John Hill Senior Managing Director hill@hydeparkcapital.com (813) 383-0205 John McDonald Senior Managing Director mcdonald@hydeparkcapital.com (813) 383-0206 Keith Hodgdon Managing Director hodgdon@hydeparkcapital.com (813) 383-0208 Healthcare M&A Report Q4 2017 Charlie Hendrick Vice President hendrick@hydeparkcapital.com (813) 383-0207 Jeffrey Hendricks Vice President jhendricks@hydeparkcapital.com (678) 523-3073 Tim Knerr Vice President knerr@hydeparkcapital.com (813) 514-9190 Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813-383-0202 www.hydeparkcapital.com Member FINRA/SIPC
Capital Markets Overview Healthcare Commentary Select Public Offerings Healthcare (Q4 2017) Major market indices including the Nasdaq, S&P 500 and S&P Global Healthcare Index posted positive results over the 12-month period ended December 31, 2017, increasing 27.2%, 18.4%, and 17.5%, respectively. The table to the right highlights select public offerings completed in the Healthcare industry during Q4 2017. Denali Therapeutics, Inc. (NASDAQ:DNLI), a biopharmaceutical company, completed the largest IPO during the quarter, raising $250 million from investors. The Healthcare Equipment & Supplies and Healthcare Technology sectors were the industry s leaders with respect to valuation during Q4 2017, trading at revenue multiples of 4.3x and 2.6x, respectively. Offer Date Issuer Industry Sector Offering Type Offering Size ($mm) 11/14/17 Anthem, Inc. Managed Healthcare Fixed Income $5,495 11/08/17 Johnson & Johnson Pharmaceuticals Fixed Income $4,492 10/18/17 UnitedHealth Group, Inc. Managed Healthcare Fixed Income $3,979 10/31/17 Celgene Corp. Pharmaceuticals Fixed Income $2,994 11/27/17 IQVIA Holdings, Inc. Life Sciences Secondary $1,020 11/13/17 Alnylam Pharmaceuticals, Inc. Biotechnology Secondary $675 12/07/17 Denali Therapeutics, Inc. Biotechnology IPO $250 11/05/17 TissueGene, Inc. Biotechnology IPO $181 12/06/17 Odonate Therapeutics, Inc. Pharmaceuticals IPO $150 11/29/17 Teladoc, Inc. Healthcare Technology Secondary $150 Public Market Performance (LTM) Public Company Market Performance by Sector 140% 130% 120% 110% 100% 90% 27.2% 18.4% 17.5% Median Change in Stock Price Enterprise Value / LTM Industry Sector 3 Months 12 months Revenue EBITDA Healthcare Facilities 4.5% 13.3% 1.2x 9.1x Healthcare Services 10.3% 9.5% 2.0x 11.3x Managed Healthcare 10.9% 42.1% 0.5x 10.3x Healthcare Technology (6.3%) 30.2% 2.6x 19.8x Healthcare Equipment & Supplies 4.6% 22.8% 4.3x 18.6x 80% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Healthcare Distribution (3.1%) (3.3%) 0.2x 9.9x S&P 500 Nasdaq S&P Global Healthcare Index Source: S&P Capital IQ 2
Total Transaction Volume Total Transaction Value ($ in billions) Annual Middle Market M&A Activity Healthcare Commentary Middle Market M&A Transactions by Deal Size Healthcare As detailed in the charts below, Healthcare Middle Market M&A transaction volume and value decreased during 2017 compared to 2016. Middle Market Healthcare deal volume fell 35% throughout 2017 to 221 completed transactions, down from 338 during the prior year period. Middle Market Healthcare deal value fell 34% to $31.9 billion compared to $48.0 billion in the prior year. We expect M&A activity in the Healthcare industry will rebound in 2018 as uncertainty around the Affordable Care Act is resolved. ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 218 $7.8 141 $5.5 (35%) (29%) $100 - $499M 91 $21.0 59 $14.6 (35%) (31%) $500 - $999M 29 $19.3 21 $11.8 (28%) (38%) Total Middle Market 338 $48.0 221 $31.9 (35%) (34%) % of Middle Market 2016 2017 % Change Less than $100M 64% 16% 64% 17% $100 - $499M 27% 44% 27% 46% $500 - $999M 9% 40% 9% 37% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Annual Trends: VOLUME U.S. Middle Market M&A Activity Annual Trends: VALUE 400 300 331 288 322 368 345 305 360 372 338 $60 $50 $47.1 $46.2 $51.2 $42.8 $48.4 $49.0 $48.0 200 197 221 $40 $30 $33.7 $35.3 $38.4 $22.8 $20 100 $10 0 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion). 3
Total Transaction Volume Total Transaction Value ($ in billions) Quarterly Middle Market M&A Activity Healthcare Commentary Middle Market M&A Transactions by Deal Size Healthcare As detailed in the table on the right, Middle Market M&A activity in the Healthcare industry fell during Q4 2017 to 48 closed transactions, a 39% decrease from the 79 transactions closed in Q4 2016. The total value of completed Middle Market Healthcare deals fell 21% to $7.7 billion in Q4 2017, down from $9.7 billion in the prior year period, with the largest decline in transactions valued less than $100 million. M&A activity in the Healthcare industry dropped during all four quarters in 2017 because of uncertainty surrounding the Affordable Care Act. ($ in billions) Deal Size Volume Value Volume Value Volume Value Less than $100M 57 $2.0 28 $1.2 (51%) (38%) $100 - $499M 15 $3.1 15 $2.8 0% (9%) $500 - $999M 7 $4.6 5 $3.7 (29%) (21%) Total Middle Market 79 $9.7 48 $7.7 (39%) (21%) % of Middle Market Q4 2016 Q4 2017 % Change Less than $100M 72% 20% 58% 16% $100 - $499M 19% 32% 31% 36% $500 - $999M 9% 48% 11% 48% Total Middle Market 100% 100% 100% 100% U.S. Middle Market M&A Activity Quarterly Trends: VOLUME U.S. Middle Market M&A Activity Quarterly Trends: VALUE 120 103 100 110 $20 $17.0 90 60 77 91 78 73 76 79 61 59 53 48 $15 $10 $11.9 $10.5 $8.7 $12.7 $15.2 $12.3 $10.9 $9.7 $9.9 $8.6 $9.4 $7.7 30 $5 0 $0 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion) 4
Recent M&A Activity Healthcare Select Announced M&A Transactions (Q4 2017) Enterprise EV / EV / Announced Date Target Buyer Industry Value ($mm) Revenue EBITDA 12/27/17 PetVet Care Centers, Inc. KKR & Co. Healthcare Facilities NA NA NA 12/27/17 Wellpartner, Inc. CVS Health Corp. Healthcare Services NA NA NA 12/26/17 Sucampo Pharmaceuticals, Inc. Mallinckrodt Public Ltd., Co. Pharmaceuticals $1,145.6 4.6x 10.7x 12/22/17 Ignyta, Inc. Roche Holdings, Inc. Biotechnology $1,823.8 NA NA 12/19/17 Kindred Healthcare, Inc. TPG Capital / Welsh, Carson, Anderson & Stowe Healthcare Facilities $4,171.2 0.6x 9.2x 12/18/17 MedRisk, Inc. The Carlyle Group Healthcare Services NA NA NA 12/18/17 Net Health Systems, Inc. The Carlyle Group Healthcare Technology NA NA NA 12/07/17 Advance Health New Mountain Capital Healthcare Services NA NA NA 12/07/17 Entellus Medical, Inc. Stryker Corp. Healthcare Equipment $663.9 7.7x NA 12/06/17 DaVita Medical Group Optum, Inc. Healthcare Services $4,900.0 NA NA 12/05/17 Cell Design Labs, Inc. Kite Pharma, Inc. Biotechnology $521.3 NA NA 12/03/17 Aetna, Inc. CVS Health Corp. Managed Healthcare $78,461.9 1.3x 13.1x 11/29/17 Remedy Health Media, LLC Praesidian Capital / Topspin Partners Healthcare Technology NA NA NA 11/27/17 MGC Diagnostics Corp. Altus Capital Healthcare Equipment $43.8 1.1x 24.4x 11/20/17 H.D. Smith, LLC AmerisourceBergen Corp. Healthcare Distributors $815.0 NA NA 11/16/17 Almost Family, Inc. LHC Group, Inc. Healthcare Services $1,016.8 1.4x 23.9x 11/15/17 MDVIP, Inc. Leonard Green & Partners Managed Healthcare NA NA NA Source: S&P Capital IQ. 5
Recent M&A Activity Healthcare Select Announced M&A Transactions (Q4 2017) Enterprise EV / EV / Announced Date Target Buyer Industry Value ($mm) Revenue EBITDA 11/15/17 Leehar Distributors, Inc. Diplomat Pharmacy, Inc. Healthcare Services $595.6 NA NA 11/14/17 TrialCard, Inc. Odyssey Investment Partners Healthcare Services NA NA NA 11/13/17 Upsher-Smith Laboratories, LLC Sumitomo Corp. of Americas Pharmaceuticals $1,055.0 2.7x NA 11/09/17 Principia Biopharma, Inc. Sanofi Biotechnology $805.0 NA NA 11/06/17 RXC Acquisition Co. McKesson Specialty Health Healthcare Services $735.0 NA NA 11/01/17 Halyard Health, Inc., (Surgical and Infection Prevention Business) Owens & Minor, Inc. Healthcare Supplies $710.0 NA NA 10/30/17 Crown Laboratories, Inc. Hildred Capital Partners Pharmaceuticals NA NA NA 10/26/17 Health Integrated, Inc. ExlService Holdings, Inc. Healthcare Services NA NA NA 10/23/17 U.S. Healthworks, Inc. Concentra, Inc. Healthcare Facilities $753.0 NA 11.3x 10/23/17 Exactech, Inc. TPG Capital, L.P. Healthcare Equipment $709.6 2.7x 16.5x 10/11/17 Summit Behavioral Healthcare, LLC FFL Partners / Lee Equity Partners Healthcare Facilities NA NA NA 10/10/17 Delphi Behavioral Health Group, LLC The Halifax Group Healthcare Services NA NA NA 10/10/17 evicore healthcare, LLC Express Scripts Co. Healthcare Technology $3,600.0 NA NA 10/10/17 MedHelp International, Inc. The Staywell Co., LLC Healthcare Technology NA NA NA 10/05/17 Tea Leaves Health, LLC Welltok, Inc. Health Care Technology $90.0 NA NA 10/04/17 Fermatex Vascular Technologies, LLC Vance Street Capital Healthcare Equipment NA NA NA 10/02/17 Apama Medical, Inc. Boston Scientific Corp. Healthcare Equipment $300.0 NA NA Source: S&P Capital IQ. 6
M&A Activity by Healthcare Sector U.S. Middle Market M&A Activity by Healthcare Sector: VOLUME % Change Healthcare Facilities 12 42 71% *Healthcare Services 6 7 17% Healthcare Technology 6 7 14% Healthcare Equipment & Supplies 4 10 150% Pharmaceuticals, Biotechnology & Life Sciences 13 20 35% 0 5 10 15 20 25 30 35 40 45 Q4 2016 Q4 2017 U.S. Middle Market M&A Activity by Healthcare Sector: VALUE % Change ($ in billions) Healthcare Facilities $0.8 $3.2 76% *Healthcare Services $1.3 $1.9 53% Healthcare Technology $0.6 $0.7 15% Healthcare Equipment & Supplies $0.8 $1.7 105% Pharmaceuticals, Biotechnology & Life Sciences $2.6 $3.8 31% $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 Q4 2016 Q4 2017 Source: S&P Capital IQ (includes all closed deals with disclosed deal value between $10 million and $1 billion). *Managed Healthcare and Healthcare Distribution transactions are included in the Healthcare Services sector. 7
Transaction Volume Private Equity Activity Healthcare Commentary Select Announced Private Equity M&A Transactions (Q4 2017) As detailed in the chart to the right, financial sponsors were active across many sectors of the Healthcare industry during Q4 2017, most notably in Healthcare Facilities with 21 announced deals. Several notable private equity deals were announced during Q4 2017, including: TPG Capital s proposed purchase of Exactech, Inc. for $721 million, KKR & Co s announced acquisition of PetVet Care Centers, Inc., and The Carlyle Group s proposed purchase of Net Health Systems, Inc. During Q4 2017, financial sponsors were most active in the Healthcare Facilities and Healthcare Services sectors, announcing 20 and 11 transactions respectively. Announced Date Target Buyer Industry Enterprise Value ($mm) EV / Revenue 12/27/17 PetVet Care Centers, Inc. KKR & Co. Healthcare Facilities NA NA NA 12/18/17 Net Health Systems, Inc. The Carlyle Group Healthcare Technology NA NA NA 12/18/17 MedRisk, Inc. The Carlyle Group Healthcare Services NA NA NA 12/07/17 Advance Health New Mountain Capital Healthcare Services NA NA NA 11/29/17 Remedy Health Media, LLC Praesidian Capital / Topspin Partners EV / EBITDA Healthcare Technology NA NA NA 11/28/17 ClearChoice Holdings, LLC Sun Capital Partners Healthcare Facilities NA NA NA 11/27/17 MGC Diagnostics Corp. Altus Capital Partners Healthcare Equipment $50 1.1x 24.4x 11/20/17 Ibs Pharma, LLC New Harbor Capital Management Healthcare Distributors NA NA NA Financial Sponsors Activity by Sector 11/15/17 MDVIP, Inc. Leonard Green & Partners Managed Healthcare NA NA NA 25 11/14/17 TrialCard, Inc. Odyssey Investment Partners Healthcare Services NA NA NA 20 20 11/14/17 Grand River Aseptic Manufacturing, Inc. Arlington Capital Partners Life Sciences NA NA NA 10/30/17 Crown Laboratories, Inc. Hildred Capital Partners Pharmaceuticals NA NA NA 15 10/30/17 Young Innovations Inc. The Jordan Company / Linden Healthcare Equipment NA NA NA 10 11 10/23/17 Exactech, Inc. TPG Capital Healthcare Equipment $721 2.7x 16.5x 6 6 10/20/17 Cirrus Medical Staffing, Inc. Webster Capital Healthcare Services $37 NA NA 5 5 10/11/17 Summit Behavioral Healthcare, LLC FFL Partners / Lee Equity Partners Healthcare Facilities NA NA NA 0 Healthcare Equipment & Supplies Healthcare Technology Healthcare Facilities Pharmaceuticals, Biotechnology & Life Sciences Healthcare Services Source: S&P Capital IQ. Graphic includes transactions with undisclosed transaction values. *Hyde Park Capital served as exclusive financial advisor to the seller. 10/10/17 Delphi Behavioral Health Group, LLC The Halifax Group Healthcare Services NA NA NA 10/04/17 Fermatex Vascular Technologies, LLC Vance Street Capital Healthcare Equipment NA NA NA 8
Industry Sector Overview Recent Stock Price Performance Commentary Healthcare Services The charts included on the following pages detail the recent stock price performance by sector for the leading public companies within the Healthcare industry for the 12-month period ended December 31, 2017. The shaded section is the most recent 3- month period (Q4) for each sector relative to the S&P 500. For the 12-month period ending December 31, 2017, the majority of the Healthcare industry had positive performances, led by the Managed Healthcare sector (up 42.1%) and the Healthcare Technology sector (up 30.2%). 130% 120% 110% 100% 90% 18.4% 9.5% During the 3-month period ended December 31, 2017, Healthcare industry sectors reported mostly positive performances, led by the Managed Healthcare sector (up 10.9%). 80% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 S&P 500 Healthcare Services Healthcare Facilities Managed Healthcare 130% 150% 120% 110% 140% 18.4% 130% 13.3% 120% 42.1% 18.4% 100% 110% 100% 90% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Source: S&P Capital IQ S&P 500 Healthcare Facilities 90% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 S&P 500 Managed Healthcare 9
Industry Sector Overview Recent Stock Price Performance Healthcare Technology Healthcare Equipment & Supplies 150% 140% 140% 130% 130% 30.2% 22.8% 120% 120% 18.4% 18.4% 110% 110% 100% 100% 90% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 90% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 S&P 500 Healthcare Technology S&P 500 Healthcare Equipment & Supplies Healthcare Distribution 130% 120% 18.4% 110% 100% 3.3% 90% 80% Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Source: S&P Capital IQ S&P 500 Healthcare Distribution 10
Industry Sector Overview Public Company Analysis ($ in millions, except per share) Healthcare Facilities Closing Price % of 52 Equity Enterprise Enterprise Value / LTM LTM Margins LTM Company Ticker 12/29/17 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA HCA Holdings, Inc. HCA $87.84 96.5% $33,153 $67,052 $42,693 $15,880 $8,031 37.2% 18.8% 1.6x 8.3x Tenet Healthcare Corp. THC $15.16 66.7% $1,520 $18,459 $19,061 $6,669 $1,995 35.0% 10.5% 1.0x 9.3x Universal Health Services, Inc. UHS $113.35 87.4% $11,004 $15,050 $10,243 $4,276 $1,697 41.7% 16.6% 1.5x 8.9x Community Health Systems, Inc. CYH $4.26 40.5% $475 $14,485 $16,764 $6,187 $1,655 36.9% 9.9% 0.9x 8.8x Encompass Health Corp. EHC $49.41 98.0% $4,901 $7,914 $3,844 $1,582 $821 41.1% 21.3% 2.1x 9.6x Select Medical Holdings Corp. SEM $17.65 89.3% $2,273 $5,696 $4,299 $831 $492 19.3% 11.5% 1.3x 11.6x Lifepoint Hospitals, Inc. LPNT $49.80 70.2% $2,047 $4,951 $6,406 $2,075 $749 32.4% 11.7% 0.8x 6.6x Hanger Orthopedic Group, Inc. HNGR $15.75 87.5% $556 $1,073 $1,012 $334 $70 33.0% 6.9% 1.1x 15.4x Average 79.5% $6,991 $16,835 $13,040 $4,729 $1,939 34.6% 13.4% 1.3x 9.8x Median 87.4% $2,160 $11,200 $8,324 $3,176 $1,238 35.9% 11.6% 1.2x 9.1x Healthcare Services Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/29/17 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Laboratory Corp. of America Holdings LH $159.51 96.6% $16,601 $23,437 $9,892 $3,336 $1,899 33.7% 19.2% 2.4x 12.3x DaVita, Inc. DVA $72.25 99.1% $14,040 $23,367 $15,213 $4,008 $2,436 26.3% 16.0% 1.5x 9.6x Quest Diagnostics, Inc. DGX $98.49 87.2% $13,764 $17,366 $7,634 $2,959 $1,432 38.8% 18.8% 2.3x 12.1x MEDNAX, Inc. MD $53.44 74.1% $4,975 $6,742 $3,378 $1,042 $599 30.8% 17.7% 2.0x 11.3x RadNet, Inc. RDNT $10.10 84.9% $475 $1,093 $912 $194 $116 21.3% 12.7% 1.2x 9.4x Average 88.4% $9,971 $14,401 $7,406 $2,308 $1,296 30.2% 16.9% 1.9x 10.9x Median 87.2% $13,764 $17,366 $7,634 $2,959 $1,432 30.8% 17.7% 2.0x 11.3x Source: S&P Capital IQ. 11
Industry Sector Overview Public Company Analysis ($ in millions, except per share) Managed Healthcare Closing Price % of 52 Equity Enterprise Company Ticker 12/29/17 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Unitedhealth Group, Inc. UNH $220.46 95.1% $215,885 $227,523 $196,633 $46,167 $16,138 23.5% 8.2% 1.2x 14.1x Aetna, Inc. AET $180.39 93.8% $62,677 $65,689 $62,197 $16,398 $6,056 26.4% 9.7% 1.1x 10.8x Cigna Corp. CI $203.09 95.6% $52,675 $53,748 $40,527 $13,279 $4,212 32.8% 10.4% 1.3x 12.8x Anthem, Inc. ANTM $225.01 95.2% $60,578 $51,451 $89,073 $17,942 $5,734 20.1% 6.4% 0.6x 9.0x Humana, Inc. HUM $248.07 93.8% $36,992 $25,835 $53,868 $9,552 $2,661 17.7% 4.9% 0.5x 9.7x Centene Corp. CNC $100.88 96.4% $17,779 $17,710 $44,870 $8,028 $2,221 17.9% 4.9% 0.4x 8.0x WellCare Health Plans, Inc. WCG $201.11 94.0% $9,009 $5,647 $15,361 $2,125 $623 13.8% 4.1% 0.4x 9.1x Magellan Health Services, Inc. MGLN $96.55 96.7% $2,306 $2,667 $5,280 $290 $243 5.5% 4.6% 0.5x 11.0x LTM LTM Margins Enterprise Value / LTM Average 95.1% $57,238 $56,284 $63,476 $14,223 $4,736 19.7% 6.7% 0.7x 10.6x Median 95.2% $44,833 $38,643 $49,369 $11,416 $3,437 19.0% 5.7% 0.5x 10.3x Healthcare Technology Closing Price % of 52 Equity Enterprise Enterprise Value / LTM LTM Margins LTM Company Ticker 12/29/17 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Cerner Corp. CERN $67.39 91.2% $22,806 $22,489 $4,988 $4,246 $1,387 85.1% 27.8% 4.5x 16.2x Athenahealth, Inc. ATHN $133.04 83.9% $5,395 $5,548 $1,179 $614 $130 52.0% 11.0% 4.7x 42.6x* Allscripts Healthcare Solutions, Inc. MDRX $14.55 95.7% $2,640 $4,414 $1,714 $862 $174 50.3% 10.1% 2.6x 25.4x Medidata Solutions, Inc. MDSO $63.37 73.8% $3,742 $3,618 $529 $405 $82 76.6% 15.5% 6.8x* 44.1x* Quality Systems, Inc. QSII $13.58 76.6% $851 $880 $524 $296 $59 56.4% 11.3% 1.7x 14.9x Healthstream, Inc. HSTM $23.16 73.5% $745 $622 $244 $138 $27 56.7% 11.1% 2.6x 22.9x Computer Programs & Systems, Inc. CPSI $30.05 83.1% $402 $546 $263 $140 $28 53.2% 10.5% 2.1x 19.8x Average 82.5% $5,226 $5,445 $1,349 $957 $270 61.5% 13.9% 3.0x 19.8x Median 83.1% $2,640 $3,618 $529 $405 $82 56.4% 11.1% 2.6x 19.8x Source: S&P Capital IQ. *Excluded from average and median calculation. 12
Industry Sector Overview Public Company Analysis ($ in millions, except per share) Healthcare Equipment & Supplies Closing Price % of 52 Equity Enterprise Enterprise Value / LTM LTM Margins LTM Company Ticker 12/29/17 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA Medtronic, Inc. MDT $80.75 90.0% $111,169 $126,832 $29,639 $20,525 $9,166 69.2% 30.9% 4.3x 13.8x Stryker Corp. SYK $154.84 96.4% $58,781 $63,277 $12,130 $8,041 $3,319 66.3% 27.4% 5.2x 19.1x Becton, Dickinson and Co. BDX $214.06 93.2% $47,861 $52,526 $12,093 $5,942 $3,333 49.1% 27.6% 4.3x 15.8x DENTSPLY International, Inc. XRAY $65.83 95.4% $15,131 $16,396 $3,899 $2,137 $822 54.8% 21.1% 4.2x 20.0x Teleflex, Inc. TFX $248.82 91.7% $11,640 $12,873 $2,065 $1,156 $556 56.0% 26.9% 6.2x 23.2x The Cooper Companies, Inc. COO $217.88 85.0% $10,807 $11,891 $2,139 $1,377 $659 64.4% 30.8% 5.6x 18.0x Varian Medical Systems, Inc. VAR $111.15 97.4% $10,359 $9,997 $2,668 $1,156 $483 43.3% 18.1% 3.7x 20.7x Steris Corp. STE $87.47 93.7% $7,503 $8,664 $2,570 $1,061 $547 41.3% 21.3% 3.4x 15.8x Average 92.9% $34,156 $37,807 $8,400 $5,174 $2,361 55.6% 25.5% 4.6x 18.3x Median 93.4% $13,386 $14,634 $3,284 $1,757 $740 55.4% 27.1% 4.3x 18.6x Healthcare Distribution Enterprise Value / Closing Price % of 52 Equity Enterprise LTM LTM Margins LTM Company Ticker 12/29/17 Week High Value Value Revenue Gross Profit EBITDA Gross Profit EBITDA Revenue EBITDA McKesson Corp. MCK $155.95 92.1% $33,451 $40,983 $201,955 $11,003 $3,885 5.4% 1.9% 0.2x 10.5x Cardinal Health, Inc. CAH $61.27 72.2% $19,545 $28,396 $130,578 $6,626 $3,041 5.1% 2.3% 0.2x 9.3x AmerisourceBergen Corp. ABC $91.82 93.8% $20,347 $21,706 $153,144 $4,545 $2,444 3.0% 1.6% 0.1x 8.9x Henry Schein, Inc. HSIC $69.88 74.7% $11,139 $13,362 $12,264 $3,365 $1,033 27.4% 8.4% 1.1x 12.9x Patterson Companies, Inc. PDCO $36.13 74.8% $3,408 $4,406 $5,532 $1,280 $391 23.1% 7.1% 0.8x 11.3x Owens & Minor, Inc. OMI $18.88 51.0% $1,134 $1,953 $9,297 $1,152 $215 12.4% 2.3% 0.2x 9.1x Average 76.4% $14,837 $18,468 $85,462 $4,662 $1,835 12.7% 3.9% 0.4x 10.3x Median 74.8% $15,342 $17,534 $71,421 $3,955 $1,739 8.9% 2.3% 0.2x 9.9x Source: S&P Capital IQ. 13
Integrity Expertise Results John Hill Senior Managing Director hill@hydeparkcapital.com (813) 383-0205 Recent Transactions John McDonald Senior Managing Director mcdonald@hydeparkcapital.com (813) 383-0206 a subsidiary of has been recapitalized by Keith Hodgdon Managing Director hodgdon@hydeparkcapital.com (813) 383-0208 Charlie Hendrick Vice President hendrick@hydeparkcapital.com (813) 383-0207 has been recapitalized by has received a growth equity investment from Jeffrey Hendricks Vice President jhendricks@hydeparkcapital.com (678) 523-3073 & Tim Knerr Vice President knerr@hydeparkcapital.com (813) 514-9190 Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813-383-0202 www.hydeparkcapital.com has been recapitalized by & has been recapitalized by Minera del Norte S.A. de C.V. Member FINRA/SIPC