capitalization profile of mkt. value number of equity mkt ... · pdf fileof mkt . value number...

1

Sources: ThomsonOne, Bloomberg

Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member

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representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information

contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a

complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does

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($ in millions)

Healthcare Services Sector Review: Publicly-Traded Healthcare Services Summary

Number Aggr. Median TEV / Median Price /

of Equity Mkt. Median % Change LTM Multiples Earnings Ratio

Companies Value 3 mos. 12 mos. Revenue EBITDA 2017 2018

Acute Care Hospitals 5 $47,936 4.9% (9.7)% 1.0x 8.2x 14.9x 10.5x

Alternate Site 16 61,692 (2.7) (6.6) 1.7 9.5 19.8 17.8

Assisted Living 1 2,409 (13.2) (29.6) 1.7 12.0 7.2 8.2

Clinical Laboratories 4 35,821 4.5 22.1 2.3 11.3 19.0 17.7

CROs — Pharma Services 11 48,455 (6.2) 6.4 2.9 12.7 18.5 16.1

Distribution / Supply 8 94,545 (1.9) (4.2) 0.6 10.3 14.7 14.5

E-Health 3 4,884 11.2 22.9 3.3 18.5 23.8 22.2

HCIT 18 49,090 17.9 15.5 3.7 16.1 25.7 22.0

HMO Medical — Diversified 4 300,684 10.9 23.3 0.9 9.8 15.8 14.0

HMO Medical — Government 3 22,482 5.4 20.1 0.4 11.2 23.8 15.4

HMO Medical — National & Regional 3 33,060 0.3 25.4 0.4 13.9 19.1 18.4

Home Care / Hospice / Staffing 6 7,320 9.4 26.1 1.2 16.0 25.0 22.7

Long-Term Care 7 3,474 (11.8) (22.1) 0.7 9.4 15.6 11.7

Other Services 6 5,381 1.6 1.2 1.5 10.1 20.6 20.8

Outsourced Services 11 18,776 13.5 12.4 1.3 11.6 21.2 19.0

Pharmacy Benefit Managers 2 121,798 (3.2) (17.4) 0.6 7.6 11.5 10.5

Physician Practice Management 2 12,192 (14.6) (23.1) 2.5 9.9 14.1 12.5

Total / Median (unweighted) 110 $869,998 1.6% 6.4% 1.3x 11.2x 19.0x 16.1x

FY2017 FY2018

Value at % Change Price / Earnings Ratio

4/30/2017 3 mos. YTD 12 mos. 36 mos. 2017 2018

Dow Jones Industrial Average 20,940.51 5.3% 5.3% 17.0% 26.5%

S&P 500 2,384.20 4.6 5.6 14.5 26.6 18.3x 17.0x

Nasdaq Composite 6,047.61 7.2 11.4 25.5 46.5

Russell 2000 1,400.43 2.9 2.6 22.7 24.4 23.8 N/A

S&P 500 Healthcare Providers & Svs. 705.61 4.8 7.6 11.7 56.6

S&P 500 Healthcare Facilities 435.91 3.7 13.1 (0.9) 29.9

S&P 500 Managed Healthcare 1,525.84 8.9 12.3 25.9 107.8

Healthcare Services Composite 642.17 (3.9)% (2.6)% (4.4)% 10.0%

Number Aggr. Equity % of Total % of Aggr. Interest Rates

of Mkt. Value Number of Equity Mkt. Median Stock Price Performance

Companies ( millions) Companies Value 3 mos. YTD 12 mos. 36 mos.

>5bln 25 $738,239 22.7% 84.9% 6.9% 4.9% 11.5% 67.0%

1bln - 5bln 40 111,950 36.4 12.9 9.1 8.5 5.7 70.5

250mm - 1bln 28 18,490 25.5 2.1 2.3 5.0 6.0 52.4

<250mm 17 1,319 15.5 0.2 (8.4) (32.3) (3.8) 2.7

Total / Median 110 $869,998 100.0% 100.0% 4.6% 4.9% 5.8% 59.7%

Capitalization Profile

Market Indices

Sector

2

Source: ThomsonOne

Healthcare Services Sector Review: Publicly-Traded Healthcare Services Summary

Median % Change - 3 Months

Performance of Market Indices for Latest 36 Months (%)

One Year Forward P/E for Latest 36 Months (x)

Physician Practice Management

Assisted Living

Long-Term Care

CROs — Pharma Services

Pharmacy Benefit Managers

Alternate Site

Distribution / Supply

HMO Medical — National & Regional

Other Services

Clinical Laboratories

Acute Care Hospitals

HMO Medical — Government

Home Care / Hospice / Staffing

HMO Medical — Diversified

E-Health

Outsourced Services

HCIT

(30.0)% (20.0)% (10.0)% 0.0% 10.0% 20.0% 30.0%

0

25

50

75

100

125

150

175

4/30/2014 8/31/2014 12/31/2014 4/30/2015 8/31/2015 12/31/2015 4/30/2016 8/31/2016 12/31/2016 4/30/2017

DJ Indu S&P 500 NASDAQ Russell 2000 Healthcare Services Composite

0

5

10

15

20

25

4/30/2014 8/31/2014 12/31/2014 4/30/2015 8/31/2015 12/31/2015 4/30/2016 8/31/2016 12/31/2016 4/30/2017

Healthcare Services Composite S&P 500

3

Source: ThomsonOne

($ in millions, except per share data)

Healthcare Services Sector Review: Public Comps Stock Price Equity Total Last Twelve Forward

Company Name As Of 52-Week Market Enterprise Months (LTM) TEV / LTM TEV / EBITDA PE Ratio PEG

04/30/17 High Low Value Value (TEV) Revenue EBITDA EBIT Revenue EBITDA 2017 2018 2017 2018 2017

Acute Care Hospitals

COMMUNITY HEALTH SYSTEMS INC $8.61 $16.34 $4.15 $987 $16,660 $17,799 $2,021 $1,125 0.9x 8.2x 8.4x 8.6x 16.4x 7.8x 2.5x

HCA HOLDINGS INC 84.21 91.03 67.00 31,195 63,594 41,990 7,736 6,252 1.5 8.2 8.0 7.6 11.5 10.5 1.0

LIFEPOINT HEALTH INC 62.15 71.00 50.60 2,509 5,489 6,414 746 347 0.9 7.4 7.0 6.6 14.9 13.3 1.7

TENET HEALTHCARE CORP 15.67 33.39 14.06 1,572 19,169 19,415 1,931 1,560 1.0 9.9 7.6 7.2 13.6 9.1 1.0

UNIVERSAL HEALTH SERVICES INC 120.76 139.46 99.72 11,673 15,583 9,929 1,653 1,274 1.6 9.4 8.9 8.4 15.1 13.7 1.7

5Number of Companies: Mean: Total: $47,936 $120,495 $95,546 1.2x 8.6x 8.0x 7.7x 14.3x 10.9x 1.6x

Median: 1.0 8.2 8.0 7.6 14.9 10.5 1.7

Alternate Site

AAC HOLDINGS INC $7.16 $24.38 $6.01 $172 $347 $286 $52 $21 1.2x 6.6x 6.6x 5.8x 13.4x 10.2x 0.7x

ACADIA HEALTHCARE COMPANY 43.58 63.68 32.54 3,827 7,083 2,873 600 444 2.5 11.8 11.3 10.3 17.8 15.3 1.3

ADEPTUS HEALTH INC 0.62 73.44 0.21 13 251 476 49 27 0.5 5.1 3.7 2.1 0.6 0.2 NM

ALLIANCE HEALTHCARE SERVICES INC 13.10 13.30 5.73 142 798 506 102 55 1.6 7.8 NA NA NA NA NA

AMERICAN RENAL ASSOCIATES HOLDINGS INC 17.21 29.65 15.47 532 1,311 750 171 138 1.7 7.7 10.2 10.1 29.5 24.4 2.7

CIVITAS SOLUTIONS INC 17.80 23.20 15.90 663 1,245 1,443 159 76 0.9 7.8 7.5 7.1 21.8 18.6 2.2

CONCORD MEDICAL SERVICES HOLDINGS LTD 4.39 5.00 3.51 195 423 108 (2) (7) 3.9 NM NM 12.2 NM NA NA

DAVITA INC 69.01 78.77 54.50 13,429 22,493 14,863 2,377 1,849 1.5 9.5 9.1 8.7 19.4 17.6 1.4

FRESENIUS MEDICAL CARE AG & CO KGAA 88.69 95.17 77.81 27,256 36,261 18,384 3,124 2,637 2.0 11.6 9.8 9.0 20.2 18.4 1.8

HEALTHSOUTH CORP 46.90 46.90 36.97 4,177 7,422 3,772 729 643 2.0 10.2 9.2 8.7 17.6 16.3 1.5

NOBILIS HEALTH CORP 1.25 4.66 1.10 77 135 288 26 10 0.5 5.1 3.4 3.0 12.9 9.6 0.6

RADNET INC 6.05 7.98 4.83 286 907 891 114 38 1.0 7.9 6.5 6.2 22.8 18.1 2.3

SELECT MEDICAL HOLDINGS CORP 13.75 15.15 10.08 1,825 4,977 4,314 463 273 1.2 10.8 9.2 8.8 16.2 14.7 1.1

SURGERY PARTNERS INC 17.20 22.85 12.25 839 2,749 1,171 179 140 2.3 15.3 13.5 12.0 26.0 18.7 0.3

U.S. PHYSICAL THERAPY INC 65.60 78.00 48.80 821 896 365 53 44 2.5 16.9 14.8 13.4 29.7 28.4 NA

VCA INC 91.57 91.96 59.51 7,439 8,843 2,632 527 444 3.4 16.8 16.1 14.6 28.2 25.9 2.4


Median: 1.7 9.5 9.2 8.8 19.8 17.8 1.5

Assisted Living

BROOKDALE SENIOR LIVING INC $12.99 $18.94 $10.65 $2,409 $8,205 $4,239 $685 $174 1.7x 12.0x 11.3x 11.3x 7.2x 8.2x 0.7x


Median: 1.7 12.0 11.3 11.3 7.2 8.2 0.7

Clinical Laboratories

LABORATORY CORPORATION OF AMERICA HOLDINGS$140.15 $146.63 $119.51 $14,356 $19,927 $9,550 $1,931 $1,610 2.1x 10.3x 9.9x 9.4x 14.8x 13.7x 1.7x

PSYCHEMEDICS CORP 19.07 27.46 10.81 104 100 43 12 12 2.4 8.1 NA NA NA NA NA

QUEST DIAGNOSTICS INC 105.51 106.59 74.04 14,437 17,834 7,551 1,461 1,298 2.4 12.2 11.9 11.4 19.0 18.0 2.4

SONIC HEALTHCARE LTD 16.52 18.48 14.78 6,925 8,722 3,857 658 471 2.3 13.3 9.7 8.9 19.4 17.7 1.5


Median: 2.3 11.3 9.9 9.4 19.0 17.7 1.7

CROs — Pharma Services

ALBANY MOLECULAR RESEARCH INC $16.01 $19.35 $12.45 $687 $1,276 $571 $102 $58 2.2x 12.5x 9.1x 8.1x 13.8x 11.6x 1.8x

CATALENT INC 29.28 30.22 20.94 3,653 5,422 1,931 424 280 2.8 12.8 12.2 11.3 19.9 17.9 2.2

CHARLES RIVER LABORATORIES INTERNATIONAL INC 89.70 91.57 67.20 4,272 5,402 1,764 427 323 3.1 12.6 11.9 11.0 17.7 15.9 1.6

ICON PLC 84.49 88.90 62.31 4,607 4,695 1,698 388 330 2.8 12.1 11.7 11.0 16.5 14.8 1.1

INC RESEARCH HOLDINGS INC 45.00 56.88 36.70 2,886 3,280 1,032 245 223 3.2 13.4 12.9 11.7 16.9 15.0 1.2

INTERPACE DIAGNOSTICS GROUP INC 2.28 19.80 0.70 20 27 165 (8) (15) 0.2 NM NM NA NM NA NA

MEDPACE HOLDINGS INC 31.71 38.94 26.01 1,292 1,446 380 117 109 3.8 12.4 11.7 10.4 19.5 17.1 1.5

PAREXEL INTERNATIONAL CORP 63.83 72.32 51.16 3,252 3,778 2,194 356 266 1.7 10.6 10.8 9.5 18.1 15.3 1.4

PATHEON NV 26.91 32.95 23.72 3,906 5,923 1,916 410 282 3.1 14.4 NA NA 22.4 17.4 1.2

PRA HEALTH SCIENCES INC 63.96 66.47 39.25 3,996 4,692 1,635 291 267 2.9 16.1 13.9 11.9 20.3 17.3 1.1

QUINTILES IMS HOLDINGS INC 84.28 84.49 61.21 19,884 26,062 6,165 1,956 1,044 4.2 13.3 12.7 11.6 18.8 16.2 1.4


Median: 2.9 12.7 11.9 11.0 18.5 16.1 1.4

Distribution / Supply

ACETO CORP $15.85 $25.98 $14.32 $477 $790 $584 $70 $64 1.4x 11.3x 10.2x 7.5x 9.3x NA 0.9x

AMERISOURCEBERGEN CORP 82.05 94.50 68.38 17,828 20,516 150,704 2,278 2,036 0.1 9.0 8.7 8.1 13.8 12.6 1.6

CARDINAL HEALTH INC 72.59 85.52 62.70 22,899 26,613 128,875 3,113 2,801 0.2 8.5 8.8 8.2 13.5 13.2 2.4

HENRY SCHEIN INC 173.80 183.00 146.23 13,856 15,628 11,695 951 817 1.3 16.4 14.9 13.8 24.0 21.7 2.4

MCKESSON CORP 138.29 199.43 114.53 29,325 37,462 199,299 4,442 4,124 0.2 8.4 8.3 9.2 11.8 11.1 2.0

OWENS & MINOR INC 34.65 38.47 30.43 2,117 2,496 9,648 271 224 0.3 9.2 9.9 9.0 19.3 16.8 9.3

PATTERSON COMPANIES INC 44.49 50.40 36.46 4,321 5,414 5,627 434 367 1.0 12.5 12.6 12.1 18.9 17.6 2.6

VWR CORP 28.26 31.75 24.42 3,721 5,676 4,526 482 401 1.3 11.8 11.5 10.7 15.6 14.5 2.0


Median: 0.6 10.3 10.1 9.1 14.7 14.5 2.2

4

Source: ThomsonOne





E-Health

EBIX INC $61.70 $65.10 $44.27 $1,951 $2,101 $307 $114 $100 6.8x 18.5x 17.1x NA 20.5x 18.4x 2.0x

HEALTHSTREAM INC 27.79 29.80 20.60 885 770 232 31 9 3.3 24.9 21.2 17.3 NM NM NA

WEBMD HEALTH CORP 54.23 67.55 48.10 2,048 2,102 699 223 170 3.0 9.4 8.9 8.5 27.0 26.0 5.4


Median: 3.3 18.5 17.1 12.9 23.8 22.2 3.7

HCIT

R1 RCM INC $3.89 $4.00 $1.47 $412 $403 $241 ($19) ($37) 1.7x NM NM 12.0x NM NM NA

ALLSCRIPTS HEALTHCARE SOLUTIONS INC 11.97 15.17 9.80 2,172 3,834 1,645 322 219 2.3 11.9 11.2 10.3 19.3 16.8 1.2

ATHENAHEALTH INC 98.01 142.40 90.11 3,904 4,048 1,112 254 130 3.6 15.9 14.3 11.9 44.7 35.6 2.2

CAREVIEW COMMUNICATIONS INC 0.19 0.25 0.04 26 79 6 (4) (4) 13.2 NM NA NA NA NA NA

CASTLIGHT HEALTH INC 3.85 5.50 3.05 406 291 107 (28) (23) 2.7 NM NM NM NM NM NA

CERNER CORP 64.75 67.50 47.01 21,395 21,603 4,919 1,618 1,160 4.4 13.4 12.8 11.8 25.8 23.4 1.8

COMPUTER PROGRAMS AND SYSTEMS INC 27.45 52.21 18.25 371 522 264 46 40 2.0 11.3 10.4 9.5 15.9 14.2 1.1

EVOLENT HEALTH INC 23.25 26.84 10.40 1,683 1,800 311 (20) (36) 5.8 NM NM NM NM NM NA

HEALTHEQUITY INC 45.52 49.25 22.26 2,714 2,534 189 67 41 13.4 37.7 41.3 31.5 NM NM NA

HMS HOLDINGS CORP 20.47 24.00 15.50 1,710 1,732 496 116 98 3.5 14.9 12.8 11.2 25.6 22.0 1.7

INOVALON HOLDINGS INC 12.25 20.05 8.60 1,919 1,642 427 101 70 3.8 16.2 15.6 13.9 41.2 33.8 5.2

MEDIDATA SOLUTIONS INC 65.43 69.68 40.47 3,811 3,713 486 114 99 7.6 32.7 27.8 22.1 NM 42.3 NA

MEDICAL TRANSCRIPTION BILLING CORP 1.36 2.18 0.29 14 25 27 (3) (8) 0.9 NM NM NM NM NM NA

NATIONAL RESEARCH CORP 42.20 46.37 32.18 668 639 112 36 31 5.7 17.5 16.9 NA 45.9 38.4 3.5

OMNICELL INC 41.40 42.05 30.26 1,537 1,736 693 102 82 2.6 17.0 13.8 11.3 30.4 20.0 1.8

PREMIER INC 33.80 34.53 28.27 4,748 7,594 1,272 453 414 6.0 16.8 15.1 13.4 17.0 15.4 1.4

QUALITY SYSTEMS INC 14.26 15.90 10.61 890 887 506 61 41 1.8 14.5 9.2 8.7 17.1 16.3 2.1

VOCERA COMMUNICATIONS INC 25.36 25.76 10.46 708 634 137 (10) (14) 4.6 NM NM 35.0 NM NM NA


Median: 3.7 16.1 14.0 11.9 25.7 22.0 1.8

HMO Medical — Diversified

AETNA INC $135.07 $136.50 $104.59 $44,806 $50,557 $62,813 $5,593 $5,330 0.8x 9.0x 9.6x 8.5x 15.2x 13.8x 1.1x

CIGNA CORP 156.37 159.08 115.03 40,135 42,470 39,660 4,029 3,465 1.1 10.5 9.8 9.0 16.4 14.3 1.2

UNITEDHEALTH GROUP INC 174.88 176.07 128.53 168,604 203,472 189,024 15,763 14,619 1.1 12.9 12.1 10.3 17.9 16.2 1.2

ANTHEM INC 177.89 184.45 114.85 47,139 60,088 86,204 6,835 6,111 0.7 8.8 10.4 8.8 15.1 13.8 1.3


Median: 0.9 9.8 10.1 8.9 15.8 14.0 1.2

HMO Medical — Government

CENTENE CORP $74.40 $75.57 $50.00 $12,817 $17,611 $45,378 $1,910 $1,715 0.4x 9.2x 9.9x 7.7x 15.8x 14.1x 1.2x

MOLINA HEALTHCARE INC 49.79 60.66 42.56 2,839 4,220 18,143 377 306 0.2 11.2 9.9 6.5 24.1 15.4 0.8

WELLCARE HEALTH PLANS INC 153.41 155.35 88.55 6,825 7,821 14,554 688 627 0.5 11.4 12.6 9.6 23.8 20.8 2.0


Median: 0.4 11.2 9.9 7.7 23.8 15.4 1.2

HMO Medical — National & Regional

UNIVERSAL AMERICAN CORP $9.97 $10.13 $6.72 $592 $622 $1,414 $37 $4 0.4x 16.9x 15.2x 12.7x NM 24.9x NA

HUMANA INC 221.98 222.48 150.00 32,028 34,632 54,782 3,521 3,009 0.6 9.8 9.9 9.0 20.1 18.4 1.5

TRIPLE-S MANAGEMENT CORP 18.10 26.86 16.49 439 457 2,985 33 19 0.2 13.9 8.0 7.6 18.1 11.9 1.8


Median: 0.4 13.9 9.9 9.0 19.1 18.4 1.7

Home Care / Hospice / Staffing

ADDUS HOMECARE CORP $33.95 $37.35 $16.55 $394 $411 $411 $33 $27 1.0x 12.3x 11.6x 10.4x 21.7x 18.7x 1.4x

ALMOST FAMILY INC 49.65 50.98 35.21 689 955 675 55 48 1.4 17.5 13.1 12.0 20.1 18.4 2.8

AMEDISYS INC 54.20 55.16 34.58 1,825 1,889 1,459 115 84 1.3 16.4 13.4 11.7 26.9 23.0 1.2

BIOSCRIP INC 1.52 3.43 0.98 184 698 927 29 2 0.8 23.8 14.4 10.7 NM NM NA

CHEMED CORP 201.38 216.01 124.78 3,239 3,338 1,592 242 201 2.1 13.8 13.0 12.4 25.3 23.8 2.5

LHC GROUP INC 54.10 55.52 32.04 989 1,093 934 70 74 1.2 15.6 14.9 13.3 25.0 22.7 1.7


Median: 1.2 16.0 13.3 11.8 25.0 22.7 1.7

5

Source: ThomsonOne





Long-Term Care

ADCARE HEALTH SYSTEMS INC $1.05 $2.60 $1.02 $21 $147 $27 $11 $4 5.4x 13.2x NA NA NA NA NA

CAPITAL SENIOR LIVING CORP 13.97 20.73 12.65 420 1,311 454 79 14 2.9 16.7 13.3 12.0 NM NM NA

DIVERSICARE HEALTHCARE SERVICES INC 10.76 12.82 6.41 70 145 426 10 3 0.3 14.4 NA NA NA NA NA

FIVE STAR SENIOR LIVING INC 1.90 3.04 1.65 95 101 1,380 19 (16) 0.1 5.4 5.6 4.7 NM NM NA

KINDRED HEALTHCARE INC 9.60 15.66 5.65 823 4,049 7,166 477 401 0.6 8.5 8.4 8.4 18.9 12.0 9.7

NATIONAL HEALTHCARE CORP 74.42 78.99 60.81 1,130 1,090 927 117 64 1.2 9.4 NA NA NA NA NA

ENSIGN GROUP INC 17.95 23.49 16.51 917 1,135 1,713 151 117 0.7 7.5 6.5 6.0 12.2 11.3 0.8


Median: 0.7 9.4 7.4 7.2 15.6 11.7 5.3

Other Services

ALERE INC $49.17 $49.42 $31.47 $4,278 $7,543 $2,384 $436 $403 3.2x 17.3x 15.5x 13.5x 23.0x 25.9x 2.3x

DIGIRAD CORP 4.70 6.15 4.15 94 111 123 15 5 0.9 7.4 8.0 6.2 18.1 15.7 1.1

CHINA CORD BLOOD CORP 7.60 8.12 4.27 917 588 115 46 37 5.1 12.7 11.6 NA NA NA NA

CRYO-CELL INTERNATIONAL INC 5.20 5.98 2.85 37 43 24 (0) 4 1.8 NM NA NA NA NA NA

HOOPER HOLMES INC 0.75 2.70 0.65 9 13 34 (4) (7) 0.4 NM NA NA NA NA NA

INFUSYSTEM HOLDINGS INC 2.05 3.67 1.55 47 81 72 16 3 1.1 5.0 NA NA NA NA NA


Median: 1.5 10.1 11.6 9.8 20.6 20.8 1.7

Outsourced Services

CORVEL CORP $44.50 $53.19 $31.00 $851 $812 $513 $66 $45 1.6x 12.3x NA NA NA NA NA

CROSS COUNTRY HEALTHCARE INC 13.97 16.38 10.54 506 573 850 40 33 0.7 14.3 11.8 9.1 19.5 16.2 0.8

DIPLOMAT PHARMACY INC 15.60 38.94 12.25 1,048 1,187 4,499 115 85 0.3 10.3 12.1 10.6 24.6 20.9 1.8

HEALTHCARE SERVICES GROUP INC 45.91 47.05 34.83 3,351 3,235 1,582 128 119 2.0 25.2 22.7 20.0 34.7 33.9 NA

MAGELLAN HEALTH INC 68.80 84.71 49.50 1,632 1,658 5,025 269 159 0.3 6.2 5.3 4.8 15.4 14.2 NM

MAXIMUS INC 60.99 62.78 43.69 3,953 4,037 2,468 390 318 1.6 10.3 10.5 9.7 19.8 18.1 1.1

ON ASSIGNMENT INC 51.77 53.80 32.04 2,733 3,326 2,485 287 228 1.3 11.6 10.7 9.7 17.9 16.3 1.6

PHARMERICA CORP 23.60 28.72 19.20 727 1,195 2,103 129 88 0.6 9.3 8.6 7.7 12.5 10.9 2.0

ADVISORY BOARD CO 51.10 51.68 24.85 2,065 2,560 791 182 127 3.2 14.1 13.0 11.9 26.8 24.0 1.9

PROVIDENCE SERVICE CORP 44.00 53.38 34.88 592 596 1,583 83 72 0.4 7.2 10.0 8.4 29.2 23.2 1.9

TIVITY HEALTH INC 33.60 34.75 11.15 1,317 1,525 516 113 110 3.0 13.5 12.7 11.5 22.6 19.9 1.7


Median: 1.3 11.6 11.2 9.7 21.2 19.0 1.7

Pharmacy Benefit Managers

CVS HEALTH CORP $82.44 $106.67 $69.30 $85,391 $109,468 $178,513 $12,759 $11,373 0.6x 8.6x 8.6x 8.3x 14.1x 12.9x 1.2x

EXPRESS SCRIPTS HOLDING CO 61.34 80.02 57.80 36,407 48,778 100,151 7,273 6,995 0.5 6.7 6.6 6.5 8.9 8.0 0.7


Median: 0.6 7.6 7.6 7.4 11.5 10.5 1.0

Physician Practice Management

ENVISION HEALTHCARE CORP $56.03 $82.66 $53.12 $6,585 $9,959 $3,696 $1,133 $983 2.7x 8.8x 7.4x 6.7x 13.4x 11.5x 1.2x

MEDNAX INC 60.36 76.96 59.36 5,607 7,246 3,270 657 578 2.2 11.0 10.5 9.6 14.7 13.5 1.0


Median: 2.5 9.9 9.0 8.1 14.1 12.5 1.1

High Yield New Issue Volume

6

Sources: Morgan Markets, Bloomberg

As of April 30, 2017

Debt Capital Markets Overview

High Yield Market Overview

High Yield Corporate Credit Yields

6.05%

5.84%

6.60%

4.35%

($ in billions)

YTD 2017 High Yield funds have seen $3.96bln of net outflows

April saw $14.8bln of High Yield issuance compared to $43.2bln in March

– Refinancing: 66% for 2017 YTD vs. 58.0% in 2016

– Acquisition finance/LBO transactions: 18% for 2017 YTD vs. 16.0% in 2016

One Healthcare issuer hit the High Yield market in April:

– Eagle Holding Co II (Caa1 / CCC+)

The yield on the High Yield index tightened by 19 bps during April, decreasing from 6.24% to 6.05%

– Healthcare yields stayed flat, tightening just 1 bp from 6.61% to 6.60% during the month of April

$27.2

$20.3

$14.6 $18.5

$25.9

$12.8 $11.1

$16.0 $17.8 $19.3

$43.2

$14.8

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17

HY - All BB B HY - Healthcare

7



Debt Capital Markets Overview

Investment Grade Market Overview

Investment Grade New Issue Volume

Investment Grade Corporate Credit Spreads

89 bps

116 bps

131 bps

168 bps

141 bps

2017 YTD Investment Grade issuance is at $492.4bln

309 deals and 598 tranches have priced in 2017 YTD with an average deal size of $1.6bln

– 2016 priced 827 deals with an average size of $1.6bln

Two Investment Grade Healthcare issuers hit the market in April:

– Kaiser Permanente (NR / AA-)

– SSM Health Care Corp (NR / A+)

In April, Investment Grade funds saw $8.9bln of net inflows; 2016 net inflows totaled $53.7bln

Investment Grade spreads tightened by 2 bps during the month, ending April at 141 bps

– Investment Grade Healthcare tightened by 1 bp during the month, ending April at 131 bps

– The 10-yr US Treasury yield ended the month at 2.28%

($ in billions)

$177.9

$79.2 $95.3

$113.7

$144.7

$102.2

$75.8

$40.2

$172.2

$88.0

$128.5

$81.8

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

$200.0

May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17

50 bps

100 bps

150 bps

200 bps

250 bps

300 bps

350 bps

May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17

IG - Healthcare IG - All AA A BBB

8



Recent High Yield Deals

Year-to-Date Debt Capital Markets Transactions

Recent Investment Grade Deals

Amount Rating Issuance

Date Issuer Security ($MM) Moody's S&P Coupon Maturity Price Yield Spread Type Sector

27-Apr-17 Eagle Holding Co II Sr. PIK Notes $550 Caa1 CCC+ 7.625% 15-May-22 100.000% 7.625% 581 bp 144A Healthcare Services

Use of Proceeds: Make a distribution to affiliates of The Carlyle Group, Hellman & Friedman, as well as management

8-Mar-17 WellCare Health Plans Inc Sr. Notes 1,200 Ba2 BB 5.250% 1-Apr-25 100.000% 5.250% 278 bp Pub Managed Care

Use of Proceeds: Repay oustanding notes and revolver; general corporate purposes

7-Mar-17 Community Health Systems Inc Sr. Sec. Notes 2,200 Ba2 BB- 6.250% 31-Mar-23 100.000% 6.250% 400 bp Pub Health Care Facilities

Use of Proceeds: Repay existing debt

3-Feb-17 Change Healthcare Sr. Notes 1,000 B3 B- 5.750% 15-Feb-25 100.000% 5.750% 336 bp 144A Healthcare IT

Use of Proceeds: Finance the merger of McKesson's Technology Solutions business (MTS) and Change Healthcare Holdings, and to refinance existing debt

12-Jan-17 Team Health Sr. Notes 865 Caa1 CCC+ 6.375% 1-Feb-25 100.000% 6.375% n/a 144A Healthcare - Facilities & Services

Use of Proceeds: Blackstone Group's buyout of the Company in a transaction valued at $6.1 b illion

Amount Rating

Date Issuer Ticker ($mm) Security Coupon Maturity Price Spread Moody's S&P Sector

25-Apr-17 Kaiser Permanente $575 Sr Unsec 3.150% 5/1/2027 99.635 +85 NR AA- Managed Care

25-Apr-17 Kaiser Permanente 1,500 Sr Unsec 4.150% 5/1/2047 99.051 +120 NR AA-

Use of Proceeds: Repay existing debt and general corporate purposes

11-Apr-17 SSM Health Care Corp 500 Sr Unsec 3.823% 6/1/2027 100.000 +150 NR A+ Healthcare - Facilities & Services

Use of Proceeds: Repay Commercial Paper/other Short-term Debt and general corporate purposes

13-Mar-17 Humana Inc HUM 600 Sr Unsec 3.950% 3/15/2027 99.877 +135 Baa3 BBB+ Managed Care

13-Mar-17 Humana Inc HUM 400 Sr Unsec 4.800% 3/15/2047 99.905 +160 Baa3 BBB+

Use of Proceeds: General corporate purposes

8-Mar-17 UnitedHealth Group UNH 625 Sr Unsec 3.375% 4/15/2027 99.489 +88 A3 A+ Managed Care

8-Mar-17 UnitedHealth Group UNH 725 Sr Unsec 4.250% 4/15/2047 99.810 +110 A3 A+

Use of Proceeds: Repay existing debt and general corporate purposes

9

Source: Loan Connector

New Issue

Loan Market Update

Tranche LIBOR Upfront

Date Company Name Tranche Type Amount Deal Amount Maturity Date Spread Fee Moody's S&P Lead Arranger(s) Use of Proceeds Phase

1-Apr-17 Chartwell Master Care LP Revolver/Line >= 1 Yr. $100,000,000 $300,000,000 6-Dec-19 NA NA NR NR BMO, Toronto Dominion Bank General Purpose Completed

1-Apr-17 Chartwell Master Care LP Revolver/Line >= 1 Yr. 200,000,000 300,000,000 6-Dec-19 NA NA NR NR BMO, Toronto Dominion Bank General Purpose Completed

10



Current Interest Rate Environment

Yield Curve Suggests Continued Low Rate Environment Forward LIBOR Rate

10-yr UST Yield Remains Near All-Time Lows % of Time the 10-yr UST was Below a Specific Yield (1962 – Present)

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

3 Mo 6 Mo 12 Mo 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 30 Yr

Forward Yield Curve - May 31

Yield Curve - April 30

Forward Yield Curve - One Year Forward (4/30/2018)

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21 Nov-21 May-22

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17

0.2%4.4%

8.7%12.4%

14.7%

20.8%

30.8%

37.7%

43.1%

50.0%

57.3%

63.5%

70.7%

77.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00%

58 54 32 50 57 29 60 65 61 45 80 43FO Pricings

by Month

$0.0

$10.0

$20.0

$30.0

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Dea

l Val

ue

Prior Period

Current Period

13 7 10 7 13 15 1 6 8 5 7 14IPO Pricings

by Month

$0.0

$2.5

$5.0

$7.5

$10.0


Dea

l Val

ue

Prior Period

Current Period

11

Sources: Capital IQ, Dealogic, Lipper


Equity Capital Markets: Deal Volume & Aftermarket Performance Trends

Follow-Ons LTM ($ in billions) Initial Public Offerings LTM ($ in billions)

LTM Aftermarket Follow-On Performance (%) Relative IPO Aftermarket Performance

2-Year Avg. Proceeds 2-Year Avg. Proceeds

(5.0%)

(2.5%)

0.0%

2.5%

5.0%

7.5%

10.0%


1-Day 1-Week 1-Month

70

80

90

100

110

120

130

140

Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17

Renaissance IPO Index

Russell 2000 Index

NASDAQ Composite

12

Source: Dealogic

Healthcare Services Initial Public Offerings

Healthcare Services Follow-On Offering

Equity Capital Markets: Year-to-Date Healthcare Services Pricings

Healthcare Services Convertible Offerings

Healthcare Services IPO Backlog

None

Filing Pricing Convert Rule Deal Market (Discount) / Years to Call

Date Date Issuer Ticker Type 144a Value Cap Coupon Premium Rank Maturity Provision Healthcare Sector

3/16/17 3/16/17 Rennova Health Inc RNVA Debt N $16.0 $10.0 NA (12.000%) NA 2.0 NA Healthcare IT

Mean $16.0 $10.0 NA (12.000%)

Median $16.0 $10.0 NA (12.000%)

Filing Pricing Deal Market Shares % Offer Discount to % Change in Price

Date Date Issuer Ticker Value Cap Offered Secondary Price Filing Last 1 Day 1 Week 1 Month Healthcare Sector

02/10/17 04/25/17 Catasys Inc CATS $15.0 $111.0 3.125 0% $4.80 (38.5%) (46.0%) 7.9% NA NA Healthcare Services

03/27/17 03/27/17 Evolent Health Inc EVH 150.0 1,444.0 7.500 100% 20.00 (5.9%) (5.9%) 2.8% 16.5% 13.5% Healthcare IT

03/07/17 03/08/17 Health Insurance Innovations Inc HIIQ 42.0 325.0 3.000 0% 14.00 (19.3%) (19.3%) 11.8% 20.0% 17.5% Healthcare IT

02/24/17 03/07/17 Cotiviti Holdings Inc COTV 349.0 3,397.0 9.683 100% 36.00 (7.1%) (4.4%) 1.0% 3.3% 16.0% Healthcare IT

02/02/17 02/03/17 Interpace Diagnostics Group Inc IDXG 4.0 17.0 1.200 0% 3.00 (30.6%) (30.6%) 5.3% (5.3%) (9.3%) Healthcare Services

01/17/17 01/19/17 Almost Family Inc AFAM 154.0 619.0 3.450 0% 44.50 (7.1%) (3.6%) 2.9% 6.7% 8.2% Healthcare Services

01/17/17 01/18/17 Teladoc Inc TDOC 159.0 899.0 9.488 19% 16.75 (3.7%) (1.5%) 9.9% 13.1% 23.9% Healthcare IT

Mean $124.7 $973.1 5.349 (16.0%) (15.9%) 5.9% 9.1% 11.6%

Median $150.0 $619.0 3.450 (7.1%) (5.9%) 5.3% 9.9% 14.7%

None

13

Source: Capital IQ

M&A Activity

Announcement Date Target(s) Buyer(s) Target Business DescriptionDeal Value

($mm)

04/28/17 Image Stream Medical, Inc. Olympus Corporation of The AmericasProvides clinical visual collaboration solutions including procedure space integration, recording, live

video streaming, real-time room status monitoring, video editing and information integration$87.0

04/28/17 St. Francis Health Center, Inc. Stormont-Vail HealthCare, Inc.Offers neurology, hematology, neurosciences, neurosurgery, pain management, sports medicine,

urology, medical and radiation oncology, cardiology, primary care and surgical servicesNA

04/27/17 15 Independent Animal Hospitals VCA Inc. Offers veterinary services via 15 animal hospitals NA

04/25/17 Emergo Group Inc. UL LLC Provides medical and IVD device consulting services worldwide NA

04/25/17 FQHC Associates, LLC Germain & Co., Inc.Provides healthcare consulting services, focusing on Federally Qualified Health Center (FQHC)

programs and collaborationsNA

04/24/17 Three Forks of Forney Cornerstone Senior Living, LLC Comprises senior living facilities 12.5

04/24/17 Gastroenterology Consultants, P.A. Gastro Health, PLOffers colonoscopy, upper GI endoscopy, ERCP, liver biopsy, flexible sigmoidoscopy, small bowel

capsule endoscopy, and hemorrhoid banding servicesNA

04/21/17 All About Home Care, LLC Nova Leap Health RI, LLCProvides personal care, homemaking and companionship services in private homes, assisted living

communities, hospitals, nursing homes and rehabilitation centersNA

04/20/17 The Premier Dental Group, Inc. Sun Life Financial Inc.Operates an independent preferred provider network of dentists, offering general dentistry, oral surgery,

endodontics, orthodontics, pediatric dentists, periodontics and prosthodontics servicesNA

04/19/17 Southeastern Spine Institute, LLC Candescent Partners, LLC Offers a variety of specialized spinal surgical procedures NA

04/19/17 Health 2.0 LLCHealthcare Information and Management Systems

Society, Endowment Arm

Promotes technologies through a series of conferences, code-a-thons and prize challenges for panels,

discussions amd product demonstrations to health care companies worldwideNA

04/19/17 The Memorial Hospital of Rhode Island Prime Healthcare Services, Inc.Operates as a community hospital in the Blackstone Valley of Rhode Island and southeastern

MassachusettsNA

04/19/17 Memorial University Medical Center, Inc. HCA Holdings, Inc.Tertiary care hospital that provides healthcare services to patients in southeast Georgia and southern

South Carolina$430

04/18/17 Exact Recruiting Solutions, Inc. Simione Healthcare Consultants, LLC Provides recruiting services for the home care and hospice industry NA

04/18/17 Pathology Associates of Princeton Aurora Diagnostics, LLCProvides laboratory and anatomic pathology services to the University Medical Center of Princeton at

Plainsboro and the surrounding central New Jersey regionNA

04/18/17 Air Medical Resource Group, Inc. Air Medical Group Holdings, Inc.Provides air medical services transporting patients in rural area hospitals to large tertiary care facilities in

metropolitan areasNA

04/18/17 Family Services of Western Pennsylvania Wesley Spectrum ServicesProvides mental health, intellectual disabilities, vocational rehabilitation, child welfare, safety net and older

adult services for children, teens, adults and familiesNA

04/17/17 Las Cruces Dermatology Associates, P.C. Epiphany Dermatology PA Provides medical, surgical and cosmetic dermatology services NA

04/17/17 Mercy Health Medical Transportation LLC First Care Medical ServicesOffers mobile intensive care, advanced life support, basic life support, bariatric transport, ambulette,

dispatch, event standby, long-distance transport and specialty care transport servicesNA

04/11/17 Physicians Plus Insurance Corporation Unity Health Plans Insurance CorporationOffers various health care plans to the needs of individuals, families and employers in Madison and

south central WisconsinNA

04/10/17 Trauma Healing Centers Incorporated OrganiGram Holdings Inc. Provides trauma, chronic pain and disabling illness treatment services NA

04/10/17 Five Behavioral Health Hospitals Care Capital Properties, Inc. Comprises a portfolio of behavioral health hospitals 380.0

04/10/17 Jefferson Dental Clinics P.C. Brentwood Associates, Inc.Operates dental centers in Dallas/Fort Worth Metroplex and offers a range of general dental and

orthodontic servicesNA

04/10/17 Dean Dorton Healthcare Solutions LLC Dean Dorton Allen Ford, PLLC, Investment Arm Offers billing and contracting credentialing services for healthcare specialists NA

04/07/17 Safis Solutions, LLC PharmaLex GmbH Provides healthcare consulting, regulatory compliance, quality systems, validation and auditing services NA

04/06/17 Sta-Home Health & Hospice, Inc. AccentCare, Inc. Provides home healthcare services to patients in Mississippi NA

14

Source: Capital IQ

M&A Activity

Announcement Date Target(s) Buyer(s) Target Business DescriptionDeal Value

($mm)

04/06/17 Medical Arts Dermatology PA Epiphany Dermatology PA Provides dermatology services in Waxahachie and Corsicana, Texas NA

04/06/17 Rehabilitation Center of Des Moines, LLC The Ensign Group, Inc. Provides licensed professional nursing care to individuals with illness or recovering from injury NA

04/06/17 PB Institute Partners Limited Partnership Delphi Behavioral Health Group, LLCOperates a drug and alcohol rehabilitation center in Florida, providing medical treatment, psychiatric

care, experiential therapy, psychotherapy, nutritional guidance and after-care services to patientsNA

04/06/17 Medical Optics, Inc. Alpha Source, Inc.Provides medical equipment, endoscope and instrument repair and restoration services to hospitals and

healthcare practices globallyNA

04/06/17 New England Baptist Hospital Inc.Beth Israel Deaconess Medical Center, Inc.;

Lahey Health System, Inc.Operates as an orthopedic center that provides medical and surgical care services NA

04/05/17 emPower Doctors LLC iHealth Solutions LLCOffers billing, electronic medical and health record system, claims, denials and credentialing services for

physiciansNA

04/05/17 Tidewater Physical Therapy, Inc. PT Network, LLC Operates an out-patient physical therapy practice NA

04/05/17 Manchester Health Services, Inc. VNA & Hospice of the SW Region, IncOffers skilled nursing, physical and occupational therapy, speech/language pathology, medical social

work, home health aide and homemaker servicesNA

04/04/17 Patient Account Services, LLC Acclara Solutions, LLCProvides revenue cycle and accounts receivables management services to its customers in the

healthcare industryNA

04/04/17 PMOA, Inc. Mitchell International, Inc. Provides pharmacy management and ancillary services to the workers compensation industry NA

04/04/17 Q Management Services LLC American Dental Partners, Inc. Offers practice management services to dental offices in Rochester, New York NA

04/03/17 Angelica Corporation KKR Credit Advisors (US) LLC Provides healthcare linen and medical laundry services for hospitals, clinics and long-term care facilities 125.0

04/03/17 University Pathologists, LLC Aurora Diagnostics Holdings, LLCOffers surgical, molecular, dermatopathology, head and neck, gastrointestinal, uropathology,

cytopathology and gynecologic, hematopathology and bone and podiatric pathology servicesNA

04/03/17 PharmaSource Healthcare, Inc. Comprehensive Pharmacy Services, Inc. Offers pharmacy management solutions and services to hospitals NA

03/02/17 HealthSource Chiropractic Clinic HealthSource Chiropractic, Inc.Provides chiropractic care services for headaches and migraines, neck pain, TMJ pain, pregnancy

related symptoms, allergies, scoliosis, back and hip pain and auto/work-related injuriesNA

03/02/17 Illinois Skilled Nursing Portfolio CareTrust REIT, Inc. Offers skilled nursing services in Illinois 29.2

03/02/17 PopHealthCare L.L.C. GuideWell Mutual Holding Corporation Provides data analytics solutions to local, regional and national health plans and provider organizations NA

03/01/17Tenet Healthcare, Home Health & Hospice

OperationsAmedisys, Inc. Provides home health and hospice services in Arizona, Illinois, Massachusetts and Texas NA

03/01/17 Allied Health Professionals, LLC RCM Technologies, Inc.Provides jobs for physical therapists, occupational therapists and speech therapists in hospitals, schools,

rehabilitation centers and outpatient programsNA

03/01/17 Rainbow ADHC, LLC Maryland Adult Day Health, Inc.Operates adult day health care centers that provide care and assistance with activities of daily living such

as eating, walking, medication management and assistance with groomingNA

03/01/17 Coding Strategies, Inc. Revenue Cycle, Inc. Provides auditing, education, reference tools and consulting services for the healthcare industry NA

15

Select Transactions

For additional information on KeyBanc Capital Markets,

please contact any of the individuals listed below

Vamsi Botla

Director

Healthcare

(312) 730-2708

[email protected]

Healthcare Investment Banking Team

Karan Jolly

Director

Healthcare

(216) 689-4535

[email protected]

Colby Kittrell

Vice President

Healthcare

(212) 476-7463

[email protected]

Mike Jackson

Managing Director & Segment

Leader – Diversified Industries Group

(216) 689-4441

[email protected]

Jim Lilly

Managing Director

Healthcare

(212) 476-7460

[email protected]

Slava Girzhel

Managing Director

Healthcare

(216) 689-4010

[email protected]

Steve Alcauskas

Managing Director

Healthcare

(503) 821-3999

[email protected]

Select KeyBanc Capital Markets Transaction Experience

Daren Oddenino

Vice President

Healthcare

(216) 689-4633

[email protected]

127 Public Square

Cleveland, OH 44114

1301 Avenue of the Americas

New York, NY 10019

227 West Monroe Street

Chicago, IL 60606

111 SW 5th Avenue

Portland, OR 97204

March 2017 March 2017 January 2017 October 2016 October 2016 September 2016 September 2016

has received an investment fromhas invested in

has received an investment from

Senior Secured Credit Facilities Senior Notes was recapitalized by Senior Notes

due 2027 & 2047 Senior Secured Credit Facilities

$175,000,000 $1,350,000,000 $325,000,000

Joint Lead Arranger,

Joint Lead Arranger & Co-Manager Exclusive Financial Advisor Co-Manager Exclusive Financial Advisor Joint Bookrunner & Exclusive Financial Advisor

Syndication Agent Syndication Agent

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