38 10.54 506 36 13 533 845 39 30 Mar-17 Dec-16 918 53 42 0.6x 13.6x 0.6x 10.0x

On Assignment, Inc. 51.77 16.6% 40.5% 53.80 32.05 2,733 617 24 3,350 2,485 260 199 Mar-17 Dec-16 2,693 320 241 1.3x 12.9x 1.2x 10.5x

Number of Companies 4 Median: 5.3% 11.5% Total $11,776 $19,268 $10,109 $16,489 1.3x 13.2x 1.2x 9.5x

Market Cap. Weighted Average: (4.1%) (5.6%) 2.0x 13.6x 9.4x

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(1)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

* To be acquired by MARS, Inc. in a $9.1 billion take-private transaction announced January 9, 2017.

Page 8: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

PUBLIC COMPARABLES

7

Payor, Provider, & Pharmacy Support Services(1)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

Stock Price

% Change 52 Week

4/30/2017 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

HMO - Medical

Commercial:

Aetna Inc. $135.07 15.0% 17.8% $136.50 $104.59 $44,806 $9,423 $17,996 $52,060 $62,629 $3,421 $3,800 Mar-17 Dec-16 $61,698 $5,510 $4,925 0.8x 15.2x 0.8x 9.4x

Anthem, Inc. 177.89 16.0% 23.5% 184.45 114.85 47,138 17,143 4,075 58,472 87,232 6,585 5,625 Mar-17 Dec-16 90,377 5,853 5,070 0.7x 8.9x 0.6x 10.0x

Cigna Corporation 156.37 6.5% 11.7% 159.08 115.03 40,135 4,763 1,968 41,288 40,173 3,898 3,790 Mar-17 Dec-16 41,472 4,589 3,782 1.0x 10.6x 1.0x 9.0x

Humana Inc. 221.98 10.1% 24.8% 222.48 150.00 32,028 5,250 3,877 29,872 54,341 3,400 2,109 Mar-17 Dec-16 54,784 3,582 3,266 0.5x 8.8x 0.5x 8.3x

UnitedHealth Group Incorporated 174.88 7.3% 32.4% 176.07 128.53 168,604 33,901 10,430 192,026 189,046 15,819 13,407 Mar-17 Dec-16 205,641 17,556 15,405 1.0x 12.1x 0.9x 10.9x

Number of Companies 5 Median: 10.1% 23.5% Total $332,712 $373,717 $433,421 $453,972 0.8x 10.6x 0.8x 9.4x

Market Cap. Weighted Average: 9.7% 26.0% 0.9x 11.6x 0.9x 10.1x

Government:

Centene Corporation $74.40 16.6% 16.9% $75.57 $50.00 $12,817 $4,647 $4,068 $12,902 $45,378 $1,949 $1,571 Mar-17 Dec-16 $48,315 $1,949 $1,536 0.3x 6.6x 0.3x 6.6x

Molina Healthcare, Inc. 49.79 (13.3%) (22.5%) 60.66 42.56 2,839 1,654 2,819 1,244 18,343 561 299 Mar-17 Dec-16 19,754 515 341 0.1x 2.2x 0.1x 2.4x

WellCare Health Plans, Inc. 153.41 5.6% 66.0% 155.35 86.75 6,825 2,080 4,054 3,343 14,651 694 622 Mar-17 Dec-16 16,517 678 583 0.2x 4.8x 0.2x 4.9x

Number of Companies 3 Median: 5.6% 16.9% Total $22,482 $17,489 $78,372 $84,585 0.2x 4.8x 0.2x 4.9x

Market Cap. Weighted Average: 9.5% 26.9% 0.2x 5.5x 0.2x 5.6x

Information Services

Data/Analytics:

Castlight Health, Inc. $3.85 18.5% 4.3% $5.50 $3.05 $293 $0 $103 $301 $107 ($49) ($52) Mar-17 Dec-16 $143 ($22) ($25) 2.8x NM 2.1x NM

Inovalon Holdings, Inc. 12.25 8.4% (31.6%) 20.05 8.60 775 259 533 1,504 433 85 44 Mar-17 Dec-16 455 110 68 3.5x 17.6x 3.3x 13.7x

National Research Corporation 31.99 3.7% 17.5% 46.37 32.14 668 3 35 1,027 112 38 33 Mar-17 Dec-16 123 42 39 9.2x 27.4x 8.3x 24.7x

Number of Companies 3 Median: 8.4% 4.3% Total $1,736 $1,027 $652 $722 3.5x 22.5x 3.3x 19.2x

Market Cap. Weighted Average: 8.3% (6.6%) 5.6x 22.1x 5.0x 18.8x

eHealth:

WebMD Health Corp. $54.23 12.4% (13.7%) $67.55 $48.10 $2,046 $1,046 $1,034 $2,713 $701 $194 $163 Mar-17 Dec-16 $727 $240 $172 3.9x 14.0x 3.7x 11.3x

Number of Companies 1 Median: 12.4% (13.7%) Total $2,046 $2,713 $701 $727 3.9x 14.0x 3.7x 11.3x

Market Cap. Weighted Average: 12.4% (13.7%) 3.9x 14.0x 3.7x 11.3x

Hospital/Physician:

Allscripts Healthcare Solutions, Inc. $11.97 2.1% (11.8%) $15.17 $9.80 $2,172 $1,328 $104 $3,827 $1,618 $246 $58 Mar-17 Dec-16 $1,756 $345 $260 2.4x 15.6x 2.2x 11.1x

Athenahealth, Inc. 98.01 (21.5%) (29.4%) 142.99 90.11 3,904 284 98 4,067 1,112 181 34 Mar-17 Dec-16 1,302 295 156 3.7x 22.5x 3.1x 13.8x

Cerner Corporation 64.75 22.1% 12.3% 67.50 47.01 21,389 550 532 21,787 4,919 1,496 976 Apr-17 Dec-16 5,338 1,758 1,267 4.4x 14.6x 4.1x 12.4x

Computer Programs and Systems, Inc. 27.45 21.2% (48.6%) 53.49 18.25 371 146 2 512 262 31 17 Mar-17 Dec-16 276 51 26 2.0x 16.6x 1.9x 10.0x

HMS Holdings Corp. 20.47 13.4% 42.0% 24.00 15.50 1,710 198 168 1,781 491 95 51 Mar-17 Dec-16 564 141 76 3.6x 18.8x 3.2x 12.6x

Premier Inc. 33.80 8.3% (1.3%) 34.53 28.27 1,714 384 236 4,664 1,353 383 282 Mar-17 Jun-16 1,685 552 404 3.4x 12.2x 2.8x 8.5x

Quality Systems, Inc. 14.26 (2.9%) (0.2%) 15.90 10.61 890 25 29 882 505 84 43 Dec-16 Mar-16 523 93 48 1.7x 10.5x 1.7x 9.5x

Advisory Board Company 51.10 13.4% 61.0% 51.68 24.85 2,065 602 150 2,549 797 140 60 Mar-17 Dec-16 816 203 90 3.2x 18.2x 3.1x 12.6x

Number of Companies 8 Median: 10.8% (0.8%) Total $34,217 $40,069 $11,057 $12,261 3.3x 16.1x 2.9x 11.7x

Market Cap. Weighted Average: 13.6% 8.8% 3.9x 15.8x 3.6x 12.2x

Forward Twelve Month

EstimateTEV/ LTM Multiples TEV/ Fwd Multiples

Total Ent.

Value

(TEV)

Latest Twelve Months

(LTM)LTM

Period

Latest

FYE DateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Page 9: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

PUBLIC COMPARABLES

8

Payor, Provider, & Pharmacy Support Services(1)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

Stock Price

% Change 52 Week

4/30/2017 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Specialty Managed Care

Assurant, Inc. $96.24 (1.7%) 13.8% $101.32 $78.50 $5,329 $1,067 $0 $5,655 $6,558 $782 $0 Mar-17 Dec-16 $6,542 NA $686 0.9x 7.2x 0.9x NA

CorVel Corporation 44.50 17.0% (0.6%) 53.19 31.00 851 0 39 831 513 66 45 Dec-16 Mar-16 NA NA NA 1.6x 12.6x NA NA

HealthEquity Inc 45.52 (3.9%) 76.2% 49.25 22.26 2,714 0 180 2,546 178 54 41 Jan-17 Jan-17 235 85 58 14.3x NM 10.8x 29.8x

Number of Companies 3 Median: (1.7%) 13.8% Total $8,895 $9,032 $7,250 $6,777 1.6x 9.9x 5.9x 29.8x

Market Cap. Weighted Average: (0.6%) 31.5% 5.0x 8.0x 4.2x 29.8x

Retail Pharmacy

CVS Health Corporation $82.44 6.0% (18.5%) $106.67 $69.30 $85,391 $27,433 $2,302 $110,461 $178,825 $12,913 $10,436 Mar-17 Dec-16 $187,675 $12,956 $10,289 0.6x 8.6x 0.6x 8.5x

Walgreens Boots Alliance Inc 86.54 6.2% 7.7% 88.00 75.74 93,546 18,911 11,822 101,382 116,081 7,254 5,528 Feb-17 Aug-16 125,501 9,567 8,128 0.9x 14.0x 0.8x 10.6x

Rite Aid Corporation(*) 4.00 (42.3%) (50.2%) 8.77 3.70 4,215 7,329 252 11,320 32,845 1,100 532 Mar-17 Mar-17 32,804 1,085 439 0.3x 10.3x 0.3x 10.4x

Number of Companies 3 Median: 6.0% (18.5%) Total $183,151 $223,163 $327,751 $345,979 0.6x 10.3x 0.6x 10.4x

Market Cap. Weighted Average: (8.7%) (25.7%) 0.9x 11.3x 0.8x 9.9x

Specialty Pharmacy

Diplomat Pharmacy, Inc. $15.60 18.2% (50.4%) $38.94 $12.25 $1,048 $137 $17 $1,178 $4,493 $91 $36 Mar-17 Dec-16 $4,737 $102 $83 0.3x 12.9x 0.2x 11.5x

Number of Companies 1 Median: 18.2% (50.4%) Total $1,048 $1,178 $4,493 $4,737 0.3x 12.9x 0.2x 11.5x

Market Cap. Weighted Average: 18.2% NM 0.3x 12.9x 0.2x 11.5x

Specialty Pharmacy Management

Express Scripts Holding Company $61.34 (9.2%) (18.1%) $80.02 $57.80 $36,407 $15,528 $3,164 $49,488 $100,317 $7,276 $5,202 Mar-17 Dec-16 $102,554 $7,426 $7,125 0.5x 6.8x 0.5x 6.7x

PharMerica Corporation 23.60 (8.3%) (1.4%) 28.72 19.20 727 467 15 1,187 2,133 130 70 Mar-17 Dec-16 2,420 144 118 0.6x 9.1x 0.5x 8.2x

Number of Companies 2 Median: (8.8%) (9.8%) Total $37,134 $50,675 $102,450 $104,974 0.5x 8.0x 0.5x 7.4x

Market Cap. Weighted Average: (9.2%) (17.8%) 0.5x 6.8x 0.5x 6.7x

TEV/ LTM Multiples TEV/ Fwd MultiplesCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)

Latest Twelve Months

(LTM)LTM

Period

Latest

FYE Date

Forward Twelve Month

Estimate

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

Page 10: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

PUBLIC COMPARABLES

9

Products & Devices(1)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

Stock Price

% Change 52 Week

4/30/2017 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Dental Products

3M Company $195.83 10.3% 17.3% $197.12 $163.17 $117,027 $11,711 $2,314 $129,296 $30,385 $8,593 $7,037 Mar-17 Dec-16 $31,138 $9,134 $7,664 4.3x 15.0x 4.2x 14.2x

DENTSPLY SIRONA, Inc. 63.24 11.8% 4.8% 65.83 55.00 14,557 1,551 363 15,997 3,873 789 486 Mar-17 Dec-16 4,091 1,011 892 4.1x 20.3x 3.9x 15.8x

Number of Companies 2 Median: 11.1% 11.0% Total $131,585 $145,293 $34,258 $35,229 4.2x 17.7x 4.0x 15.0x

Market Cap. Weighted Average: 10.5% 15.9% 4.2x 15.6x 4.1x 14.3x

Durable Medical Equipment

Hill-Rom Holdings, Inc. $75.64 26.8% 42.4% $77.37 $46.79 $4,975 $2,402 $219 $7,269 $2,678 $579 $371 Mar-17 Sep-16 $2,822 $623 $482 2.7x 12.5x 2.6x 11.7x

Invacare Corporation 14.70 28.9% 33.5% 16.65 8.00 471 149 79 551 1,018 (11) (25) Mar-17 Dec-16 993 4 (15) 0.5x NM 0.6x NM

ResMed Inc. 67.99 (0.2%) 20.3% 73.46 55.43 9,642 1,168 827 10,045 2,029 568 457 Mar-17 Jun-16 2,206 693 523 5.0x 17.7x 4.6x 14.5x

Number of Companies 3 Median: 26.8% 33.5% Total $15,088 $17,865 $5,724 $6,021 2.7x 15.1x 2.6x 13.1x

Market Cap. Weighted Average: 9.6% 28.0% 4.1x 15.9x 3.8x 13.5x

Life Sciences Tools

Agilent Technologies, Inc. $55.05 13.2% 33.7% $55.51 $40.26 $17,743 $1,992 $2,241 $17,700 $4,241 $954 $719 Jan-17 Oct-16 $4,467 $1,061 $963 4.2x 18.6x 4.0x 16.7x

Becton, Dickinson and Company 186.97 6.7% 15.5% 187.20 157.60 39,886 10,306 556 50,484 12,320 3,265 2,197 Mar-17 Sep-16 12,370 3,728 2,991 4.1x 15.5x 4.1x 13.5x

Thermo Fisher Scientific Inc. 165.33 13.7% 13.8% 168.76 139.07 64,680 17,071 734 81,494 18,744 4,759 2,953 Apr-17 Dec-16 19,932 5,205 4,754 4.3x 17.1x 4.1x 15.7x

VWR Corp. 28.26 11.1% 5.2% 31.75 24.42 3,720 2,181 142 5,795 4,555 447 314 Mar-17 Dec-16 4,644 505 436 1.3x 13.0x 1.2x 11.5x

Number of Companies 4 Median: 12.1% 14.6% Total $126,028 $155,473 $39,860 $41,413 4.1x 16.3x 4.0x 14.6x

Market Cap. Weighted Average: 11.3% 16.9% 4.2x 16.7x 4.0x 15.0x

Medical Devices and Products

Abbott Laboratories $43.64 6.4% 8.0% $45.84 $36.76 $75,727 $23,974 $8,860 $91,023 $22,303 $4,399 $2,619 Mar-17 Dec-16 $26,838 $7,472 $6,051 4.1x 20.7x 3.4x 12.2x

Baxter International Inc. 55.68 18.3% 25.8% 56.50 42.22 30,176 2,787 2,858 30,598 10,263 2,107 1,341 Mar-17 Dec-16 10,497 2,423 1,700 3.0x 14.5x 2.9x 12.6x

Boston Scientific Corporation 26.38 10.5% 20.8% 26.47 19.67 36,113 5,514 283 41,904 8,582 2,090 1,270 Mar-17 Dec-16 9,061 2,585 1,742 4.9x 20.0x 4.6x 16.2x

ConforMIS Inc 5.62 (33.6%) (57.4%) 13.17 4.35 246 15 64 191 80 (55) (58) Mar-17 Dec-16 86 (51) (58) 2.4x NM 2.2x NM

C. R. Bard, Inc. 307.48 29.0% 43.5% 307.88 203.63 22,267 1,752 1,070 23,651 3,779 1,184 973 Mar-17 Dec-16 3,987 1,336 1,205 6.3x 20.0x 5.9x 17.7x

Danaher Corporation 83.33 2.9% 14.1% 102.79 75.71 57,841 11,950 804 69,958 18,707 4,227 3,103 Mar-17 Dec-16 18,207 4,355 3,098 3.7x 16.6x 3.8x 16.1x

Hologic, Inc. 45.15 11.3% 33.1% 45.20 32.64 12,610 3,308 1,140 15,082 2,894 1,006 560 Apr-17 Sep-16 3,254 1,072 991 5.2x 15.0x 4.6x 14.1x

Johnson & Johnson 123.47 8.9% 9.8% 129.00 109.32 334,714 32,370 39,343 333,125 72,236 25,283 21,508 Apr-17 Jan-17 76,746 27,653 24,155 4.6x 13.2x 4.3x 12.0x

K2M Group Holdings, Inc. 22.15 8.0% 34.7% 23.10 10.10 943 73 39 970 242 (4) (34) Mar-17 Dec-16 279 14 (21) 4.0x NM 3.5x NM

Medtronic plc 83.09 10.9% 4.1% 89.27 69.35 113,741 32,149 11,458 135,719 29,361 9,016 6,109 Jan-17 Apr-16 30,767 9,936 8,910 4.6x 15.1x 4.4x 13.7x

Penumbra, Inc. 85.45 18.1% 57.1% 88.38 45.88 2,873 0 233 2,468 279 (3) (5) Mar-17 Dec-16 337 5 1 8.9x NM 7.3x NM

Stryker Corporation 136.37 10.6% 24.5% 136.60 106.48 50,970 7,219 3,279 55,665 11,785 3,172 2,578 Mar-17 Dec-16 12,458 3,565 3,241 4.7x 17.5x 4.5x 15.6x

Teleflex Incorporated 206.89 24.5% 31.1% 207.26 136.53 9,302 2,089 689 11,044 1,931 522 399 Apr-17 Dec-16 2,115 663 563 5.7x 21.2x 5.2x 16.7x

Number of Companies 13 Median: 10.6% 24.5% Total $747,525 $811,398 $182,442 $194,631 4.6x 17.1x 4.4x 14.8x

Market Cap. Weighted Average: 9.9% 13.1% 4.5x 15.5x 4.3x 13.4x

Medical / Surgical / Dental Supplies & Distribution

AmerisourceBergen Corporation $82.05 (0.5%) (5.1%) $94.50 $68.38 $17,828 $4,455 $2,404 $20,202 $149,759 $2,341 $1,930 Mar-17 Sep-16 $164,663 $2,443 $2,130 0.1x 8.6x 0.1x 8.3x

Cardinal Health, Inc. 72.59 0.2% (7.5%) 85.52 62.70 22,899 5,461 1,368 27,313 128,394 3,134 2,433 Mar-17 Jun-16 137,646 3,377 2,934 0.2x 8.7x 0.2x 8.1x

Henry Schein, Inc. 173.80 8.9% 1.9% 183.00 146.23 13,856 1,399 63 15,946 11,782 1,005 831 Apr-17 Dec-16 12,267 1,077 892 1.4x 15.9x 1.3x 14.8x

McKesson Corporation 138.29 1.1% (18.3%) 199.43 114.53 29,325 9,123 2,434 38,860 196,498 4,481 3,604 Dec-16 Mar-16 201,048 4,125 3,578 0.2x 8.7x 0.2x 9.4x

Owens & Minor, Inc. 34.65 (3.2%) (5.2%) 38.47 30.43 2,117 564 127 2,516 9,596 255 202 Mar-17 Dec-16 9,740 260 207 0.3x 9.8x 0.3x 9.7x

Patterson Companies, Inc. 44.49 7.2% 2.1% 50.40 36.46 4,321 1,215 122 5,335 5,602 421 335 Jan-17 Apr-16 5,792 440 378 1.0x 12.7x 0.9x 12.1x

Number of Companies 6 Median: 0.6% (5.1%) Total $90,346 $110,173 $501,631 $531,154 0.2x 9.3x 0.2x 9.5x

Market Cap. Weighted Average: 1.9% (8.6%) 0.4x 10.0x 0.4x 9.8x

TEV/ LTM Multiples TEV/ Fwd MultiplesCash and

Equiv.Company Name

Equity

Mkt.

Value

Total Debt

Total Ent.

Value

(TEV)

Latest Twelve Months

(LTM)LTM

Period

Latest

FYE Date

Forward Twelve Month

Estimate

Page 11: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

PUBLIC COMPARABLES

10

Provider-Based Services(1)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

Stock Price

% Change 52 Week

4/30/2017 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Acute-Care Hospitals

Community Health Systems, Inc. $8.61 30.9% (47.6%) $20.00 $4.15 $987 $15,245 $247 $16,620 $17,925 $2,027 $989 Mar-17 Dec-16 $15,793 $2,045 $1,082 0.9x 8.2x 1.1x 8.1x

HCA Healthcare Inc 84.21 5.9% 2.7% 91.03 67.00 31,213 31,514 803 64,369 41,853 8,160 6,152 Mar-17 Dec-16 43,878 8,647 6,543 1.5x 7.9x 1.5x 7.4x

LifePoint Health, Inc. 62.15 3.6% (15.0%) 71.00 50.60 2,509 2,910 126 5,510 6,414 738 383 Mar-17 Dec-16 6,629 811 452 0.9x 7.5x 0.8x 6.8x

Tenet Healthcare Corporation 15.67 (14.3%) (51.4%) 33.39 14.06 1,572 15,218 572 19,307 19,390 2,142 1,283 Mar-17 Dec-16 20,079 2,578 1,700 1.0x 9.0x 1.0x 7.5x

Number of Companies 4 Median: 4.7% (31.3%) Total $36,281 $105,806 $85,582 $86,379 1.0x 8.0x 1.0x 7.5x

Market Cap. Weighted Average: 5.5% (2.2%) 1.5x 7.9x 1.4x 7.4x

Assisted Living

Brookdale Senior Liv ing Inc. $12.99 (12.1%) (29.6%) $18.94 $10.65 $2,409 $5,167 $89 $7,490 $4,931 $779 $263 Mar-17 Dec-16 $4,623 $690 $184 1.5x 9.6x 1.6x 10.9x

Capital Senior Liv ing Corporation 13.97 (17.5%) (31.4%) 20.73 12.65 420 1,014 26 1,397 454 78 14 Mar-17 Dec-16 487 102 22 3.1x 17.8x 2.9x 13.7x

Number of Companies 2 Median: (14.8%) (30.5%) Total $2,829 $8,887 $5,385 $5,110 2.3x 13.7x 2.2x 12.3x

Market Cap. Weighted Average: (12.9%) (29.9%) 1.8x 10.8x 1.8x 11.3x

Long-Term Care

Kindred Healthcare, Inc. $9.60 38.1% (35.6%) $15.66 $5.65 $823 $3,369 $228 $4,196 $7,150 $515 $361 Mar-17 Dec-16 $6,877 $533 $393 0.6x 8.2x 0.6x 7.9x

National HealthCare Corporation 74.42 (2.3%) 15.3% 78.99 60.81 1,130 149 209 1,073 936 103 63 Mar-17 Dec-16 NA NA NA 1.1x 10.4x NA NA

Ensign Group, Inc. 17.95 (12.5%) (22.5%) 23.49 16.51 910 267 41 1,175 1,713 120 79 Mar-17 Dec-16 1,804 297 130 0.7x 9.8x 0.7x 4.0x

Number of Companies 3 Median: (2.3%) (22.5%) Total $2,862 $6,444 $9,800 $8,681 0.7x 9.8x 0.6x 5.9x

Market Cap. Weighted Average: 6.1% (11.3%) 0.8x 9.6x 0.6x 5.8x

Diagnostic Imaging

Alliance HealthCare Serv ices, Inc. $13.10 34.4% 83.0% $13.30 $5.73 $142 $543 $21 $795 $512 $127 $60 Mar-17 Dec-16 NA NA NA 1.6x 6.3x NA NA

RadNet, Inc. 6.05 0.0% 16.3% 7.98 4.83 286 636 8 913 897 113 46 Mar-17 Dec-16 919 143 59 1.0x 8.1x 1.0x 6.4x

Varian Medical Systems, Inc. 90.74 15.4% 24.3% 106.70 76.94 8,481 547 706 8,347 3,121 558 481 Mar-17 Sep-16 2,785 581 481 2.7x 15.0x 3.0x 14.4x

Number of Companies 3 Median: 15.4% 24.3% Total $8,908 $10,055 $4,530 $3,703 1.6x 8.1x 2.0x 10.4x

Market Cap. Weighted Average: 15.2% 25.0% 2.6x 14.6x 2.9x 14.1x

Dialysis Services

American Renal Associates Holdings, Inc. $17.21 (10.2%) (37.4%) $29.65 $15.47 $532 $566 $84 $1,326 $755 $150 $115 Mar-17 Dec-16 $807 $109 NA 1.8x 8.8x 1.6x 12.2x

DaVita Inc. 69.01 6.9% (7.7%) 78.77 54.50 13,429 9,089 1,785 21,960 14,861 2,465 1,724 Mar-17 Dec-16 15,473 2,495 1,759 1.5x 8.9x 1.4x 8.8x

Fresenius Medical Care AG & Co. KGaA 88.69 6.6% 4.1% 95.79 75.71 27,256 8,420 683 35,903 17,848 3,396 2,629 Mar-17 Dec-16 20,510 3,874 3,029 2.0x 10.6x 1.8x 9.3x

Number of Companies 3 Median: 6.6% (7.7%) Total $41,217 $59,190 $33,464 $36,790 1.8x 8.9x 1.6x 9.3x

Market Cap. Weighted Average: 6.5% (1.4%) 1.8x 10.0x 1.6x 9.2x

Home Care, Hospice, and Home Infusion

Home Care / Hospice:

Addus HomeCare Corporation $33.95 (0.1%) 77.8% $37.35 $16.55 $394 $24 $19 $398 $410 $34 $27 Mar-17 Dec-16 $434 $36 $29 1.0x 11.9x 0.9x 10.9x

Almost Family, Inc. 49.65 4.9% 15.8% 50.98 35.21 688 130 14 793 671 56 51 Mar-17 Dec-16 848 74 69 1.2x 14.2x 0.9x 10.7x

Amedisys, Inc. 54.20 14.5% 4.0% 55.16 34.58 1,825 92 48 1,892 1,459 95 76 Mar-17 Dec-16 1,550 147 121 1.3x 19.8x 1.2x 12.8x

Chemed Corporation 201.38 20.7% 52.8% 216.01 124.78 3,239 147 47 3,483 1,592 224 189 Mar-17 Dec-16 1,673 259 209 2.2x 15.6x 2.1x 13.5x

LHC Group, Inc. 54.10 13.2% 32.0% 55.52 32.04 982 79 17 1,055 939 86 74 Mar-17 Dec-16 1,032 86 83 1.1x 12.3x 1.0x 12.2x

Number of Companies 5 Median: 13.2% 32.0% Total $7,128 $7,621 $5,071 $5,537 1.2x 14.2x 1.0x 12.2x

Market Cap. Weighted Average: 15.4% 2.0% 1.6x 15.9x 1.5x 12.7x

Home Infusion:

BioScrip, Inc. $1.52 14.3% (43.9%) $3.43 $0.98 $184 $472 $21 $706 $915 $28 $4 Mar-17 Dec-16 $890 $53 $26 0.8x 25.6x 0.8x 13.3x

Number of Companies 1 Median: 14.3% (43.9%) Total $184 $706 $915 $890 0.8x 25.6x 0.8x 13.3x

Market Cap. Weighted Average: 14.3% (43.9%) 0.8x 25.6x 0.8x 13.3x

TEV/ Fwd MultiplesTEV/ LTM MultiplesCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

Total Ent.

Value

(TEV)

Latest Twelve Months

(LTM)LTM

Period

Latest

FYE Date

Forward Twelve Month

Estimate

Page 12: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

Stock Price

% Change 52 Week

4/30/2017 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Physician Practice Management

Specialty:

MEDNAX, Inc. $60.36 (11.9%) (14.7%) $76.96 $59.36 $5,607 $1,902 $53 $7,471 $3,266 $653 $558 Mar-17 Dec-16 $3,605 $707 $602 2.3x 11.4x 2.1x 10.6x

Number of Companies 1 Median: (11.9%) (14.7%) Total $5,607 $7,471 $3,266 $3,605 2.3x 11.4x 2.1x 10.6x

Market Cap. Weighted Average: (11.9%) (14.7%) 2.3x 11.4x 2.1x 10.6x

Behavioral Health / Management

AAC Holdings, Inc. $7.16 (11.7%) (65.4%) $24.38 $6.01 $172 $198 $6 $347 $287 $21 $2 Mar-17 Dec-16 $308 $55 $24 1.2x 16.5x 1.1x 6.3x

Acadia Healthcare Company, Inc. 43.58 13.5% (29.9%) 64.24 32.54 3,828 3,281 43 7,043 2,873 585 444 Mar-17 Dec-16 2,946 649 476 2.5x 12.0x 2.4x 10.9x

Civ itas Solutions, Inc. 17.80 (8.7%) (10.6%) 23.20 15.90 663 635 18 1,283 1,438 137 63 Mar-17 Sep-16 1,542 170 87 0.9x 9.4x 0.8x 7.5x

Magellan Health, Inc. 68.80 (9.2%) (2.1%) 84.71 49.50 1,632 636 614 1,681 5,025 272 164 Mar-17 Dec-16 6,028 342 184 0.3x 6.2x 0.3x 4.9x

Universal Health Serv ices, Inc. 120.76 6.9% (10.5%) 139.46 99.72 10,795 3,899 63 15,668 9,929 1,697 1,274 Mar-17 Dec-16 11,659 1,841 1,404 1.6x 9.2x 1.3x 8.5x

Number of Companies 5 Median: (8.7%) (10.6%) Total $17,091 $26,022 $19,553 $22,482 1.2x 9.4x 1.1x 7.5x

Market Cap. Weighted Average: 6.1% (14.6%) 1.6x 9.6x 1.5x 8.6x

Surgicenters / Rehabilitation

Surgery Centers(*):

Surgery Partners, Inc. $17.20 (7.3%) 3.7% $22.85 $12.25 $839 $1,480 $67 $2,239 $1,165 $246 $205 Mar-17 Dec-16 $1,302 $212 NA 1.9x 9.1x 1.7x 10.6x

Number of Companies 1 Median: (7.3%) 3.7% Total $839 $2,239 $1,165 $1,302 1.9x 9.1x 1.7x 10.6x

Market Cap. Weighted Average: (7.3%) 3.7% 1.9x 9.1x 1.7x 10.6x

Rehabilitation:

HealthSouth Corporation $46.90 18.6% 12.2% $46.90 $36.97 $4,201 $2,953 $144 $7,805 $3,711 $826 $651 Mar-17 Dec-16 $4,014 $828 $650 2.1x 9.4x 1.9x 9.4x

Select Medical Holdings Corporation 13.75 (0.4%) 1.2% 15.15 10.08 1,824 2,816 65 5,073 4,309 458 305 Mar-17 Dec-16 4,522 553 396 1.2x 11.1x 1.1x 9.2x

U.S. Physical Therapy, Inc. 65.60 (6.3%) 30.4% 78.00 48.80 821 42 15 896 352 60 51 Sep-16 Dec-15 400 59 57 2.5x 15.0x 2.2x 15.1x

Number of Companies 3 Median: (0.4%) 12.2% Total $6,847 $13,774 $8,373 $8,936 2.1x 11.1x 1.9x 9.4x

Market Cap. Weighted Average: 10.6% 11.4% 1.9x 10.5x 1.8x 10.0x

TEV/ LTM Multiples TEV/ Fwd MultiplesTotal Ent.

Value

(TEV)

Latest Twelve Months

(LTM)LTM

Period

Latest

FYE Date

Forward Twelve Month

EstimateCompany Name

Equity

Mkt.

Value

Total DebtCash and

Equiv.

PUBLIC COMPARABLES

11

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

Provider-Based Services(1)

* Figures are adjusted for minority interest.

Page 13: INDUSTRY UPDATE │ MAY 2017 · healthcare transaction highlights announced healthcare & life sciences transactions median healthcare & life sciences transaction multiples peg investments

PAGE |

Enterprise Enterprise Value / LTM Private Equity

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

4/1/2017 Metro Medical Solutions LLC - Dean Dorton Allen Ford PLLC - - - - No

4/3/2017 Vtesse, Inc. - Sucampo Pharmaceuticals, Inc. $200.6 - - - No

4/3/2017 Daiichi Sankyo Inc Pharmaceutical Packaging

Plant

Daiichi Sankyo, Inc. Sharp Corp. (PA) $14.0 - - 14.0x No

4/3/2017 University Pathologists - Aurora Diagnostics, Inc. - - - - No

4/3/2017 Grafton Aged Care Home - Vital Healthcare Property Trust - - - - No

4/3/2017 Pacific Nutritional, Inc. - Columbia Nutritional Inc - - - - No

4/3/2017 Accelerated Hand Therapy & Rehabilitation, Inc. - Thomas H. Lee Partners LP; Professional

Orthopedic & Sports Physical Therapy

PC

- - - - Yes

4/4/2017 Radwell LLC - Health Management Corporation of

America LLC

- - - - No

4/4/2017 Kissito Pace of Roanoke LLC - Welsh, Carson, Anderson & Stowe; Total

Community Options, Inc.

- - - - Yes

4/4/2017 Companion Care LLC - CK Franchising, Inc. - - - - No

4/4/2017 WPC Healthcare, Inc. - Thomas H. Lee Partners LP; Intermedix

Corp.

- - - - Yes

4/5/2017 J.G. Finneran Associates, Inc - Porvair Plc $14.0 - - 14.0x No

4/5/2017 Advanced Practice Strategies, Inc. - Relias Learning LLC - - - - No

4/6/2017 Palm Beach Institute - Delphi Behavioral Health Group LLC - - - - No

4/6/2017 Zhou Nutrition Branson Books LLC Nutraceutical International Corp. $19.7 - - 19.7x No

4/6/2017 Medical Arts Dermatology PC - CI Capital Partners LLC; Epiphany

Dermatology PA

- - - - Yes

4/6/2017 Rehabilitation Center of Des Moines LLC Genesis Healthcare, Inc. The Ensign Group, Inc. - - - - No

4/6/2017 New England Baptist Hospital - Beth I srael Deaconess Medical Center,

Inc.

- - - - No

4/6/2017 ImagineCare Inc Dartmouth-Hitchcock Health LifecareX AB - - - - No

4/7/2017 Akorn, Inc. - Fresenius Kabi AG $4,736.7 - - - No

4/10/2017 JDC Healthcare Management LLC - Brentwood Associates - - - - Yes

4/11/2017 SL Pharma Labs, Inc. - Exova Group Plc - - - - No

4/11/2017 Stemvax, Inc. - Quest Management, Inc. (Latv ia) - - - - No

4/12/2017 Entrada, Inc. - NextGen Healthcare Information

Systems LLC

$34.0 - - 34.0x No

4/12/2017 Halt Medical, Inc. - Acessa Health, Inc. - - - - No

4/13/2017 Carestream Dental LLC Carestream Health, Inc. Clayton Dubilier & Rice LLC; Carestream

Dental LLC /Private Group/;

CareCapital Advisors Ltd.

$1,000.0 - - - Yes

4/14/2017 Health 2.0 LLC - Healthcare Information & Management

Systems Society

- - - - No

4/17/2017 Pharmachem Laboratories, Inc. - Ashland LLC $660.0 - - - No

4/17/2017 Las Cruces Dermatology Associates PC - Epiphany Dermatology PA - - - - No

4/18/2017 Medtronic Plc /Medical Supplies Bus/ Medtronic Plc Cardinal Health, Inc. $6,100.0 - - - No

4/18/2017 Berkeley Advanced Biomaterials, Inc. - GNI USA, Inc. $85.3 - - - No

4/18/2017 Exact Recruiting Solutions, Inc. - Simione Healthcare Consultants LLC - - - - No

4/18/2017 Pathology Associates of Princeton - Aurora Diagnostics, Inc. - - - - No

4/18/2017 ArroHealth Global Excel Management, Inc. New Mountain Capital LLC; CIOX

Health LLC

- - - - Yes

4/18/2017 Alpine Immune Sciences, Inc. - Nivalis Therapeutics, Inc. - - - - No

4/18/2017 CityMD - Warburg Pincus LLC - - - - Yes

4/18/2017 Air Medical Resource Group - Kohlberg Kravis Roberts & Co. LP; Air

Medical Group Holdings, Inc.

- - - - Yes

4/19/2017 Medicalis Corp. - Siemens Healthcare GmbH - - - - No

4/19/2017 Care New England Health System, Inc. Memorial Hospital of Rhode Island Partners HealthCare System, Inc. - - - - No

4/19/2017 Memorial Hospital of Rhode Island Care New England Health System, Inc. Prime Healthcare Foundation, Inc. - - - - No

4/20/2017 Upsher-Smith Laboratories, Inc. /Generic

Pharmaceuticals Bus/

ACOVA, Inc. Sawai Pharmaceutical Co., Ltd. $1,050.0 - - - No

4/20/2017 The Premier Dental Group, Inc. - Sun Life Financial, Inc. - - - - No

4/20/2017 Ciel Medical, Inc. - Vyaire Medical, Inc. - - - - No

4/21/2017 All About Home Care LLC - Nova Leap Health RI LLC $1.2 - - 1.2x No

4/21/2017 Emergo Group, Inc. - Underwriters Laboratories, Inc. - - - - No

4/21/2017 Mercy Health Medical Transportation LLC - First Care Medical Serv ices LLC - - - - No

4/23/2017 C.R. Bard, Inc. (New Jersey) - Becton, Dickinson & Co. $23,645.2 - - - No

4/25/2017 Source Medical Solutions, Inc. - Surgical Information Systems LLC - - - - No

4/26/2017 Wound Care Technologies, Inc. - Baxter International, Inc. - - - - No

4/27/2017 Calbiotech, Inc. - ERBA Diagnostics Mannheim GmbH - - - - No

4/28/2017 Image Stream Medical, Inc. - Olympus Corporation of the Americas $87.0 - - - No

4/28/2017 Teijin Ltd. /Subsidiaries 2/ Teijin Ltd. Quadrant Management, Inc.; PPS HME

LLC

- - - - Yes

M&A TRANSACTIONS

12

Announced U.S. Healthcare & Life Sciences M&A(1)

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

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Energy, Power & Infrastructure

IndustrialsHealthcare & Life Sciences

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Aerospace, Defense & Government

Services

Business Services

Building Products & Materials

Technology, Media & Telecom

Specialty Distribution

Consumer

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DISCLOSURES

HEALTHCARE & LIFE SCIENCES

INDUSTRY UPDATE │ MAY 2017

1. FactSet.

2. Company Filings.

3. S&P.

4. PNC Debt Capital Markets.

5. Thomson Financial.

6. Bloomberg.