Description
Healthcare Providers & Facilities
Market Monitor
Spring 2016
MOSS ADAMS CAPITAL LLC
. Selected Healthcare Transactions
Healthcare Providers & Facilities
2
MOSS ADAMS CAPITAL LLC
. Case Study: Sell-Side M&A
Situation:
The Everett Clinic, PLLC (“TEC” or the “Company”) is the leading primary and
acute care provider in Snohomish County, Washington. Nationally recognized for
both its excellent level of patient care and the quality of its management team, TEC
has more than 2,000 employees and generates over $360 million in annual net
revenues.
TEC’s shareholders and senior administrators were evaluating strategic
alternatives to take the Company through its next phase of growth, which included
aggressive expansion plans into nearby King and Skagit counties. The Company’s
shareholders believed that in order to succeed in these new markets TEC needed
to be acquired by a strategic partner that could provide: i) A strong brand and
value system synonymous with patient-centric quality and care; ii) Access to
capital; and the iii) Ability to grow TEC into the premier network of outpatient
clinic services in western Washington.
The shareholders also wanted to realize a full liquidity event at a maximum
market value.
Solution:
Moss Adams Capital (“MAC”) was engaged to identify a partner that recognized
TEC’s patient care objectives and intermediate to long-expansion goals. TEC
ultimately entered into exclusive negotiations with DaVita Health Care Partners
(DHCP), a multi-billion dollar, publicly traded healthcare organization.
TEC saw strong potential with DaVita Healthcare partners via DHCP’s vision and
support of splitting TEC into two entities – one, a professional operation that
executed superior patient care; the other, an administrative operation that could
be scaled and expanded throughout western Washington.
MAC advised TEC throughout the due diligence process and helped negotiate a
very attractive market valuation and transaction structure, that fully addressed the
objectives of multiple shareholder groups within the Company.
Healthcare Providers & Facilities
3
MOSS ADAMS CAPITAL LLC
.
Contents Section Page Industry Update 4 Public Company Stock Performance & Valuations 6 Recent M&A Transactions & Valuations 11 Mid-Market M&A Overview 14 Moss Adams Overview 17 Contact Information 22 Healthcare Providers & Facilities 4 MOSS ADAMS CAPITAL LLC . Industry Update: 2016 Healthcare Outlook Election Uncertainty Clouds the Healthcare Business Climate in 2016 Given the standard quadrennial election year rhetoric that’s now well underway (and with the major political parties promoting strongly opposing views regarding the role of government in healthcare), predicting the long-term regulatory environment and overall direction of the healthcare industry is currently a bit of a conundrum. For example, public opinion polls taken in recent months now indicate that the affordability of prescription drugs is the leading healthcare concern among the public, upstaging even debate over the Affordable Care Act. Large insurers, who have become popular scapegoats for both political parties, will continue to face intense scrutiny. Proposed mergers, such as Aetna-Humana and Anthem-Cigna, will attract broad public comment as they are being reviewed by antitrust regulators. The uncertainty that looms over the political landscape will continue to weigh on all sectors of the healthcare industry until midyear, when nominees more clearly detail their positions (Modern Healthcare - 1/1/16). 2016 Policy Changes & Trends Will Continue to Affect Hospitals While health policy discussion on the campaign trail heats up in an effort to determine the future policy landscape, the immediate focus will continue to be on policies and programs that will emerge in the Obama administration’s final year, and more particularly on the continued migration away from fee-for-service. Other major trends that hospitals should closely monitor are i) the emergence of Accountable Care Organizations, ii) mandatory bundled payments, and iii) physician payment reforms that require physicians to adopt advanced payment models or face increasingly strict pay-forperformance criteria. (The Advisory Board - 1/11/16). Continued Consolidation Among Healthcare Providers: Trends/Issues Impacting Healthcare M&A in 2016 The continued consolidation trend by, among and within hospitals, physician groups, senior/assisted living businesses and most other specialty HC services niches will drive M&A activity in 2016.
Specifically, the following factors will be present in the 2016 healthcare M&A environment: 1.) NFP and For-Profit Hospitals – Continued expansion and consolidation. 2.) Physician Group Alignment – Physician groups continue to consolidate, exemplified by the DaVita Healthcare Partners acquisition of The Everett Clinic(1). 3.) Examination of Physician Group Mergers – In many more venues, physician groups that are considering merging with hospitals will draw the attention of State Regulators, the Federal Trade Commission and, of course lawyers, who believe such combinations are anti-competitive and/or not in the best interests of individual patients.
4.) Private Equity Investment – Despite recent slowdowns in the stock market, private equity firms continue to actively seek investment opportunities in the healthcare industry. Healthcare Providers & Facilities (1) See page 3 5 MOSS ADAMS CAPITAL LLC . Industry Update (cont.) CEO’s Top Four Consolidation and Integration Challenges / Goals for 2016 As purchasers challenge hospitals and respective health systems to show their value in a competitive marketplace, integration has risen on the priority lists of executives. In a survey of more than 150 Advisory Board members, participants were asked to rank a list of 18 integration initiatives by level of difficulty and performance. Four distinct initiatives were more prevalent than others: 1) Driving Clinical Standardization – In a marketplace where payments are increasingly tied to value rather than volume, providers are looking to improve quality and reduce clinical variation; 2) System Wide Physician Alignment – Hospitals and health systems view engagement with and leadership from physicians as a key to their success; 3) Increasing IT Interoperability – Not only crucial for the sharing of information, but also for enabling internal benchmarking; and, 4) Integrating Assets – Top performers recognize the need to continually evolve and modify processes and structures in order to integrate new assets post –M&A. (The Advisory Board - 2/16/2016) Healthcare Industry Employee Hiring Trend Continues into 2016 Early figures from the Bureau of Labor Statistics (“BLS”) reported that the healthcare industry added a total of 474,000 net jobs in 2015. Further, early figures from the BLS indicate another 36,800 net jobs were added in January 2016.
The total net new job positions added in 2015 is a large increase as compared to 2014, when 259,000 new jobs added. Some healthcare sectors have reported a reduction in jobs in their niches, including dental practices, labs, and nursing homes. (Bob Herman, Modern Healthcare - 2/5/16). Top Medical Innovations to Watch in 2016 (as noted by the Cleveland Clinic) In an effort to determine the medical innovations that are expected to have the greatest impact on healthcare during 2016– Cleveland Clinic solicited nominations from more than 100 of its researchers. The following were the four leading medical innovations expected in 2016: 1) The advancement of vaccine development was the number one innovation to watch in the coming year - exemplified by the development of a new Ebola vaccine less than a year after the outbreak in West Africa began; 2) Genomics-based clinical trials in which researchers are beginning to enroll patients in clinical trials based on specific genetic markers was number two on the list; 3) CRISPR gene editing – a new and relatively inexpensive technique for editing genetic code, that can pave the way for breakthrough treatments; and, 4) Clean water from sewage - a new process for converting human waste into clean drinking water.
(The Advisory Board - 11/2/2015) Healthcare Providers & Facilities 6 MOSS ADAMS CAPITAL LLC . HC Providers & Facilities – Valuations Vary Across Industry Niche   EV/EBITDA multiples for those niches tracked in the MAC Healthcare Industry Survey have generally been flat to moderately lower over the past six months, with the notable exception of the Senior/Assisted Living niche, which has declined significantly.  The outlook for the overall HC Providers industry group remains positive, with the revenue growth rate for all six of the industry niches expected to outpace the S&P 500 over the next 12 months.  Expectations for the Post-acute Care/Rehab niche continues to be promising, with 14.2% revenue growth expected over the next 12 months. We believe the decline in Senior/Assisted Living HC niche is based largely on the current and expected impact of valuebased programs cutting into the sector’s operating margins. Healthcare Providers & Facilities vs. S&P 27.0x 25.0x 23.0x Market Performance 21.0x 19.0x 17.0x Next 12 Months: Estimated Sales Growth Healthcare Distributors 11.4x Senior / Assisted Living 11.0x Home Care / Home Health / Hospice 10.9x S&P 500 15.0x 10.6x 13.0x Healthcare Services 11.0x 10.4x Post-Acute Care / Rehab 9.0x 9.0x 7.0x Acute Care Hospitals 5.0x 8.0x Note: As of 3/7/2016. Note: The Healthcare Providers & Facilities indices are composed of the public companies included on pages 12-14. Estimated growth is based on the median estimates of Wall Street analysts. Source: S&P Capital IQ, WSJ. Healthcare Providers & Facilities 7 MOSS ADAMS CAPITAL LLC . HC Providers & Facilities – Recent Stock Performance  As noted in the table below, over the past three years shares of the publicly traded companies in four of the six niches tracked in the MAC Healthcare Industry Survey have significantly outperformed the overall S&P 500 index.  Those HC industry niches outperforming the S&P 500 index’s performance (of +29.6%) include Home/Hospice Care (+84.8%), Healthcare Distributors (+65.0%), Acute Care Hospitals (+55.5%), and Post-Acute Care/Rehab (+40.2%). 3-Year Indexed Stock Price Performance 140% Percent (%) Change: Feb ’13 - Present 120% 100% Home / Hospice Care - 84.8% Healthcare Distributors Acute Care Hospitals - 65.0% 55.5% Market Performance 80% 60% Post-Acute Care / Rehab - 40.2% S&P 500 Index 29.6% Healthcare Services 27.0% 40% 20% 0% -20% -40% Senior / Assisted Living - (45.4%) -60% -80% Note: The Healthcare Providers & Facilities indices are composed of the public companies included on pages 12-14. Source: Moss Adams Capital, S&P Capital IQ. Healthcare Providers & Facilities 8 MOSS ADAMS CAPITAL LLC . Valuation Metrics: Acute & Post-Acute Care ($US in millions, except per share amounts) 3/8/16 Company Name Share Price NTM Est. Growth TTM Data 52 Week High - Low Market Cap Enterprise Value Sales EBITDA EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Acute Care Hospitals HCA Holdings, Inc. $71.49 $95.49 - $43.91 $28,379 $60,314 $39,678 $7,869 19.8% 5.7% 5.7% 1.5x 7.7x 1.4x 7.3x Universal Health Services Inc. 111.82 148.57 - 100.82 10,921 14,862 9,043 1,658 18.3% 16.8% 6.5% 1.6x 9.0x 1.4x 8.4x Community Health Systems, Inc. 16.15 65.00 - 12.86 1,821 19,493 19,437 2,387 12.3% 3.7% 21.4% 1.0x 8.2x 1.0x 6.7x Tenet Healthcare Corp. 25.83 60.93 - 21.39 2,545 19,321 18,634 2,177 11.7% 2.6% 12.6% 1.0x 8.9x 1.0x 7.9x Acadia Healthcare Company, Inc. 55.78 85.62 - 51.02 4,865 7,260 1,794 384 21.4% 60.5% 67.8% 4.0x 18.9x 2.5x 11.3x LifePoint Health, Inc. 63.72 88.18 - 58.20 2,748 5,330 5,214 646 12.4% 24.6% 20.7% 1.0x 8.3x 0.8x 6.8x Median $17,092 $13,839 $1,918 15.4% 11.2% 16.7% 1.3x 8.6x 1.2x 7.6x Average $21,097 $15,634 $2,520 16.0% 19.0% 22.5% 1.7x 10.1x 1.4x 8.1x Post-acute Care/Rehab HEALTHSOUTH Corp. $35.48 $48.37 - $30.26 $3,185 $6,623 $3,116 $706 22.7% 16.7% 10.1% 2.1x 9.4x 1.8x 8.5x Select Medical Holdings Corporation 10.53 17.20 - 7.33 1,383 4,193 3,683 384 10.4% 14.2% 30.3% 1.1x 10.9x 1.0x 8.4x Kindred Healthcare Inc. 11.44 24.66 - 7.96 959 4,168 7,055 563 8.0% 3.1% 5.8% 0.6x 7.4x 0.6x 7.0x The Ensign Group, Inc. 21.22 27.04 - 17.60 1,076 1,159 1,342 121 9.0% 17.0% 32.6% 0.9x 9.6x 0.7x 7.2x AAC Holdings, Inc. 16.63 46.60 - 14.36 373 520 194 28 14.3% 38.5% 92.3% 2.7x 18.7x 1.9x 9.7x Civitas Solutions, Inc. 18.17 30.23 - 15.19 674 1,299 1,378 131 9.5% 4.7% 24.8% 0.9x 9.9x 0.9x 8.0x US Physical Therapy Inc. 51.34 56.37 - 42.59 642 714 327 55 17.0% 8.3% (1.2%) 2.2x 12.9x 2.0x 13.0x Median $1,299 $1,378 $131 10.4% 14.2% 24.8% 1.1x 9.9x 1.0x 8.4x Average $2,668 $2,442 $284 13.0% 14.6% 27.8% 1.5x 11.2x 1.3x 8.8x Note: Not meaningful (NM) if EV/Revenue is greater than 5x, or EV/EBITDA is greater than 20x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. .
NTM figures are based on the median estimate of Wall St. analysts. Sources: S&P, Capital IQ, Wall Street Journal. Healthcare Providers & Facilities 9 MOSS ADAMS CAPITAL LLC . Valuation Metrics: Senior / Assisted Living & Homecare / Hospice ($US in millions, except per share amounts) 3/8/16 Company Name Share Price TTM Data 52 Week High - Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Senior/Assisted Living Brookdale Senior Living Inc. $14.87 $39.89 - $11.28 $2,749 $9,299 $4,237 $812 19.2% 19.5% 11.4% 2.2x 11.5x 1.8x 10.3x 2.15 8.06 - 1.42 330 5,265 5,519 544 9.9% 4.6% (48.4%) 1.0x 9.7x 0.9x 18.8x Capital Senior Living Corp. 17.38 27.75 - 14.58 513 1,299 411 73 17.8% 10.9% 29.5% 3.2x 17.8x 2.8x 13.7x Five Star Quality Care Inc. 2.58 5.07 - 2.00 128 219 1,125 27 2.4% 22.9% 20.6% 0.2x 8.1x 0.2x 6.7x Genesis Healthcare, Inc. Median $3,282 $2,681 $308 13.8% 15.2% 16.0% 1.6x 10.6x 1.4x 12.0x Average $4,020 $2,823 $364 12.3% 14.5% 3.3% 1.6x 11.8x 1.4x 12.4x $219 14.2% 3.2% 8.5% 1.5x 10.6x 1.5x 9.7x Homecare/Home Health/Hospice Chemed Corp. $130.49 $160.12 - $113.26 $2,216 $2,316 $1,543 Amedisys Inc. 37.25 48.34 - 24.81 1,255 1,324 1,281 88 6.9% 5.5% 43.6% 1.0x 15.0x 1.0x 10.5x The Ensign Group, Inc. 21.22 27.04 - 17.60 1,076 1,159 1,342 121 9.0% 17.0% 32.6% 0.9x 9.6x 0.7x 7.2x LHC Group, Inc. 35.33 51.83 - 29.69 635 764 797 80 10.0% 10.4% (3.5%) 1.0x 9.6x 0.9x 9.9x Almost Family Inc. 36.86 50.48 - 33.69 380 498 532 38 7.1% 14.0% 29.2% 0.9x 13.2x 0.8x 10.2x Addus HomeCare Corporation 19.50 38.08 - 18.16 214 260 337 21 6.2% 18.7% 38.1% 0.8x 12.5x 0.6x 9.1x Median $962 $1,039 $84 8.1% 12.2% 30.9% 0.9x 11.5x 0.8x 9.8x Average $1,054 $972 $94 8.9% 11.5% 24.7% 1.0x 11.7x 0.9x 9.4x Note: Not meaningful (NM) if EV/Revenue is greater than 5x, or EV/EBITDA is greater than 20x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St.
analysts. Sources: S&P, Capital IQ. Wall street Journal. Healthcare Providers & Facilities 10 MOSS ADAMS CAPITAL LLC . Valuation Metrics: Healthcare Services & Distributors ($US in millions, except per share amounts) 3/8/16 Company Name Share Price TTM Data 52 Week High - Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Healthcare Services Laboratory Corp. of America Holdings 110.32 $131.19 - $97.79 11,220 17,089 8,506 1,659 19.5% 8.2% 14.1% 2.0x 10.3x 1.9x 9.0x Quest Diagnostics Inc. $68.43 89.00 - 59.66 $9,769 $13,562 $7,493 $1,485 19.8% 0.7% 4.5% 1.8x 9.1x 1.8x 8.7x Team Health Holdings, Inc. 44.19 70.21 - 33.15 3,250 5,745 3,597 362 10.1% 31.9% 40.8% 1.6x 15.9x 1.2x 11.3x Healthways Inc. 10.78 22.46 - 9.18 389 636 771 33 4.3% (1.6%) 161.6% 0.8x 19.3x 0.8x 7.4x Median $9,653 $5,545 $924 14.8% 4.4% 27.5% 1.7x 13.1x 1.5x 8.9x Average $9,258 $5,092 $885 13.4% 9.8% 55.2% 1.6x 13.6x 1.4x 9.1x Healthcare Distributors McKesson Corporation $158.80 $243.61 - $148.29 $36,300 $44,043 $189,131 $4,294 2.3% 4.7% 20.7% 0.2x 10.3x 0.2x 8.5x Cardinal Health, Inc. 82.71 91.91 - 74.73 27,239 31,051 112,423 2,893 2.6% 12.9% 17.1% 0.3x 10.7x 0.2x 9.2x AmerisourceBergen Corporation 87.82 120.68 - 80.50 18,044 21,625 139,082 1,638 1.2% 8.4% 45.5% 0.2x 13.2x 0.1x 9.1x 167.51 170.24 - 126.17 13,726 14,977 10,630 928 8.7% 6.5% 9.2% 1.4x 16.1x 1.3x 14.8x Patterson Companies, Inc. 44.09 53.07 - 38.51 4,272 5,477 5,432 483 8.9% 5.3% (4.4%) 1.0x 11.3x 1.0x 11.9x Owens & Minor Inc. 39.80 40.23 - 31.89 2,495 2,918 9,773 273 2.8% 2.1% 3.8% 0.3x 10.7x 0.3x 10.3x PharMerica Corporation 22.35 36.96 - 21.81 682 1,111 2,029 136 6.7% 4.9% (1.4%) 0.5x 8.2x 0.5x 8.3x Median $14,977 $10,630 $928 2.8% 5.3% 9.2% 0.3x 10.7x 0.3x 9.2x Average $17,314 $66,929 $1,521 4.7% 6.4% 12.9% 0.6x 11.5x 0.5x 10.3x Henry Schein, Inc. Note: Not meaningful (NM) if EV/Revenue is greater than 5x, or EV/EBITDA is greater than 20x. NA if denominator is 0, for percentages and multiples, or if estimates are not available.
NTM figures are based on the median estimate of Wall St. analysts. Sources: S&P, Capital IQ, Wall Street Journal. Healthcare Providers & Facilities 11 MOSS ADAMS CAPITAL LLC . Selected Recent M&A Transactions - 2/16- Present (a) $ in millions Announced Acquirer/Investor Target Transaction Value Target Description 03/03/16 Summit Behavioral Healthcare, LLC St. Joseph Institute, Inc. Operates an addiction treatment and detoxification center. - 03/02/16 LHC Group, Inc. Heartlite Hospice, Inc. Operates a hospice center. - 03/02/16 Civitas Solutions, Inc. Tender Loving Care, Inc. Owns and operates facilities that provide services for individuals with brain injuries. - 03/01/16 LifeCare Holdings, Inc. Haven Home Health, LLC Provides home healthcare services. - 03/01/16 Winterfell Healthcare Holdings - NT-HCI, LLC; Winterfell Healthcare NT-HCI CAM2, LLC Winterfell Healthcare Owner General Partnership Owns and operates retirement facilities. $923.3 02/29/16 VCA Inc. CAPNA, Inc. Owns and operates veterinary hospitals. $344.0 02/26/16 Beaufort Memorial Hospital Sea Island Cancer Center LLC (nka:Beaufort Memorial Medical Oncology) Owns and operates a facility that offers treatment for cancers and benign conditions. - 02/25/16 McKesson Specialty Health Vantage Oncology, LLC Owns and operates cancer treatment facilities. - 02/18/16 Welltower Inc.; Canada Pension Plan Investment Board; Discovery Senior Living Aston Care Systems, Inc. Operates senior living communities in Florida. $569.0 02/17/16 Surgical Care Affiliates, Inc.; Midwest Physician Administrative Services LLC Naperville Surgical Centre Operates an outpatient surgery center. 02/17/16 Post Acute Partners, LLC Lakeside Beikirch Care Center Inc Operates a nursing facility. - 02/16/16 Surgical Care Affiliates, Inc. Center for Minimally Invasive Surgery Offers surgery services in the areas of adult and pediatric spine. - 02/16/16 Springpoint Senior Living, Inc. Franciscan Oaks Owns and operates a senior living community. - 02/10/16 One Equity Partners LLC All Metro Aids Inc. Provides home health care services. 02/10/16 Columbia Medical Center of Plano Subsidiary, L.P. Forest Park Medical Center at Frisco, LLC Operates as a hospital in Texas. 02/09/16 Premise Health Holding Corp. Parker at McCarrick Inc. Owns and operates onsite multi-site clinics that provide acute care. - 02/08/16 Premier Health Partners, Inc. Women First Wellness Center, Inc. Operates an obstetrician and gynecologist facility. - 02/11/16 Amedisys Inc. Associated Home Care Inc. Provides in-home senior care services in Massachusetts. 02/04/16 Linsalata Capital Partners; Linsalata Capital Partners Fund VI, L.P. H.H. Franchising Systems, Inc. Provides in-home care and home healthcare services for seniors. 02/02/16 Avalon Health Care Group Hale Nani Investors LLC Operates a rehabilitation and nursing center. 02/09/16 Ciena Healthcare Management, Inc. Laurel Health Care Company Provides skilled nursing, rehabilitation, and assisted living services. 02/02/16 LifePoint Health, Inc. Providence Hospitals Provides healthcare services including cardiovascular and heart care services. 02/01/16 Larkin Community Hospital, Inc. Palm Springs General Hospital, Inc. Operates as a hospital and provides healthcare services. The Francis E. Parker Memorial Home Inc. Margaret McLaughlin McCarrick Care Center Inc. Operates a 120 bed acute rehabilitation and nursing home. (nka:Parker at McCarrick Inc.) 02/01/16 $1.9 $96.3 $38.1 $44.6 $132.2 $40.0 $12.0 Sources: S&P, Capital IQ. (a) Public Companies in bold. Healthcare Providers & Facilities 12 MOSS ADAMS CAPITAL LLC .
Recent Notable and Disclosed M&A Transactions (a) $ in millions Announced Acquirer/Investor 02/11/16 Amedisys Inc. (NasdaqGS:AMED) Transaction Value Target Target Description Associated Home Care Inc. Provides in home care services in Massachsetts. Metric $38.1 02/02/16 LifePoint Health, Inc. (NasdaqGS:LPNT) Providence Hospitals Provides healthcare services including cardiovascular and heart care services. 12/11/15 Constellation Helathcare Technologies, Inc. (AIM:CHT) MDRX Medical Billing, LLC Owns and operates a hospital. 12/04/15 Kaiser Permanente Inc. Group Health Cooperative Provides healthcare services to residents in Washington and Northern Idaho. 10/16/15 RadNet (Nasdaq:RDNT) Diagnostic Imaging Group Owns and operates 17 imaging centers. Provides treatment for persons with a dual diagnosis of substance addiction and mental health disorders. 1.0x Rev $132.2 $30.0 $65.4 09/18/15 Universal Health Services (NYSE:UHS) Foundations Recovery Network 09/16/15 Fujian Thai Hot Investment Alliance HealthCare Services (Nasdaq:AIQ) Provides outpatient diagnostic and radiation therapy services in the U.S. 09/15/15 Griffin-American Healthcare REIT Trilogy Investors 09/03/15 LHC Group (Nasdaq:LHCG) Halcyon Hospice 09/03/15 Molina Healthcare (NYSE:MOH) Providence Human Services 09/02/15 BayBridge Seniors Housing 08/31/15 0.9x Rev; 6.2x EEBITDA 0.9x Rev $350.0 $699.0 Owner-operator of integrated senior healthcare campuses throughout the Midwest. Independent providers of hospice services with 16 locations across three states. 1.6x Rev; 5.8x EBITDA $1,125.0 $58.5 1.4x Rev National provider of behavioral and mental health services. $200.0 0.6x Rev Amica Mature Lifestyles (TSX:ACC) Luxury seniors residences, with 26 properties throughout Canada. $835.0 7.7x Rev; 27.5 EBITDA Encompass Home Health CareSouth Health System Portfolio of 45 home health locations. $170.0 1.6x Rev 08/24/15 DaVita HealthCare Partners (NYSE:DVA) Renal Ventures Management Operates 36 dialysis clinics in 6 states. $415.0 08/04/15 Team Health (NYSE:TMH) IPC Healthcare (Nasdaq:IPCM) Acute hospitalist and post-acute provider organization. 07/30/15 Envision Healthcare (Nasdaq:EVHC) Rural/Metro Provider of emergency and non-emergency ambulance transportation. 07/27/15 Medical Properties Trust (NYSE:MPW) Capella Healthcare Owns and operates acute care and specialty hospital facilities in six states. 07/01/15 Madison Dearborn Partners Pattersori Companies' Medical Business Provides rehabilitation, assistive, and splitting products. 06/12/15 Quantum International Income Corp. (TSXV:QIC) Columbus Hospital LTACH LLC Operates an acute care specialty hospital for higher acute patients. 06/11/15 HEALTHSOUTH Corp. (NYSE:HLS) Reliant Hospital Partners, LLC Owns and operates rehabilitation hospitals in the United States. Sleep Management Provides home based medical services focused on patients with chronic sleep conditions, 06/09/15 Patient Home Monitoring $1,600.0 $620.0 1.0x Rev; 10.3x EBITDA $1,500.0 1.9x Rev; 14.3x EBITDA $715.0 1.5x Rev; 10.6x EBITDA $29.0 1.1x Rev $730.0 2.9x Rev; 8.9x EBITDA $88.1 Deal Size 2.2x Rev; 10.7x EBITDA 2.1x Rev; 4.9x EBITDA Revenue Multiple EBITDA Multiple Transactions Represented M&A Transactions in the table above include those with EV above $5 million and with reported deal metrics. Sources: S&P, Capital IQ. (a) Public companies in bold. Healthcare Providers & Facilities 13 20 15 9.0x High $1,600.0 7.7x 27.5x Median $350.0 1.5x 10.3x Low $29.0 0.6x 4.9x Mean $494.8 1.9x 11.0x MOSS ADAMS CAPITAL LLC .
Overview of Selected M&A Transactions Universal Health Services (NYSE:UHS) acquires Foundation Recovery Network, LLC September 18, 2015 Providers & Facilities Mid-Market M&A*  On September 18, 2015, Universal Health Services, an owner and operator of acute care hospitals in Pennsylvania, agreed to buy Foundation Recovery Network, an integrated treatment center for co-occurring mental health and substance use disorders for a reported $350 million. 350  The transaction increased the number of residential beds under the Universal Health Services umbrella by 322 beds - in four different facilities and eight outpatient center -with an additional 140 expansion beds in the pipeline. 300  Alan B. Miller, CEO and Chairman of the Board of Universal Health Services had the following to say about the transaction: “We were attracted to [Foundations] proven track record of providing high quality treatment and reputation for excellence in this very attractive market segment.” 250 Kaiser Permanente Inc. acquires Group Health Cooperative December 4, 2015  On December 4, 2015, Kaiser Permanente Inc. (“Kaiser”), a healthcare provider servicing eight states and more than 10 million members agreed to buy Group Health Cooperative (“Group Health”), a not-for-profit health plan with 590,000 members in Washington State and parts of Idaho for a rumored $1.8 billion(1).  With the acquisition of Group Health, Kaiser said it intends to invest in advanced technology, facilities, and the Group Health workforce in order to advance the growth of their integrated model for healthcare delivery and coverage.
Proponents of the deal say the move is necessary in an era of growing hospital and health-system acquisitions to ensure the future of Group Health.  Subsequent to the transaction, Group Health Physicians, a practice of more than 1,000 providers, entered into an agreement with Kaiser to provide healthcare services exclusively to Group Health members. (1) Per The Seattle Times Number of Announced Transactions  UHS will use Foundation as a platform for growth in a new substance disorder service line. 301 290 249 282 276 249 200 150 146 146 100 50 52 42 0 2008 2009 2010 2011 2012 2013 2014 2015 * 2015 2016 YTD* YTD* YTD figures represent total year-to-date M&A as of March 07, 2015 & 2016. Middle market M&A includes transactions with EV < $500mm, and transactions with undisclosed EV. Sources: Company press releases, S&P Capital IQ, Modern Healthcare. Bizjournals Healthcare Providers & Facilities 14 MOSS ADAMS CAPITAL LLC .
Public Company Equity Offerings $ in millions Date Transaction Value Company Funding Type Target Description 01/05/16 Acadia Healthcare Company, Inc. (NasdaqGS:ACHC) Follow-On Equity Offering Provider of inpatient behavioral health care services. 11/30/15 AmSurg Corp. (NasdaqGS:AMSG) Follow-On Equity Offering Provides ambulatory and physician services. $440.0 11/19/15 The Joint Corp. (NasdaqCM:JYNT) Follow-On Equity Offering Operates as a franchisor of chiropractic clinics. $12.5 10/14/15 Apollo Medical Holdings, Inc.
(OTCPK:AMEH) PIPE Operates as an integrated population health management company. $10.0 10/01/15 Surgery Partners (NasdaqGS:SGRY) IPO Portfolio of 99 surgical facilities across 28 states. 10/01/15 Civitas Solutions, Inc. (NYSE:CIVI) Follow-On Equity Offering Provides home based health services to individuals with developmental disabilities. 08/31/15 PharMEDium Healthcare IPO National provider of compounded sterile preparations to acute care hospitals. 08/31/15 American Renal Associates Holdings, Inc. IPO Operates 181 dialysis clinic locations in 23 states. 07/31/15 Adeptus Health (NYSE:ADPT) Follow-On Equity Offering Owns and operates a network of independent freestanding emergency rooms. $200.2 07/01/15 Teladoc (NYSE:TDOC) Follow-on Equity Offering Provider of 24/7 tele-health consultations. $135.0 06/25/15 BioCorRx Inc. (OTCPK:BICX) PIPE Operates alcoholism rehabilitation and treatment centers in California. 06/05/15 Evolent Health (NYSE:EVH) IPO Provider of population health managed services solutions. $891.0 05/21/15 Community Healthcare Trust (NYSE:CHCT) IPO REIT focused on acquiring non-urban healthcare properties. $119.7 05/04/15 Acadia Healthcare Company, Inc.
(NasdaqGS:ACHC) Follow-on Equity Offering Provider of inpatient behavioral health care services. $299.3 03/31/15 Convalo Health International Corp. (TSXV:CXV) PIPE Operates as an intensive outpatient treatment services company. 03/31/15 AdCare Health Systems, Inc. (AMEX:ADK) PIPE Owns and manages skilled nursing facilities and assisted living facilities. 03/13/15 Surgical Care Affiliates, Inc.
(NasdaqGS:SCAI) Follow-on Equity Offering Owns and operates a network of multi-specialty ambulatory centers and surgical hospitals. 03/09/15 BioScrip, Inc. (NasdaqGS:BIOS) PIPE Provides home infusion and other home care services. 02/09/15 The Ensign Group, Inc. (NasdaqGS:ENSG) Follow-on Equity Offering Provides skilled nursing and rehabilitative care services. 01/06/15 Providence Service Corp.
(NasdaqGS:PRSC) Follow-on Equity Offering Provides and manages government sponsored non-emergency transportation services. $683.5 $271.4 $43.0 $100.0 NA $10.0 $14.1 $8.5 $232.8 $83.9 $102.5 $65.5 U.S. Public equity offerings of at least $5 million the last three years. Sources: S&P Capital IQ and PitchBook Data Inc. Healthcare Providers & Facilities 15 MOSS ADAMS CAPITAL LLC . Private Company Capital Raises $ in millions Date Transaction Value Company Funding Type Target Description 01/11/16 Mid-Atlantic Health Care, LLC Growth Capital / Private Equity Provides post-hospital services for senior citizens. 12/22/15 Tabco Towers Housing Associates, LLC Venture Capital Manages senior housing apartments. 12/17/15 Hometeam Care, Inc. Venture Capital Provides home care solutions for older adults. 12/16/15 Recovery Centers of America Holdings LLC Growth Capital / Private Equity Operates a network of recovery campuses that provide addiction care services. 12/10/15 MedVet Associates, Inc. Growth Capital / Private Equity Provides specialty and emergency veterinary care services for dogs and cats. 10/16/15 Healthcare Integrity LLC Venture Capital Manages a general acute care hospital. $5.0 10/08/15 PM Pediatrics Management Group Growth Capital / Private Equity Provides pediatric urgent care in New York and New Jersey. $8.4 10/07/15 Merrill Gardens, LLC Growth Capital / Private Equity Owns and operates senior living communities across 6 states. 09/30/15 Access Integrated Healthcare Venture Capital Healthcare services organization serving the workers' compensation industry. $50.0 09/22/15 Access Clinical Partners Venture Capital Owns and operates urgent care centers. $25.4 09/17/15 VillageMD Venture Capital Management services company that partners with leading healthcare providers. $36.0 09/16/15 DJ HealthUnion Systems Undisclosed Provider of digital hospital solutions. $12.5 09/08/15 Aegis Senior Communities LLC Growth Capital / Private Equity Owns and operates senior living communities in WA and CA. $12.5 09/03/15 Community Intervention Services Growth Capital / Private Equity Provider of behavioral health services that cares for more than 50,000 patients annually. $55.0 08/20/15 ZocDoc Venture Capital Online doctor appointment service. 08/20/15 Grand Rounds Venture Capital Online platform that connects patients with medical specialists. $55.0 08/20/15 Maryland Proton Treatment Center, LLC Growth Capital / Private Equity Development stage company intending to operate a cancer treatment facility. $20.0 07/31/15 Community Medical Group Growth Capital / Private Equity Operates medical centers providing Medicaid and Medicare services in Florida. $15.3 07/28/15 South Bay Mental Health Center, Inc. Growth Capital / Private Equity Provides community-based services to patients in MA. $11.2 07/22/15 Gynesonics Growth Capital / Private Equity Women's healthcare company. $43.0 $13.3 $9.7 $32.8 $231.5 $35.4 $100.0 $130.0 Equity capital raises of > $5 million for U.S. private companies in the last eight months. Sources: S&P Capital IQ and PitchBook Data Inc. Healthcare Providers & Facilities 16 MOSS ADAMS CAPITAL LLC . Overview of Selected Capital Raises Acadia Healthcare Company, Inc. (Nasdaq:ACHC) (Franklin, TN) January 5, 2016 Providers & Facilities Mid-Market Cap Raises* 140  On January 5, 2016 Acadia Healthcare Company, Inc. (“Acadia”) announced a proposed underwritten public offering of 10,000,000 shares of its common stock. Acadia announced its intent to use the proceeds from the offering to fund the Company’s acquisition strategy, and, specifically to fund a piece of the purchase price for the Company’s planned acquisition of the Priory Group, a leading U.K.
provider of behavioral healthcare services.  Acadia announced on January 12, that the Company completed the underwritten public offering for gross proceeds of approximately $610 million. Recovery Centers of America Holdings LLC (Private Company) (King of Prussia, PA) December 16, 2015  On December 16, 2015, Recovery Centers of America Holdings, LLC (the “Company”), announced that it had raised $231.5 million in a new round of financing from Deerfield Management Company.  Recovery Centers of America operates a network of neighborhood-based recovery campuses that provide addiction care services. The Company will use the proceeds to expand their presence in the northeast United States, with the acquisition of eight developmental sites. The Company’s stated goals are to be operating over 1,200 beds by 2017 and to create one of the world’s largest addiction treatment and behavioral healthcare companies. Number of Transactions  Acadia Healthcare is a provider of inpatient behavioral healthcare services with a network of 258 facilities and more than 9,900 beds in 39 states, the United Kingdom, and Puerto Rico. 120 124 106 100 101 96 91 80 76 60 46 40 34 29 20 11 0 2008 2009 2010 2011 2012 2013 2014 2015 * Sources: Company press releases, S&P Capital IQ, BusinessWire Healthcare Providers & Facilities 17 2015 2016 YTD* YTD* YTD figures represent total year-to-date capital raises as of March 07, 2015 & 2016.
Middle market Public Offerings & Capital Raises includes transactions with < $500mm, and transactions with undisclosed values. MOSS ADAMS CAPITAL LLC . Moss Adams at a Glance: Leadership through Experience and Results Moss Adams Capital LLC Moss Adams LLP • • 100+ years old – Founded in 1913 • Largest accounting firm headquartered in the western U.S. • 2,400 employees in 28 locations • Fully integrated accounting, tax, and business advisory firm • Middle-market specialists • The Moss Adams Advantage: Discrete, highly leverageable transaction resources and services Full-service investment banking and strategic advisor services • Dedicated industry specialists • Focus on privately owned and family-held companies • Mergers and acquisitions • Private debt & equity placements • Mezzanine capital • Due Diligence preparation & advisory International Presence • Healthcare Providers & Facilities Major market affiliates throughout the U.S. and more than 100 countries around world 18 MOSS ADAMS CAPITAL LLC . Expert Teams INDUSTRY KNOWLEDGE MATCHED WITH AN EXPERIENCED TEAM • Senior Level Attention • Commitment to our Clients • Professional Excellence • Objective & Independent Advice • Creating Value for Owners • Global Presence & Capabilities Premier accounting and financial services advice for middle market healthcare providers and facilities companies. Healthcare Providers & Facilities 19 MOSS ADAMS CAPITAL LLC . Moss Adams Capital Overview Full Service Mid-Market Investment Bank Corporate Finance Comprehensive Industry Coverage  Capital Placement – Equity and Debt Aerospace, Defense & Government Services Food, Beverage & Agriculture Healthcare Services & Products Infrastructure & Construction Paper, Plastics, & Packaging Real Estate, Lodging & Leisure  Exclusive sales and divestitures Business & Marketing Services Industrials / Niche Manufacturing  Strategic alternatives assessment Automotive & Dealer Services Consumer, Retail & Apparel  Merger and acquisition advisory Technology, Communications, & Media Transportation & Logistics  Strategic planning  Management buy-outs  Recapitalizations  Fairness opinions  Restructuring and special situations advisory Highlights and Accomplishments  Completed more than 250 transactions  Access to key decision-makers among institutional investor universe  Coverage of relevant strategic partners  Average of 20 years of investment banking experience among senior leaders Healthcare Providers & Facilities 20 MOSS ADAMS CAPITAL LLC . Global Reach Moss Adams is a founding member of Praxity, AISBL, a global alliance of independent accounting firms. In addition to its deep, direct international relationships, Praxity provides access and trusted advisory expertise worldwide. Europe Austria, Azerbaijan, Belgium, Bosnia-Herzgovina, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Jersey, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, Ukraine North America Canada, United States Asia Bangladesh, China, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan, Thailand, Vietnam Middle East and Indian Subcontinent Latin America and Caribbean Argentina, Bermuda, Brazil, Cayman Islands, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Peru, Puerto Rico, Uruguay, Venezuela Healthcare Providers & Facilities Africa Angola, Benin, Botswana, Cameroon, Cape Verde, Djibouti, Egypt, Ghana, Ivory Coast, Kenya, Lesotho, Madagascar, Mauritius, Morocco, Namibia, Nigeria, Senegal, South Africa, Tunisia 21 Bahrain, India, Israel, Jordan, Kuwait, Lebanon, Oman, Pakistan, Palestinian territories, Qatar, Saudi Arabia, Sri Lanka, Tajikistan, United Arab Emirates Australasia Australia, New Caledonia, New Zealand MOSS ADAMS CAPITAL LLC . Global M&A Reach Through Local Relationships Local, National and Global Reach Our affiliation with CFxB consists of 150+ Corporate Finance Professionals across the U.S. and in over 25 countries. more than 25 countries Mazars Europe 140 offices Mazars M&A 20 offices MNP Corporate Finance 10 offices MNP LLP 70 offices Mazars Asia 25 offices Moss Adams Capital 3 offices Moss Adams LLP 28 offices Weiser Mazars 6 offices William Buck CAA 6 offices Mazars Middle East 15 offices BKD Corporate Finance 4 offices BKD LLP 33 offices Mazars South America 20 offices Healthcare Providers & Facilities Mazars Africa 40 offices 22 MOSS ADAMS CAPITAL LLC . Contact Us Moss Adams Capital LLC 999 3rd Avenue Suite 2800 Seattle, WA 98104 2040 Main Street Suite 900 Irvine, CA 92614 Richard Anderson Managing Director (949) 221-4006 rich.anderson@mossadams.com Tyler Dale Vice President (949) 221-4030 tyler.dale@mossadams.com Andrew Suen Vice President (949) 517-9428 andrew.suen@mossadams.com Wiley Kitchell Managing Director (206) 302-6780 wiley.kitchell@mossadams.com Robert Miranda Vice President (949) 221-4021 robert.miranda@mossadams.com Robert Miranda Associate (949) 517-9452 brandley.erhart@mossadams.com Harman Wales Managing Director (206) 302-6770 jet.wales@mossadams.com James Rothenberger Vice President (206) 302-6777 james.rothenberger@mossadams.com Robert Miranda Analyst (949) 221-4099 james.parr@mossadams.com Brandon Clewett Director (949) 517-9426 brandon.clewett@mossadams.com Scott Porter Vice President (206) 302-6326 scott.porter@mossadams.com Daniel Seubert Analyst (206) 302-6775 daniel.seubert@mossadams.com Healthcare Providers & Facilities 23 MOSS ADAMS CAPITAL LLC .
Contents Section Page Industry Update 4 Public Company Stock Performance & Valuations 6 Recent M&A Transactions & Valuations 11 Mid-Market M&A Overview 14 Moss Adams Overview 17 Contact Information 22 Healthcare Providers & Facilities 4 MOSS ADAMS CAPITAL LLC . Industry Update: 2016 Healthcare Outlook Election Uncertainty Clouds the Healthcare Business Climate in 2016 Given the standard quadrennial election year rhetoric that’s now well underway (and with the major political parties promoting strongly opposing views regarding the role of government in healthcare), predicting the long-term regulatory environment and overall direction of the healthcare industry is currently a bit of a conundrum. For example, public opinion polls taken in recent months now indicate that the affordability of prescription drugs is the leading healthcare concern among the public, upstaging even debate over the Affordable Care Act. Large insurers, who have become popular scapegoats for both political parties, will continue to face intense scrutiny. Proposed mergers, such as Aetna-Humana and Anthem-Cigna, will attract broad public comment as they are being reviewed by antitrust regulators. The uncertainty that looms over the political landscape will continue to weigh on all sectors of the healthcare industry until midyear, when nominees more clearly detail their positions (Modern Healthcare - 1/1/16). 2016 Policy Changes & Trends Will Continue to Affect Hospitals While health policy discussion on the campaign trail heats up in an effort to determine the future policy landscape, the immediate focus will continue to be on policies and programs that will emerge in the Obama administration’s final year, and more particularly on the continued migration away from fee-for-service. Other major trends that hospitals should closely monitor are i) the emergence of Accountable Care Organizations, ii) mandatory bundled payments, and iii) physician payment reforms that require physicians to adopt advanced payment models or face increasingly strict pay-forperformance criteria. (The Advisory Board - 1/11/16). Continued Consolidation Among Healthcare Providers: Trends/Issues Impacting Healthcare M&A in 2016 The continued consolidation trend by, among and within hospitals, physician groups, senior/assisted living businesses and most other specialty HC services niches will drive M&A activity in 2016.
Specifically, the following factors will be present in the 2016 healthcare M&A environment: 1.) NFP and For-Profit Hospitals – Continued expansion and consolidation. 2.) Physician Group Alignment – Physician groups continue to consolidate, exemplified by the DaVita Healthcare Partners acquisition of The Everett Clinic(1). 3.) Examination of Physician Group Mergers – In many more venues, physician groups that are considering merging with hospitals will draw the attention of State Regulators, the Federal Trade Commission and, of course lawyers, who believe such combinations are anti-competitive and/or not in the best interests of individual patients.
4.) Private Equity Investment – Despite recent slowdowns in the stock market, private equity firms continue to actively seek investment opportunities in the healthcare industry. Healthcare Providers & Facilities (1) See page 3 5 MOSS ADAMS CAPITAL LLC . Industry Update (cont.) CEO’s Top Four Consolidation and Integration Challenges / Goals for 2016 As purchasers challenge hospitals and respective health systems to show their value in a competitive marketplace, integration has risen on the priority lists of executives. In a survey of more than 150 Advisory Board members, participants were asked to rank a list of 18 integration initiatives by level of difficulty and performance. Four distinct initiatives were more prevalent than others: 1) Driving Clinical Standardization – In a marketplace where payments are increasingly tied to value rather than volume, providers are looking to improve quality and reduce clinical variation; 2) System Wide Physician Alignment – Hospitals and health systems view engagement with and leadership from physicians as a key to their success; 3) Increasing IT Interoperability – Not only crucial for the sharing of information, but also for enabling internal benchmarking; and, 4) Integrating Assets – Top performers recognize the need to continually evolve and modify processes and structures in order to integrate new assets post –M&A. (The Advisory Board - 2/16/2016) Healthcare Industry Employee Hiring Trend Continues into 2016 Early figures from the Bureau of Labor Statistics (“BLS”) reported that the healthcare industry added a total of 474,000 net jobs in 2015. Further, early figures from the BLS indicate another 36,800 net jobs were added in January 2016.
The total net new job positions added in 2015 is a large increase as compared to 2014, when 259,000 new jobs added. Some healthcare sectors have reported a reduction in jobs in their niches, including dental practices, labs, and nursing homes. (Bob Herman, Modern Healthcare - 2/5/16). Top Medical Innovations to Watch in 2016 (as noted by the Cleveland Clinic) In an effort to determine the medical innovations that are expected to have the greatest impact on healthcare during 2016– Cleveland Clinic solicited nominations from more than 100 of its researchers. The following were the four leading medical innovations expected in 2016: 1) The advancement of vaccine development was the number one innovation to watch in the coming year - exemplified by the development of a new Ebola vaccine less than a year after the outbreak in West Africa began; 2) Genomics-based clinical trials in which researchers are beginning to enroll patients in clinical trials based on specific genetic markers was number two on the list; 3) CRISPR gene editing – a new and relatively inexpensive technique for editing genetic code, that can pave the way for breakthrough treatments; and, 4) Clean water from sewage - a new process for converting human waste into clean drinking water.
(The Advisory Board - 11/2/2015) Healthcare Providers & Facilities 6 MOSS ADAMS CAPITAL LLC . HC Providers & Facilities – Valuations Vary Across Industry Niche   EV/EBITDA multiples for those niches tracked in the MAC Healthcare Industry Survey have generally been flat to moderately lower over the past six months, with the notable exception of the Senior/Assisted Living niche, which has declined significantly.  The outlook for the overall HC Providers industry group remains positive, with the revenue growth rate for all six of the industry niches expected to outpace the S&P 500 over the next 12 months.  Expectations for the Post-acute Care/Rehab niche continues to be promising, with 14.2% revenue growth expected over the next 12 months. We believe the decline in Senior/Assisted Living HC niche is based largely on the current and expected impact of valuebased programs cutting into the sector’s operating margins. Healthcare Providers & Facilities vs. S&P 27.0x 25.0x 23.0x Market Performance 21.0x 19.0x 17.0x Next 12 Months: Estimated Sales Growth Healthcare Distributors 11.4x Senior / Assisted Living 11.0x Home Care / Home Health / Hospice 10.9x S&P 500 15.0x 10.6x 13.0x Healthcare Services 11.0x 10.4x Post-Acute Care / Rehab 9.0x 9.0x 7.0x Acute Care Hospitals 5.0x 8.0x Note: As of 3/7/2016. Note: The Healthcare Providers & Facilities indices are composed of the public companies included on pages 12-14. Estimated growth is based on the median estimates of Wall Street analysts. Source: S&P Capital IQ, WSJ. Healthcare Providers & Facilities 7 MOSS ADAMS CAPITAL LLC . HC Providers & Facilities – Recent Stock Performance  As noted in the table below, over the past three years shares of the publicly traded companies in four of the six niches tracked in the MAC Healthcare Industry Survey have significantly outperformed the overall S&P 500 index.  Those HC industry niches outperforming the S&P 500 index’s performance (of +29.6%) include Home/Hospice Care (+84.8%), Healthcare Distributors (+65.0%), Acute Care Hospitals (+55.5%), and Post-Acute Care/Rehab (+40.2%). 3-Year Indexed Stock Price Performance 140% Percent (%) Change: Feb ’13 - Present 120% 100% Home / Hospice Care - 84.8% Healthcare Distributors Acute Care Hospitals - 65.0% 55.5% Market Performance 80% 60% Post-Acute Care / Rehab - 40.2% S&P 500 Index 29.6% Healthcare Services 27.0% 40% 20% 0% -20% -40% Senior / Assisted Living - (45.4%) -60% -80% Note: The Healthcare Providers & Facilities indices are composed of the public companies included on pages 12-14. Source: Moss Adams Capital, S&P Capital IQ. Healthcare Providers & Facilities 8 MOSS ADAMS CAPITAL LLC . Valuation Metrics: Acute & Post-Acute Care ($US in millions, except per share amounts) 3/8/16 Company Name Share Price NTM Est. Growth TTM Data 52 Week High - Low Market Cap Enterprise Value Sales EBITDA EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Acute Care Hospitals HCA Holdings, Inc. $71.49 $95.49 - $43.91 $28,379 $60,314 $39,678 $7,869 19.8% 5.7% 5.7% 1.5x 7.7x 1.4x 7.3x Universal Health Services Inc. 111.82 148.57 - 100.82 10,921 14,862 9,043 1,658 18.3% 16.8% 6.5% 1.6x 9.0x 1.4x 8.4x Community Health Systems, Inc. 16.15 65.00 - 12.86 1,821 19,493 19,437 2,387 12.3% 3.7% 21.4% 1.0x 8.2x 1.0x 6.7x Tenet Healthcare Corp. 25.83 60.93 - 21.39 2,545 19,321 18,634 2,177 11.7% 2.6% 12.6% 1.0x 8.9x 1.0x 7.9x Acadia Healthcare Company, Inc. 55.78 85.62 - 51.02 4,865 7,260 1,794 384 21.4% 60.5% 67.8% 4.0x 18.9x 2.5x 11.3x LifePoint Health, Inc. 63.72 88.18 - 58.20 2,748 5,330 5,214 646 12.4% 24.6% 20.7% 1.0x 8.3x 0.8x 6.8x Median $17,092 $13,839 $1,918 15.4% 11.2% 16.7% 1.3x 8.6x 1.2x 7.6x Average $21,097 $15,634 $2,520 16.0% 19.0% 22.5% 1.7x 10.1x 1.4x 8.1x Post-acute Care/Rehab HEALTHSOUTH Corp. $35.48 $48.37 - $30.26 $3,185 $6,623 $3,116 $706 22.7% 16.7% 10.1% 2.1x 9.4x 1.8x 8.5x Select Medical Holdings Corporation 10.53 17.20 - 7.33 1,383 4,193 3,683 384 10.4% 14.2% 30.3% 1.1x 10.9x 1.0x 8.4x Kindred Healthcare Inc. 11.44 24.66 - 7.96 959 4,168 7,055 563 8.0% 3.1% 5.8% 0.6x 7.4x 0.6x 7.0x The Ensign Group, Inc. 21.22 27.04 - 17.60 1,076 1,159 1,342 121 9.0% 17.0% 32.6% 0.9x 9.6x 0.7x 7.2x AAC Holdings, Inc. 16.63 46.60 - 14.36 373 520 194 28 14.3% 38.5% 92.3% 2.7x 18.7x 1.9x 9.7x Civitas Solutions, Inc. 18.17 30.23 - 15.19 674 1,299 1,378 131 9.5% 4.7% 24.8% 0.9x 9.9x 0.9x 8.0x US Physical Therapy Inc. 51.34 56.37 - 42.59 642 714 327 55 17.0% 8.3% (1.2%) 2.2x 12.9x 2.0x 13.0x Median $1,299 $1,378 $131 10.4% 14.2% 24.8% 1.1x 9.9x 1.0x 8.4x Average $2,668 $2,442 $284 13.0% 14.6% 27.8% 1.5x 11.2x 1.3x 8.8x Note: Not meaningful (NM) if EV/Revenue is greater than 5x, or EV/EBITDA is greater than 20x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. .
NTM figures are based on the median estimate of Wall St. analysts. Sources: S&P, Capital IQ, Wall Street Journal. Healthcare Providers & Facilities 9 MOSS ADAMS CAPITAL LLC . Valuation Metrics: Senior / Assisted Living & Homecare / Hospice ($US in millions, except per share amounts) 3/8/16 Company Name Share Price TTM Data 52 Week High - Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Senior/Assisted Living Brookdale Senior Living Inc. $14.87 $39.89 - $11.28 $2,749 $9,299 $4,237 $812 19.2% 19.5% 11.4% 2.2x 11.5x 1.8x 10.3x 2.15 8.06 - 1.42 330 5,265 5,519 544 9.9% 4.6% (48.4%) 1.0x 9.7x 0.9x 18.8x Capital Senior Living Corp. 17.38 27.75 - 14.58 513 1,299 411 73 17.8% 10.9% 29.5% 3.2x 17.8x 2.8x 13.7x Five Star Quality Care Inc. 2.58 5.07 - 2.00 128 219 1,125 27 2.4% 22.9% 20.6% 0.2x 8.1x 0.2x 6.7x Genesis Healthcare, Inc. Median $3,282 $2,681 $308 13.8% 15.2% 16.0% 1.6x 10.6x 1.4x 12.0x Average $4,020 $2,823 $364 12.3% 14.5% 3.3% 1.6x 11.8x 1.4x 12.4x $219 14.2% 3.2% 8.5% 1.5x 10.6x 1.5x 9.7x Homecare/Home Health/Hospice Chemed Corp. $130.49 $160.12 - $113.26 $2,216 $2,316 $1,543 Amedisys Inc. 37.25 48.34 - 24.81 1,255 1,324 1,281 88 6.9% 5.5% 43.6% 1.0x 15.0x 1.0x 10.5x The Ensign Group, Inc. 21.22 27.04 - 17.60 1,076 1,159 1,342 121 9.0% 17.0% 32.6% 0.9x 9.6x 0.7x 7.2x LHC Group, Inc. 35.33 51.83 - 29.69 635 764 797 80 10.0% 10.4% (3.5%) 1.0x 9.6x 0.9x 9.9x Almost Family Inc. 36.86 50.48 - 33.69 380 498 532 38 7.1% 14.0% 29.2% 0.9x 13.2x 0.8x 10.2x Addus HomeCare Corporation 19.50 38.08 - 18.16 214 260 337 21 6.2% 18.7% 38.1% 0.8x 12.5x 0.6x 9.1x Median $962 $1,039 $84 8.1% 12.2% 30.9% 0.9x 11.5x 0.8x 9.8x Average $1,054 $972 $94 8.9% 11.5% 24.7% 1.0x 11.7x 0.9x 9.4x Note: Not meaningful (NM) if EV/Revenue is greater than 5x, or EV/EBITDA is greater than 20x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St.
analysts. Sources: S&P, Capital IQ. Wall street Journal. Healthcare Providers & Facilities 10 MOSS ADAMS CAPITAL LLC . Valuation Metrics: Healthcare Services & Distributors ($US in millions, except per share amounts) 3/8/16 Company Name Share Price TTM Data 52 Week High - Low Market Cap Enterprise Value Sales EBITDA NTM Est. Growth EBITDA Margin Sales EBITDA EV Multiple TTM Sales TTM EBITDA NTM Sales NTM EBITDA Healthcare Services Laboratory Corp. of America Holdings 110.32 $131.19 - $97.79 11,220 17,089 8,506 1,659 19.5% 8.2% 14.1% 2.0x 10.3x 1.9x 9.0x Quest Diagnostics Inc. $68.43 89.00 - 59.66 $9,769 $13,562 $7,493 $1,485 19.8% 0.7% 4.5% 1.8x 9.1x 1.8x 8.7x Team Health Holdings, Inc. 44.19 70.21 - 33.15 3,250 5,745 3,597 362 10.1% 31.9% 40.8% 1.6x 15.9x 1.2x 11.3x Healthways Inc. 10.78 22.46 - 9.18 389 636 771 33 4.3% (1.6%) 161.6% 0.8x 19.3x 0.8x 7.4x Median $9,653 $5,545 $924 14.8% 4.4% 27.5% 1.7x 13.1x 1.5x 8.9x Average $9,258 $5,092 $885 13.4% 9.8% 55.2% 1.6x 13.6x 1.4x 9.1x Healthcare Distributors McKesson Corporation $158.80 $243.61 - $148.29 $36,300 $44,043 $189,131 $4,294 2.3% 4.7% 20.7% 0.2x 10.3x 0.2x 8.5x Cardinal Health, Inc. 82.71 91.91 - 74.73 27,239 31,051 112,423 2,893 2.6% 12.9% 17.1% 0.3x 10.7x 0.2x 9.2x AmerisourceBergen Corporation 87.82 120.68 - 80.50 18,044 21,625 139,082 1,638 1.2% 8.4% 45.5% 0.2x 13.2x 0.1x 9.1x 167.51 170.24 - 126.17 13,726 14,977 10,630 928 8.7% 6.5% 9.2% 1.4x 16.1x 1.3x 14.8x Patterson Companies, Inc. 44.09 53.07 - 38.51 4,272 5,477 5,432 483 8.9% 5.3% (4.4%) 1.0x 11.3x 1.0x 11.9x Owens & Minor Inc. 39.80 40.23 - 31.89 2,495 2,918 9,773 273 2.8% 2.1% 3.8% 0.3x 10.7x 0.3x 10.3x PharMerica Corporation 22.35 36.96 - 21.81 682 1,111 2,029 136 6.7% 4.9% (1.4%) 0.5x 8.2x 0.5x 8.3x Median $14,977 $10,630 $928 2.8% 5.3% 9.2% 0.3x 10.7x 0.3x 9.2x Average $17,314 $66,929 $1,521 4.7% 6.4% 12.9% 0.6x 11.5x 0.5x 10.3x Henry Schein, Inc. Note: Not meaningful (NM) if EV/Revenue is greater than 5x, or EV/EBITDA is greater than 20x. NA if denominator is 0, for percentages and multiples, or if estimates are not available.
NTM figures are based on the median estimate of Wall St. analysts. Sources: S&P, Capital IQ, Wall Street Journal. Healthcare Providers & Facilities 11 MOSS ADAMS CAPITAL LLC . Selected Recent M&A Transactions - 2/16- Present (a) $ in millions Announced Acquirer/Investor Target Transaction Value Target Description 03/03/16 Summit Behavioral Healthcare, LLC St. Joseph Institute, Inc. Operates an addiction treatment and detoxification center. - 03/02/16 LHC Group, Inc. Heartlite Hospice, Inc. Operates a hospice center. - 03/02/16 Civitas Solutions, Inc. Tender Loving Care, Inc. Owns and operates facilities that provide services for individuals with brain injuries. - 03/01/16 LifeCare Holdings, Inc. Haven Home Health, LLC Provides home healthcare services. - 03/01/16 Winterfell Healthcare Holdings - NT-HCI, LLC; Winterfell Healthcare NT-HCI CAM2, LLC Winterfell Healthcare Owner General Partnership Owns and operates retirement facilities. $923.3 02/29/16 VCA Inc. CAPNA, Inc. Owns and operates veterinary hospitals. $344.0 02/26/16 Beaufort Memorial Hospital Sea Island Cancer Center LLC (nka:Beaufort Memorial Medical Oncology) Owns and operates a facility that offers treatment for cancers and benign conditions. - 02/25/16 McKesson Specialty Health Vantage Oncology, LLC Owns and operates cancer treatment facilities. - 02/18/16 Welltower Inc.; Canada Pension Plan Investment Board; Discovery Senior Living Aston Care Systems, Inc. Operates senior living communities in Florida. $569.0 02/17/16 Surgical Care Affiliates, Inc.; Midwest Physician Administrative Services LLC Naperville Surgical Centre Operates an outpatient surgery center. 02/17/16 Post Acute Partners, LLC Lakeside Beikirch Care Center Inc Operates a nursing facility. - 02/16/16 Surgical Care Affiliates, Inc. Center for Minimally Invasive Surgery Offers surgery services in the areas of adult and pediatric spine. - 02/16/16 Springpoint Senior Living, Inc. Franciscan Oaks Owns and operates a senior living community. - 02/10/16 One Equity Partners LLC All Metro Aids Inc. Provides home health care services. 02/10/16 Columbia Medical Center of Plano Subsidiary, L.P. Forest Park Medical Center at Frisco, LLC Operates as a hospital in Texas. 02/09/16 Premise Health Holding Corp. Parker at McCarrick Inc. Owns and operates onsite multi-site clinics that provide acute care. - 02/08/16 Premier Health Partners, Inc. Women First Wellness Center, Inc. Operates an obstetrician and gynecologist facility. - 02/11/16 Amedisys Inc. Associated Home Care Inc. Provides in-home senior care services in Massachusetts. 02/04/16 Linsalata Capital Partners; Linsalata Capital Partners Fund VI, L.P. H.H. Franchising Systems, Inc. Provides in-home care and home healthcare services for seniors. 02/02/16 Avalon Health Care Group Hale Nani Investors LLC Operates a rehabilitation and nursing center. 02/09/16 Ciena Healthcare Management, Inc. Laurel Health Care Company Provides skilled nursing, rehabilitation, and assisted living services. 02/02/16 LifePoint Health, Inc. Providence Hospitals Provides healthcare services including cardiovascular and heart care services. 02/01/16 Larkin Community Hospital, Inc. Palm Springs General Hospital, Inc. Operates as a hospital and provides healthcare services. The Francis E. Parker Memorial Home Inc. Margaret McLaughlin McCarrick Care Center Inc. Operates a 120 bed acute rehabilitation and nursing home. (nka:Parker at McCarrick Inc.) 02/01/16 $1.9 $96.3 $38.1 $44.6 $132.2 $40.0 $12.0 Sources: S&P, Capital IQ. (a) Public Companies in bold. Healthcare Providers & Facilities 12 MOSS ADAMS CAPITAL LLC .
Recent Notable and Disclosed M&A Transactions (a) $ in millions Announced Acquirer/Investor 02/11/16 Amedisys Inc. (NasdaqGS:AMED) Transaction Value Target Target Description Associated Home Care Inc. Provides in home care services in Massachsetts. Metric $38.1 02/02/16 LifePoint Health, Inc. (NasdaqGS:LPNT) Providence Hospitals Provides healthcare services including cardiovascular and heart care services. 12/11/15 Constellation Helathcare Technologies, Inc. (AIM:CHT) MDRX Medical Billing, LLC Owns and operates a hospital. 12/04/15 Kaiser Permanente Inc. Group Health Cooperative Provides healthcare services to residents in Washington and Northern Idaho. 10/16/15 RadNet (Nasdaq:RDNT) Diagnostic Imaging Group Owns and operates 17 imaging centers. Provides treatment for persons with a dual diagnosis of substance addiction and mental health disorders. 1.0x Rev $132.2 $30.0 $65.4 09/18/15 Universal Health Services (NYSE:UHS) Foundations Recovery Network 09/16/15 Fujian Thai Hot Investment Alliance HealthCare Services (Nasdaq:AIQ) Provides outpatient diagnostic and radiation therapy services in the U.S. 09/15/15 Griffin-American Healthcare REIT Trilogy Investors 09/03/15 LHC Group (Nasdaq:LHCG) Halcyon Hospice 09/03/15 Molina Healthcare (NYSE:MOH) Providence Human Services 09/02/15 BayBridge Seniors Housing 08/31/15 0.9x Rev; 6.2x EEBITDA 0.9x Rev $350.0 $699.0 Owner-operator of integrated senior healthcare campuses throughout the Midwest. Independent providers of hospice services with 16 locations across three states. 1.6x Rev; 5.8x EBITDA $1,125.0 $58.5 1.4x Rev National provider of behavioral and mental health services. $200.0 0.6x Rev Amica Mature Lifestyles (TSX:ACC) Luxury seniors residences, with 26 properties throughout Canada. $835.0 7.7x Rev; 27.5 EBITDA Encompass Home Health CareSouth Health System Portfolio of 45 home health locations. $170.0 1.6x Rev 08/24/15 DaVita HealthCare Partners (NYSE:DVA) Renal Ventures Management Operates 36 dialysis clinics in 6 states. $415.0 08/04/15 Team Health (NYSE:TMH) IPC Healthcare (Nasdaq:IPCM) Acute hospitalist and post-acute provider organization. 07/30/15 Envision Healthcare (Nasdaq:EVHC) Rural/Metro Provider of emergency and non-emergency ambulance transportation. 07/27/15 Medical Properties Trust (NYSE:MPW) Capella Healthcare Owns and operates acute care and specialty hospital facilities in six states. 07/01/15 Madison Dearborn Partners Pattersori Companies' Medical Business Provides rehabilitation, assistive, and splitting products. 06/12/15 Quantum International Income Corp. (TSXV:QIC) Columbus Hospital LTACH LLC Operates an acute care specialty hospital for higher acute patients. 06/11/15 HEALTHSOUTH Corp. (NYSE:HLS) Reliant Hospital Partners, LLC Owns and operates rehabilitation hospitals in the United States. Sleep Management Provides home based medical services focused on patients with chronic sleep conditions, 06/09/15 Patient Home Monitoring $1,600.0 $620.0 1.0x Rev; 10.3x EBITDA $1,500.0 1.9x Rev; 14.3x EBITDA $715.0 1.5x Rev; 10.6x EBITDA $29.0 1.1x Rev $730.0 2.9x Rev; 8.9x EBITDA $88.1 Deal Size 2.2x Rev; 10.7x EBITDA 2.1x Rev; 4.9x EBITDA Revenue Multiple EBITDA Multiple Transactions Represented M&A Transactions in the table above include those with EV above $5 million and with reported deal metrics. Sources: S&P, Capital IQ. (a) Public companies in bold. Healthcare Providers & Facilities 13 20 15 9.0x High $1,600.0 7.7x 27.5x Median $350.0 1.5x 10.3x Low $29.0 0.6x 4.9x Mean $494.8 1.9x 11.0x MOSS ADAMS CAPITAL LLC .
Overview of Selected M&A Transactions Universal Health Services (NYSE:UHS) acquires Foundation Recovery Network, LLC September 18, 2015 Providers & Facilities Mid-Market M&A*  On September 18, 2015, Universal Health Services, an owner and operator of acute care hospitals in Pennsylvania, agreed to buy Foundation Recovery Network, an integrated treatment center for co-occurring mental health and substance use disorders for a reported $350 million. 350  The transaction increased the number of residential beds under the Universal Health Services umbrella by 322 beds - in four different facilities and eight outpatient center -with an additional 140 expansion beds in the pipeline. 300  Alan B. Miller, CEO and Chairman of the Board of Universal Health Services had the following to say about the transaction: “We were attracted to [Foundations] proven track record of providing high quality treatment and reputation for excellence in this very attractive market segment.” 250 Kaiser Permanente Inc. acquires Group Health Cooperative December 4, 2015  On December 4, 2015, Kaiser Permanente Inc. (“Kaiser”), a healthcare provider servicing eight states and more than 10 million members agreed to buy Group Health Cooperative (“Group Health”), a not-for-profit health plan with 590,000 members in Washington State and parts of Idaho for a rumored $1.8 billion(1).  With the acquisition of Group Health, Kaiser said it intends to invest in advanced technology, facilities, and the Group Health workforce in order to advance the growth of their integrated model for healthcare delivery and coverage.
Proponents of the deal say the move is necessary in an era of growing hospital and health-system acquisitions to ensure the future of Group Health.  Subsequent to the transaction, Group Health Physicians, a practice of more than 1,000 providers, entered into an agreement with Kaiser to provide healthcare services exclusively to Group Health members. (1) Per The Seattle Times Number of Announced Transactions  UHS will use Foundation as a platform for growth in a new substance disorder service line. 301 290 249 282 276 249 200 150 146 146 100 50 52 42 0 2008 2009 2010 2011 2012 2013 2014 2015 * 2015 2016 YTD* YTD* YTD figures represent total year-to-date M&A as of March 07, 2015 & 2016. Middle market M&A includes transactions with EV < $500mm, and transactions with undisclosed EV. Sources: Company press releases, S&P Capital IQ, Modern Healthcare. Bizjournals Healthcare Providers & Facilities 14 MOSS ADAMS CAPITAL LLC .
Public Company Equity Offerings $ in millions Date Transaction Value Company Funding Type Target Description 01/05/16 Acadia Healthcare Company, Inc. (NasdaqGS:ACHC) Follow-On Equity Offering Provider of inpatient behavioral health care services. 11/30/15 AmSurg Corp. (NasdaqGS:AMSG) Follow-On Equity Offering Provides ambulatory and physician services. $440.0 11/19/15 The Joint Corp. (NasdaqCM:JYNT) Follow-On Equity Offering Operates as a franchisor of chiropractic clinics. $12.5 10/14/15 Apollo Medical Holdings, Inc.
(OTCPK:AMEH) PIPE Operates as an integrated population health management company. $10.0 10/01/15 Surgery Partners (NasdaqGS:SGRY) IPO Portfolio of 99 surgical facilities across 28 states. 10/01/15 Civitas Solutions, Inc. (NYSE:CIVI) Follow-On Equity Offering Provides home based health services to individuals with developmental disabilities. 08/31/15 PharMEDium Healthcare IPO National provider of compounded sterile preparations to acute care hospitals. 08/31/15 American Renal Associates Holdings, Inc. IPO Operates 181 dialysis clinic locations in 23 states. 07/31/15 Adeptus Health (NYSE:ADPT) Follow-On Equity Offering Owns and operates a network of independent freestanding emergency rooms. $200.2 07/01/15 Teladoc (NYSE:TDOC) Follow-on Equity Offering Provider of 24/7 tele-health consultations. $135.0 06/25/15 BioCorRx Inc. (OTCPK:BICX) PIPE Operates alcoholism rehabilitation and treatment centers in California. 06/05/15 Evolent Health (NYSE:EVH) IPO Provider of population health managed services solutions. $891.0 05/21/15 Community Healthcare Trust (NYSE:CHCT) IPO REIT focused on acquiring non-urban healthcare properties. $119.7 05/04/15 Acadia Healthcare Company, Inc.
(NasdaqGS:ACHC) Follow-on Equity Offering Provider of inpatient behavioral health care services. $299.3 03/31/15 Convalo Health International Corp. (TSXV:CXV) PIPE Operates as an intensive outpatient treatment services company. 03/31/15 AdCare Health Systems, Inc. (AMEX:ADK) PIPE Owns and manages skilled nursing facilities and assisted living facilities. 03/13/15 Surgical Care Affiliates, Inc.
(NasdaqGS:SCAI) Follow-on Equity Offering Owns and operates a network of multi-specialty ambulatory centers and surgical hospitals. 03/09/15 BioScrip, Inc. (NasdaqGS:BIOS) PIPE Provides home infusion and other home care services. 02/09/15 The Ensign Group, Inc. (NasdaqGS:ENSG) Follow-on Equity Offering Provides skilled nursing and rehabilitative care services. 01/06/15 Providence Service Corp.
(NasdaqGS:PRSC) Follow-on Equity Offering Provides and manages government sponsored non-emergency transportation services. $683.5 $271.4 $43.0 $100.0 NA $10.0 $14.1 $8.5 $232.8 $83.9 $102.5 $65.5 U.S. Public equity offerings of at least $5 million the last three years. Sources: S&P Capital IQ and PitchBook Data Inc. Healthcare Providers & Facilities 15 MOSS ADAMS CAPITAL LLC . Private Company Capital Raises $ in millions Date Transaction Value Company Funding Type Target Description 01/11/16 Mid-Atlantic Health Care, LLC Growth Capital / Private Equity Provides post-hospital services for senior citizens. 12/22/15 Tabco Towers Housing Associates, LLC Venture Capital Manages senior housing apartments. 12/17/15 Hometeam Care, Inc. Venture Capital Provides home care solutions for older adults. 12/16/15 Recovery Centers of America Holdings LLC Growth Capital / Private Equity Operates a network of recovery campuses that provide addiction care services. 12/10/15 MedVet Associates, Inc. Growth Capital / Private Equity Provides specialty and emergency veterinary care services for dogs and cats. 10/16/15 Healthcare Integrity LLC Venture Capital Manages a general acute care hospital. $5.0 10/08/15 PM Pediatrics Management Group Growth Capital / Private Equity Provides pediatric urgent care in New York and New Jersey. $8.4 10/07/15 Merrill Gardens, LLC Growth Capital / Private Equity Owns and operates senior living communities across 6 states. 09/30/15 Access Integrated Healthcare Venture Capital Healthcare services organization serving the workers' compensation industry. $50.0 09/22/15 Access Clinical Partners Venture Capital Owns and operates urgent care centers. $25.4 09/17/15 VillageMD Venture Capital Management services company that partners with leading healthcare providers. $36.0 09/16/15 DJ HealthUnion Systems Undisclosed Provider of digital hospital solutions. $12.5 09/08/15 Aegis Senior Communities LLC Growth Capital / Private Equity Owns and operates senior living communities in WA and CA. $12.5 09/03/15 Community Intervention Services Growth Capital / Private Equity Provider of behavioral health services that cares for more than 50,000 patients annually. $55.0 08/20/15 ZocDoc Venture Capital Online doctor appointment service. 08/20/15 Grand Rounds Venture Capital Online platform that connects patients with medical specialists. $55.0 08/20/15 Maryland Proton Treatment Center, LLC Growth Capital / Private Equity Development stage company intending to operate a cancer treatment facility. $20.0 07/31/15 Community Medical Group Growth Capital / Private Equity Operates medical centers providing Medicaid and Medicare services in Florida. $15.3 07/28/15 South Bay Mental Health Center, Inc. Growth Capital / Private Equity Provides community-based services to patients in MA. $11.2 07/22/15 Gynesonics Growth Capital / Private Equity Women's healthcare company. $43.0 $13.3 $9.7 $32.8 $231.5 $35.4 $100.0 $130.0 Equity capital raises of > $5 million for U.S. private companies in the last eight months. Sources: S&P Capital IQ and PitchBook Data Inc. Healthcare Providers & Facilities 16 MOSS ADAMS CAPITAL LLC . Overview of Selected Capital Raises Acadia Healthcare Company, Inc. (Nasdaq:ACHC) (Franklin, TN) January 5, 2016 Providers & Facilities Mid-Market Cap Raises* 140  On January 5, 2016 Acadia Healthcare Company, Inc. (“Acadia”) announced a proposed underwritten public offering of 10,000,000 shares of its common stock. Acadia announced its intent to use the proceeds from the offering to fund the Company’s acquisition strategy, and, specifically to fund a piece of the purchase price for the Company’s planned acquisition of the Priory Group, a leading U.K.
provider of behavioral healthcare services.  Acadia announced on January 12, that the Company completed the underwritten public offering for gross proceeds of approximately $610 million. Recovery Centers of America Holdings LLC (Private Company) (King of Prussia, PA) December 16, 2015  On December 16, 2015, Recovery Centers of America Holdings, LLC (the “Company”), announced that it had raised $231.5 million in a new round of financing from Deerfield Management Company.  Recovery Centers of America operates a network of neighborhood-based recovery campuses that provide addiction care services. The Company will use the proceeds to expand their presence in the northeast United States, with the acquisition of eight developmental sites. The Company’s stated goals are to be operating over 1,200 beds by 2017 and to create one of the world’s largest addiction treatment and behavioral healthcare companies. Number of Transactions  Acadia Healthcare is a provider of inpatient behavioral healthcare services with a network of 258 facilities and more than 9,900 beds in 39 states, the United Kingdom, and Puerto Rico. 120 124 106 100 101 96 91 80 76 60 46 40 34 29 20 11 0 2008 2009 2010 2011 2012 2013 2014 2015 * Sources: Company press releases, S&P Capital IQ, BusinessWire Healthcare Providers & Facilities 17 2015 2016 YTD* YTD* YTD figures represent total year-to-date capital raises as of March 07, 2015 & 2016.
Middle market Public Offerings & Capital Raises includes transactions with < $500mm, and transactions with undisclosed values. MOSS ADAMS CAPITAL LLC . Moss Adams at a Glance: Leadership through Experience and Results Moss Adams Capital LLC Moss Adams LLP • • 100+ years old – Founded in 1913 • Largest accounting firm headquartered in the western U.S. • 2,400 employees in 28 locations • Fully integrated accounting, tax, and business advisory firm • Middle-market specialists • The Moss Adams Advantage: Discrete, highly leverageable transaction resources and services Full-service investment banking and strategic advisor services • Dedicated industry specialists • Focus on privately owned and family-held companies • Mergers and acquisitions • Private debt & equity placements • Mezzanine capital • Due Diligence preparation & advisory International Presence • Healthcare Providers & Facilities Major market affiliates throughout the U.S. and more than 100 countries around world 18 MOSS ADAMS CAPITAL LLC . Expert Teams INDUSTRY KNOWLEDGE MATCHED WITH AN EXPERIENCED TEAM • Senior Level Attention • Commitment to our Clients • Professional Excellence • Objective & Independent Advice • Creating Value for Owners • Global Presence & Capabilities Premier accounting and financial services advice for middle market healthcare providers and facilities companies. Healthcare Providers & Facilities 19 MOSS ADAMS CAPITAL LLC . Moss Adams Capital Overview Full Service Mid-Market Investment Bank Corporate Finance Comprehensive Industry Coverage  Capital Placement – Equity and Debt Aerospace, Defense & Government Services Food, Beverage & Agriculture Healthcare Services & Products Infrastructure & Construction Paper, Plastics, & Packaging Real Estate, Lodging & Leisure  Exclusive sales and divestitures Business & Marketing Services Industrials / Niche Manufacturing  Strategic alternatives assessment Automotive & Dealer Services Consumer, Retail & Apparel  Merger and acquisition advisory Technology, Communications, & Media Transportation & Logistics  Strategic planning  Management buy-outs  Recapitalizations  Fairness opinions  Restructuring and special situations advisory Highlights and Accomplishments  Completed more than 250 transactions  Access to key decision-makers among institutional investor universe  Coverage of relevant strategic partners  Average of 20 years of investment banking experience among senior leaders Healthcare Providers & Facilities 20 MOSS ADAMS CAPITAL LLC . Global Reach Moss Adams is a founding member of Praxity, AISBL, a global alliance of independent accounting firms. In addition to its deep, direct international relationships, Praxity provides access and trusted advisory expertise worldwide. Europe Austria, Azerbaijan, Belgium, Bosnia-Herzgovina, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Jersey, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, Ukraine North America Canada, United States Asia Bangladesh, China, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan, Thailand, Vietnam Middle East and Indian Subcontinent Latin America and Caribbean Argentina, Bermuda, Brazil, Cayman Islands, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Peru, Puerto Rico, Uruguay, Venezuela Healthcare Providers & Facilities Africa Angola, Benin, Botswana, Cameroon, Cape Verde, Djibouti, Egypt, Ghana, Ivory Coast, Kenya, Lesotho, Madagascar, Mauritius, Morocco, Namibia, Nigeria, Senegal, South Africa, Tunisia 21 Bahrain, India, Israel, Jordan, Kuwait, Lebanon, Oman, Pakistan, Palestinian territories, Qatar, Saudi Arabia, Sri Lanka, Tajikistan, United Arab Emirates Australasia Australia, New Caledonia, New Zealand MOSS ADAMS CAPITAL LLC . Global M&A Reach Through Local Relationships Local, National and Global Reach Our affiliation with CFxB consists of 150+ Corporate Finance Professionals across the U.S. and in over 25 countries. more than 25 countries Mazars Europe 140 offices Mazars M&A 20 offices MNP Corporate Finance 10 offices MNP LLP 70 offices Mazars Asia 25 offices Moss Adams Capital 3 offices Moss Adams LLP 28 offices Weiser Mazars 6 offices William Buck CAA 6 offices Mazars Middle East 15 offices BKD Corporate Finance 4 offices BKD LLP 33 offices Mazars South America 20 offices Healthcare Providers & Facilities Mazars Africa 40 offices 22 MOSS ADAMS CAPITAL LLC . Contact Us Moss Adams Capital LLC 999 3rd Avenue Suite 2800 Seattle, WA 98104 2040 Main Street Suite 900 Irvine, CA 92614 Richard Anderson Managing Director (949) 221-4006 rich.anderson@mossadams.com Tyler Dale Vice President (949) 221-4030 tyler.dale@mossadams.com Andrew Suen Vice President (949) 517-9428 andrew.suen@mossadams.com Wiley Kitchell Managing Director (206) 302-6780 wiley.kitchell@mossadams.com Robert Miranda Vice President (949) 221-4021 robert.miranda@mossadams.com Robert Miranda Associate (949) 517-9452 brandley.erhart@mossadams.com Harman Wales Managing Director (206) 302-6770 jet.wales@mossadams.com James Rothenberger Vice President (206) 302-6777 james.rothenberger@mossadams.com Robert Miranda Analyst (949) 221-4099 james.parr@mossadams.com Brandon Clewett Director (949) 517-9426 brandon.clewett@mossadams.com Scott Porter Vice President (206) 302-6326 scott.porter@mossadams.com Daniel Seubert Analyst (206) 302-6775 daniel.seubert@mossadams.com Healthcare Providers & Facilities 23 MOSS ADAMS CAPITAL LLC .
