Healthcare M&A Report Q4 2013

Transcription

1 John Hill Senior Managing Director (813) John McDonald Senior Managing Director (813) Keith Hodgdon Senior Vice President (813) Healthcare M&A Report Q Jeffrey Bridge Vice President (813) Michael Mariani Associate (813) Charlie Hendrick Senior Analyst (813) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC

2 Capital Markets Overview Healthcare Commentary Major market indices including the Nasdaq, S&P Global Healthcare Index and S&P 500 increased approximately 34%, 32% and 26%, respectively, over the 12-month period ending December 31, As detailed in the table on the right, the equity markets displayed overall strength and investor demand, primarily in the Biotechnology sector, as several public equity offerings were successfully completed during Q Select Public Offerings Healthcare (Q4 2013) ($ in millions) Offer Date Issuer Industry Sector IPO / Secondary Offering Size 10/29/13 HCA Holdings, Inc. Healthcare Facilities Secondary $1,410 10/15/13 Veeva Systems, Inc. Health Care Technology IPO $261 10/29/13 Surgical Care Affiliates, Inc. Healthcare Facilities IPO $235 12/04/13 Celldex Therapeutics, Inc. Biotechnology Secondary $172 10/17/13 Portola Pharmaceuticals, Inc. Biotechnology Secondary $151 From a valuation perspective, the high-growth Healthcare Technology sector continued to trade at relatively strong multiples of revenue (3.2x) as well as the Healthcare Equipment & Supplies sector at multiples of EBITDA (12.3x). 11/06/13 Integra LifeSciences Holdings Corp. Healthcare Equipment Secondary $140 11/13/13 Tandem Diabetes Care, Inc. Healthcare Equipment IPO $120 10/08/13 Kythera Biopharmaceuticals, Inc. Biotechnology Secondary $120 12/03/13 Clovis Oncology, Inc. Biotechnology Secondary $115 Public Market Performance (LTM) Public Company Market Performance by Sector 140% 130% 120% 110% 100% 34.2% 32.1% 26.4% Median Change in Stock Price Enterprise Value / LTM Industry Sector 3 Months 12 months Revenue EBITDA Healthcare Facilities 6.0% 45.8% 1.5x 8.4x Healthcare Services (2.0%) 7.4% 1.8x 8.2x Managed Healthcare 5.2% 44.3% 0.3x 5.4x Healthcare Technology 5.8% 52.5% 3.2x 23.3x Healthcare Equipment & Supplies 9.0% 29.4% 3.4x 12.3x 90% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Healthcare Distribution 17.8% 56.7% 0.4x 11.4x Source: S&P Capital IQ S&P 500 Nasdaq S&P Global Healthcare Index 2

3 Annual Middle Market M&A Activity Healthcare Commentary Middle Market M&A Transactions by Deal Size - Healthcare As detailed in the table on the right, Healthcare M&A transaction volume and value declined during 2013 compared to The number of middle market Healthcare deals declined 20% to 269 completed deals, down from 336 in 2012; while the total value of closed transactions decreased 20% to $33.3 billion. Transactions in the $100 million to $499 million range represented 27% of total deal volume and 50% of total deal value for the year. Transactions in the Healthcare Industry have declined since the highs reached in 2011 as uncertainty regarding healthcare reform has weighed on M&A activity. ($ in billions) % Change Deal Size Volume Value Volume Value Volume Value Less than $100M 221 $ $6.2 (18%) (23%) $100 - $499M 100 $ $16.7 (27%) (27%) $500 - $999M 15 $ $10.3 0% (3%) Total Middle Market 336 $ $33.3 (20%) (20%) % of Middle Market Less than $100M 66% 19% 67% 19% $100 - $499M 30% 55% 27% 50% $500 - $999M 4% 26% 6% 31% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Annual Trends: VOLUME U.S. Middle Market M&A Activity Annual Trends: VALUE Total Transaction Volume Total Transaction Value ($ in billions) Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion). 3

4 Quarterly Middle Market M&A Activity Healthcare Commentary As detailed in the table on the right, Healthcare M&A transaction volume and value declined in Q compared to Q The number of middle market Healthcare deals declined 24% in Q compared to the prior year period, while the total value of completed transactions fell 3% to $12.4 billion. Transactions in the $100 million to $499 million range represented 22% of total deal volume and 40% of total deal value. Middle market M&A activity in the Healthcare Industry has increased over the last three quarters as the industry continues to consolidate, evidenced by recent acquisitions made by Tenet Healthcare Corp. (NYSE:THC) and Community Health Systems, Inc. (NYSE:CYH). U.S. Middle Market M&A Activity Quarterly Trends: VOLUME ($ in billions) Middle Market M&A Transactions by Deal Size Healthcare Q Q % Change Deal Size Volume Value Volume Value Volume Value Less than $100M 79 $ $2.3 (22%) (22%) $100 - $499M 34 $ $4.8 (41%) (24%) $500 - $999M 5 $3.5 8 $5.2 60% 50% Total Middle Market 118 $ $12.4 (24%) (3%) % of Middle Market Less than $100M 67% 23% 69% 18% $100 - $499M 29% 50% 22% 40% $500 - $999M 4% 27% 9% 42% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Quarterly Trends: VALUE Total Transaction Volume Total Transaction Value ($ in billions) Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion) 4

5 Recent M&A Activity Healthcare Select Announced M&A Transactions (Q4 2013) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 12/31/13 Patient Safety Technologies, Inc. Stryker Corp. Healthcare Equipment & Supplies $ x 35.2x 12/26/13 Scientific Protein Laboratories, LLC Shenzhen Hepalink Pharmaceutical Co., Ltd. Pharmaceuticals $337.5 NA NA 12/23/13 ATMI, Inc. (LifeSciences Business) Pall Corp. Life Sciences $185.0 NA NA 12/19/13 Global Diabetes Business AstraZeneca, AB Pharmaceuticals $7,025.0 NA NA 12/19/13 Endoscopic Technologies, Inc. AtriCure, Inc. Healthcare Equipment & Supplies $60.7 NA NA 12/17/13 Aqua Pharmaceuticals, LLC Almirall, SA Pharmaceuticals $402.6 NA NA 12/16/13 Solta Medical, Inc. Valeant Pharmaceuticals International, Inc. Healthcare Equipment & Supplies $ x 110.6x 12/16/13 NuPathe, Inc. Endo Health Solutions, Inc. Pharmaceuticals $256.0 NA NM 12/16/13 ARC Physical Therapy Plus, LP U.S. Physical Therapy, Ltd. Healthcare Services $ x NA 12/06/13 Post Acute Medical at San Antonio, LLC Carter Validus Mission Critical REIT, Inc. Healthcare Facilities $25.8 NA NA 12/04/13 Rempex Pharmaceuticals, Inc. The Medicines Co. Pharmaceuticals $467.7 NA NA 12/02/13 Allied Healthcare (Staffing Division) Local Staff, LLC Healthcare Services $ x NA 12/01/13 CircuLite, Inc. Heartware International, Inc. Healthcare Equipment & Supplies $401.8 NA NA 11/27/13 Coram, Inc. CVS Caremark Corp. Healthcare Services $2,100.0 NA NA 11/25/13 BarrierSafe Solutions International, Inc. Ansell, Ltd. Healthcare Equipment & Supplies $ x 9.6x 11/20/13 Callidus Biopharma, Inc. Amicus Therapeutics, Inc. Pharmaceuticals $130.6 NA NA 11/19/13 Patheon, Inc. JLL Partners / Koninklijke DSM NV Life Sciences $1, x 14.5x 11/18/13 Vital Signs, Inc. CareFusion Corp. Healthcare Equipment & Supplies $ x NA 11/15/13 Inspire Pharmaceuticals, Inc. Oak Pharmaceuticals, Inc. Pharmaceuticals $52.8 NA NA 11/13/13 MedWest Health System, Inc. DLP Healthcare, LLC Healthcare Facilities $26.3 NA NA 11/11/13 ViroPharma, Inc. Shire Pharmaceutical Holdings, Ltd. Pharmaceuticals $3, x 62.2x 11/11/13 Novartis Vaccines & Diagnostics, Inc. (Blood Transfusion Diagnostics Unit) Grifols, SA Healthcare Equipment & Supplies $1, x NA 11/07/13 Santarus, Inc. Salix Pharmaceuticals, Inc. Pharmaceuticals $1, x 24.3x 11/06/13 Passport Health Communications, Inc. Experian plc Healthcare Technology $850.0 NA NA Source: S&P Capital IQ. 5

6 Recent M&A Activity Healthcare Select Announced M&A Transactions (Q4 2013) Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue EV / EBITDA 11/05/13 SunCrest Healthcare, Inc. National Health Industries, Inc. Healthcare Services $ x NA 11/04/13 Senior Home Care, Inc. Kindred Healthcare, Inc. Healthcare Services $ x NA 11/01/13 Merck & Co., Inc. (Portfolio of 11 Branded Finished Dose Form Molecules) Aspen Global, Inc. Biotechnology $ x NA 10/29/13 Allergan, Inc. (Obesity Intervention Business) Apollo Endosurgery, Inc. Healthcare Equipment & Supplies $110.0 NA NA 10/29/13 Vidacare Corp. Teleflex, Inc. Healthcare Equipment & Supplies $262.5 NA NA 10/28/13 Confluent Surgical, Inc. Integra LifeSciences Corp. Healthcare Equipment & Supplies $ x NA 10/22/13 PLUS Diagnostics, Inc. Miraca Life Sciences, Inc. Healthcare Services $ x NA 10/22/13 Forest Park Medical Center at Frisco, LLC Sabra Texas Holdings, LP Healthcare Facilities $119.8 NA NA 10/16/13 McKesson Automation, Inc. Francisco Partners Management, LLC Healthcare Technology $52.0 NA NA 10/14/13 Vet Therapeutics, Inc. Aratana Therapeutics, Inc. Biotechnology $52.7 NA NA 10/14/13 Savient Pharmaceuticals, Inc. US WorldMeds, LLC Biotechnology $55.0 NA NA 10/10/13 Osiris Therapeutics, Inc. (Culture Expanded Mesenchymal Stem Cell Business) Mesoblast, Ltd. Biotechnology $100.1 NA NA 10/07/13 Lanx, Inc. EBI Holdings, LLC Healthcare Equipment & Supplies $147.0 NA NA 10/03/13 PACSGEAR, Inc. Perceptive Software USA, Inc. Healthcare Technology $54.0 NA NA 10/02/13 Pipeline Biomedical, Inc. MAKO Surgical Corp. Healthcare Equipment & Supplies $119.3 NA NA Source: S&P Capital IQ. 6

7 M&A Activity by Healthcare Sector U.S. Middle Market M&A Activity by Healthcare Sector: VOLUME % Change Healthcare Facilities % * Healthcare Services % Healthcare Technology % Healthcare Equipment & Supplies % Healthcare Distribution % Pharmaceuticals, Biotechnology & Life Sciences % U.S. Middle Market M&A Activity by Healthcare Sector: VALUE % Change ($ in billions) Healthcare Facilities $8.8 $9.8 12% * Healthcare Services $3.1 $5.3 42% Healthcare Technology $2.6 $2.4 9% Healthcare Equipment & Supplies $6.4 $ % Healthcare Distribution $0.0 $1.0 NM Pharmaceuticals, Biotechnology & Life Sciences $13.2 $ % $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $ Source: S&P Capital IQ (includes all closed deals with disclosed deal value between $10 million and $1 billion). *Managed Healthcare transactions are included in the Healthcare Services sector. 7

8 Private Equity Activity Healthcare Commentary Financial sponsors were active in Q making several investments and exits. Select Private Equity M&A Transactions - Buyer (Q4 2013) ($ in millions) Announced Date Target Buyer Transaction Value 11/19/13 Patheon, Inc. JLL Partners / Koninklijke DSM NV $1,922 Several notable private equity deals were announced during the 4 th quarter including JLL Partners $1.9 billion proposed purchase of Patheon, Inc.; S.A.C. Capital, Visium Asset Management and Healthcare Royalty Partners sale of Santarus, Inc. for $2.1 billion; and Odyssey Investment Partners and Morgan Stanley Private Equity s sale of BarrierSafe Solutions International, Inc. for $615 million. For the year-to-date period as of December 31, 2013, financial sponsors participated in 18% of deals and accounted for 11% of total transaction value. 11/18/13 52-Property Portfolio of Senior Housing Properties Newcastle Investment Corp. $1,010 11/19/13 25 Independent Living Facilities National Health Investors, Inc. $491 10/11/13 10/11/13 Bryan Senior Investors, LP (Watercrest at Bryan) Legacy Ranch Alzheimer's Special Care Center CHP Partners, LP $27 CHP Partners, LP $12 11/04/13 NRFC Clinton Holdings, LLC NorthStar Healthcare Income, Inc. $11 11/14/13 VeriTeQ Corp. Alpha Capital AG /Sandor Advisors / Hudson Bay Capital / 10/11/13 The Springs at San Angelo CHP Partners LP $11 $11 Financial Sponsors vs. Strategic Buyers Select Private Equity M&A Transactions Seller (Q4 2013) ($ in millions) Announced Date Target Seller Transaction Value Total Transaction Volume Total Transaction Value ($ in billions) 11/07/13 Santarus, Inc. 11/06/13 Passport Health Communications, Inc. 11/25/13 BarrierSafe Solutions International, Inc. 12/04/13 Rempex Pharmaceuticals, Inc. 10/14/13 Nanostim, Inc. S.A.C. Capital Management / Visium Asset Management / HealthCare Royalty Partners Great Hill Partners / Primus; Spectrum Equity Investors / Select Capital Ventures / Ares Capital Management LLC Odyssey Investment Partners / Morgan Stanley Private Equity Vivo Capital /Adams Street Partners / Frazier Healthcare Ventures / OrbiMed Advisors / SV Life Sciences Advisers InterWest Partners LLC / U.S. Venture Partners / Life Science Angels / Emergent Medical Partners $2,148 $850 $615 $468 $189 10/07/13 Lanx, Inc. Goldman Sachs Group / Noro-Moseley Partners / Oakwood Medical Investors / Credit Suisse / Hercules Technology Growth Capital / Chicago Growth Partners / Noro-Moseley Partners / Delta-v Capital $147 10/22/13 PLUS Diagnostics, Inc. Water Street Healthcare Partners $83 Financial Sponsor Strategic Buyer Financial Sponsor Strategic Buyer Source: S&P Capital IQ (includes all closed deals with disclosed deal value between $10 million and $1 billion). 11/05/13 SunCrest Healthcare, Inc. MBF Healthcare Partners / MBF Healthcare Partners $76 8

9 Industry Sector Overview Recent Stock Price Performance Commentary The charts included on the following pages detail the recent stock price performance by sector for the leading public companies within the Healthcare industry for the 12-month period ended December 31, The shaded section is the most recent 3- month period (Q4). For the 12-month period, all sector indices in the Healthcare industry experienced positive performance led by the Healthcare Distribution and Healthcare Technology sectors (up 56.7% and 52.5%, respectively). During the 3-month period ended December 31, 2013 (Q4), the majority of the sector indices in the Healthcare industry experienced positive performance as well, led by the Healthcare Distribution and Healthcare Equipment & Supplies sectors (up 17.8% and 9.0%, respectively). Healthcare Facilities 150% 140% 45.8% 130% 26.4% 120% 110% 100% 90% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 S&P 500 Healthcare Facilities 140% Healthcare Services 150% Managed Healthcare 130% 140% 44.3% 26.4% 120% 130% 110% 7.4% 120% 26.4% 100% 110% 90% 100% 80% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 90% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 S&P 500 Healthcare Services S&P 500 Managed Healthcare Source: S&P Capital IQ 9

10 Industry Sector Overview Recent Stock Price Performance Healthcare Technology Healthcare Equipment & Supplies 160% 140% 150% 52.5% 130% 29.4% 140% 120% 26.4% 130% 26.4% 110% 120% 110% 100% 100% 90% 90% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 80% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 S&P 500 Healthcare Technology S&P 500 Healthcare Equipment & Supplies Healthcare Distribution 160% 150% 56.7% 140% 130% 120% 26.4% 110% 100% 90% Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 S&P 500 Healthcare Distribution Source: S&P Capital IQ 10

11 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Healthcare Facilities Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/31/13 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA HCA Holdings, Inc. HCA $ % $22,069 $51,554 $33,780 $12,327 $6, % 19.0% 1.5x 8.0x Community Health Systems, Inc. CYH $ % $3,646 $13,588 $13,043 $4,829 $1, % 12.5% 1.0x 8.3x Universal Health Services, Inc. UHS $ % $8,026 $11,812 $7,248 $2,851 $1, % 19.1% 1.6x 8.5x Tenet Healthcare Corp. THC $ % $4,359 $10,278 $9,548 $3,412 $1, % 12.8% 1.1x 8.4x HEALTHSOUTH Corp. HLS $ % $3,338 $5,070 $2,224 $985 $ % 24.2% 2.3x 9.4x Lifepoint Hospitals, Inc. LPNT $ % $2,522 $4,144 $3,619 $1,255 $ % 13.4% 1.1x 8.5x Select Medical Holdings Corp. SEM $ % $1,594 $3,124 $2,936 $572 $ % 12.9% 1.1x 8.3x AmSurg Corp. AMSG $ % $1,464 $2,566 $1,042 $566 $ % 33.7% 2.5x 7.3x Hanger Orthopedic Group, Inc. HGR $ % $1,385 $1,849 $1,049 $374 $ % 16.6% 1.8x 10.6x Average 93% $5,378 $11,554 $8,277 $3,019 $1, % 18.2% 1.6x 8.6x Median 96% $3,338 $5,070 $3,619 $1,255 $ % 16.6% 1.5x 8.4x Healthcare Services Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/31/13 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA DaVita, Inc. DVA $ % $13,481 $21,749 $11,174 $3,401 $2, % 20.4% 1.9x 9.5x Quest Diagnostics, Inc. DGX $ % $8,358 $11,623 $7,163 $2,878 $1, % 19.9% 1.6x 8.2x Laboratory Corp. of America Holdings LH $ % $8,550 $11,060 $5,777 $2,235 $1, % 22.1% 1.9x 8.7x MEDNAX, Inc. MD $ % $5,378 $5,481 $2,058 $706 $ % 22.8% 2.7x 11.7x Alliance Healthcare Services, Inc. AIQ $ % $263 $809 $453 $211 $ % 31.0% 1.8x 5.8x Bio-Reference Laboratories, Inc. BRLI $ % $711 $744 $715 $323 $ % 14.1% 1.0x 7.4x RadNet, Inc. RDNT $ % $66 $653 $684 $161 $ % 14.1% 1.0x 6.8x Average 79% $5,258 $7,445 $4,003 $1,416 $ % 20.6% 1.7x 8.3x Median 84% $5,378 $5,481 $2,058 $706 $ % 20.4% 1.8x 8.2x Source: S&P Capital IQ. 11

12 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Managed Healthcare Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/31/13 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Unitedhealth Group, Inc. UNH $ % $77,465 $84,738 $120,141 $32,552 $10, % 8.5% 0.7x 8.3x Aetna, Inc. AET $ % $24,091 $28,976 $44,038 $11,227 $3, % 8.9% 0.7x 7.4x Cigna Corp. CI $ % $25,119 $26,639 $31,849 $12,154 $3, % 11.7% 0.8x 7.1x WellPoint, Inc. WLP $ % $28,193 $22,671 $68,989 $14,969 $5, % 8.0% 0.3x 4.1x Humana, Inc. HUM $ % $16,503 $9,862 $40,683 $8,806 $2, % 6.5% 0.2x 3.7x Centene Corp. CNC $ % $3,368 $3,031 $10,589 $1,702 $ % 2.6% 0.3x 11.0x* WellCare Health Plans, Inc. WCG $ % $3,096 $1,724 $9,077 $1,243 $ % 3.6% 0.2x 5.3x Magellan Health Services, Inc. MGLN $ % $1,658 $1,330 $3,368 $271 $ % 7.2% 0.4x 5.5x Molina Healthcare, Inc. MOH $ % $1,645 $824 $6,576 $1,229 $ % 3.6% 0.1x 3.5x Universal American Corp. UAM $ % $638 $705 $2,172 $485 $ % 3.3% 0.3x 9.7x Health Net, Inc. HNT $ % $2,397 $630 $11,148 $1,643 $ % 3.1% 0.1x 1.8x Average 92% $16,743 $16,466 $31,694 $7,844 $2, % 6.1% 0.4x 5.6x Median 97% $3,368 $3,031 $11,148 $1,702 $ % 6.5% 0.3x 5.4x Healthcare Technology Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/31/13 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Cerner Corp. CERN $ % $19,641 $18,902 $2,761 $2,300 $ % 29.4% 6.8x 23.3x Athenahealth, Inc. ATHN $ % $4,924 $5,105 $540 $319 $ % 8.9% 9.5x* 106.5x* Allscripts Healthcare Solutions, Inc. MDRX $ % $2,709 $3,193 $1,373 $548 $ % 2.1% 2.3x 111.9x* Medidata Solutions, Inc. MDSO $ % $3,214 $3,083 $261 $193 $ % 16.3% 11.8x* 72.5x* MedAssets, Inc. MDAS $ % $1,172 $1,975 $674 $526 $ % 30.8% 2.9x 9.5x WebMD Health Corp. WBMD $ % $1,935 $1,858 $502 $294 $ % 12.2% 3.7x 30.3x Quality Systems, Inc. QSII $ % $1,255 $1,171 $446 $256 $ % 19.9% 2.6x 13.1x Healthstream, Inc. HSTM $ % $900 $796 $123 $72 $ % 18.7% 6.5x 34.6x Computer Programs & Systems, Inc. CPSI $ % $685 $671 $198 $89 $ % 25.3% 3.4x 13.4x Merge Healthcare, Inc. MRGE $ % $217 $444 $243 $140 $ % 6.7% 1.8x 27.1x Source: S&P Capital IQ. * Excluded from average and median calculation. Average 86% $3,665 $3,720 $712 $474 $ % 17.0% 3.8x 21.6x Median 93% $1,595 $1,917 $474 $275 $ % 17.5% 3.2x 23.3x 12

13 Industry Sector Overview Public Company Analysis ($ in millions, except per share) Healthcare Equipment & Supplies Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/31/13 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Medtronic, Inc. MDT $ % $58,489 $58,193 $16,764 $12,529 $5, % 33.7% 3.5x 10.3x Covidien plc COV $ % $32,075 $35,236 $10,189 $6,089 $2, % 28.2% 3.5x 12.3x Stryker Corp. SYK $ % $28,700 $26,336 $8,891 $6,050 $1, % 18.5% 3.0x 16.0x Zimmer Holdings, Inc. ZMH $ % $16,017 $16,202 $4,563 $3,379 $1, % 37.3% 3.6x 9.5x CR Bard, Inc. BCR $ % $10,933 $11,655 $2,999 $1,849 $ % 27.7% 3.9x 14.0x DENTSPLY International, Inc. XRAY $ % $7,017 $8,555 $2,950 $1,572 $ % 19.1% 2.9x 15.2x Varian Medical Systems, Inc. VAR $ % $8,550 $7,876 $2,943 $1,250 $ % 23.1% 2.7x 11.6x Alere, Inc. ALR $ % $2,942 $7,058 $3,013 $1,499 $ % 20.9% 2.3x 11.2x The Cooper Companies, Inc. COO $ % $6,153 $6,439 $1,588 $1,027 $ % 28.5% 4.1x 14.2x Sirona Dental Systems, Inc. SIRO $ % $3,946 $3,782 $1,101 $591 $ % 24.8% 3.4x 13.8x Steris Corp. STE $ % $2,857 $3,204 $1,560 $632 $ % 18.4% 2.1x 11.1x Average 97% $16,153 $16,776 $5,142 $3,315 $1, % 25.5% 3.2x 12.7x Median 98% $8,550 $8,555 $2,999 $1,572 $ % 24.8% 3.4x 12.3x Healthcare Distribution Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/31/13 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA McKesson Corp. MCK $ % $37,929 $39,843 $127,163 $7,647 $3, % 2.5% 0.3x 12.4x Cardinal Health, Inc. CAH $ % $22,983 $24,113 $99,727 $5,026 $2, % 2.5% 0.2x 9.6x AmerisourceBergen Corp. ABC $ % $16,547 $16,713 $87,959 $2,485 $1, % 1.3% 0.2x 14.5x Henry Schein, Inc. HSIC $ % $10,083 $10,898 $9,443 $2,620 $ % 8.5% 1.2x 13.6x Omnicare, Inc. OCR $ % $6,623 $8,092 $6,206 $1,496 $ % 11.6% 1.3x 11.3x Patterson Companies, Inc. PDCO $ % $4,212 $4,557 $3,760 $1,195 $ % 10.6% 1.2x 11.5x Owens & Minor, Inc. OMI $ % $2,293 $2,355 $9,172 $1,097 $ % 2.6% 0.3x 9.8x PharMerica Corp. PMC $ % $645 $827 $1,741 $318 $ % 6.9% 0.5x 6.9x Average 97% $12,664 $13,425 $43,146 $2,735 $1, % 5.8% 0.6x 11.2x Median 98% $8,353 $9,495 $9,307 $1,990 $ % 4.8% 0.4x 11.4x Source: S&P Capital IQ. 13

14 Integrity Expertise Results John Hill Senior Managing Director (813) Recent Transactions John McDonald Senior Managing Director (813) Keith Hodgdon Senior Vice President (813) Jeffrey Bridge Vice President (813) Michael Mariani Associate (813) Charlie Hendrick Senior Analyst (813) Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL Tel: Member FINRA/SIPC