Healthcare & Life Sciences Industry Update · 2012. 7. 18. · 3 Healthcare & Life Sciences Industry Stock Performance 46.0% Top 25 Equity Offerings (by proceeds) Equity Markets Overview

Healthcare & Life Sciences Industry Update

Member FINRA/SIPC

Industry UpdateJuly 2012

www.harriswilliams.com

What We’ve Been

Reading

July 2012

1

As many readers are already aware, on June 28th the Supreme Court of the United States

upheld the majority of the Patient Protection and Affordable Care Act (“ACA”) by a five to

four vote majority. In the wake of the ruling, the media and internet have been abuzz with

commentary and discussion around the implications of the decision for patients, insurers, and

other players in healthcare. As the ACA will be one of the most significant pieces of

legislation in U.S. history, we chose to focus our update this month on some selected pieces

discussing the act and the ruling.

• The Wharton Business School’s online news site, Knowledge@Wharton, has an excellent

article summarizing the major components of the ACA decision and goes on to give some

views from experts in the UPenn community across medicine, law, and business. Among

the topics discussed are the potential costs from the increased regulation and the chaos that

could have resulted had the ACA been found to be unconstitutional. Read the article here.

• The Atlantic published an article by Jordan Weissmann that discusses one of the less

publicized parts of the Supreme Court ruling on the ACA: the striking down of the

expansion of Medicaid. The article discusses this topic from a number of angles and

includes excerpts from Weissman’s conversation with a University of Michigan professor

of law. The premise is that this component of the ACA decision could pave the way for

legal challenges to a number of federal programs that require state cooperation.

• Modern Healthcare created an interactive timeline of the history of healthcare reform in the

U.S. While the events leading up to the creation, passage, and recent upholding of the

ACA are the focus of the timeline, the reader can also go back much further to see other

major events such as the creation of Medicare, HIPAA, and other cornerstones of the U.S.

healthcare landscape. With each event, Modern Healthcare provides a relevant article from

which the reader can gather more detail. Access the timeline here.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=3038



http://www.theatlantic.com/business/archive/2012/06/the-most-important-part-of-todays-health-care-ruling-you-havent-heard-about/259134/



http://www.modernhealthcare.com/section/healthcare-reform?utm_source=rightrailbug&utm_medium=button&utm_campaign=reform

2

Key Trading

Statistics

(detail begins

on page 6)

Equity Trading

Overview

July 2012

Public Company

Sector

Performance

(12-month %

change in stock

price)

Change in Stock Price

3 mos. 12 mos. Revenue EBITDA Revenue EBITDA

Clinical Laboratories 3 $8,340 1.4% 2.4% 1.7x 8.5x 1.7x 8.2x

Contract Pharma Manufacturing 5 898 33.1% 16.8% 1.3x 13.7x 1.4x 11.2x

Contract Research Organizations 5 1,555 1.0% (19.1%) 1.2x 10.2x 1.2x 8.3x

Disease Management 3 1,922 (11.8%) (45.4%) 2.1x 7.2x 1.4x 7.3x

Emergency Services 1 1,817 11.0% 30.4% 2.5x 9.7x 2.2x 8.0x

Health Care Staffing 4 818 (6.6%) (10.6%) 0.6x 9.8x 0.5x 7.1x

HMO - Medical 11 13,405 (15.4%) (13.0%) 0.3x 5.8x 0.3x 6.2x

Information Services 13 2,223 1.1% 0.0% 2.9x 11.9x 2.9x 9.4x

Specialty Managed Care 2 1,770 4.9% 0.2% 0.8x 6.3x 0.8x NA

Specialty Pharmacy Management 4 13,285 (3.3%) 1.5% 0.6x 9.5x 0.6x 8.2x

Dental Products 4 18,535 (2.3%) (1.5%) 2.6x 9.9x 2.5x 9.2x

Durable Medical Equipment 4 2,087 (4.3%) (21.2%) 1.2x 6.3x 1.2x 7.0x

Life Sciences Tools 3 13,112 (7.4%) (14.2%) 2.2x 8.3x 2.2x 7.4x

Medical Devices and Products 14 35,197 (0.6%) (3.4%) 2.3x 8.8x 2.3x 8.1x

Medical / Surgical / Dental Supplies 7 8,880 1.0% (4.2%) 0.2x 8.0x 0.2x 7.5x

Acute-Care Hospitals 6 13,175 10.9% (11.2%) 1.0x 6.5x 0.9x 6.3x

Assisted Living 7 1,524 (4.2%) (22.8%) 1.8x 12.3x 1.7x 10.8x

Diagnostic Imaging 3 2,545 (18.9%) (39.8%) 1.4x 5.7x 1.4x 5.6x

Dialysis Services 2 21,994 5.2% 5.4% 2.2x 10.4x 2.0x 9.3x

Home Care / Hospice 7 998 (8.9%) (14.6%) 0.6x 5.1x 0.5x 5.7x

Long-Term Care 4 953 6.3% (8.0%) 0.6x 5.8x 0.6x 4.8x

Physician Practice Management 4 848 2.7% (3.9%) 0.6x 7.8x 1.4x 8.1x

Psychiatric Hospitals / Management 3 2,342 (6.6%) (15.4%) 0.3x 5.8x 0.3x 5.8x

Surgicenters / Rehabilitation 4 2,187 11.8% 9.7% 1.6x 7.5x 1.5x 7.6x

Payer, Provider, & Pharmacy Support Services 51 $4,603 1.5% (3.7%) 1.4x 9.3x 1.3x 8.2x

Products & Devices 32 $15,562 (2.7%) (8.9%) 1.7x 8.2x 1.7x 7.8x

Provider-Based Services 40 $5,174 (0.2%) (11.2%) 1.1x 7.4x 1.2x 7.1x

HW&Co. HCLS Composite Index 123 $7,100 (0.0%) (7.6%) 1.4x 8.4x 1.3x 7.7x

S&P 500 (2.9%) 4.2%

Payer

, P

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er,

& P

harm

acy

Su

pp

ort

Ser

vic

es

Pro

du

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Dev

ices

Pro

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er-B

ase

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ervic

es

Median TEV/

Forward MulitplesSectorNumber of

Companies

Average

Enterprise

Value ($ mm)

Median TEV/

LTM Multiples

Emergency Services

Contract Pharma Manufacturing

Surgicenters / Rehabilitation

Dialysis Services

S&P 500

Clinical Laboratories

Specialty Pharmacy Management

Specialty Managed Care

Information Services

Dental Products

Medical Devices and Products

Physician Practice Management

Medical / Surgical / Dental Supplies

HW&Co. HCLS Composite Index

Long-Term Care

Health Care Staffing

Acute-Care Hospitals

HMO - Medical

Life Sciences Tools

Home Care / Hospice

Psychiatric Hospitals / Management

Contract Research Organizations

Durable Medical Equipment

Assisted Living

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%

3

Healthcare &

Life Sciences

Industry Stock

Performance

Top 25 Equity

Offerings

(by proceeds)

Equity Markets

Overview

July 2012

46.9%

46.0%

39.2%

40

60

80

100

120

140

160

Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12

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

Closing Date Filing Date Issuer Ticker Transaction Type

Gross Proceeds

($mm)

06/05/12 06/05/12 Medicines Co MDCO Convertible $275.0

06/29/12 06/28/12 Team Health Holdings Inc TMH Follow-On 230.3

06/19/12 06/19/12 Affymetrix Inc AFFX Convertible 105.0

06/27/12 03/23/12 Tesaro Inc TSRO IPO 81.0

06/01/12 06/01/12 GreenWorld Development Inc GREW Follow-On 75.0

06/14/12 11/14/11 Aegerion Pharmaceuticals Inc AEGR Follow-On 50.2

06/20/12 11/25/11 Cytokinetics Inc CYTK Follow-On 42.5

06/20/12 12/02/11 GenMark Diagnostics Inc GNML Follow-On 42.0

06/27/12 10/08/10 Omeros Corp OMER Follow-On 34.5

06/25/12 06/25/12 Kips Bay Medical Inc KIPS Follow-On 28.8

06/22/12 06/04/12 Coronado Biosciences Inc CNDO Follow-On 28.8

06/01/12 06/01/12 Inovio Pharmaceuticals Inc INO Follow-On 25.0

06/28/12 06/28/12 Unilife Corp UNS Follow-On 20.0

06/15/12 06/15/12 Mela Sciences Inc MELA Follow-On 20.0

06/01/12 05/29/12 AcelRx Pharmaceuticals Inc ACRX Follow-On 18.7

06/27/12 06/21/12 Biodel Inc BIOD Follow-On 18.5

06/20/12 06/20/12 Zalicus Inc ZLCS Follow-On 15.0

06/19/12 04/12/12 AspenBio Pharma Inc APPY Follow-On 12.2

06/15/12 07/01/11 Microvision Inc MVIS Follow-On 10.5

06/14/12 06/14/12 OXiGENE Inc OXGN Follow-On 10.0

06/18/12 06/18/12 Medgenics Inc MDGN Follow-On 9.5

06/28/12 06/28/12 Fibrocell Science Inc FCSC Convertible 8.4

06/18/12 10/30/09 CEL SCI Corp CVM Follow-On 5.6

06/07/12 04/09/12 Novelos Therapeutics Inc NVLT Follow-On 5.4

06/15/12 06/15/12 Genta Inc GNTAD Convertible 4.6

4

Announced

Healthcare &

Life Sciences

M&A

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

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

Healthcare &

Life Sciences

M&A Trends

Announced

Private Equity

M&A Activity

Middle Market Healthcare Transaction Highlights Quarterly M&A Activity

LTM Deal Statistics

Note: Transactions based on publicly available information

M&A

Overview

July 2012

179

223

278 279

255

225242

256267

245 236219

229

5

11

17 18

19

17

13

18

16

1318

11

20

0

50

100

150

200

250

300

350

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

Nu

mb

er o

f T

ra

nsa

cti

on

s__

PEG Acquirer Strategic Acquirer

$389.4

$194.1 $174.6

$110.6

$141.4

$61.7

0

200

400

600

800

1000

1200

1400

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2007 2008 2009 2010 2011 2012 YTD

Nu

mb

er o

f Tra

nsa

ctio

ns_

_

Ag

greg

ate

Tra

nsa

cti

on

Va

lue (

$ i

n b

illi

on

s)

Aggregate Deal Value # of deals

15.5x 15.2x

7.7x

12.8x 11.1x

12.4x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

0x

3x

6x

9x

12x

15x

18x

21x

2007 2008 2009 2010 2011 2012 YTD

EV

/ LT

M R

ev

en

ue M

ultip

le_

_EV

/ L

TM

EB

ITD

A M

ult

iple

__

TEV / LTM EBITDA TEV / LTM Sales

31

40

58

69

94

113

79

42

71

65

31

2327

40

60 62

95

49 50

80

120

62

0

20

40

60

80

100

120

140

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

Tra

nsa

cti

on

Vo

lum

e'

Number of Investments Number of Exits

HC&LS Industry Number of

Segment Companies

Biotechnology 4

Healthcare Technology 19

Healthcare Distributors 10

Healthcare Equipment 23

Healthcare Facilities 34

Healthcare Services 58

Healthcare Supplies 8

Life Sciences Tools & Services 10

Managed Healthcare 6

Pharmaceuticals 21

Aggregate Number Median Transaction Multiples

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

$151.0 991 2.08x 11.1x

Announced Target Buyer

6/29/2012 OMH HealthEdge Holdings, Inc. TA Associates, Inc.

6/29/2012 Amylin Pharmaceuticals, Inc. Bristol-Myers Squibb Company

6/26/2012 M.A.R.Y. Medical, Inc. The Riverside Company

6/20/2012 Sun Healthcare Group, Inc. (NasdaqGS:SUNH) Genesis HealthCare Corporation

6/15/2012 OraPharma, Inc. Valeant Pharmaceuticals International

6/15/2012 Pinnacle Infusion, Inc. CarePoint Partners, LLC

6/12/2012 Urgent Care Specialists, LLC Ridgemont Equity Partners

6/12/2012 Pentec Health, Inc. Norwest Equity Partners

6/8/2012 Center for Diagnostic Imaging, Inc. Insight Health Corp.

5

Key Credit

Statistics

Top 20 Recent

Healthcare &

Life Sciences

Debt Offerings

(by deal amount)

Average Secondary Spread

Average Spread on Healthcare Loans

Credit Statistics

Quarterly Healthcare Loan Volume

Debt Markets

Overview

July 2012

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

06/27/12 Abbott Laboratories Pharmaceutical preparations $7,500 Bridge Loan AA / A1 L+ 125

06/27/12 Abbott Laboratories Pharmaceutical preparations 5,000 Revolver/Line >= 1 Yr. AA / A1 L+ 75

06/27/12 Abbott Laboratories Pharmaceutical preparations 2,000 Revolver/Line >= 1 Yr. AA / A1 L+ 75

06/29/12 Sheridan Healthcare Inc General medical & surgical hospitals 600 Term Loan B NR / WR L+ 475

06/29/12 Sheridan Healthcare Inc General medical & surgical hospitals 110 Term Loan NR / WR L+ 775

06/29/12 Sheridan Healthcare Inc General medical & surgical hospitals 100 Revolver/Line >= 1 Yr. NR / WR N/A

07/02/12 US Renal Care Inc Specialty outpatient clinics 305 Term Loan B B+ / B1 L+ 500

07/02/12 US Renal Care Inc Specialty outpatient clinics 120 Term Loan B+ / B1 L+ 900

07/02/12 US Renal Care Inc Specialty outpatient clinics 60 Revolver/Line >= 1 Yr. B+ / B1 N/A

06/18/12 Pharmaceutical Research Associates Inc Medical laboratories 370 Term Loan B B+ / Ba2 L+ 475

06/18/12 Pharmaceutical Research Associates Inc Medical laboratories 40 Revolver/Line >= 1 Yr. B+ / Ba2 L+ 475

06/08/12 Healthways Inc Specialty hospitals exc. psychiatric 200 Revolver/Line >= 1 Yr. NR / WR L+ 250

06/08/12 Healthways Inc Specialty hospitals exc. psychiatric 200 Term Loan A NR / WR L+ 250

06/27/12 Providence Health & Services General medical & surgical hospitals 400 Revolver/Line >= 1 Yr. NR / NR L+ 400

06/05/12 Owens & Minor Inc Medical and hospital equipment 350 Revolver/Line >= 1 Yr. BBB / Ba1 L+ 138

06/30/12 Upsher-Smith Laboratories Inc Pharmaceutical preparations 200 Revolver/Line >= 1 Yr. NR / NR N/A

06/30/12 Upsher-Smith Laboratories Inc Pharmaceutical preparations 100 Term Loan A NR / NR L+ 225

06/30/12 Methodist Le Bonheur Healthcare General medical & surgical hospitals 273 Other Loan NR / NR N/A

06/28/12 Lincare Holdings Inc Home health care services 250 Term Loan A NR / NR L+ 163

06/07/12 Advanced Homecare Management Home health care services 135 Term Loan A BB / B1 L+ 400

L + 0

L + 200

L + 400

L + 600

L + 800

L + 1000

Av

era

ge

Sp

rea

d O

ver

LIB

OR

__

0.0x

2.0x

4.0x

6.0x

Debt/EBITDA Senior Debt/EBITDA EBITDA/Cash Interest EBITDA - Capex/Cash Interest

EB

ITD

A M

ult

iple

__

2006 2007 2008 2009 2010 2011 2012 YTD

L + 0

L + 100

L + 200

L + 300

L + 400

L + 500

2006 2007 2008 2009 2010 2011 2012 YTD

Aver

age

Sp

read

Over

LIB

OR

__

Revolving Credit / Term Loan A Weighted-Average Institutional

$0

$3

$6

$9

$12

$15

$18

$21

$24

2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12

Lo

an

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$ i

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Pro Rata Institutional

Healthcare & Life Sciences Trading Statistics

July 2012

As of June 29, 2012 6

Payer, Provider, & Pharmacy Support Services Stock Price

Change in Stock

Price

% Change 52 Week

6/29/2012 3 mos. 12 mos. 3 mos. 12 mos. High Low Revenue EBITDA EBIT Revenue EBITDA EBIT Revenue EBITDA Revenue EBITDA

Clinical Laboratories

Bio-Reference Laboratories Inc. $26.28 $24.14 $20.94 12.2% 27.3% $26.50 $11.41 $728 $32 $20 $740 $613 $84 $68 Apr-12 Oct-11 $663 $90 $73 1.2x 8.9x 1.1x 8.2x

Laboratory Corp. of America Holdings 92.61 93.24 98.27 1.4% (2.7%) 99.76 74.57 8,965 2,121 130 10,977 5,597 1,277 1,081 Mar-12 Dec-11 5,718 1,336 1,128 2.0x 8.5x 1.9x 8.2x

Quest Diagnostics Inc. 59.90 61.17 59.61 (2.3%) 2.4% 62.32 45.13 9,503 3,920 145 13,304 7,625 1,635 1,345 Mar-12 Dec-11 7,711 1,646 1,356 1.7x 8.0x 1.7x 8.1x

Number of Companies 3 Median: 1.4% 2.4% Total $19,195 $8,340 $13,835 $14,091 1.7x 8.5x 1.7x 8.2x

Mean: 3.8% 9.0% $8,340 1.6x 8.5x 1.6x 8.2x

Contract Pharma Manufacturing

Akorn, Inc. $15.77 $11.99 $7.19 33.1% 123.4% $16.09 $6.63 $1,500 $102 $28 $1,573 $163 $50 $44 Mar-12 Dec-11 $262 $102 $89 9.6x 24.6x 6.0x 15.4x

Cambrex Corporation. 9.41 6.75 4.93 33.9% 116.3% 9.54 4.15 279 84 21 342 265 52 29 Mar-12 Dec-11 270 NA 31 1.3x 6.8x 1.3x NA

Integrated Biopharma Inc. 0.09 0.06 0.09 282.2% 1.2% 0.33 0.02 2 13 1 14 23 1 1 Mar-12 Jun-11 NA NA NA 0.6x 13.7x NA NA

Patheon Inc. 2.38 2.21 2.04 11.9% 14.9% 2.49 1.06 308 315 20 594 690 24 (23) Apr-12 Oct-11 727 53 20 0.9x 26.1x 0.8x 11.2x

West Pharmaceutical Services, Inc. 50.49 41.25 45.45 18.0% 16.8% 50.49 35.50 1,710 381 100 1,965 1,213 205 130 Mar-12 Dec-11 1,259 215 135 1.6x 9.3x 1.6x 9.1x

Number of Companies 5 Median: 33.1% 16.8% Total $3,798 $898 $2,355 $2,518 1.3x 13.7x 1.4x 11.2x

Mean: 75.8% 54.5% $898 2.8x 16.1x 2.4x 11.9x

Contract Research Organizations

Albany Molecular Research Inc. $2.55 $2.84 $4.98 (7.9%) (46.3%) $5.16 $2.08 $78 $5 $8 $76 $204 $7 ($11) Mar-12 Dec-11 $213 $19 $5 0.4x 10.2x 0.4x 3.9x

Charles River Laboratories International, Inc. 32.76 35.93 41.68 (8.6%) (19.1%) 42.20 25.52 1,605 704 61 2,244 1,143 272 188 Mar-12 Dec-11 1,152 272 197 2.0x 8.2x 1.9x 8.3x

Covance Inc. 47.85 46.78 61.17 1.0% (19.3%) 62.64 42.02 2,654 340 440 2,554 2,125 308 203 Mar-12 Dec-11 2,200 310 194 1.2x 8.3x 1.2x 8.2x

ICON Public Limited Company 22.53 21.96 25.21 6.0% (2.6%) 25.50 15.03 1,345 20 129 1,159 969 76 35 Mar-12 Dec-11 1,087 118 74 1.2x 15.3x 1.1x 9.8x

PAREXEL International Corporation 28.23 26.24 24.16 3.4% 21.6% 28.93 15.26 1,691 235 130 1,742 1,314 148 79 Mar-12 Jun-11 1,382 166 98 1.3x 11.8x 1.3x 10.5x

Number of Companies 5 Median: 1.0% (19.1%) Total $7,373 $1,555 $5,755 $6,034 1.2x 10.2x 1.2x 8.3x

Mean: (1.2%) (13.1%) $1,555 1.2x 10.8x 1.2x 8.1x

Disease Management

Alere Inc. $19.44 $23.95 $37.91 (22.5%) (45.4%) $38.53 $17.62 $1,562 $3,534 $514 $5,192 $2,475 $580 $175 Mar-12 Dec-11 $2,695 $625 $518 2.1x 8.8x 1.9x 8.3x

Corac Group plc 0.13 $0.16 $0.22 (11.8%) (41.8%) 0.24 0.13 33 0 24 9 1 (9) (9) Dec-11 Dec-11(Capability Needed)(Capability Needed)(Capability Needed) 17.5x NM NA NA

Healthways Inc. 7.98 $6.97 $16.30 6.8% (47.0%) 17.62 5.59 267 298 1 563 691 101 51 Mar-12 Dec-11 686 89 37 0.8x 5.6x 0.8x 6.3x

Number of Companies 3 Median: (11.8%) (45.4%) Total $1,862 $1,922 $3,167 $3,381 2.1x 7.2x 1.4x 7.3x

Mean: (9.2%) (44.7%) $1,922 6.8x 7.2x 1.4x 7.3x

Emergency Services

Air Methods Corp. $98.25 $87.92 $75.67 11.0% 30.4% $99.90 $56.17 $1,261 $558 $2 $1,817 $719 $188 $111 Mar-12 Dec-11 $828 $226 $140 2.5x 9.7x 2.2x 8.0x

Number of Companies 1 Median: 11.0% 30.4% Total $1,261 $1,817 $719 $828 2.5x 9.7x 2.2x 8.0x

Mean: 11.0% 30.4% $1,817 2.5x 9.7x 2.2x 8.0x

Health Care Staffing

AMN Healthcare Services Inc. $5.93 $6.20 $8.38 (4.4%) (29.0%) $8.75 $3.60 $242 $194 $5 $455 $898 $56 $40 Mar-12 Dec-11 $933 $67 $48 0.5x 8.1x 0.5x 6.8x

Cross Country Healthcare, Inc. 4.37 5.12 7.51 (13.6%) (42.7%) 8.00 3.76 134 40 9 163 509 19 9 Mar-12 Dec-11 520 22 11 0.3x 8.4x 0.3x 7.4x

On Assignment Inc. 15.96 18.50 10.42 (8.9%) 68.7% 19.37 6.27 600 81 18 664 635 59 50 Mar-12 Dec-11 1,234 112 96 1.0x 11.2x 0.5x 5.9x

Team Health Holdings, Inc. 24.09 20.54 23.12 16.0% 7.7% 25.89 15.08 1,592 409 10 1,991 3,263 172 140 Mar-12 Dec-11 2,006 208 152 0.6x 11.6x 1.0x 9.6x

Number of Companies 4 Median: (6.6%) (10.6%) Total $2,569 $818 $5,305 $4,694 0.6x 9.8x 0.5x 7.1x

Mean: (2.7%) 1.2% $818 0.6x 9.8x 0.6x 7.4x

Company NameLTM

Period (3)

Lastest

FYE

Date(3)

TEV/ LTM Multiples (5)Equity

Mkt. ValueTotal Debt

Cash and

Equiv.

Total

Ent.

Value

(TEV)

Lastest Twelve Months

(LTM)TEV/ Fwd MultiplesForward Estimate


July 2012

As of June 29, 2012 7

Payer, Provider, & Pharmacy Support Services

Stock Price

Change in Stock

Price

% Change 52 Week


HMO - Medical

Commercial:

Aetna Inc. $38.77 $49.62 $44.30 (21.8%) (13.0%) $51.14 $33.43 $13,469 $4,128 $809 $16,788 $34,308 $3,796 $3,341 Mar-12 Dec-11 $35,541 $3,324 $2,929 0.5x 4.4x 0.5x 5.1x

Cigna Corp. 44.00 48.99 51.85 (10.1%) (14.2%) 52.95 38.79 12,686 5,229 2,111 15,804 23,375 2,407 2,206 Mar-12 Dec-11 28,468 2,917 2,428 0.7x 6.6x 0.6x 5.4x

Coventry Health Care Inc. 31.79 $34.44 $37.53 (8.1%) (12.9%) 37.86 25.78 4,541 1,585 1,745 4,381 12,849 949 834 Mar-12 Dec-11 14,153 806 664 0.3x 4.6x 0.3x 5.4x

Health Net, Inc. 24.27 $40.51 $32.02 (38.5%) (25.2%) 41.22 20.51 2,021 511 391 2,142 11,368 306 275 Mar-12 Dec-11 11,247 319 305 0.2x 7.0x 0.2x 6.7x

Humana Inc. 77.44 91.27 80.82 (15.4%) (5.1%) 96.46 65.20 12,637 1,915 3,656 10,896 37,860 2,541 2,236 Mar-12 Dec-11 39,604 2,473 2,164 0.3x 4.3x 0.3x 4.4x

Unitedhealth Group, Inc. 58.50 59.01 52.08 0.7% 13.5% 60.75 41.27 60,691 12,854 11,661 61,884 103,712 9,333 8,560 Mar-12 Dec-11 109,898 9,620 8,674 0.6x 6.6x 0.6x 6.4x

WellPoint Inc. 63.79 72.38 78.00 (10.9%) (19.5%) 80.90 56.61 21,104 10,189 2,279 29,014 61,232 4,991 4,326 Mar-12 Dec-11 61,402 4,573 4,093 0.5x 5.8x 0.5x 6.3x


Mean: (14.9%) (10.9%) $20,130 0.4x 5.6x 0.4x 5.7x

Government:

AMERIGROUP Corporation $65.91 $67.45 $73.90 0.4% (6.6%) $75.74 $37.57 $3,197 $737 $640 $3,293 $6,547 $294 $278 Mar-12 Dec-11 $8,718 $391 $344 0.5x 11.2x 0.4x 8.4x

Centene Corp. 30.16 50.80 37.00 (36.4%) (15.7%) 50.98 24.26 1,552 350 433 1,469 5,851 251 200 Mar-12 Dec-11 8,065 200 133 0.3x 5.9x 0.2x 7.3x

Molina Healthcare Inc. 23.46 35.01 27.43 (29.8%) (13.1%) 36.83 13.93 1,087 229 518 799 5,024 192 147 Mar-12 Dec-11 5,983 128 71 0.2x 4.2x 0.1x 6.2x

WellCare Health Plans, Inc. 53.00 74.24 54.72 (24.9%) 2.1% 74.41 33.29 2,284 144 1,445 983 6,423 475 460 Mar-12 Dec-11 7,169 410 380 0.2x 2.1x 0.1x 2.4x


Mean: (22.7%) (8.3%) $1,636 0.3x 5.8x 0.2x 6.1x

Information Services

Data/Analytics:

Accelrys Inc. $8.09 $7.89 $7.30 1.1% 16.4% $8.45 $5.68 $449 $0 $95 $304 $149 $16 ($9) Mar-12 Dec-11 $165 $34 $23 2.0x 19.4x 1.8x 9.0x

Electronic Arts Inc. 12.05 16.41 24.56 (26.6%) (48.6%) 23.36 11.95 0 539 1,293 0 4,143 290 74 Mar-12 Mar-12 4,310 673 507 0.0x 0.0x 0.0x 0.0x

National Research Corp. 52.35 42.60 36.41 24.5% 44.1% 53.00 28.00 355 14 8 361 78 24 19 Mar-12 Dec-11 87 27 22 4.6x 14.9x 4.2x 13.2x

Number of Companies 3 Median: 1.1% 16.4% Total $804 $222 $4,371 $165 2.0x 14.9x 1.8x 9.0x

Mean: (0.3%) 4.0% $222 2.2x 11.4x 2.0x 7.4x

eHealth:

WebMD Health Corp. 20.51 23.16 48.06 (20.3%) (53.7%) 49.24 20.18 1,145 800 1,142 803 534 96 81 Mar-12 Dec-11 $502 $103 $29 1.5x 8.3x NA NA

Number of Companies 1 Median: (20.3%) (53.7%) Total $1,145 $803 $534 $502 1.5x 8.3x NA NA

Mean: (20.3%) (53.7%) $803 1.5x 8.3x NA NA

Hospital/Physician:

Allscripts Healthcare Solutions, Inc. $10.93 $16.25 $20.23 (35.1%) (43.0%) $21.66 $8.99 $2,086 $346 $176 $2,256 $1,473 $247 $161 Mar-12 Dec-11 $1,505 $349 $244 1.5x 9.1x 1.5x 6.5x

athenahealth, Inc. 79.17 71.99 46.93 7.4% 89.4% 87.16 40.79 2,838 0 52 2,722 351 53 36 Mar-12 Dec-11 429 86 64 7.8x 51.5x 6.3x 31.6x

Cerner Corporation 82.66 75.87 64.06 8.5% 36.6% 88.32 53.93 14,090 153 281 13,349 2,307 629 494 Mar-12 Dec-11 2,616 836 588 5.8x 21.2x 5.1x 16.0x

Computer Programs & Systems Inc. 57.22 56.06 66.34 0.9% (7.7%) 79.06 41.80 633 0 9 607 178 45 42 Mar-12 Dec-11 194 51 48 3.4x 13.6x 3.1x 11.9x

HMS Holdings Corp. 33.31 30.57 26.39 5.3% 31.7% 34.98 19.78 2,863 346 107 3,102 389 117 86 Mar-12 Dec-11 508 173 106 8.0x 26.5x 6.1x 18.0x

MedAssets, Inc. 13.45 13.05 13.99 2.8% 1.9% 14.58 8.52 784 974 1 1,756 598 182 79 Mar-12 Dec-11 608 198 88 2.9x 9.7x 2.9x 8.9x

Merge Healthcare Incorporated 2.86 4.86 5.21 (51.2%) (43.5%) 7.23 2.20 264 250 39 475 241 54 35 Mar-12 Dec-11 251 49 31 2.0x 8.8x 1.9x 9.6x

Quality Systems Inc. 27.51 41.74 45.74 (37.4%) (35.8%) 50.70 23.93 1,633 0 134 1,493 430 126 116 Mar-12 Mar-12 518 163 143 3.5x 11.9x 2.9x 9.2x

SunCoke Energy Inc. 14.65 14.55 0.00 2.7% 0.0% 18.00 9.20 1,026 726 114 1,672 1,675 157 94 Mar-12 Dec-11 1,940 257 178 1.0x 10.6x 0.9x 6.5x


Mean: (10.7%) 3.3% $3,048 4.0x 18.1x 3.4x 13.1x

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

Company NameEquity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period (3)

Lastest

FYE

Date(3)


July 2012

As of June 29, 2012 8

Payer, Provider, & Pharmacy Support Services Stock Price

Change in Stock

Price

% Change 52 Week


Specialty Managed Care

Assurant Inc. 34.84 39.15 36.01 (13.7%) (3.6%) 44.54 30.65 2,988 1,067 1,065 2,989 8,309 941 810 Mar-12 Dec-11 8,366 NA 878 0.4x 3.2x 0.4x NA

CorVel Corporation 49.00 41.19 48.83 23.4% 4.1% 54.64 38.04 557 0 7 550 413 58 43 Mar-12 Mar-12 443 NA NA 1.3x 9.5x 1.2x NA

Number of Companies 2 Median: 4.9% 0.2% Total $3,544 $1,770 $8,722 $8,809 0.8x 6.3x 0.8x NA

Mean: 4.9% 0.2% $1,770 0.8x 6.3x 0.8x NA

Specialty Pharmacy Management

BioScrip Inc. $7.43 $6.93 $6.92 9.6% 13.3% $7.88 $5.00 $434 $291 $0 $725 $1,843 $63 $49 Mar-12 Dec-11 $630 $47 $31 0.4x 11.5x 1.2x 15.3x

Express Scripts Holding Company 55.83 56.94 54.57 5.0% 3.4% 58.98 34.47 44,970 11,537 9,578 46,929 47,166 2,642 2,413 Mar-12 Dec-11 92,547 5,231 4,522 1.0x 17.8x 0.5x 9.0x

Omnicare Inc. 31.23 35.40 32.05 (11.7%) (0.3%) 36.48 20.36 3,528 1,992 622 4,899 6,250 662 528 Mar-12 Dec-11 6,244 662 553 0.8x 7.4x 0.8x 7.4x

PharMerica Corporation 10.92 12.45 13.89 (12.6%) (14.4%) 16.45 9.03 322 272 7 588 2,045 104 73 Mar-12 Dec-11 1,945 101 72 0.3x 5.6x 0.3x 5.8x

Number of Companies 4 Median: (3.3%) 1.5% Total $49,254 $13,285 $57,305 $101,365 0.6x 9.5x 0.6x 8.2x

Mean: (2.4%) 0.5% $13,285 0.6x 10.6x 0.7x 9.4x

Company NameEquity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period (3)

Lastest

FYE

Date(3)



July 2012

As of June 29, 2012 9

Products & Devices Stock Price

Change in Stock

Price

% Change 52 Week


Dental Products

3M Co. $89.60 $87.27 $97.62 0.9% (3.8%) $98.19 $68.63 $62,171 $5,174 $2,332 $64,051 $29,786 $7,494 $6,234 Mar-12 Dec-11 $30,587 $7,837 $6,568 2.2x 8.5x 2.1x 8.2x

DENTSPLY International Inc. 37.81 39.72 39.23 (5.5%) 0.7% 41.38 28.35 5,360 1,987 67 7,315 2,684 429 326 Mar-12 Dec-11 2,959 601 476 2.7x 17.1x 2.5x 12.2x

Sirona Dental Systems Inc. 45.01 51.06 56.00 (12.1%) (15.3%) 56.47 38.69 2,503 78 78 2,507 953 238 162 Mar-12 Sep-11 962 264 230 2.6x 10.5x 2.6x 9.5x

Young Innovations Inc. 34.49 30.91 29.33 10.4% 20.6% 36.25 25.06 271 0 5 266 107 29 25 Mar-12 Dec-11 109 30 26 2.5x 9.3x 2.4x 8.9x


Mean: (1.6%) 0.6% $18,535 2.5x 11.4x 2.4x 9.7x

Durable Medical Equipment

Hill-Rom Holdings, Inc. $30.85 33.13 47.34 (7.9%) (32.6%) $48.80 $26.90 $1,914 $95 $175 $1,835 $1,612 $307 $221 Mar-12 Sep-11 $1,668 $335 $224 1.1x 6.0x 1.1x 5.5x

Invacare Corporation 15.43 15.82 34.00 (8.4%) (53.3%) 34.52 14.09 491 268 33 726 1,806 131 91 Mar-12 Dec-11 1,706 NA 59 0.4x 5.5x 0.4x NA

ResMed Inc. 31.20 30.74 30.64 0.7% 1.8% 35.32 23.37 4,454 236 776 3,914 1,338 358 275 Mar-12 Jun-11 1,366 375 291 2.9x 10.9x 2.9x 10.4x

Steris Corp. 31.37 30.67 36.09 (0.7%) (9.8%) 36.76 27.08 1,814 210 151 1,874 1,407 286 223 Mar-12 Mar-12 1,393 268 204 1.3x 6.6x 1.3x 7.0x


Mean: (4.1%) (23.4%) $2,087 1.4x 7.3x 1.4x 7.6x

Life Sciences Tools

Agilent Technologies Inc. $39.24 $44.77 $50.23 (11.7%) (22.4%) $52.62 $28.67 $13,636 $2,177 $3,896 $11,919 $6,787 $1,416 $1,167 Apr-12 Oct-11 $7,011 $1,617 $1,431 1.8x 8.4x 1.7x 7.4x

Becton, Dickinson and Company 74.75 77.65 89.30 (3.0%) (12.9%) 89.75 69.59 15,152 4,170 1,839 17,206 7,943 2,208 1,684 Mar-12 Sep-11 7,966 2,230 1,668 2.2x 7.8x 2.2x 7.7x

Life Technologies Corporation 44.99 47.64 51.30 (7.4%) (14.2%) 52.61 35.30 8,034 2,425 219 10,212 3,819 1,234 826 Mar-12 Dec-11 3,841 1,397 1,146 2.7x 8.3x 2.7x 7.3x


Mean: (7.4%) (16.5%) $13,112 2.2x 8.2x 2.2x 7.5x

Medical Devices and Products

Abbott Laboratories $64.47 $61.30 $53.33 5.7% 23.6% $64.47 $46.29 $101,437 $16,647 $4,346 $108,647 $39,267 $11,348 $8,327 Mar-12 Dec-11 $39,933 $12,476 $9,764 2.8x 9.6x 2.7x 8.7x

ArthroCare Corporation 29.28 25.69 34.15 9.5% (11.9%) 35.00 23.54 810 0 162 726 360 22 (2) Mar-12 Dec-11 367 96 69 2.0x 33.0x 2.0x 7.5x

Baxter International Inc. 53.15 59.57 60.92 (10.7%) (10.6%) 62.50 47.55 29,569 5,216 2,272 32,751 13,997 3,852 3,165 Mar-12 Dec-11 14,224 4,030 3,311 2.3x 8.5x 2.3x 8.1x

Boston Scientific Corporation 5.67 5.90 7.17 (5.5%) (18.2%) 7.55 5.01 8,104 4,259 284 12,079 7,563 1,615 936 Mar-12 Dec-11 7,463 1,694 1,021 1.6x 7.5x 1.6x 7.1x

CR Bard Inc. 107.44 98.01 112.82 8.6% (1.6%) 113.84 80.80 9,095 1,239 675 9,660 2,926 947 835 Mar-12 Dec-11 3,023 945 828 3.3x 10.2x 3.2x 10.2x

Danaher Corp. 52.08 55.12 54.54 (5.4%) (0.1%) 56.45 39.34 36,079 4,926 1,043 40,029 17,115 3,730 2,997 Mar-12 Dec-11 18,553 4,041 3,253 2.3x 10.5x 2.2x 9.9x

Hanger, Inc. 25.64 21.87 26.17 16.8% 3.8% 26.46 14.57 871 506 32 1,345 936 166 134 Mar-12 Dec-11 981 165 129 1.4x 8.1x 1.4x 8.1x

Hologic Inc. 18.04 21.90 20.52 (17.0%) (9.1%) 22.16 13.90 4,773 1,527 855 5,445 1,862 619 310 Mar-12 Sep-11 1,913 705 592 2.9x 8.8x 2.8x 7.7x

Hospira Inc. 34.98 36.15 53.69 (7.1%) (37.8%) 57.12 26.92 5,777 1,779 656 6,900 4,021 621 377 Mar-12 Dec-11 4,023 668 481 1.7x 10.4x 1.7x 10.3x

Johnson & Johnson 67.56 65.34 67.57 3.1% 1.9% 68.05 59.08 185,545 19,449 30,267 171,147 64,996 19,379 16,203 Apr-12 Jan-12 67,336 21,203 17,787 2.6x 8.8x 2.5x 8.1x

Medtronic, Inc. 38.73 38.20 38.00 (1.2%) 1.7% 40.78 30.18 39,700 10,678 1,248 47,786 16,184 5,470 4,637 Apr-12 Apr-12 16,492 6,118 5,311 3.0x 8.7x 2.9x 7.8x

Stryker Corporation 55.10 55.03 60.14 0.0% (5.2%) 60.64 43.73 20,989 1,774 690 19,466 8,453 2,491 2,002 Mar-12 Dec-11 8,705 2,603 2,122 2.3x 7.8x 2.2x 7.5x

Thermo Fisher Scientific, Inc. 51.91 55.89 64.78 (7.4%) (19.0%) 65.68 43.06 19,067 6,675 788 24,949 12,105 2,439 1,517 Mar-12 Dec-11 12,414 2,718 2,344 2.1x 10.2x 2.0x 9.2x

Zimmer Holdings, Inc. 64.36 64.72 64.52 1.7% 2.7% 66.41 47.00 11,336 1,717 674 11,831 4,477 1,484 1,114 Mar-12 Dec-11 4,533 1,678 1,331 2.6x 8.0x 2.6x 7.0x


Mean: (0.6%) (5.7%) $35,197 2.4x 10.7x 2.3x 8.4x

Medical / Surgical / Dental Supplies

AmerisourceBergen Corporation $39.35 $38.22 $42.65 0.4% (4.2%) $43.47 $34.33 $9,869 $1,882 $2,327 $9,424 $81,001 $1,388 $1,254 Mar-12 Sep-11 $80,989 $1,414 $1,281 0.1x 6.8x 0.1x 6.7x

Cardinal Health, Inc. 42.00 41.77 46.45 (2.6%) (6.7%) 47.06 37.53 14,535 2,553 2,410 14,585 107,551 2,059 1,746 Mar-12 Jun-11 107,861 2,151 1,847 0.1x 7.1x 0.1x 6.8x

Henry Schein, Inc. 78.49 76.09 74.32 3.5% 10.5% 80.38 58.50 7,054 481 102 7,803 8,682 721 603 Mar-12 Dec-11 8,960 747 634 0.9x 10.6x 0.9x 10.4x

McKesson Corporation 93.75 87.83 84.54 5.8% 13.1% 94.47 66.61 22,143 3,980 3,149 22,974 122,734 2,880 2,329 Mar-12 Mar-12 125,513 3,140 2,656 0.2x 8.0x 0.2x 7.3x

Owens & Minor Inc. 30.63 29.70 35.21 1.0% (10.5%) 35.71 25.87 1,946 212 214 1,945 8,722 248 214 Mar-12 Dec-11 9,024 260 226 0.2x 7.8x 0.2x 7.5x

Patterson Companies, Inc. 34.47 33.01 33.55 4.6% 5.9% 34.70 26.19 3,800 850 574 4,077 3,536 400 358 Apr-12 Apr-12 3,686 430 387 1.2x 10.2x 1.1x 9.5x

PSS World Medical Inc. 20.99 24.93 28.45 (18.3%) (24.4%) 28.87 18.51 1,058 455 163 1,354 2,102 169 133 Mar-12 Mar-12 1,746 161 125 0.6x 8.0x 0.8x 8.4x


Mean: (0.8%) (2.3%) $8,880 0.5x 8.3x 0.5x 8.1x

TEV/ Fwd MultiplesCash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period (3)

Lastest

FYE

Date(3)

Company NameEquity


TEV/ LTM Multiples (5)Forward Estimate


July 2012

As of June 29, 2012

Stock Price

Change in Stock

Price

% Change 52 Week


Acute-Care Hospitals

Community Health Systems, Inc. $28.03 $22.50 $26.38 25.8% 12.6% $28.79 $14.61 $2,497 $9,557 $129 $12,350 $14,056 $1,867 $1,203 Mar-12 Dec-11 $13,672 $1,936 $1,212 0.9x 6.5x 0.9x 6.4x

Health Management Associates Inc. 7.85 7.20 10.96 17.2% (27.0%) 11.26 4.81 2,012 3,715 8 5,687 6,064 866 576 Mar-12 Dec-11 6,606 967 647 0.9x 6.6x 0.9x 5.9x

HCA Holdings, Inc. 30.43 26.96 33.83 27.4% (7.1%) 34.92 17.03 13,335 28,296 471 42,375 33,650 6,146 4,622 Mar-12 Dec-11 35,671 6,464 4,780 1.3x 6.7x 1.2x 6.6x

Lifepoint Hospitals Inc. 40.98 39.19 40.00 4.7% 5.6% 42.19 28.95 1,998 1,603 116 3,526 3,654 549 358 Mar-12 Dec-11 3,640 562 379 1.0x 6.4x 1.0x 6.3x

Tenet Healthcare Corp. 5.24 5.26 6.30 1.6% (15.3%) 6.54 3.46 2,168 4,583 104 7,068 9,646 1,083 667 Mar-12 Dec-11 9,766 1,224 796 0.7x 6.5x 0.7x 5.8x

Universal Health Services Inc. 43.16 42.68 54.01 3.3% (15.8%) 55.42 31.35 4,179 3,628 42 8,046 7,567 1,204 906 Mar-12 Dec-11 7,565 1,241 944 1.1x 6.7x 1.1x 6.5x


Mean: 13.3% (7.8%) $13,175 1.0x 6.6x 1.0x 6.2x

Assisted Living

Assisted Living Concepts Inc. $14.22 $17.09 $16.44 (15.2%) (15.4%) $20.33 $11.16 $330 $84 $3 $409 $235 $67 $45 Mar-12 Dec-11 $238 $70 $43 1.7x 6.1x 1.7x 5.9x

Brookdale Senior Living Inc. 17.74 $18.60 $25.01 (3.3%) (26.5%) 25.51 10.98 2,150 2,593 42 4,701 2,341 382 122 Mar-12 Dec-11 2,703 410 147 2.0x 12.3x 1.7x 11.5x

Capital Senior Living Corp. 10.60 $9.49 $9.48 13.7% 14.5% 10.84 5.44 290 280 18 552 271 39 18 Mar-12 Dec-11 305 51 21 2.0x 14.3x 1.8x 10.8x

Emeritus Corp. 16.83 18.03 22.24 (4.2%) (21.2%) 22.88 13.36 758 2,231 50 2,939 1,278 209 75 Mar-12 Dec-11 1,308 234 96 2.3x 14.3x 2.2x 12.6x

Five Star Quality Care Inc. 3.07 3.47 6.08 (10.5%) (48.2%) 6.15 2.15 147 115 27 232 1,276 41 17 Mar-12 Dec-11 1,405 44 15 0.2x 5.7x 0.2x 5.3x

Skilled Healthcare Group, Inc. 6.28 7.29 10.95 (17.9%) (32.4%) 11.00 3.30 242 476 10 707 867 118 93 Mar-12 Dec-11 877 114 86 0.8x 5.9x 0.8x 6.2x

Sunrise Senior Living Inc. 7.29 6.08 9.95 12.2% (22.8%) 10.17 3.68 415 758 47 1,132 624 58 18 Mar-12 Dec-11 1,355 79 NA 1.8x 18.4x 0.8x 14.3x


Mean: (3.6%) (21.7%) $1,524 1.6x 11.0x 1.3x 9.5x

Diagnostic Imaging

Alliance Healthcare Services, Inc. $1.00 $1.48 $3.74 (30.7%) (73.5%) $3.80 $0.84 $51 $642 $60 $684 $496 $146 $35 Mar-12 Dec-11 $487 $136 $37 1.4x 4.6x 1.4x 5.0x

RadNet, Inc. 2.66 3.26 4.40 (18.9%) (39.8%) 4.58 1.87 102 561 2 662 644 110 52 Mar-12 Dec-11 666 119 56 1.0x 5.7x 1.0x 5.6x

Varian Medical Systems Inc. 60.77 68.44 70.77 (11.7%) (12.8%) 71.95 48.72 6,776 162 617 6,290 2,714 631 575 Mar-12 Sep-11 2,846 652 599 2.3x 10.0x 2.2x 9.7x


Mean: (20.4%) (42.0%) $2,545 1.6x 6.8x 1.5x 6.7x

Dialysis Services

DaVita Inc. $98.21 $86.99 $88.67 10.0% 14.8% $98.21 $59.14 $9,234 $4,515 $449 $13,923 $7,298 $1,533 $1,252 Mar-12 Dec-11 $7,757 $1,632 $1,323 1.9x 9.0x 1.8x 8.5x

Fresenius Medical Care AG & Co. KGAA 70.79 68.75 74.40 0.4% (4.0%) 72.31 54.14 21,497 8,806 580 30,065 13,060 2,675 2,110 Mar-12 Dec-11 14,120 2,971 2,380 2.4x 11.7x 2.1x 10.1x


Mean: 5.2% 5.4% $21,994 2.2x 10.4x 2.0x 9.3x

Home Care / Hospice

Addus HomeCare Corporation $4.91 $5.20 $6.04 3.4% (7.9%) $6.38 $3.00 $53 $32 $1 $83 $274 $14 $10 Mar-12 Dec-11 $278 $15 $12 0.3x 6.2x 0.3x 5.7x

Almost Family Inc. 22.34 25.75 27.09 (13.6%) (14.6%) 28.04 12.50 208 2 37 173 347 36 33 Mar-12 Dec-11 363 35 30 0.5x 4.9x 0.5x 5.0x

Amedisys Inc. 12.45 14.05 27.29 (13.5%) (52.2%) 27.76 9.12 375 137 41 472 1,482 133 94 Mar-12 Dec-11 1,500 99 58 0.3x 3.5x 0.3x 4.8x

Gentiva Health Services Inc. 6.93 8.08 21.05 (20.1%) (66.0%) 21.83 2.81 211 938 73 1,079 1,783 182 152 Mar-12 Dec-11 1,749 175 144 0.6x 4.3x 0.6x 6.2x

LHC Group, Inc. 16.96 18.10 23.75 (8.9%) (24.6%) 24.53 12.34 321 14 0 349 631 69 61 Mar-12 Dec-11 649 64 61 0.6x 5.1x 0.5x 5.4x

Lincare Holdings Inc. 34.02 26.01 30.13 30.8% 17.1% 34.20 19.65 2,874 727 29 3,532 1,917 459 330 Mar-12 Dec-11 2,040 496 362 1.8x 7.7x 1.7x 7.1x

Chemed Corp. 60.44 63.34 66.97 (4.6%) (6.8%) 67.43 47.66 1,162 169 34 1,297 1,378 182 158 Mar-12 Dec-11 1,436 205 167 0.9x 7.1x 0.9x 6.3x

Number of Companies 7 Median: (8.9%) (14.6%) Total $5,205 $998 $7,812 $8,014 0.6x 5.1x 0.5x 5.7x

Mean: (3.8%) (22.1%) $998 0.7x 5.5x 0.7x 5.8x

Long-Term Care

The Ensign Group, Inc. $28.27 $26.91 $31.53 4.4% (8.7%) $32.65 $19.61 $603 $205 $33 $787 $777 $116 $90 Mar-12 Dec-11 $840 $127 $99 1.0x 6.8x 0.9x 6.2x

Kindred Healthcare Inc. 9.83 8.14 22.30 8.3% (54.5%) 23.69 7.60 520 1,659 40 2,105 5,909 386 205 Mar-12 Dec-11 6,322 441 241 0.4x 5.4x 0.3x 4.8x

National Healthcare Corp. 45.23 45.63 51.92 (1.2%) (7.4%) 53.08 29.97 631 10 60 659 752 96 67 Mar-12 Dec-11 747 NA NA 0.9x 6.2x 0.9x NA

Sun Healthcare Group, Inc. 8.37 6.75 8.25 26.6% 4.6% 8.77 2.06 214 92 45 261 1,923 80 49 Mar-12 Dec-11 1,864 75 39 0.1x 3.2x 0.1x 3.5x

Number of Companies 4 Median: 6.3% (8.0%) Total $1,968 $953 $9,361 $9,773 0.6x 5.8x 0.6x 4.8x

Mean: 9.5% (16.5%) $953 0.6x 5.4x 0.6x 4.8x

TEV/ LTM Multiples (5) TEV/ Fwd Multiples

Company NameEquity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period (3)

Lastest

FYE

Date(3)

Forward Estimate

10

Provider-Based Services


July 2012

As of June 29, 2012 11

Provider-Based Services

Stock Price

Change in Stock

Price

% Change 52 Week


Physician Practice Management

Multispecialty / Primary Care:

IPC The Hospitalist Company, Inc. $45.32 35.71 49.42 22.9% (2.1%) $52.23 $29.70 $751 $15 $22 $744 $474 $50 $47 Mar-12 Dec-11 $524 $58 $55 1.6x 14.8x 1.4x 12.7x

Number of Companies 1 Median: 22.9% (2.1%) Total $751 $744 $474 $524 1.6x 14.8x 1.4x 12.7x

Mean: 22.9% (2.1%) $744 1.6x 14.8x 1.4x 12.7x

Specialty:

Integramed America Inc. $13.85 $11.98 $9.76 12.1% 41.5% $13.90 $6.70 $166 $10 $57 $119 $280 $19 $10 Mar-12 Dec-11 $302 $22 $11 0.4x 6.3x 0.4x 5.5x

MEDNAX, Inc. 68.54 72.55 73.65 (8.3%) (5.6%) 75.86 58.48 3,287 84 22 3,344 1,629 386 359 Mar-12 Dec-11 1,772 413 382 2.1x 8.7x 1.9x 8.1x


Mean: 1.9% 17.9% $1,731 1.2x 7.5x 1.1x 6.8x

Dental:

Birner Dental Management Services Inc. $16.36 $16.79 $20.80 (6.7%) (14.5%) $21.43 $14.75 $31 $5 $1 $35 $62 $4 $2 Mar-12 Dec-11 NA NA NA 0.6x 7.8x NA NA

Number of Companies 1 Median: (6.7%) (14.5%) Total $31 $35 $62 $0 0.6x 7.8x NA NA

Mean: (6.7%) (14.5%) $35 0.6x 7.8x NA NA

Psychiatric Hospitals / Management

Magellan Health Services Inc. $45.33 $48.57 $55.69 (6.6%) (15.4%) $56.76 $40.24 $1,238 $0 $172 $1,035 $2,880 $203 $173 Mar-12 Dec-11 $3,301 $236 $172 0.4x 5.1x 0.3x 4.4x

Providence Service Corp. 13.71 14.79 12.44 (12.2%) 10.0% 15.94 8.35 179 148 47 286 975 44 30 Mar-12 Dec-11 1,088 50 34 0.3x 6.6x 0.3x 5.8x

Universal Health Services Inc. 43.16 42.68 54.01 3.3% (15.8%) 55.42 31.35 4,179 3,628 42 8,046 7,567 1,204 906 Mar-12 Dec-11 7,565 1,241 944 1.1x 6.7x 1.1x 6.5x


Mean: (5.2%) (7.0%) $2,342 0.4x 4.6x 0.5x 5.5x

Surgicenters / Rehabilitation

Surgery Centers:

AmSurg Corp. $29.98 $27.85 $26.99 7.6% 17.2% $30.00 $19.08 $948 $448 $44 $1,662 $839 $288 $260 Mar-12 Dec-11 $923 $312 $284 2.0x 5.8x 1.8x 5.3x

Number of Companies 1 Median: 7.6% 17.2% Total $948 $1,662 $839 $923 2.0x 5.8x 1.8x 5.3x

Mean: 7.6% 17.2% $1,662 2.0x 5.8x 1.8x 5.3x

Rehabilitation / Long Term Acute Care:

HEALTHSOUTH Corp. $23.26 $20.42 $26.42 12.9% (10.6%) $27.16 $13.65 $2,224 $1,246 $44 $3,875 $2,060 $470 $391 Mar-12 Dec-11 $2,132 $491 $412 1.9x 8.0x 1.8x 7.9x

Select Medical Holdings Corporation 10.11 7.18 8.92 25.0% 11.8% 10.25 5.48 1,426 1,433 9 2,882 2,855 385 315 Mar-12 Dec-11 2,941 396 325 1.0x 7.4x 1.0x 7.3x

US Physical Therapy Inc. 25.43 23.20 25.47 10.6% 7.7% 26.23 16.58 299 25 10 329 243 43 37 Mar-12 Dec-11 254 40 41 1.4x 7.7x 1.3x 8.3x


Mean: 16.2% 3.0% $2,362 1.4x 7.7x 1.4x 7.8x

Company NameEquity


Cash and

Equiv.

Total

Ent.

Value

(TEV)


(LTM)LTM

Period (3)

Lastest

FYE

Date(3)


12

M&A Detail

July 2012

Announced U.S.

Healthcare &

Life Sciences

M&A

Enterprise Enterprise Value / LTM Private Equity

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

6/29/2012 OMH HealthEdge Holdings, Inc. HealthEdge Investment Partners TA Associates, Inc. $95.3 - - - Yes

6/29/2012 Amylin Pharmaceuticals, Inc.

(NasdaqGS:AMLN)

Eli Lilly & Co. (NYSE:LLY) Bristol-Myers Squibb Company

(NYSE:BMY)

$6,722.7 9.9x - - Yes

6/29/2012 HPI Integrated Medical Facility in Oklahoma

City, OK

- Carter Validus Mission Critical REIT,

Inc.

$9.3 12.5x - - No

6/28/2012 ProCare Health Plan, Inc. - The Detroit Medical Center $6.0 0.8x - - No

6/27/2012 Holy Redeemer Health System, Inc. - Abington Health - - - - No

6/26/2012 Virtual Clinical Solutions, Inc. - Trifecta Multimedical, LLC - - - - No

6/26/2012 DataSolv Services, Inc. - Atlantic Health Management Solutions

LLC

- - - - No

6/26/2012 Boston Scientific Corporation, Assets of

Prolieve Business

Boston Scientific Corporation

(NYSE:BSX)

Medifocus Inc. (OTCPK:MDFZ.F) $5.0 - - - No

6/26/2012 M.A.R.Y. Medical, Inc. - The Riverside Company - - - - Yes

6/25/2012 Florida Atlantic Anesthesia, Inc. - MEDNAX, Inc. (NYSE:MD) - - - - No

6/25/2012 Semprus BioSciences Corp. SR One; Pangaea Ventures Ltd.;

Foundation Medical Partners; 5AM

Ventures

Teleflex Incorporated (NYSE:TFX) $80.0 - - - Yes

6/25/2012 Intelligent Bio-Systems, Inc. Columbia Venture Lab; Hub Angels

Investment Group, LLC; Kegonsa

Partners, LP

Qiagen NV (NasdaqGS:QGEN) - - - - Yes

6/22/2012 Marina Medical Billing Service, Inc. American Capital, Ltd.

(NasdaqGS:ACAS); Beverly Capital

LLC

T-System, Inc. - - - - Yes

6/22/2012 Dr. Vibot - Evader, Inc. (OTCPK:EVDR) - - - - No

6/21/2012 Psoria-Shield Inc. - Wellness Center USA, Inc.

(OTCPK:WCUI)

$15.0 - - - No

6/21/2012 Xanodyne Pharmaceuticals, Inc., Zipsor Liquid

Filled Capsules

Xanodyne Pharmaceuticals, Inc. DepoMed Inc. (NasdaqGS:DEPO) $30.9 1.6x - - No

6/21/2012 Velocette Holding Company, Inc. - CentraMed - - - - No

6/21/2012 Southern Implants, Inc. MedVenture Associates Keystone Dental, Inc. - - - - Yes

6/21/2012 Central Bark Doggy Day Care - Villa La PAWS LLC - - - - No

6/21/2012 Associated Billing Services, Inc. - Etransmedia Technology, Inc. - - - - No

6/20/2012 Warm Health, Inc. - Altegra Health, Inc. - - - - No

6/20/2012 Sun Healthcare Group, Inc. (NasdaqGS:SUNH) BlackRock, Inc. (NYSE:BLK) Genesis HealthCare Corporation $321.9 0.1x 3.5x 5.7x Yes

6/20/2012 Spinal USA, LLC and Precision Medical of

Mississippi, LLC

- Precision Spine, Inc. $72.0 - - - No

6/19/2012 CHRISTUS Santa Rosa Health Care

Corporation, Inpatient Adult Rehabilitation Unit

CHRISTUS Santa Rosa Health Care

Corporation

HEALTHSOUTH Corp. (NYSE:HLS) - - - - No

6/19/2012 Norwich Anesthesia Associates PC - North American Partners In

Anesthesia, L.L.P.

- - - - No

6/18/2012 Doctors on Call - Aperture Health, Inc (OTCPK:APRE) - - - - No

6/18/2012 CyberCare Inc. Axiom Venture Partners, L.P.;

Bulova Technologies Group, Inc.

(OTCPK:BLVT)

CyberCare Health Network, LLC - - - - Yes

6/18/2012 PKC Corporation CW Group, Inc. Sharecare, Inc. - - - - Yes

6/18/2012 LIFESCAN Louisville - Norton Healthcare, Inc. - - - - No

6/18/2012 Twelve Senior Housing Communities Ventas Realty, Limited Partnership;

MLD Delaware Trust

Assisted Living Concepts Inc.

(NYSE:ALC)

$97.0 15.2x - - No

6/18/2012 Celator Pharmaceuticals, Inc. Domain Associates, L.L.C.; TL

Ventures

Redpoint Bio Corporation

(OTCPK:RPBC)

- - - - Yes

6/15/2012 OraPharma, Inc. Water Street Healthcare Partners Valeant Pharmaceuticals International,

Inc. (TSX:VRX)

$426.0 4.5x - - Yes

6/15/2012 Living Well Health Solutions LLC Envest Ventures, LLC Healthstat, Inc. - - - - Yes

6/15/2012 St. Anthony Physicians Shawnee - SSM Health Care Of Oklahoma - - - - No

6/15/2012 The Texas Medical Clinic at Arlington and

Sunnyvale Medical Plaza in Sunnyvale

Caddis Partners, LLC American Realty Capital Healthcare

Trust, Inc.

- - - - No

6/15/2012 Pinnacle Infusion, Inc. - CarePoint Partners, LLC - - - - Yes

6/14/2012 mRemedy, Inc. DoApp, Inc.; Mayo Clinic, Inc. Axial Exchange, Inc. - - - - No

6/14/2012 Health Data Solutions, Inc. - WebPT, Inc. - - - - No

6/14/2012 Alliance, Inc. - Sheppard Pratt Health System, Inc. - - - - No

6/14/2012 North East Dental Management DFW Capital Partners; MCG Capital

Corporation (NasdaqGS:MCGC);

NXT Capital, LLC

- - - - - Yes

6/13/2012 Accumed Systems, Inc., Radial Artery Access

Wrist Positioning Splint Product

Accumed Systems, Inc. Vascular Solutions Inc.

(NasdaqGS:VASC)

$1.5 - - - No

6/13/2012 East Tennessee Medical Group, P.C. - Blount Memorial Hospital, $24.3 - - - No

6/12/2012 O2 Insights Inc. - Systagenix Wound Management Ltd. - - - - No

6/12/2012 Urgent Care Specialists, LLC - Ridgemont Equity Partners - - - - Yes

6/12/2012 Pentec Health, Inc. Frazier Healthcare Ventures; DW

Healthcare Partners

Norwest Equity Partners; Norwest

Mezzanine Partners

- - - - Yes

6/12/2012 Silver Pine Medical Group PLC - Prism Medical Group PC - - - - No

6/12/2012 Troy Internal Medicine, P.C. - Prism Medical Group PC - - - - No

13

M&A Detail

July 2012

Announced U.S.

Healthcare &

Life Sciences

M&A

(Continued)

Turner Bredrup Managing Director

[email protected]

+1 (804) 915-0110

Cheairs Porter Managing Director

[email protected]

+1 (804) 915-0130

James Clark Managing Director

[email protected]

+1 (804) 915-0119

Todd Morris Managing Director

[email protected]

+1 (415) 217-3412

Geoff Smith Director

[email protected]

+1 (804) 915-0195

Andy Dixon Vice President

[email protected]

+1 (415) 217-3419

Contacts

Whit Knier Vice President

[email protected]

+1 (804) 932-1321

Enterprise Enterprise Value / LTM Private Equity

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

6/12/2012 Jefferson Regional Medical Center, Inc. - Highmark Inc. $200.0 - - - No

6/11/2012 Trimcare Holdings, LLC - Cannabis Science, Inc. - - - - No

6/11/2012 Casualty Management Network, LLC - Prime Health Services, Inc. - - - - No

6/11/2012 iMDsoft, Inc. - TPG Growth; Skyline Global Partners

LLC

- - - - Yes

6/11/2012 Integramed America Inc. (NasdaqGM:INMD) IAT Reinsurance Company Ltd.;

Wilshire Insurance Co; Diamondback

Capital; BlueLine Partners, L.L.C.

Sagard Capital $173.3 0.4x 6.5x - Yes

6/11/2012 Cupertino Medical Group PC - U.S. Healthworks, Inc. - - - - No

6/8/2012 Center for Diagnostic Imaging, Inc. Onex Corporation (TSX:OCX) Insight Health Corp. - - - - Yes

6/8/2012 Piedmont Medical and Renal Associates - Valley Nephrology Associates Ltd. - - - - No

6/8/2012 Southern Maryland Hospital, Inc. - - - - - - No

6/7/2012 Continuum Health Partners, Inc. - NYU Elaine A. and Kenneth G.

Langone Medical Center

- - - - No

6/7/2012 Fairview Red Wing Health Services Fairview Health Services, Inc. Mayo Health System - - - - No

6/7/2012 Improve USA, Inc. - Pharmachem Laboratories, Inc. - - - - No

6/7/2012 RNL USA Limited Rapid Nutrition Pty Ltd Green Mountain Development Corp.

(OTCPK:GMND)

- - - - No

6/7/2012 SRI Surgical Express Inc. (NasdaqGM:STRC) MicroCapital LLC; Standard Textile

Co., Inc.; Henry Investment Trust;

Boosales Family LP

Synergy Health plc (LSE:SYR) $38.1 0.3x 5.0x - Yes

6/6/2012 99-Bed Nursing Home In Scottsburg - Georgia Healthcare REIT, Inc. $3.5 - - - No

6/6/2012 Middle Georgia Nursing Home, Inc. - Dodge NH, LLC $5.1 - - - No

6/6/2012 Advanced Answers On Demand, Inc. Fortissimo Capital Primus - - - - Yes

6/5/2012 Canchew Biotechnologies LLC Sanammad Foundation Medical Marijuana, Inc.

(OTCPK:MJNA)

- - - - No

6/5/2012 Live Oak Management Group, Paris Nursing &

Rehabilitation Center

Live Oak Management Group The Ensign Group, Inc.

(NasdaqGS:ENSG)

- - - - No

6/5/2012 Kazaam Web Concepts, LLC - inVentiv Health Communications

Europe GmbH

- - - - No

6/5/2012 Peak Health Solutions, Inc. - EDG Partners, LLC - - - - Yes

6/5/2012 JGL, Inc. - GreenLeaf Genetics, LLC - - - - No

6/4/2012 Integrated Physician Systems, LLC - SuccessEHS, Inc. - - - - No

6/4/2012 Doctors Hospital Of Mcminn County, LLC Restoration Healthcare LLC Lifepoint Hospitals Inc.

(NasdaqGS:LPNT)

- - - - No

6/4/2012 Watson Pharmaceuticals, Inc., Exclusive Rights

to the Cormax Brand

Watson Pharmaceuticals, Inc.

(NYSE:WPI)

E. Claiborne Robins Company, Inc. - - - - No

6/4/2012 Ascend Health Corporation CHL Medical Partners; Polaris

Venture Partners, Inc.; Three Arch

Partners; Altos Health Management,

Universal Health Services Inc.

(NYSE:UHS)

$517.0 - - - Yes

6/4/2012 MEDTOX Scientific Inc. (NasdaqGS:MTOX) - Laboratory Corp. of America

Holdings (NYSE:LH)

$248.2 2.2x 16.6x - No

6/4/2012 Aurora Health Management, LLC, Three Skilled

Nursing Facilities

Aurora Health Management, LLC Sabra Health Care REIT, Inc.

(NasdaqGS:SBRA)

$21.8 - - - No

6/4/2012 Crown Health Care, P.A. - Cornerstone Health Care, P.A. - - - - No

6/1/2012 Pleiad, Inc. - CROMSOURCE - - - - No

6/1/2012 Pampa Regional Medical Center LLC Signature Hospital Corporation, Inc. Prime Healthcare Services, Inc. - - - - No

6/1/2012 Overlake Internal Medicine Associates PS,

Medical Oncology Practice

Overlake Internal Medicine

Associates PS

Overlake Medical Clinics, LLC - - - - No

6/1/2012 Medical Mobility, Inc. - United Seating & Mobility, LLC - - - - No

6/1/2012 secureRAD, Inc. - Force 3, Inc. - - - - No

6/1/2012 NP Medical Inc., Filter Product Business NP Medical Inc. GVS S.p.A. - - - - No

Paul Hepper Vice President

[email protected]

+1 (804) 932-1326

Andy Hewlett Vice President

[email protected]

+1 (415) 217-3427

mailto:[email protected]









14

Sources:

Capital IQ.

Thomson Financial.

S&P.

Reuters.

Bloomberg.

Irving Levin Associates.

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Documents

Healthcare & Life Sciences Industry Update · 2012. 7. 18. · 3 Healthcare & Life Sciences Industry Stock Performance 46.0% Top 25 Equity Offerings (by proceeds) Equity Markets Overview