founded in 1991 -...
TRANSCRIPT
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Deep domain expertise in three inter-related sectors and broad industry networks
A market-leading corporate finance advisory firm
Founded in 1991
Entrepreneurial and owner-managed
40 person team; 250+ completed transactions
Broad global network
Creative solutions
Senior level focus on every transaction
with global reach
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About Results International
http://www.google.co.uk/url?sa=i&source=images&cd=&cad=rja&docid=DFQYiv0ak9F7FM&tbnid=JC0hUqObSsXtIM:&ved=0CAgQjRwwAA&url=http://miranda.hemscott.com/servlet/HsPublic?context=ir.access&ir_option=RNS_NEWS&item=45709189634603&ir_client_id=687&ei=XFtMUracJemM7QaDtIHgCg&psig=AFQjCNEyyjGJ5RmA-3O_m4xWlR5jBhRVwA&ust=1380822236675855http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=Xnpv6mT1mXrNHM&tbnid=3pJvLIYwfhFInM:&ved=0CAUQjRw&url=http://my.opera.com/community/opera/buttons/&ei=NuDXUv-XB8am0QXpzoGIBw&bvm=bv.59568121,d.bGE&psig=AFQjCNE6m80XE3hdbm-4Akuss3EvthcY7Q&ust=1389965726223087http://www.covance.com/index.phphttp://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=c0RRud0PBBv66M&tbnid=_v7sGUY1JN5xDM:&ved=0CAUQjRw&url=http://weijiblog.com/2010/03/42-merck/&ei=sEjUUdHsIcSJhQfd_ICgDw&bvm=bv.48705608,d.ZG4&psig=AFQjCNH22HylAPJvqj1KeOfdNdZOwjzjUQ&ust=1372953090294243
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Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15
Healthcare IT - Europe Healthcare IT - US Biopharma IT Generalists NASDAQ Composite Index FTSE 100
Q1 2015 Performance
Healthcare IT Europe 5.2%
Healthcare IT - US 7.1%
Biopharma IT -0.5%
Generalists -2.3%
HealthTech(1)
6.6%
Results International Global HealthTech Indices
Note: Based on share prices as at 31 March 2015 Note: Indices weighted by market capitalisation Note: Biopharma IT index predominantly reflects Veeva performance since IPO in October 2013 Note:
(1) Excludes Generalists
Sources: Capital IQ and Results analysis 2
17.8%
7.3%
16.7%
1.6%
-6.9%
2.6%
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HealthTech: Share Price Performance
Note: Share price performance as at 31 March 2015 Note: *Last 12 Months & Q1-2015 reference dates adjusted to first trading day post IPO for Inovalon Holdings (11-Feb-15) Sources: Capital IQ and Results analysis
3
47.4%
33.3%
13.3% 7.9%
1.9%
28.1% 30.2%
6.3%
-25.5%
11.9%
-33.7%
-23.8%
-63.4%
-5.3% -5.6%
-16.0%
83.2%
-4.4% -9.8%
-2.8%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Last
12 M
on
ths
34.9%
-0.7%
8.0%
-3.7%
12.9% 9.0%
13.3%
5.6%
-18.1%
11.9%
-6.3% -4.8%
-33.7%
2.5%
-14.5% -10.7%
25.6%
-3.3%
2.7%
43.8%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Q1-2
015
Healthcare IT Europe Healthcare IT US Biopharma IT
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HealthTech: Recent IPO Performances
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Note: Calendarised to December year end; $ millions, except share price data Note:
(1) Current increase from IPO price; Market data as of 31 March 2015
Note: (2)
Castlight projecting negative EBITDA for CY2015 Source: Capital IQ
Company IPO Date Description Raised Indicative Price
Range ($)
IPO Price
($)
Increase vs.
range
Day 1
Increase
Current
Increase(1)
Current
EV
EV / Revenue
2015E
EV / EBITDA
2015E
Feb-15 Cloud-based healthcare
data analytics software 600.0 24.00-26.00 27.00 8.0% 0.0% 11.9% 4,597 10.6x 29.2x
Apr-14 Healthcare information technology and services
1,300.0 18.00-21.00 20.00 2.5% 15.0% 35.4% 12,700 4.3x 13.8x
Mar-14 Healthcare enterprise management software
177.6 13.00-15.00 16.00 14.3% 148.8% (51.5%) 521 6.8x n.m. (2)
Dec-13
Software, hardware and services for the healthcare and energy sectors
199.7 n.a. 2.93 n.a. 20.1% 45.0% 281 2.9x 11.6x
Oct-13
Cloud-based CRM software for the biopharma industry
260.9 16.00-18.00 20.00 17.6% 85.8% 27.7% 2,959 7.6x 26.7x
NYSE
NYSE
LSE
NYSE
NasdaqGS
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HealthTech: Valuation Benchmarks
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EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end Note: Median values reported; excludes negative multiples Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category Note: McKesson excluded from above analysis because majority of revenue is generated from pharmaceutical distribution Source: Capital IQ
4.2%
7.1%
10.0%
19.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
28.2%
24.6%
21.7%
23.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
4.0 x
3.1 x 2.9 x
6.8 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
11.4 x 11.9 x 12.7 x
26.7 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
-
21
17
20
32
29
18
28 27
28
32
44
61
54
4
3
5
1
1
7
2 7 5
6
2
8
12
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0
10
20
30
40
50
60
70
80
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
Healthcare IT Biopharma IT Healthcare IT Total Disclosed Deal Value Biopharma IT Total Disclosed Deal Value
HealthTech: Global M&A Activity
6 Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
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$m
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HealthTech: Selected Deals in Q1 2015
Date Buyer Target EV ($m) EV /
Revenue EV /
EBITDA Company description
Target Location
Mar-15 - - - Healthcare analytics and performance benchmarking software
Mar-15 - - - Practice management software for physiotherapists and rehabilitation clinics
Mar-15 - - - Cloud-based electronic medical record software
Mar-15 81.4 1.8x 15.0x Practice management, communication and electronic patient record software
Mar-15 - - - Business intelligence, performance analyisis and emergency room software for the healthcare industry
Mar-15 - - - Key Opinion Leader campaign optimisation software for the biopharma industry
Feb-15 70.0 - - Medical imaging software
Feb-15 - - - Administrative and invoicing software for GP clinics
Feb-15 - - - Employee credentialing and talent management software for the healthcare industry
Feb-15 17.0 1.0x - Electronic health record solutions for hospitals and mental health providers
Feb-15 - - - Pharmacy management software for long-term post-acute care
Jan-15 140.0 - - Cloud-based analytics, decision support and financial planning software for the healthcare industry
Jan-15 40.0 - - Cloud-based electronic health record and financial software for rural and community hospitals
Jan-15 - - - Cloud-based sales and marketing analytics software for the biopharma industry
Jan-15 65.0 - - Genomic analysis and bioinformatics software
Jan-15 - - - Electronic Clinical Outcome Assessments solutions for clinical trials
Jan-15 37.0 - - Medical imaging software
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Note: Financials relate to the companies full fiscal year before the transaction took place Note: Enterprise Value (EV) = transaction value scaled to 100% shareholding plus net debt (includes minority interest) Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
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HealthTech: Selected Fundraisings in Q1 2015
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company headquarters
Mar-15 Seed - High-Tech Grnderfonds; Innovationsstarter Fund; Quotas Beteiligungs Tinnitus treatment mobile music application
Mar-15 Seed 0.7 Proxy Ventures UK Self-health and medicine management mobile app
Mar-15 Seed 0.3 - Genomic data sharing platform
Mar-15 - 2.0 Groupe Arnault; DR. KADE Pharmaherstelle; and an individual investor Female health mobile app
Mar-15 - 1.0 - Geriatric out-patient care support application
Mar-15 - 8.5 - Neuro-therapy software and hardware
Feb-15 - 9.9 - Diversified healthcare software vendor
Feb-15 Seed 2.5 Creathor Venture; Partech; Stephan Schamback; Heilemann Ventures; Atlantic Labs
Telemedicine application for dermatology
Feb-15 - 0.4 Oy Verman Ab; Integra Capital Partners Oy Ltd; Avohoidon Tutkimussaatio; WetRock Capital & Consulting Oy
Clinical decision support software for diagnostics
Feb-15 Series B 13.5 Amadeus Capital Partners Limited; Smedvig Capital Limited; Octopus Investments Limited
Patient eMarketplace for clinical trials
Jan-15 - 0.1 Rothenberg Ventures Clinical treatment applications for psychology
Jan-15 Seed 1.3 Invest PME SA; Alsace Capital Simulation software for drug discovery
Jan-15 Seed 0.1 DreamIt Health Medical photo sharing and management mobile app
Jan-15 - 1.2 Industrifonden Online platform for fat and muscle mass measurement
Jan-15 Series A 1.5 Capricorn Venture Partners; Participatiemaatschappij Vlaanderen NV Simulation software for cardiovascular procedures
Jan-15 - 0.6 - Mobile patient management/ engagement app
8 Sources: Capital IQ and Results analysis
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Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Rev. Growth Revenue EBITDA
Company (31-Mar-15) Week High Cap Cash Debt Value CY2015 CY15-16 CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Generalists with significant HealthTech exposure
Oracle 43.15 92% 195,729 43,777 (11,083) 184,646 39,008 2.6% 49.3% 48.8% 4.7 x 4.6 x 9.6 x 9.4 x
SAP 72.30 99% 88,315 3,369 8,390 96,705 21,499 5.0% 35.2% 35.1% 4.5 x 4.3 x 12.8 x 12.2 x
Thermo Fisher Scientific 134.34 97% 54,136 1,352 13,216 67,352 16,886 4.2% 25.1% 26.2% 4.0 x 3.8 x 15.9 x 14.6 x
EMC 25.56 83% 51,043 8,321 (1,197) 49,846 25,990 6.1% 27.5% 27.3% 1.9 x 1.8 x 7.0 x 6.6 x
Thomson Reuters 40.55 99% 32,221 1,179 7,729 39,950 9,845 2.7% 28.2% 29.4% 3.2 x 3.1 x 11.4 x 10.6 x
Computer Sciences Corporation 65.28 89% 9,424 2,393 356 9,780 12,185 1.4% 17.6% 18.1% 0.8 x 0.8 x 4.6 x 4.4 x
Aspen Technology 38.49 80% 3,418 231 (231) 3,187 461 9.6% 43.0% 43.2% 6.9 x 6.3 x 16.1 x 14.6 x
25th percentile 2.7% 26.3% 26.7% 2.6 x 2.5 x 8.3 x 8.0 x
Median 4.2% 28.2% 29.4% 4.0 x 3.8 x 11.4 x 10.6 x
75th percentile 5.5% 39.1% 39.2% 4.6 x 4.4 x 14.3 x 13.4 x
Healthcare IT - Europe
CompuGroup Medical 28.83 92% 1,434 23 371 1,805 587 7.1% 22.2% 23.7% 3.1 x 2.9 x 13.8 x 12.1 x
EMIS Group 12.83 94% 809 7 25 834 237 7.0% 29.8% 30.2% 3.5 x 3.3 x 11.9 x 10.9 x
Cegedim 33.84 92% 473 44 550 1,024 539 2.8% 19.1% 19.4% 1.9 x 1.8 x 9.9 x 9.5 x
Servelec Group 4.25 87% 290 6 (9) 281 98 7.9% 24.6% 25.3% 2.9 x 2.7 x 11.6 x 10.5 x
Craneware 7.99 96% 216 36 (36) 179 50 8.2% 30.4% 30.7% 3.6 x 3.3 x 11.9 x 10.9 x
25th percentile 7.0% 22.2% 23.7% 2.9 x 2.7 x 11.6 x 10.5 x
Median 7.1% 24.6% 25.3% 3.1 x 2.9 x 11.9 x 10.9 x
75th percentile 7.9% 29.8% 30.2% 3.5 x 3.3 x 11.9 x 10.9 x
Healthcare IT - US
McKesson 226.20 97% 53,558 4,587 7,340 60,898 186,620 4.3% 2.7% 2.9% 0.3 x 0.3 x 12.1 x 10.9 x
Cerner 73.26 98% 26,336 1,421 (1,291) 25,045 5,044 21.0% 31.3% 33.4% 5.0 x 4.1 x 15.8 x 12.3 x
IMS Health 27.07 95% 9,297 390 3,403 12,700 2,943 9.6% 31.4% 31.9% 4.3 x 3.9 x 13.8 x 12.4 x
athenahealth 119.39 71% 4,661 115 94 4,754 920 21.4% 17.4% 17.8% 5.2 x 4.3 x 29.8 x 23.9 x
Inovalon Holdings 30.21 90% 4,460 163 138 4,597 436 21.7% 36.2% 37.2% 10.6 x 8.7 x 29.2 x 23.3 x
Allscripts Healthcare Solutions 11.96 65% 2,163 53 523 2,686 1,434 6.1% 16.7% 18.3% 1.9 x 1.8 x 11.2 x 9.7 x
MedAssets 18.82 74% 1,139 12 878 2,016 759 4.5% 30.2% 30.5% 2.7 x 2.5 x 8.8 x 8.3 x
Quality Systems 15.98 85% 963 125 (125) 839 515 6.8% 16.1% 17.2% 1.6 x 1.5 x 10.1 x 8.9 x
Castlight Health 7.76 31% 713 192 (192) 521 76 58.4% (91.9%) (44.0%) 6.8 x 4.3 x n.m. n.m.
Healthstream 25.20 78% 709 121 (121) 588 203 14.6% 13.7% 15.4% 2.9 x 2.5 x 21.3 x 16.4 x
Computer Programs & Systems 54.26 80% 614 34 (34) 580 199 6.8% 24.8% 26.6% 2.9 x 2.7 x 11.7 x 10.3 x
Merge Healthcare 4.47 95% 436 42 184 619 248 10.0% 21.7% 23.7% 2.5 x 2.3 x 11.5 x 9.6 x
25th percentile 6.8% 16.4% 17.5% 2.6 x 2.4 x 11.3 x 9.6 x
Median 10.0% 21.7% 23.7% 2.9 x 2.7 x 12.7 x 11.3 x
75th percentile 21.2% 30.8% 31.2% 5.1 x 4.2 x 19.9 x 15.4 x
Biopharma IT
Veeva Systems 25.53 76% 3,356 398 (398) 2,959 388 24.2% 28.5% 29.2% 7.6 x 6.1 x 26.7 x 21.0 x
Medidata Solutions 49.04 84% 2,777 273 (32) 2,745 401 19.8% 23.5% 25.3% 6.8 x 5.7 x 29.2 x 22.6 x
Instem 2.83 95% 35 2 - 28 21 8.7% 16.6% 18.3% 1.5 x 1.4 x 9.3 x 7.8 x
25th percentile 14.2% 20.0% 21.8% 4.2 x 3.6 x 18.0 x 14.4 x
Median 19.8% 23.5% 25.3% 6.8 x 5.7 x 26.7 x 21.0 x
75th percentile 22.0% 26.0% 27.2% 7.2 x 5.9 x 28.0 x 21.8 x
EBITDA Margin
HealthTech: Selected Publicly Traded Companies
9
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA; Net debt includes minority interest Note:
(1)McKesson excluded from Healthcare IT US summary analysis above because majority of revenue is generated from pharmaceutical distribution
Note: (2)
Castlight Health has run a negative gross margin during a period of rapid growth due to additional implementation costs associated with launching new customers Note:
(3) Cegedims revenue growth and EBITDA multiples reflect the divestiture of its Information and CRM solutions assets to IMS Health in June 2014
Source: Capital IQ
(1)
(2)
(3)
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10
Richard Latner
Manager
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