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Full Legal Disclaimer

This research presentation expresses our research opinions. You should assume that as of the publication date of any presentation, report or letter, Spruce

Point Capital Management LLC (possibly along with or through our members, partners, affiliates, employees, and/or consultants) along with our subscribers

and clients has a long position in all stocks (and are long/short combinations of calls and puts on the stock) covered herein, including without limitation Henry

Schein, Inc. (“HSIC”), and therefore stand to realize significant gains in the event that the price of its stock rises. Following publication of any presentation,

report or letter, we intend to continue transacting in the securities covered therein, and we may be long, short, or neutral at any time hereafter regardless of our

initial recommendation. All expressions of opinion are subject to change without notice, and Spruce Point Capital Management does not undertake to update

this report or any information contained herein. Spruce Point Capital Management, subscribers and/or consultants shall have no obligation to inform any

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This research presentation expresses our research opinions, which we have based upon interpretation of certain facts and observations, all of which are

based upon publicly available information, and all of which are set out in this research presentation. Any investment involves substantial risks, including

complete loss of capital. Any forecasts or estimates are for illustrative purpose only and should not be taken as limitations of the maximum possible loss or

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should assume these types of statements, expectations, pro forma analyses, estimates, and projections may turn out to be incorrect for reasons beyond

Spruce Point Capital Management LLC’s control. This is not investment or accounting advice nor should it be construed as such. Use of Spruce Point Capital

Management LLC’s research is at your own risk. You should do your own research and due diligence, with assistance from professional financial, legal and

tax experts, before making any investment decision with respect to securities covered herein. All figures assumed to be in US Dollars, unless specified

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To the best of our ability and belief, as of the date hereof, all information contained herein is accurate and reliable and does not omit to state material facts

necessary to make the statements herein not misleading, and all information has been obtained from public sources we believe to be accurate and reliable,

and who are not insiders or connected persons of the stock covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer,

or to any other person or entity that was breached by the transmission of information to Spruce Point Capital Management LLC. However, Spruce Point

Capital Management LLC recognizes that there may be non-public information in the possession of HSIC or other insiders of HSIC that has not been publicly

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Capital Management LLC.

Executive Summary

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Spruce Point Conducted Proprietary Analysis To Investigate Vets First Choice’s (“VFC”) Recent Performance And Believes There Is A Window Of Opportunity To Purchase Shares Of HSIC Today At A Steep Discount To Where Wall Street Analysts Will Eventually Value The Company:Henry Schein (“HSIC”) announced on April 23, 2018 that it would spin-off and merge its animal health business with privately held, VFC to create a new company to be named Vets First Corp. We believe that investors are awaiting the S-1 (new security filing) and S-4 (merger filing) to obtain more information and future projections on Vets First Corp. Given the current information void, Spruce Point conducted big data analysis and a large proprietary survey of vets that reveals significant underappreciated growth at VFC. We believe analysts are overly focused on the pressures of HSIC’s dental business, and ignoring the tremendous growth at VFC. We expect that investors and analysts focus and sentiment will shift in the coming weeks and months as the growth that we’ve uncovered becomes much more evident.

Vets First Choice is a Next Generation Technology Solution To Allow Vets To Recapture Revenue Lost To Online Pharmacies: Vets First Corporation will be run by Benjamin and David Shaw. The Shaw Family has created a tremendous amount of value in the animal health space as David Shaw was the founder of Idexx (now valued at ~$22B). The Shaw family created VFC as a result of vet practices having lost a majority of the revenue stream that they had garnered from selling prescriptions. Historically, vets were both the doctor and pharmacy for animals. However, the internet disrupted the latter for vet practices over time. Vets First Choice seeks to bring back the lost prescription revenue stream to the vet practice by bringing a front-end online pharmacy solution to all of its customers. Further, Vets First Choice helps vets manage their practice by offering insights and ways to enhance compliance (filling prescription that a vet writes) which leads to greater profits for the vets, happier pet owners, and healthier pets.

Vets First Choice Will Be Able To Capitalize On Henry Schein’s Trusted Relationship With Vet Clinics And Turbocharge Vets First Choice’s Growth Profile: Henry Schein already services over 80,000 vets around the world and is the #1 animal health distributor and solutions provider in NA, Europe and Australia/NZ (>70% customer penetration). Furthermore, Henry Schein’s animal health group employs a sales staff of ~680 employees vs ~100 employees at Vets First Choice. We believe that VFC is leveraging Henry Schein’s brand, sales force and existing install base to rapidly deploy its product offering.

Spin-Offs Tend To Outperform The Market And HSIC’s Existing Shareholder Base Has A Strong Affinity For Pure Play Animal Health Stocks: Spruce Point likes to make investments with highly attractive risk/reward profiles. Academic research and recent data points suggest that spin-offs outperform the broader market. Typical spin-offs exhibit early selling pressure in the first few weeks of trading. However, we analyzed HSIC’s shareholder base, and believe a significant amount of HSIC shareholders will not only continue to own Vets First Corp, but could also be incremental buyers. We believe the success of last week’s spin and IPO of Elanco Animal Health (NYSE: ELAN) by Eli Lilly (ELY) illustrates strong underlying demand for animal health stocks. We believe VFC will have a better sales and EBITDA growth story than ELAN.

Spruce Point Is Long Henry Schein (NASDAQ: HSIC), Sees Approximately 30% to 50% Upside Potential

5

Spruce Point Is Long Henry Schein (NASDAQ: HSIC), Sees Approximately 30% to 50% Upside Potential

Based On Spruce Point’s Proprietary Data Scrape We believe Vets First Choice Now Has +7,900 Unique Veterinary Practices (+54% YTD) On Its Prescription Management Platform. Our Analysis Suggests That It Will End The Year With Over 9,000 Vet Practices: In order to assess the current growth of VFC we developed an algorithm to process over 40,000 zip codes through Vets First Choice’s Vet Finder. We continue to run the algorithm on a weekly basis to track vet adoption and currently find that over 7,900 unique vet practices are on the VFC platform. This compares with 5,100 vet practices that were disclosed in HSIC’s press release on April 23, 2018. We believe that VFC’s prescription management platform adoption is accelerating and that it is adding on average +80 new vets per week. At this rate of adoption, we believe that over 9,000 Vet Practices will have signed up for the platform by the end of 2018. Given recent momentum, we believe, that Vets First Choice’s “install base” will grow +75% in 2018. This rate of adoption is significantly above the level last disclosed by HSIC and will be a key valuation driver of sell-side analyst models.

We Surveyed Over 100 Vet Practices That Are Currently Using Vets First Choice Prescription Management Platform And Find, On Average, That They Are Selling $37K And $55K In Their Second And Third Full Calendar Years, Respectively: Using our proprietary “Vets First Choice Database”, we conducted a survey of over 100 vet practices. The survey participants offered insights into their practice’s sales levels and cadence on the Vets First Choice Prescription Management Platform. Further, our survey was able to identify simple changes that vet practices could employ that would lead to greater traction with their existing install base. For example, our survey finds that vet practices who no longer fax prescriptions are currently seeing 45% higher sales on the VFC platform versus practices that still fax written prescriptions to their competition.

Vets First Corp Will Be The Fastest Growing EBITDA Story In The Animal Health Sector: The newly created entity, Vets First Corp will be growing its EBITDA at a faster clip than any other pure play animal health company in our peer group (ELAN, ZTS, IDXX, HSKA, PETQ, PETS). We estimate that Vets First Corp will grow its EBITDA to ~$500M in 2020, more than doubling our 2017E EBITDA of $242M. Longer-term, we believe that the install base exiting 2020 could achieve between $2.2B and $4.0B of EBITDA should each Vet practice reach between $250K and $500K of sales on their Vets First Choice prescription platform.

Our Sum-of-the-Parts (SOTP) Base Case Analysis Yields An HSIC Price Target of $106/share, ~30% Upside: We think the stock approaches this level by the end of this year as more information is released to the public, the spin-off nears consummation, and an expanded analyst universe assumes coverage of VFC with strong buy recommendations. We believe that investor knowledge that Vets First Choice’s install base has grown to +7,900, as well as our conviction that Vets First Corp can reach ~$500M of EBITDA by 2020, merits an immediate repricing of HSIC shares today on modest industry multiple assumptions. Our upside case to $126/share (+50%) assumes HSIC/VFC garners a premium multiple

6

Timeline And Upcoming Catalysts

We believe the findings of our proprietary data scrape and market survey will be validated over the next four months as

HSIC provides updated information, and the Street begins to fully appreciate the value of Vets First Corp.

Our Estimated Timeline of Events:

September 2018• S-1 and S-4 Filed (most likely confidentially)

October 2018 / November 2018• Analyst Day for SpinCo, Vets First Corp• Vets First Corp will likely offer projections for the newly combined entity

November 2018 / December 2018• “When Issued” trading begins (approximately 2-3 weeks prior to spin)

December 2018 / January 2019• Actual spin and completion of transaction

2019 & Beyond• Sellside coverage is likely to come from existing HSIC analysts as well as a group of analyst that cover the animal

heath sector• We expect at least six to ten analysts to initiate coverage with buy ratings soon after the transaction is completed

7

HSIC -- Sum of Parts Valuation

Metric Mulitple Value Comment

Legacy HSIC Valuation

HSIC - FY19E EBITDA Estimate $1,123.3

Less: EBITDA attributable to SpinCo 267.8

Legacy HSIC EBITDA $855.5 12.0x $10,267

SpinCo Valuation (i.e. Vets First Corp)

(HSIC Animal Health + Vets First Choice)

Vets First Corp. 2020E EBITDA $501.3 25.0x $12,532

Net Debt at SpinCo (1,125.0) $1.0B to $1.25B dividend to HSIC (from SpinCo)

SpinCo Equity Value 11,407.2

HSIC Share of SpinCo (~63%) $7,186.6 current HSIC shareholders will own ~63% of SpinCo

Spin Adjustments

Cash Dividend to HSIC from SpinCo $1,125.0

Plus: Net Cash Received from Spin $1,125.0

Current Net Debt at HSIC

HSIC Current Debt $2,177.2

HSIC Minority Interest 302.4

HSIC Cash (111.3)

Less: Current Net Debt at HSIC $2,368.3

Price Target for Current HSIC Shareholders

Current Value to HSIC shareholders $16,209.8

HSIC Shares 153.1

Current Price Target $105.88

Upside Potential 26%

HSIC’s Sum of Parts Valuation – Base Case

We estimate that Vets First Choice will more than double its 2017 EBITDA to ~$500M by 2020. The pro forma entity will

offer investors exposure to the higher growth animal health industry. We see the new VFC potentially garnering a

multiple commensurate with industry bellwether Idexx. Our base case assumes a discount to Idexx, but we believe that

the size of the addressable market for the pro forma entity far surpasses that of Idexx’s market opportunity.

Source: Bloomberg, Company Filings and Spruce Point Estimates

$ in millions, except per share figures

We are valuing legacy HSIC at a one turn discount to its current EV/ EBITDA multiple of

~13.0X. We think a slight discount to its current valuation is warranted since the

legacy HSIC will no longer be exposed to the higher growth animal health sector

Vets First Corporation:Strategic Rationale For The Marriage of HSIC’s Animal Health Business And Vets First Choice

9

Henry Schein’s Animal Health Business Is a Global Leader In Animal Health Solutions

HSIC’s Animal Health business is a fueled by 680 global field sales consultants that have achieved over 70%

veterinarian penetration and 20%-35% market share in key pet markets globally.

Source: Henry Schein Q2 2018 Presentation

10

Vets First Choice Is A Next Generation Technology Solution for Veterinarians

Vets First Choice was founded in 2010 by Ben Shaw and his father, David Shaw (Founder of IDEXX, a $21 billion market

cap company in the animal space). The vision of Vets First Choice is to empower veterinarians to reach their full

clinical and financial potential by leveraging advanced technology.

Source: Vets First Choice August 2018

11

VFC’s Pharmacy Solution Allows Vets To Recapture Revenue Lost To Online Competition

Source: Maine The Magazine, Vets First Choice

Historically, vets generated revenues by acting as both doctors (medical attention) and pharmacies (writing Rx) for

their clientele. Today over 60% of vets write prescriptions for online pet pharmacy retailers like 1800petmeds.com

resulting in a lost revenue stream. Vets First Choice recaptures this revenue source by delivering vet’s clientele with

an online purchase experience and greater customer compliance (animal prescription use).

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VFC’s Pharmacy Solution Allows Vets To Recapture Revenue Lost To Online Competition

Source: vetsfirstchoice.com

VFC provides a white labeled front-end online pharmacy to all of its vet partners (see below).

VFC shares a portion of the revenue with the vet, allowing them to recapture a previously lost revenue source.

VFC provides recommendations to vets in order to keep pricing competitive.

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The Rationale Behind The Spin And Merge

The corporate marriage of Henry Schein’s Animal Health with Vets First Choice creates an instant best-in-class animal

health innovator. Henry Schein brings over 80,000 vet relationships worldwide to a technology asset that we believe

every vet in the world should consider, and may eventually adopt. Henry Schein’s relationships and integrity with vets

worldwide will “turbo charge” Vets First Choice’s growth profile.

(1) Estimate based on Spruce Point Research. Active practices were 5,100 at the end of 2017 as disclosed in the 8K sourced belowSource: Henry Schein 8K (April 23, 2018), Vets First Choice

Relationships with:• Over 80,000 vet practices worldwide• >70% of vet practices in the U.S.,

Europe, Australia & New Zealand• #1 Animal health and solutions provider

in each of the above markets

• +7,900(1) active practices on RX management platform

• Leading insights, analytics and services platform, helping vets to identify and manage gaps in care

vetsfirstcorp

Complementary skill sets that create the only multi-channel, integrated platform entirely focused on improving the

veterinary practice

Significant global scale in an attractive end-market

• Strive to significantly build on this global leadership position

Opportunity to expand margins as recurring revenues accelerate amidst platform adoption

The ability to harness technology to create market growth and expand customer lifetime value

Evolving consumer trends have created an opportunity for rapid growth on the right platform

Vets First Corp Well Positioned To Succeed

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Vets First Corporation Transaction Summary

The Vets First Corporation transaction is a tax-free event for U.S. tax purposes and is expected to realize $100M of

operating income synergies by year three.

Source: Henry Schein 8K (April 23, 2018), Vets First Choice

Reverse Morris Trust: intended to be a tax-free spin-off to Henry Schein shareholders for U.S. tax

purposes, followed by a merger with Vets First Choice

Expected to close: end of 2018 / January 2019

Expected ownership:

• HSIC shareholders: 63%

• Vets First Choice shareholders: 37%

Combined company expected to realize in excess of $100M of operating income synergies by year three

Tax-free dividend of $1.0B to $1.25B in cash to RemainCo from SpinCo

• Henry Schein plans to use the proceeds of this transaction for general corporate purposes, including

share repurchases, paying down debt and disciplined M&A

Post closing, Henry Schein expects to deliver EPS growth for the remaining consolidated Henry Schein

business in the high-single digit to low-double digit range

15

A Win-Win Situation For HSIC Shareholders

HSIC shareholders are well positioned to benefit from both the tremendous growth opportunity associated with

Vets First Corp and a refocused Henry Schein (RemainCo)

Source: Henry Schein 8K (April 23, 2018)

Unlocks Shareholder Value for HSIC and Vets First Corp. Positions each company for above market growth Streamlines focus and enhances capital allocation Grows available market for veterinarians and manufacturers Expected year three synergies will be in excess of $100M in operating income

Vets First Corp. (SpinCo + Vets First Choice) Assist veterinarians in managing their practices through a

multi-channel platform Harness the power of insights and analytics Henry Schein Animal Health practice management

solutions combined with Vets First Choice platform to drive differentiated level of service and support to veterinarians

Help clinicians achieve better outcomes for pets through increased compliance

Positions Vets First Corp to achieve a premium valuation

Henry Schein (RemainCo) Increase focus in helping dentists and physicians in operating

a more efficient practice so practitioners can deliver quality clinical care

High-touch, full-service, value-added approach for supplies, equipment, service, and practice management software

Provide innovative solutions for global dental and medical practitioners

Opportunity for increased investment Expected to be between $1.0 billion and $1.25 billion in cash

on a tax-free basis HSIC expects to deliver EPS growth for the remaining

consolidated business in the high-single digit to low-double digit range

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We Expect Vets First Corp. Will Be Another Successful Spin-0ff

Spin-offs have historically outperformed the broader market by a large margin as the transaction allows for the individual

segments of a parent company to be more efficiently valued. The transaction also broadens the potential universe of investors

that can now choose which parts of the historical business that they would like to own (RemainCo, SpinCo, or both). Additionally,

spin-offs often free management teams from the bureaucracy of the parent company while creating a public currency that can be

better used to incentivize and align management with their investor base.

Source: BloombergUS listed Spin-outs with over $1B market cap since 2016

First Day Parent Company SpinCo Returns Since Spin

"RW" Trading Name Ticker Name Ticker Spin-Off S&P

01/04/16 Fiat Chrysler Automobiles FCAU Ferrari NV RACE 200% 45%

02/04/16 WR Grace & Co GRA GCP Applied Technologies GCP 56% 53%

03/04/16 Manitowoc Co Inc/The MTW Welbilt Inc WBT 57% 46%

05/16/16 WestRock Co WRK Ingevity Corp NGVT 287% 42%

07/01/16 Herc Holdings Inc HRI Hertz Global Holdings HTZ -61% 39%

07/05/16 Danaher Corp DHR Fortive Corp FTV 76% 40%

09/07/16 EMC Corp EMC Dell Technologies Inc Class V DVMT 101% 34%

09/08/16 SINA Corp/China SINA Weibo Corp WB 54% 34%

10/03/16 Air Products & Chemicals APD Versum Materials Inc VSM 29% 35%

10/31/16 Johnson Controls JCI Adient PLC ADNT -10% 38%

11/01/16 Yum! Brands Inc YUM Yum China Holdings Inc YUMC 34% 38%

11/10/16 Conagra Brands Inc CAG Lamb Weston Holdings Inc LW 120% 35%

01/03/17 Xerox Corp XRX Conduent Inc CNDT 66% 30%

01/04/17 Hilton Worldwide HLT Park Hotels & Resorts Inc PK 9% 29%

01/04/17 Hilton Worldwide HLT Hilton Grand Vacations Inc HGV 27% 29%

01/30/17 Varian Medical Systems VAR Varex Imaging Corp VREX 8% 28%

02/01/17 Citrix Systems Inc CTXS LogMeIn Inc LOGM -18% 28%

04/03/17 Hewlett Packard Enterprise HPE DXC Technology Co DXC 61% 24%

05/15/17 Ashland Global Holdings ASH Valvoline Inc VVV -6% 22%

06/01/17 TEGNA Inc TGNA Cars.com Inc CARS 0% 20%

06/05/17 SINA Corp/China SINA Weibo Corp WB 1% 20%

07/18/17 Vornado Realty VNO JBG SMITH Properties JBGS -2% 19%

08/07/17 MetLife Inc MET Brighthouse Financial Inc BHF -28% 18%

12/05/17 Aptiv APTV Delphi Technologies PLC DLPH -42% 11%

05/01/18 Pentair PNR nVent Electric PLC NVT 23% 10%

05/09/18 Dover DOV Apergy Corp APY 9% 8%

05/22/18 ALTICE EUROPE ATC NA Altice USA Inc ATUS -3% 7%

06/01/18 Wyndham Destinations WYND Wyndham Hotels & Resorts Inc WH -9% 7%

06/01/18 DXC Technology DXC Perspecta Inc PRSP 3% 7%

07/02/18 Autoliv ALV Veoneer Inc VNE 34% 7%

08/08/18 Linn Energy LNGG Riviera Resources Inc/Linn RVRA -6% 2%

Average 34% 26%

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Case Study: Last Week’s Spin And IPO of ELAN Illustrates Investors Appetite For Pure-Play Animal Health Stocks

Elanco Animal Health (NYSE: ELAN) was spun-out and IPO’ed by Eli Lilly & Co (NYSE: LLY) on September 20, 2018.

Vets First Corp will have both a stronger topline and EBITDA growth story versus Elanco. We are in agreement with the

Wall St. Journal recent assessment that “Animal-Health Stocks Will Continue to Shine” (2)

Source: Bloomberg, Company Filings and Spruce Point Estimates(1) Spruce Point Estimates for both actual and estimated results for 2017 to 2020(2) Wall St Journal “Animal-Heath Stocks Will Continue to Shine”, Sept 24, 2018

Company Name:

Ticker:

Business Description

ELAN

Provides veterinary

supplies to the companion,

equine and food animals

segment

Provides technology

solutions to help vets

manage gaps in care and

provides and also provides

an online pharmacy

solution

Companion animal disease

prevention and

therepuetics

Food animal vaccines,

enzymes, and anti-biotics

Vets First Corp

TBD

Elanco Animal Health Company Name:

Price and Enterprise Value

IPO Price and Date: NA $24.00 (9/19/18)

Price: TBD $34.58

Ent. Value (1) $12,532 $14,646

Sales and EBITDA

Sales Growth y/y Sales Growth y/y

2017(1) $3,734 $2,889

2018E $4,088 10% $2,977 3%

2019E $4,444 9% $3,073 3%

2020E $4,845 9% $3,194 4%

EBITDA EBITDA

2017(1) $242 $499

2018E $293 21% $557 12%

2019E $391 33% $628 13%

2020E $501 28% $753 20%

Valuation

EV/ EBITDA EV/ EBITDA

2018E 42.8x 26.3x

2019E 32.1x 23.3x

2020E 25.0x 19.5x

Vets First Corp Elanco Animal Health

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Spin-Offs Outperform The Broader Market Indexes

Bloomberg US Spin-Off Index performance vs S&P 500 since 2016

Source: Bloomberg

Bloomberg US Spin-Off Index performance vs S&P 500 since 2008

Spruce Point likes investing situations where the data suggests a favorable risk/reward. Numerous academic

studies and recent performance suggests that spin-offs outperform the market.

19

HSIC Cross-Ownership Analysis Indicates That Many HSIC Shareholders Will Continue To Own VFC

We believe that existing HSIC shareholders will continue to own Vets First Corp given their ownership levels of IDXX

and ZTS (the 2 biggest animal health sector pure plays). The cross-ownership analysis illustrates HSIC’s existing

shareholder’s large exposure and understanding of the “Animal Health” theme.

Source: Bloomberg

HSIC IDXX ZTS

# % Value ($M) # % Value ($M) # % Value ($M)Vanguard Group Inc/The 1 10.6% $1,297.1 1 10.3% $713.2 2 7.4% $2,859.1

Generation Investment Management L 2 9.2% $1,134.2

Longview Partners Guernsey Ltd 3 9.0% $1,110.2

BlackRock Inc 4 7.0% $861.8 2 7.3% $503.3 1 7.7% $2,977.5

Power Corp of Canada 5 4.8% $590.2

State Street Corp 6 4.5% $555.3 5 4.0% $274.8 4 3.8% $1,481.1

Select Equity Group Inc 7 4.4% $533.8

FMR LLC 8 4.3% $531.9

Alecta Pens ionsforsakring Omses idi 9 3.6% $442.2

Brown Brothers Harriman & Co 10 3.6% $442.0 16 1.3% $487.2

Janus Henderson Group PLC 11 2.1% $255.0 44 0.4% $26.2 19 1.1% $433.8

JPMorgan Chase & Co 12 1.8% $219.4 42 0.4% $27.1

CI Investments Inc/Canada 13 1.8% $219.4

Eaton Vance Corp 14 1.7% $206.3 29 0.9% $329.6

American Century Cos Inc 15 1.4% $175.7 19 1.0% $66.6 32 0.7% $283.2

Invesco Ltd 16 1.4% $175.3 11 1.4% $98.6 34 0.7% $274.6

Swedbank AB 17 1.3% $164.8

T Rowe Price Group Inc 18 1.2% $152.6 7 2.4% $169.6 22 1.1% $410.3

Geode Capita l Management LLC 19 1.2% $152.6 16 1.2% $82.3 21 1.1% $419.0

Northern Trust Corp 20 1.2% $148.6 15 1.2% $83.4 17 1.2% $480.5

BANK OF NEW YORK MELLON CORP/THE 21 1.1% $136.7 13 1.3% $93.1 20 1.1% $429.2

State of New York 22 1.1% $132.2

Goldman Sachs Group Inc/The 23 1.0% $123.2 12 1.4% $97.4 12 1.4% $551.9

Park West Asset Management LLC 24 1.0% $122.0

Neuberger Berman Group LLC 25 1.0% $120.8 10 1.8% $125.8 36 0.6% $245.6

HSIC Top 25 81.5% $10,003.5 34.0% $2,361.5 30.2% $11,662.7

HSIC Top 50 96.8% $11,882.5 39.0% $2,707.2 39.3% $15,174.5

The large index and ETF funds are also expected to be natural buyers of Vets First Corp. over time

HSIC’s top 25 holders representing $10B of HSIC ownership also represent $11.7B of combined ownership in IDXX and ZTS

Spruce Point Proprietary Data Scrape & Survey Indicates That Vets First Choice Is Materially Outperforming Market Expectations

21

Spruce Point’s Data Scrape Provides Realtime Insights Into VFC’s Traction With Vets

Source: Vets First Choice -- Find My Vet Searchable Database

In order to get an advance read on the traction that VFC is having with vets during 2018, Spruce Point initiated a data

scrape. The scrape allows us to aggregate the number of vets currently leveraging the VFC platform and monitor the growth

of new users over time. We believe this data provides valuable insights into VFC’s performance ahead of transaction filings.

Spruce Point inspected the HTML code behind Vets First Choice’s Vet Finder and found that it was accessing a searchable

API on the AWS server

We gathered a list of over 40,000 zip codes and then wrote an algorithm that searched and recorded results for vet practices

The algorithm is run on a recurring basis to provide insights into the penetration of the VFC platform

Write code that allows for

the search, retrieval and

documentation of vets on

the VFC platform for over

40,000 US Zip codes

Run the code on a weekly

basis to determine

changes in the number of

vets on the VFC platform

Step 1: Identify Search Tool For Vets Step 2: Identify Vets Websites Step 3: Create Algorithm

22

Vets First Choice Appears To Be Growing Well Ahead of Market Expectations

Our data scrape program identified +7,900 unique practices on the Vets First Choice Platform. This pace indicates that

its install base will grow to over 9,000 vets by the end of 2018.

Source: Spruce Point Research(1) 2015E and 2016E are based on Spruce Point Research Estimates(2) 2017 vet practices on Vets First Choice prescription management platform was disclosed by Henry Schein(3) +7,900 vet practices have been captured on Spruce Point’s proprietary algorithm as of the date of this report(4) we estimate that over 9,000 vet practices will be on Vets First Choice Prescription management platform by the end of 2018

# of Vet Practices on the VFC Prescription Management

Platform Based on SP Data Scrape

August 2018 Vets First Choice Slide Deck

(data as of 12/31/17)

2,426

3,517

5,100

+7,900(3)

+9,000(4)

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2015E(1) 2016E(1) 2017(2) 2018E(3,4)

# o

f pra

ctices

23

The United States Veterinarian Market

We believe that all 25,000 U.S. vet practices will have an online pharmacy solution at some point in the future. Vet

practices are in the midst of a secular change where companies like Vets First Choice can streamline the ability to offer

a pharmacy online. Vets First Choice will likely have grown its U.S. market share to 36% by the end of 2018 from ~20%

at the end of 2017. Ultimately, we think investors will begin to ascribe value to the worldwide opportunity as HSIC

currently has over 80,000 vet relationships globally.

Source: Vets First Choice Presentation

24

Vets First Choice Survey Questions

Spruce Point Survey Questions: Does your practice currently use Vets First Choice?

General Questions: • Where is your practice located? • What year was your vet practice started? • How many vets are in your practice? • What is your annual practice revenue (multiple choice)?

Sales info on Vets First Choice:• What year did you begin using Vets First Choice? • On the Vets First Choice Platform, what were your sales in the following years: 2013, 2014, 2015, 2016, 2017?• What are your sales YTD in 2018? • What are your expected sales in 2018, 2019 and 2020?• What do you anticipate are your peak sales?

Online Pricing / Product Pricing• Does your practice use the recommended pricing that Vets First Choice suggest? • Which are the products that your practice prices on its own?• Why do you use your own pricing?

Fax Usage:• Some practices that are using VFC are no longer filling scripts via fax, does your practice still fill scripts via fax?• Do you plan to stop filling scripts via fax (i.e. online or paper only) at some point in the future?

Compounding (mixing of drugs to fit the unique needs of an animal):• What % of your prescriptions require compounding? • Do you believe that Vets First Choice brings integrity in regards to compounding drugs?• Are you aware of the USP updates on compounding standards which are anticipated to be official on December 1, 2019?

Feedback on Vets First Choice:• Overall, how would you rate the Vets First Choice Platform? • Which other online platforms did you consider before choosing Vets First Choice? • What were the reasons you ended up choosing Vets First Choice?• Any general comments on Vets First Choice?

Source: Spruce Point Survey

25

What year Did you begin using Vets First Choice?

On The Vets First Choice Platform, what were your sales in the following years?

On The Vets First Choice Platform, what do you estimate will be your sales in 2018 and 2019?

N =87

Cohort # Year 1(1) Year 2(2) Year 3(3) Year 4(4)

Pre -2013 4 $9,425 $28,966 $36,502 $41,624

2014 4 29,961 64,484 78,684 81,270

2015(5) 5 4,637 29,790 30,787 35,949

2016(5) 19 19,758 41,338 50,611 57,742

2017(5) 21 7,768 14,410 19,112

2018(5) 34 11,115 15,109

87

Average $12,611 $24,419 $37,314 $55,263

N 87 87 53 32

Growth y/y 94% 53% 48%

What is your Annual Practice Revenue?

N=257

Size # % of Total

Under $500,000 57 22%

$500K  to <$1M 60 23%

$1M to <$1.5M 61 24%

$1.5M to <$2.0M 32 12%

$2.0M to <$2.5M 18 7%

$2.5M to <$3.0M 13 5%

Over $3M 16 6%

Total 257 100%

How Many Vets Are in your practice?

N=257

# of Vets # % of Total

1 72 28%

2 61 24%

3 45 18%

4 31 12%

5 19 7%

6 12 5%

7 5 2%

8 2 1%

9 3 1%

11 1 0%

13 2 1%

14 2 1%

15 1 0%

25 1 0%

Total 257 100%

Survey Results – General Questions & Cohort Data

General Questions

Source: Spruce Point Survey(1) Year 1 represents the sales in the first calendar year of joining the platform and therefore represents less than 12 months of sales(2) Year 2 represents the first full calendar year of platform sales for each Vet Clinic(3) Year 3 represents the second full calendar year of platform sales for each Vet Clinic(4) Year 4 represents the third full calendar year of platform sales for each Vet Clinic(5) Numbers in blue font represents survey participant expectations for sales in 2018 and 2019

Sales Cohort Data

The average vet practice is growing its sales by 53% and 48% in its second and third full calendar years on the Vets First Choice

Platform, respectively.

26

Some practices that are using VFC are no longer filling

scripts via fax, does your practice still fill scripts via fax?

N = 75

Avg.

Size # % of Total 2018E Rev

Yes 53 71% $17,628

No 22 29% $25,532

Total 75 100%

Does your practice use the recommended

pricing that Vets First Choice Suggest?

N = 120

Size # % of Total

Yes 107 89%

No 13 11%

Total 120 100%

Do you believe that Vets First Choice brings

integrity in regards to compounding drugs?

N = 69

Size # % of Total

Yes 66 96%

No 3 4%

Total 69 100%

Overall, how would you rate Vets First Choice platform?

N=85

Rating # % of Total

Very Dissatisfied 0 0%

Dissatisfied 3 4%

Fair 17 20%

Satified 45 53%

Very Satisfied 20 24%

Total 85 100%

Survey Results – Online Pricing, Faxing, Drug Compounding, And Customer Satisfaction

Online Pricing

Source: Spruce Point Survey

Practices that don’t fax scripts to competitive pharmacies (i.e. allow scripts to be filled by

outside pharmacies) have meaningfully more revenue on the Vets First Choice Platform

Faxing

Compounding of Animal Medication

Given the ranges of pet types (dogs, cats, horses, etc.) and sizes, compounding (mixing of drugs to fit the unique needs of an animal)

is often necessary to achieve the proper dosages and also serves as a convenient way

for pet owners to administer their pet’s medications. The Vets First Choice platform

also gives vets an ability to monetize and prescribe compounded medications.

Our survey reveals that 96% of respondents believe that Vets First Choice brings integrity to an area of animal pharma that historically

has had a very bad reputation filled with bad players.

Customer Satisfaction

Users of the Vets First Choice platform are happy, with only 3 respondent saying they

were dissatisfied with the platform.

27

Select Quotes From Survey Participants

What were the reasons you ended up choosing Vets First Choice?• Caliber of support, vision of the team at the top, consistent superlative care, year over year . . . VFC is superlative and always has been. Much

better compounding platform. We were compounding in-house and loved the fact we would be able to outsource it to a company that does it well.

• [Vets First Choice] marketing tools ROCK! The amount of support given to hospitals is amazing:)• Better profit share and good customer service• Ease of use and reduction of workload of pharmacy staff• Easier client facing website• Easy set up and low maintenance • Impressed with their setup and business model• integration with practice management software and prices• it was the best [solution] that fit our needs• They had compounded medications and the system integrated with our PMS and wrote the rx's in our system• Vetsource has a poor product catalog. Anticipating the 2way integration of VFC with my practice software• We used Road Runner for our compounded medications/prescriptions & they merged with Road Runner• [10 survey participants mentioned pharmacy compounding solutions and/or Road Runner merger as reason for choosing Vets First Choice]

Selected other general comments left by our survey participants:• Good service so far. Our clients are very happy about it• I wish my clients would try it and see how easy it is• Good concepts with energetic company - I know there is more we should be taking advantage of• Reputable company with great customer service. My clients have been very satisfied• VFC is a great way to offer products that do not make sense to stock• It is nice to not have to stock as much on the shelves in our very small practice where we don't have the extra room anyways! Directing our

clients to our online store has been a great way to decrease the inventory kept in the hospital• We have started using Vet's first choice as a way to offer our clients more products. We currently are allowing products not sold in office on

our online pharmacy. Also as a way to get people back from using other online pharmacies

Source: Spruce Point Survey

Revaluing HSIC Given Our New Insights

29

We Believe Sell-Side Analysts Haven’t Done The Work To Fully Understand The Upside of The Spin-off

Only 5 out of 16 analyst that publish price targets have the equivalent of a “Buy” rating on HSIC. We don’t believe the

analysts have conducted extensive diligence to fully understand what the upcoming spin and merge with Vets First

Choice represents to current HSIC shareholders. This presents an opportunity, and it appears astute investors are

already valuing HSIC slightly above the average analyst price target.

Source: Bloomberg

Broker Recommendation Price Target

Leerink Partners LLC Outperform $100

Craig-Hallum Capital Group LLC Buy 96

Barrington Research Outperform 92

Baird Outperform 90

RBC Capital Markets Sector Perform 85

Stifel Neutral 81

Goldman Sachs Hold 81

Evercore ISI In-line 79

Piper Jaffray Overweight 78

J.P. Morgan Hold 77

Jefferies Neutral 77

Credit Suisse Neutral 76

Barclays Equal-weight 73

Stephens Inc Equal-weight 70

Morgan Stanley Underweight 65

Morningstar, Inc Neutral 65

Average Price Target $80

30

Vets First Choice -- Standalone Revenue Model

2015 2016 2017 2018E 2019E 2020E

Vets First Choice Summary Revenues

VFC - Platform(1) $61.3 $98.1 $117.8

Road Runner / Atlas (2) 0.0 0.0 39.3

Total(3) $61.3 $98.1 $157.0 $233.5 $321.4 $435.7

% Growth 60% 60% 49% 38% 36%

Platform Customer -- Year End(4) 2,426 3,517 5,100 9,000 12,500 17,000

Growth (5) 45% 45% 76% 39% 36%

Average Sales / Customer -- Year End $25,280 $27,900 $30,784 $25,941 $25,708 $25,628

Customers

Pre - 2015 2,426 2,426 2,426 2,426 2,426 2,426

2016 1,091 1,091 1,091 1,091 1,091

2017 1,583 1,583 1,583 1,583

2018 3,900 3,900 3,900

2019 3,500 3,500

2020 4,500

Total 2,426 3,517 5,100 9,000 12,500 17,000

Average Net Sales per Platform Customer by Cohort (6)

Pre - 2015(7) $25,280 $33,783 $46,971 $58,713 $73,392 $91,740

2016 $14,818 $31,004 $37,958 $43,306 $51,494

2017 $5,826 $10,807 $14,334 $18,283

2018 $8,336 $11,332 $13,032

2019 $8,336 $11,332

2020 $8,336

Total $25,280 $27,900 $30,784 $25,941 $25,708 $25,628

Vets First Choice – Spruce Point Projections

Our proprietary data scrape and survey results form the basis of our Vets First Choice standalone model.

$ in millions, except Average Sales per Customer

Based on our proprietary Vets First Choice algorithm, we believe

Vets First Choice is onboarding +80 vet practices per week to

their online pharmacy

Based on Survey Results

Source: Bloomberg, Company Filings and Spruce Point Estimates. Store counts at end of year assumes a regular amount of churn.(1) Based on Spruce Point Diligence, platform customers represented ~75% of the PF 2017 sales of $157M(2) Road Runner and Atlas were purchased by VFC on August 10, 2017(3) HSIC transcript on April 23, 2018 disclosed that VFC generated "a little over $157M in revenues“ in 2017(4) HSIC Spin-out presentation on April 23, 2018 disclosed VFC had ~5,100 active practices on the RX management platform at the end of 2017(5) Based on Spruce Point Diligence, practices enrolled grew by ~45% in 2016 and 2017(6) Average Net Sales per Platform Customer for the 2016 to 2020 customer cohorts are based on our survey results (highlighted in blue font) and then net out a 25% payment to the vets(7) Average Net Sales per Platform Customer for the Pre-2015 Cohort are imputed from 2015 to 2017 based on VFC estimated historical and actual results. Results from 2018 to 2020 assume 25% annualized growth

31

Vets First Corp -- Pro Forma Model

2015 2016 2017 2018E 2019E 2020E

Revenues by Segment

HSIC -- Animal Health $2,921.6 $3,253.1 $3,476.6 $3,750.0 $4,012.5 $4,293.4

Growth 11.3% 6.9% 8.4% 7.0% 7.0%

Adjusted Internal (i.e. Organic) growth(1) 7.1% 6.0% 8.5% 7.0% 7.0%

HSIC -- Tech / VAS (Animal Health Portion) $100.0 $105.0 $110.3 $115.8

Growth 5.0% 5.0% 5.0%

Vets First Choice -- Stand Alone(2) $61.3 $98.1 $157.0 $233.5 $321.4 $435.7

Summary Revenues by Segment

HSIC - Animal Health $2,921.6 $3,253.1 $3,476.6 $3,750.0 $4,012.5 $4,293.4

HSIC - Tech / VAS (Animal Health Portion) 90.7 95.2 100.0 105.0 110.3 115.8

Vets First Choice 61.3 98.1 157.0 233.5 321.4 435.7

Total Revenues $3,073.7 $3,446.5 $3,733.6 $4,088.5 $4,444.1 $4,844.8

Growth 12.1% 8.3% 9.5% 8.7% 9.0%

EBITDA by Segment

HSIC - Animal Health EBITDA $200.4 $225.0 $240.8 $257.6

Margin 5.8% 6.0% 6.0% 6.0%

HSIC - Tech / VAS (Animal Health Portion) EBITDA 24.5 25.8 27.0 28.4

Margin 24.5% 24.5% 24.5% 24.5%

Vets First Choice EBITDA 17.0 42.2 73.0 115.3

Margin(3) 10.8% 18.1% 22.7% 26.5%

Synergies 50.0 100.0

Total EBITDA $242.0 $293.0 $390.8 $501.3

Margin 6.5% 7.2% 8.8% 10.3%

Vets First Corp – Spruce Point’s Model

The justification for our 2020E EBITDA estimate of ~$500M is presented below.

Source: Bloomberg, Company Filings and Spruce Point Estimates(1) Adjusted for acquisitions, FX, calendar effect of an extra week and direct / agency sales(2) See previous slide(3) Based on Spruce Point diligence, we estimate incremental margins growing to 37% by 2020

$ in millions

Our research indicates that Vets First Choice will

have greater than 30% incremental margins

HSIC is guiding to +$100M of synergies by

year three

Adjusted internal growth has averaged ~7% since

the end of 2015.

32

Medium to Longer Term US EBITDA Opportunity

# of Vet Average Sales / Vet Clinic

Practices $25,628 $100,000 $250,000 $500,000

9,000 $425.4 $673.1 $1,172.6 $2,005.1

12,500 458.6 802.6 1,496.3 2,652.6

17,000 501.3 969.1 1,912.6 3,485.1

Vets First Corp – Medium To Long Term EBITDA Opportunity

Once investors better understand the value proposition that Vets First Corp will bring to vet clinics in the U.S.,

investors will have a clearer understanding of the +$2.0B EBITDA U.S. long-term potential opportunity.

Source: Spruce Point Estimates

Benjamin J. Shaw, CEO of Vets First Choice on April 23, 2018

(announcement of transaction):

“We expect that [vet clinics on the Vets First Choice Platform will] identify more than $0.5

million to $1 million of incremental new revenues to their practice.”

33

Vets First Corp -- Consensus vs. Spruce Point

At the moment, there are not many analysts offering projections on VFC. Spruce Point estimates are materially higher

than whisper numbers that we have heard Morgan Stanley and Goldman Sachs are using for Vets First Corp.

$265.5 $271.1$292.6

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Morgan Stanley Goldman Sachs Spruce Point

$302.2$334.9

$399.4

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Morgan Stanley Goldman Sachs Spruce Point

2018E EBITDA(1) 2019E EBITDA(1) 2020E EBITDA(1)

Source: Spruce Point Research(1) Whisper numbers believed to be from analyst models where they were separately modeling Vets First Corp

$348.3

$407.4

$501.3

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Morgan Stanley Goldman Sachs Spruce Point

34

Catalyst: Expected Analyst Coverage

We expect that many of the existing HSIC analysts and Animal Health sector analysts will be adding Vets First Corp to

their coverage universe. Therefore, we expect between six to ten analysts to cover Vets First Choice soon after the

transaction is completed.

Source: Bloomberg

Medical, Dental & Animal

Distribution Pure Play Animal Heath

Ticker HSIC PDCO ZTS IDXX HSKA KIN PETQ PETS

Market Cap $12,913.4 $2,329.6 $43,484.6 $21,287.5 $818.5 $458.0 $1,057.5 $729.2

Firms Currently Covering HSIC

Baird X XBarclays X X XBarrington Research XCraig-Hal lum X X X XCredit Suisse X X X X XEdward Jones X XEvercore ISI X XGabel l i & Co X X X XGoldman Sachs X X XJ.P. Morgan X X XJefferies X X X XLeerink Partners X XMorgan Stanley X X XMorningstar, Inc X X X XPiper Jaffray X X XRBC Capita l X XStephens Inc XSti fel X X X XWil l iam Bla i r X X X X X

Firms Covering Animal Health

Al l iance Global X XArgus Research XB Ri ley FBR X XBenchmark Company XBMO Capita l Markets XCanaccord Genuity X XCantor Fi tzgera ld X XCL King X X X X XCowen XHC Wainwright XLadenburg Thalmann XLake Street XNoble Capita l Markets XOppenheimer XRaymond James X X XSidoti X XSunTrust X

Total Coverage 19 16 17 8 8 7 5 5

35

Historical Valuation of HSIC

We take a conservative view in valuing the remaining HSIC dental business at a discount to its

historical EV / Est. EBITDA close to 13x

Source: Bloomberg

We apply a discounted multiple for our base case to the remaining

HSIC business

Long-Term Average

HSIC’s Seven Year Historical EV / Est. EBITDA

36

HSIC -- Sum of Parts Valuation

Metric Mulitple Value Comment

Legacy HSIC Valuation

HSIC - FY19E EBITDA Estimate $1,123.3

Less: EBITDA attributable to SpinCo 267.8

Legacy HSIC EBITDA $855.5 12.0x $10,267

SpinCo Valuation (i.e. Vets First Corp)

(HSIC Animal Health + Vets First Choice)

Vets First Corp. 2020E EBITDA $501.3 25.0x $12,532

Net Debt at SpinCo (1,125.0) $1.0B to $1.25B dividend to HSIC (from SpinCo)

SpinCo Equity Value 11,407.2

HSIC Share of SpinCo (~63%) $7,186.6 current HSIC shareholders will own ~63% of SpinCo

Spin Adjustments

Cash Dividend to HSIC from SpinCo $1,125.0

Plus: Net Cash Received from Spin $1,125.0

Current Net Debt at HSIC

HSIC Current Debt $2,177.2

HSIC Minority Interest 302.4

HSIC Cash (111.3)

Less: Current Net Debt at HSIC $2,368.3

Price Target for Current HSIC Shareholders

Current Value to HSIC shareholders $16,209.8

HSIC Shares 153.1

Current Price Target $105.88

Upside Potential 26%

HSIC’s Sum of Parts Valuation – Base Case

We estimate that Vets First Choice will more than double its 2017 EBITDA to ~$500M by 2020. The pro forma entity will

offer investors exposure to the high growth animal health industry. We see the new VFC potentially garnering a

multiple commensurate with industry bellwether Idexx. Our base case assumes a discount to Idexx, but we believe that

the size of the addressable market for the pro forma entity far surpasses that of Idexx’s market opportunity.

Source: Bloomberg, Company Filings and Spruce Point Estimates

$ in millions, except per share figures

We are valuing legacy HSIC at a one turn discount to its current long-term EV/ EBITDA

multiple of ~13.0X. We think a slight discount to its current valuation is warranted since the legacy HSIC will no longer be exposed to the

higher growth animal health sector

37

Vets First Corp Will Be The Fastest EBITDA Growth Story In The Animal Space

Vets First Corp will be the 3rd largest pure play animal health company and be the fastest EBITDA growth story in its

space. As a result, we expect VFC to attract significant attention from growth starved investors.

Source: Bloomberg, Company Filings and Spruce Point Estimates(1) Revenue and EBITDA data for 2017 for Vets First Corp are Spruce Point Estimates

Fastest EBITDA Growth within its

peer group

We expect a significant amount of analyst coverage for Vets First Corp. out of the gate

($ in millions, except per share figures)

Valuation EBITDA Growth

# of Sales EBITDA EV / Sales EV/ EBITDA CAGR

Name Ticker Analysts 2017 2018E 2019E 2020E 2017 2018E 2019E 2020E 2017 2018E 2019E 2020E 2017 2018E 2019E 2020E 18E to 19E 18E to 20E

Animal Health - Fast Growing (+$500M Market Cap)

ZOETIS INC ZTS 18 $5,307 $5,778 $6,237 $6,600 $1,927 $2,241 $2,496 $2,714 8.8x 8.1x 7.5x 7.1x 24.3x 20.9x 18.8x 17.3x 11% 10%

IDEXX LABS IDXX 9 $1,969 $2,223 $2,448 $2,682 $500 $577 $659 $723 11.2x 9.9x 9.0x 8.2x 44.1x 38.2x 33.5x 30.5x 14% 12%

ELANCO ANIMAL HEALTH ELAN 3 $2,889 $2,977 $3,073 $3,194 $499 $557 $628 $753 5.1x 4.9x 4.8x 4.6x 29.4x 26.3x 23.3x 19.5x 13% 16%

HESKA CORP HSKA 8 $129 $135 $150 $170 $23 $20 $24 $25 6.3x 6.0x 5.4x 4.8x 34.6x 40.9x 33.6x 33.0x 22% 11%

PETIQ INC PETQ 5 $267 $502 $579 $708 $22 $43 $54 $68 4.4x 2.3x 2.0x 1.6x 52.2x 26.9x 21.8x 17.0x 24% 26%

PETMED EXPRESS PETS 4 $270 $291 $311 $332 $52 $56 $60 $63 2.4x 2.2x 2.0x 1.9x 12.2x 11.2x 10.5x 10.1x 7% 6%

Average 6.3x 5.6x 5.1x 4.7x 32.8x 27.4x 23.6x 21.2x 15% 14%

Vets First Corp. (1)N/A ? $3,734 $4,088 $4,444 $4,845 $242 $293 $391 $501 33% 31%

38

HSIC -- Sum of Parts Valuation -- Sensitivity

Low Base Bull

Metric Mulitple Value Metric Mulitple Value Metric Mulitple Value

Legacy HSIC Valuation

HSIC - FY19E EBITDA Estimate $1,123.3 $1,123.3 $1,123.3

Less: EBITDA attributable to SpinCo 267.8 267.8 267.8

Legacy HSIC EBITDA $855.5 10.0x $8,555 $855.5 12.0x $10,267 $855.5 13.0x $11,122

SpinCo Valuation (i.e. Vets First Corp)

(HSIC Animal Health + Vets First Choice)

Vets First Corp. 2020E EBITDA $501.3 20.0x $10,026 $501.3 25.0x $12,532 $501.3 32.0x $16,041

Net Debt at SpinCo (1,125.0) (1,125.0) (1,125.0)

SpinCo Equity Value 8,900.8 11,407.2 14,916.2

HSIC Share of SpinCo (~63%) $5,607.5 $7,186.6 $9,397.2

Spin Adjustments

Cash Dividend to HSIC from SpinCo $1,125.0 $1,125.0 $1,125.0

Plus: Net Cash Received from Spin $1,125.0 $1,125.0 $1,125.0

Current Net Debt at HSIC

HSIC Current Debt $2,177.2 $2,177.2 $2,177.2

HSIC Minority Interest 302.4 302.4 302.4

HSIC Cash (111.3) (111.3) (111.3)

Less: Current Net Debt at HSIC $2,368.3 $2,368.3 $2,368.3

Price Target for Current HSIC Shareholders

Current Value to HSIC S/Hs $12,919.7 $16,209.8 $19,276.1

HSIC Shares 153.1 153.1 153.1

Current Price Target $84.39 $105.88 $125.90

Upside Potential 0% 26% 49%

HSIC SOTP Sensitivity Analysis

Our bull case scenario suggests that HSIC would be worth $126 representing +50% upside. Our bull case illustrates

the upside of HSIC shares today should Vets First Corp be awarded the highest multiple in its peer group.

Source: Bloomberg, Company Filings and Spruce Point Estimates

A peer group high multiple will be warranted to Vets First

Corp given the infancy of its rollout as well as the

stickiness of its reoccurring revenue stream

39

HSIC Peer Group Trading Valuations

Source: Bloomberg, Company Filings and Spruce Point Estimates

($ in millions, except per share figures)

Stock % of EBITDA Enterprise Value

Price 52-wk Revenue Growth Margin P/E EBITDA Sales Div

Name Ticker 9/25/2018 High EV 2017 2018E 2017 2018E 2017 2018E 2019E 2017 2018E 2019E 2017 2018E 2019E Yield

Medical / Dental Distribution / Dental Supply

PATTERSON COS PDCO $24.56 61% $3,092 -1.5% 0.7% 7.4% 5.1% 11.6x 18.4x 16.1x 7.5x 10.9x 10.9x 0.6x 0.6x 0.5x 4.2%

DENTSPLY SIRONA XRAY $37.45 54% $9,892 5.6% 1.0% 23.2% 18.5% 14.1x 17.8x 16.0x 10.8x 13.4x 11.9x 2.5x 2.5x 2.4x 0.9%

Animal Health - Fast Growing

ZOETIS INC ZTS $90.25 96% $46,882 8.6% 8.9% 36.3% 38.8% 37.6x 29.3x 26.2x 24.3x 20.9x 18.8x 8.8x 8.1x 7.5x 0.6%

IDEXX LABS IDXX $245.84 96% $22,050 10.9% 12.9% 25.4% 26.0% 74.9x 58.8x 50.6x 44.1x 38.2x 33.5x 11.2x 9.9x 9.0x 0.0%

ELANCO ANIMAL HEALTH ELAN $34.58 NA $14,646 -0.8% 3.0% 17.3% 18.7% NA NA 38.4x 29.4x 26.3x 23.3x 5.1x 4.9x 4.8x 0.0%

HESKA CORP HSKA $109.16 97% $811 -0.6% 4.4% 18.1% 14.7% NA 63.8x 55.5x 34.6x 40.9x 33.6x 6.3x 6.0x 5.4x 0.0%

PETIQ INC PETQ $41.04 93% $1,164 NA 88.1% 8.4% 8.6% NA 49.3x 43.1x 52.2x 26.9x 21.8x 4.4x 2.3x 2.0x 0.0%

PETMED EXPRESS PETS $35.25 61% $635 11.6% 7.9% 19.3% 19.4% 20.8x 16.8x 15.0x 12.2x 11.2x 10.5x 2.4x 2.2x 2.0x 3.1%

KINDRED BIOSCIEN KIN $13.55 86% $348 NM NM NM NM NM NM NM NM NM NM NA NM 14.9x 0.0%

HENRY SCHEIN INC HSIC $84.34 97% $14,979 7.7% 7.7% 8.5% 8.3% 23.4x 20.5x 18.9x 14.2x 13.4x 13.3x 1.2x 1.1x 1.1x 0.0%

40

Risks To Our Long Thesis

Recent lawsuit by Idexx vs. Vets First Choice: Idexx filed a lawsuit against two former employees of Idexx and Vets First Choice claiming violations of non-compete clauses and taking confidential information from Idexx on August 3, 2018. We believe that Idexx has a bone to pick with its former founder who we believe did not leave Idexx on good terms. Both Idexx and Vets First Choice are headquartered near each other in Maine, and are now fighting both locally and nationally for top talent. Via LinkedIn, we believe at least 35 former employees have left Idexx for Vets First Choice.

Amazon Threat: We believe Amazon poses a risk to almost every online distribution business. That being said, there are some models that need high touch points and different level of service than Amazon can provide and/or intends to provide.

Buying Power of Vet Practices: Akin to what has transpired with dental practices, we believe more vet practices will create or enter into group purchasing organizations (GPO) which may pressure prices in the long-run.