TRANSACTIONS # BY SEGMENT (Q4)

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1 Q4 213 saw a slight uptick in M&A activity in the US healthcare industry. The trend is expected to continue for the duration of the year, though not without some fits and starts. The challenges facing Healthcare CEOs and CFOs in the coming year will be many and diverse as the industry continues to work through the uncertainties still present in the marketplace. The stuttering start of the HelathCare.gov rollout and the continuing trickle of regulatory rulings coming from HHS are indications that the industry may not yet have the clarity that much of the marketplace expected to have by the New Year. In any event, shareholders seem to be growing impatient with the amount of sidelined capital as evidenced by how far the index trailed the broader market in Q4. Nimble executives will need to find ways to manage the transition of their current portfolio away from the old volume based fee for service model to the new value based healthcare paradigm. In addition, they need to be ready to make swift decisions on which operating units and businesses to keep, which to exit, and which to acquire. This bodes well for the lower middle market, and is evidenced by the deal count and trend line in value of invested capital seen in 213. We expect to see deal value to rise as horizontal consolidations continue, and deal count to rise as vertical integration becomes one of the last cost control measures available to CEOs requiring rapid structural change. If you have any questions please contact us. - Chris Bouck, Principal - Travis Conway, Director TRANSACTIONS # BY SEGMENT (Q4) Laboratory Services 19 Technology 119 Equipment & Supplies 211 Providers & Services STRATEGIC VS. FINANCIAL TRANSACTIONS HIGHLIGHTS STRATEGIC ACQUISITIONS Local Staff acquired the operating assets of Allied Healthcare Staffing division of On Assignment Staffing for $3.6 million. Kitara Media Corp acquired Health Guru Media for $16.7 million from a group of investors. US Physical Therapy acquired 9% of ARC Physical Therapy for $36 million. ARC reported $11.5 million revenue FY 12. Undisclosed 39% Strategic 41% FINANCIAL ACQUISITIONS Francisco Partners Management signed a definitive agreement to acquire McKesson Automation from McKesson Corporation (NYSE:MCK) for $52 million. Financial 2% 1

2 Transactions Closed Date Target Buyers Transaction Comments 1/16/213 Aesynt Francisco Partners Management LLC 11/8/213 Vantage Health Inc. (OTCBB:VNTH) Nanobeak Inc. 12/19/213 Endoscopic Technologies, Inc. AtriCure, Inc. (NasdaqGM:ATRC) 1/9/213 Imperium Health Management, LLC Almost Family Inc. (NasdaqGS:AFAM) 1/16/213 Campbell Clinic Surgery Center-Midtow n Campbell Clinic Inc. 11/4/213 One Senior Living Community Located in Milford, Massachusetts Capital Senior Living Corp. (NYSE:CSU) 11/5/213 SunCrest Healthcare, Inc. National Health Industries, Inc. 11/13/213 Babar Enterprises, LLC Agility Health, Inc. (TSXV:AHI) Francisco Partners Management signed a definitive agreement to acquire McKesson Automation from McKesson Corporation (NYSE:MCK) for $52 million on October 16, 213. Post acquisition, McKesson Automation w ill operate under a new name. The transaction is subject to customary closing conditions. Nanobeak acquired 81.7% stake in Vantage Health (OTCBB:VNTH) from Bayview Terrace Limited on November 4, 213. Under the terms of agreement, Nanobeak issued.5 million shares in exchange of 112 million shares of Vantage Health, representing 81.7% stake in Vantage Health. AtriCure (NasdaqGM:ATRC) signed an agreement to acquire Endoscopic Technologies (Estech) from a group of shareholders for $61 million on December 19, 213. AtriCure w ill make an up-front payment of $34 million in $2.1mm of AtriCure common stock and up to $26 million in additional consideration based on achievements. Almost Family (NasdaqGS:AFAM) acquired 61.5% stake of Imperium Health Management for $5.8 million on October 9, 213. $3 million w ill be retained by Imperium for general corporate purposes. The transaction allow s for additional investments to be made by Almost Family to fund Imperium's development. Campbell Clinic acquired Midtow n Surgery Center for $3.2 million on October 15, 213. In conjunction w ith acquisition, Campbell Clinic has taken a loan of $3.2 million through Magna Bank. Capital Senior Living (NYSE:CSU) acquired a senior living community located in Milford, Massachusetts for $15.8 million on November 4, 213. The transaction w as financed w ith $11.9 million of non-recourse 1-year mortgage debt from Fannie Mae w ith the balance of the acquisition price paid from cash. National Health Industries signed a definitive agreement to acquire SunCrest HealthCare for $75.5 million in cash on November 4, 213. The purchase price is subject to a w orking capital adjustment. For the year ended December 31, 212, SunCrest reported revenues of $15.5 million. Agility Health (TSXV:AHI) acquired Excel Sports & Physical Therapy for $3.1 million on November 13, 213. $1.75 million is in cash and $1.89 million restricted voting common shares of Agility Health. Agility w ill pay the vendors any AR that are collected in excess of $.35 million w ithin the first 11 months follow ing closing. US HEALTHCARE M&A ACTIVITY , 1, 8, 6, 4, 2, - Deals Capital Invested HEALTHCARE TRANSACTIONS # OF TRANSACTIONS BY QUARTER Q1 Q2 Q3 Q4 2

3 % Change from Previous Month Close Price Publicly traded healthcare stocks continued the trend seen throughout the year with valuations slightly trailing the broader S&P. R&D and healthcare technology (HIT) companies have received the most generous valuation multiples from investors as investment dollars seem to be chasing innovation. Hospital and clinical systems have rarely put up multiples that are competitive with pharma, R&D, and HIT. However, the year ahead may signal a shift in this pattern as delivery systems increase their focus on vertical integration, picking up industry innovators in the process and cost controls built in to ACA begin to clamp down on the more profitable, but less certain outcomes that accompany research based or speculative business models. Successful companies will be marked by agility and flexibility benefiting the quick decision making and the quick execution of smaller companies; although the low tolerance for risk may mitigate this advantage. With all of the changes coming down the pipe, quick identification and speedy response to new challenges will determine success regardless of the size of a business. Market Cap Stock Price Stock Price Change Price/ Price Price/ Price/ Company Name Symbol State ($ in Mil) (Date) Monthly YTD LMT EPS Book Sales EBITDA MedAssets, Inc. NasdaqGS:MDAS GA $ 1, $ % 14.79% 67.6x 2.6x 3.2x 1.4x PharMerica Corporation NYSE:PMC KY $ $ 14. (2.3%) (1.69%) 1.6x.9x.4x 6.9x Analogic Corporation NasdaqGS:ALOG MA $ $ % 6.35% 33.x 2.1x 1.5x 12.4x AtriCure, Inc. NasdaqGM:ATRC OH $ $ 7.92 (1.81%) 14.78% NM 1.7x 2.3x NM Edwards Lifesciences Corp. NYSE:EW CA $ 9,46.5 $ (4.39%) (8.88%) 38.2x 6.3x 4.8x 19.5x Mindray Medical International LimitNYSE:MR NA $ 4, $ % 22.14% 35.4x 3.6x 3.8x 17.4x Cardinal Health, Inc. NYSE:CAH OH $ 22,814.8 $ % 62.24% 18.7x 3.6x.2x 9.5x AdCare Health Systems Inc. AMEX:ADK GA $ $ 4. (9.48%) (15.77%) NM 2.8x 1.1x 12.x Emeritus Corp. NYSE:ESC WA $ 1, $ (2.46%) 12.42% NM 6.x 3.8x 2.8x Lifepoint Hospitals Inc. NasdaqGS:LPNT TN $ 2,275.1 $ % 28.37% 15.x 1.1x 1.2x 7.4x Alliance Healthcare Services, Inc. NasdaqGM:AIQ CA $ 8.58 $ % 21.79% NM NM 1.4x 4.3x CorVel Corporation NasdaqGS:CRVL CA $ $ % 1.39% 22.4x 4.9x 1.2x 9.2x National Research Corp. NasdaqGS:NRCI.B NE $ $ % 6.65% 29.x 7.x 4.7x 14.7x Omnicare Inc. NYSE:OCR OH $ 4,26.87 $ % 12.8% 16.7x 1.2x.9x 8.3x Magellan Health Services Inc. NasdaqGS:MGLN CT $ 1, $ (7.74%) (2.92%) 11.2x 1.3x.3x 4.5x WellCare Health Plans, Inc. NYSE:WCG FL $ 2,54.78 $ % 19.4% 13.7x 1.9x.2x 4.9x Average $ 3,271.4 $ % 12.66% 26.x 3.7x 1.9x 1.8x HEALTHCARE INDUSTRY VS. S&P 5 RUNNING 12 MONTHS 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% -5.% Healthcare Industry S&P 5 Index 3

4 % Change from Previous Month-End Close Price Market Cap Stock Price Change Price/ Price/ Price/ TEV/ Segment Averages ($ in Mil) Month YTD LTM LTM EPS Book Sales EBITDA Healtcare Providers and Services $ 5, % 42.5% 42.5% 48.43x 5.8x 4.66x 23.56x Healthcare Equipment and Supplies $ 3, % 8.8% 8.8% 45.1x 5.4x 5.74x 21.87x Laboratory Services $ 2, (11.2%) (8.1%) (8.1%) 51.32x 2.26x 1.47x 6.43x Healthcare Technology $ 2,5.71 (1.5%) 48.7% 48.7% 54.48x 6.5x 8.38x 67.82x Industry Average $ 4, % 24.5% 24.5% 39.14x 4.46x 4.34x 2.5x S&P 5 Average $ 34, % 29.6% 29.6% 27.25x 5.4x 3.6x 11.96x HEALTHCARE SEGMENTS VS. S&P 5 RUNNING 12 MONTHS 6.% 5.% 4.% 3.% 2.% 1.%.% -1.% -2.% Healthcare Providers and Serives Healthcare Equipment and Supplies Laboratory Services Healthcare Technology S&P 5 Index 4

5 COMPANIES BY REGION HEALTHCARE COMPANIES BY REGION AS OF DECEMBER COMPANIES BY SIZE State Not Disclosed $ - 5 $5-1 $1-25 $25-5 $5-1 $1+ AZ CO KS ND NE NM OK SD TX UT WY * in millions Southeast, 26% Mountain, 1% N/A, 9% Great Lakes, 1% Southwest, 12% West Coast, 22% Northeast, 11% 5

6 Transactions Closed CAPITAL STACK 1% 8% 6% 4% 2% % Equity Sub Debt Senior Debt US MIDDLE MARKET M&A ACTIVITY Q4 212 Q1 213 Q2 213 Q3 213 Q Capital Invested (in $Mil) Deals Closed Capital Invested Source: PitchBook TRANSACTION MULTIPLES EBITDA MULTIPLES BY TRANSACTION SIZE 12.x 1.x 1.9x 1.8x 8.x 9.4x 9.1x 9.1x 8.x 6.x 7.2x 6.x 6.4x 4.x 5.9x 4.8x 4.9x 5.2x 5.1x 5.x 2.x.x Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Source: PitchBook $-25mm $25-25mm $25mm+ 6

7 Chris Bouck Principal Healthcare Team p: e. Travis Conway Director - Healthcare Team p: e. tconway@sdrventures.com TRANSACTION ADVISORY Buy Side Running a proven process effective at generating responses, identifying off-the-radar opportunities, negotiating and closing accretive acquisitions. CAPITAL FORMATION Private Capital Placement An effective and efficient process negotiating favorable debt and equity with the right capital partner for our clients Sell Side Our process is designed to identify the right buyer and maximize shareholder value for our clients. Address Website Phone 5613 DTC Parkway, Suite 82 Greenwood Village, CO