1 Sources: ThomsonOne, Bloomberg Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity. ($ in millions) Healthcare Services Sector Review: Publicly-Traded Healthcare Services Summary Number Aggr. Median TEV / Median Price / of Equity Mkt. Median % Change LTM Multiples Earnings Ratio Companies Value 3 mos. 12 mos. Revenue EBITDA 2016 2017 Acute Care Hospitals 5 $52,872 15.9% (9.8)% 1.0x 8.5x 17.3x 12.8x Alternate Site 16 68,902 6.9 (7.8) 2.4 11.4 21.4 18.2 Assisted Living 1 3,430 13.4 (49.0) 2.0 11.9 7.4 6.7 Clinical Laboratories 4 29,658 14.2 (0.3) 2.5 10.2 14.5 13.9 CROs — Pharma Services 9 29,162 10.1 4.8 2.4 12.5 18.2 16.1 Distribution / Supply 8 107,989 3.2 (3.3) 0.6 10.0 15.1 14.4 E-Health 3 4,722 22.8 42.1 4.1 17.0 19.0 24.2 HCIT 18 47,995 3.1 (10.3) 3.6 13.5 23.5 20.8 HMO Medical — Diversified 4 237,003 9.1 8.1 0.9 9.0 14.6 13.3 HMO Medical — Government 3 17,473 (0.2) (0.0) 0.4 9.7 17.7 13.2 HMO Medical — National & Regional 3 27,641 16.8 6.9 0.4 9.9 18.6 17.8 Home Care / Hospice / Staffing 6 5,436 8.1 4.8 1.0 11.9 18.2 16.8 Long-Term Care 7 4,234 2.1 (35.7) 0.9 7.9 16.0 14.5 Other Services 7 5,530 4.8 (1.0) 1.5 9.9 16.3 13.9 Outsourced Services 11 14,583 (0.9) 11.3 0.9 10.2 16.8 15.7 Pharmacy Benefit Managers 2 156,412 3.3 (6.7) 0.7 10.0 14.4 13.1 Physician Practice Management 5 15,450 2.4 (28.2) 1.4 12.0 15.6 14.6 Total / Median (unweighted) 112 $828,491 6.9% (1.0)% 1.0x 10.2x 16.8x 14.5x FY2016 FY2017 Value at % Change Price / Earnings Ratio 4/30/2016 3 mos. YTD 12 mos. 36 mos. 2016 2017 Dow Jones Industrial Average 17,773.64 8.1% 3.6% (1.4)% 20.9% S&P 500 2,065.30 6.5 2.6 (2.0) 30.5 16.8x 15.8x Nasdaq Composite 4,775.36 3.4 (2.6) (4.6) 44.7 Russell 2000 1,130.85 9.5 2.0 (7.9) 22.4 21.5 17.6 S&P 500 Healthcare Providers & Svs. 629.16 7.8 0.2 (1.3) 76.2 S&P 500 Healthcare Facilities 437.16 14.7 18.1 5.0 33.9 S&P 500 Managed Healthcare 1,207.54 9.9 5.4 8.4 111.5 Healthcare Services Composite 672.44 5.8% (7.6)% (9.6)% 27.1% Number Aggr. Equity % of Total % of Aggr. of Mkt. Value Number of Equity Mkt. Median Stock Price Performance Companies ( millions) Companies Value 3 mos. YTD 12 mos. 36 mos. >5bln 26 $702,514 23.2% 84.8% 8.3% 3.1% 2.1% 105.3% 1bln - 5bln 42 107,672 37.5 13.0 9.5 6.5 (0.2) 89.0 250mm - 1bln 27 16,768 24.1 2.0 3.3 5.9 (1.9) 99.2 <250mm 17 1,537 15.2 0.2 3.6 (39.7) (11.4) 16.3 Total / Median 112 $828,491 100.0% 100.0% 6.0% 4.5% (1.0)% 94.1% Capitalization Profile Market Indices Sector
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1
Sources: ThomsonOne, Bloomberg
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member
NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities
representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information
contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a
complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does
not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.
Use of Proceeds: To finance the merger of RegionalCare Hospital Partners with Capella Healthcare
8-Apr-16 Quorum Health Sr. Notes 400 Caa1 CCC+ 11.625% 15-Apr-23 98.266 12.000% 1,053 bp 144A Healthcare - Facilities & Services
Use of Proceeds: Spin-off from Community Health Systems
28-Mar-16 Surgery Center Holdings Sr. Notes 400 Caa2 CCC+ 8.875% 15-Apr-21 100.000 8.875% 751 bp 144A Healthcare - Facilities & Services
Use of Proceeds: To repay second-lien term debt, repay the outstanding balance on their revolver and to fund general corporate purposes
4-Feb-16 Vizient Sr. Notes 600 Caa1 CCC+ 10.375% 1-Mar-24 100.000 10.375% 867 bp 144A Healthcare IT
Use of Proceeds: Acquisition of MedAssets’ Spend and Clinical Resource Management and Sg2 businesses
4-Feb-16 Acadia Healthcare Sr. Notes 390 B3 B 6.500% 1-Mar-24 100.000 6.500% 479 bp 144A Healthcare - Facilities & Services
Use of Proceeds: Acquisition of U.K.-based behavioral healthcare services provider Priory Group
28-Jan-16 Centene Corp Sr. Notes 1,400 Ba2 BB 5.625% 15-Feb-21 100.000 5.625% 423 bp 144A Managed Care
28-Jan-16 Centene Corp Sr. Notes 1,000 Ba2 BB 6.125% 15-Feb-24 100.000 6.125% 420 bp 144A Managed Care
Use of Proceeds: To fund the acquisition of Health Net
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Source: Loan Connector
New Issue
Forward Calendar
None
Loan Market Update
Tranche LIBOR Upfront
Date Company Name Tranche Type Amount Deal Amount Maturity Date Spread Fee Moody's S&P Lead Arranger(s) Use of Proceeds Phase
28-Apr-16 EyeCare Services Partners Other Loan $61,000,000 $61,000,000 NA NA NA NR NR NXT Capital LLC General Purpose Completed
22-Apr-16 St. Lawrence Health Systems, Inc. Term Loan 6,500,000 6,500,000 22-Apr-23 NA NA NR NR NA General Purpose Completed
1-Apr-16 Trilogy Health Services Inc Revolver/Line >= 1 Yr. 60,000,000 60,000,000 21-Mar-21 400 NA NR NR Capital One Bank, Wells Fargo & Co General Purpose Completed
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Sources: Morgan Markets, Bloomberg
As of April 30, 2016
Yield Curve Suggests Continued Low Rate Environment Forward LIBOR Rate
10-yr UST Yield Remains Near All-Time Lows % of Time the 10-yr UST was Below a Specific Yield (1962 – Present)
Current Interest Rate Environment
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
3 Mo 6 Mo 12 Mo 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 30 Yr
Forward Yield Curve - April 31 Yield Curve -March 31
Date Date Issuer Ticker Value Cap Offered Secondary Range Price Range 1 Day 1 Week 1 Month Healthcare Sector
08/31/15 04/20/16American Renal Associates
Holdings IncARA $190.0 $654.0 8.625 0% 20.00 - 23.00 $22.00 In Range 20.5% 25.0% NA Healthcare Services
Mean $190.0 $654.0 8.625 20.5% 25.0% -
Median $190.0 $654.0 8.625 20.5% 25.0% -
Filing Expected Expected
Date Date Issuer Ticker Value Sector Issuer Description
4/22/16 TBA Performance Health Holdings Corp PHC $100.0 Healthcare Services Health and wellness company that offers pain management, fitness, therapy, and wellness products
Filing Pricing Deal Market Shares % Offer Discount to % Change in Price
Date Date Issuer Ticker Value Cap Offered Secondary Price Filing Last 1 Day 1 Week 1 Month Healthcare Sector
03/02/16 03/03/16 PRA Health Sciences Inc PRAH $214.0 $2,693.0 5.000 0% $42.70 4.4% 4.4% 2.9% 1.3% 3.0% Healthcare Services
Mean $458.0 $3,861.0 8.250 0.2% 1.8% 1.9% (1.7%) (0.1%)
Median $458.0 $3,861.0 8.250 0.2% 1.8% 1.9% (1.7%) (0.1%)
Announcement Date Target(s) Buyer(s) Target Business DescriptionDeal Value
($mm)
04/27/16 ExamWorks Group, Inc. Leonard Green & Partners, L.P.Provides independent medical examinations, peer and bill reviews, Medicare
compliance, case management and other related services$1,981
04/26/16 Lifeguard Medical Solutions, LLC Allied 100, LLCDistributes automated external defibrillators and offer an online monitoring system, onsite
training programs and medical oversight servicesNA
04/26/16Healthsouth Rehabilitation Hospital Of
Beaumont LLCPost Acute Medical, LLC
Owns and operates a rehabilitation hospital that provides treatment for strokes,
amputations, arthritis, brain injuries and other injuriesNA
04/22/16 Dimensional Management Corporation Waud Capital Partners, L.L.C. Offers dental care services and operates 23 dental offices NA
04/21/16 Stat Read, LLC Teleradiology Specialists, PLLC Provides radiology report reading services under the name UrgentRad Radiology NA
04/19/16 Prospective Payment Specialists, Inc. Receivables Outsourcing, Inc.Provides compliance and revenue cycle services to teaching hospitals, regional medical
centers, and critical access hospitalsNA
04/19/16 Today's Options of New York, Inc. Molina Healthcare, Inc.Offers healthcare plans to its members in Central NY including Medicaid Managed Care,
Child Health Plus and health benefit exchange plans41
04/19/16 Avadyne Health, Inc. MTS Health Investors, LLCProvides outsourced revenue cycle management services and technology solutions to
hospital clientsNA
04/18/16 The Meadows of Wickenburg, Inc. Kohlberg & Company, L.L.C.Provides addiction and psychological trauma treatment services for conditions including
trauma, PTSD, alcohol addiction and more180
04/11/16 Sequence Therapy, LLC Advantis CorporationProvides pain management and physical therapy services and develops digital
application for healthcare providersNA
04/11/16ACSH Urgent Care of Virginia and ACSH
Primary Care of VirginiaUrgeMedical Group, Inc.
ACSH Urgent Care of Virginia, LLC and ACSH Primary Care of Virginia, LLC own and
operate urgent care centers1
04/11/16 Wunderlich, M.D., S.C. DuPage Medical Group, Ltd.Offers services for chronic medical conditions; evaluation of new illnesses, pre-surgical
clearance, surgery and prevention screeningsNA
04/08/16 Mountain View Medical Group, P.C. DaVita HealthCare Partners Inc. Operates as a multiple-physician medical practice group in the Pikes Peak region NA
04/08/16Autoclave Testing Supplies and Autoclave
Testing ServicesMesa Laboratories Inc.
Autoclave Testing Supplies, Inc. and Autoclave Testing Services, Inc. distribute dental
sterilizer testing productsNA
04/08/16 Aging Family Services, Inc. LifeLinks,LLCProvides professional geriatric care management services to older adults in Raleigh,
Durham, and Chapel HillNA
04/06/16 Evergreen Rehabilitation, LLC Encore Rehabilitation Services, LLCProvides physical, occupational, and speech therapy services to long-term care
communities and outpatient therapy centersNA
04/06/16 Legend Healthcare, LLC The Ensign Group, Inc.Offers nursing and rehabilitative care, restorative care, physician services coordination,
pharmacy services, social service and care planningNA
04/06/16 Prairie View Healthcare Community Welcov Healthcare, LLC Operates a 52-bed nursing facility providing transitional, long-term and memory care NA
04/05/16 Upper Valley ENT Premier HealthNet Offers ears, nose and throat treatment services NA
04/05/16 Forty seven Medical Office Facilities Physicians Realty Trust Forty seven Medical Office Facilities throughtout the United States 611
04/04/16 Moore Physical Therapy and FitnessProfessional Orthopedic and Sports
training, fitness, ergonomics and nutrition servicesNA
04/04/16Victory Park Nursing Home and Victoria
Retirement CommunityCareTrust REIT, Inc.
Victory Park Nursing Home and Victoria Retirement Community comprises nursing and
retirement facilitiesNA
04/04/16 Cedar Falls Health Care Center CareTrust REIT, Inc. Cedar Falls Health Care Center comprises an 82-bed skilled nursing facility 5
04/04/16Kindred Healthcare, Inc., 12 Long Term
Acute Care HospitalsCurahealth, LLC 12 Long Term Acute Care Hospitals 28
04/04/16 Children's Emergency Services, Inc. Team Health Holdings, Inc. Provides emergency healthcare services for Dayton Children's Hospital NA
04/04/16 North Florida Anesthesia Consultants, Inc. Sheridan Healthcare, Inc.Provides anesthetic services for surgery centers and physician offices in Jacksonville,
Florida and the surrounding areasNA
04/01/16 Physicians' Specialty Hospital, LLC Community Health Systems, Inc.Offers spine surgery, urology, podiatry, pain management, minimally invasive general
surgery, bariatric surgery and other surgery servicesNA
04/01/16 CryoGen Management Signet Interactive LLCOffers cryogenic services including careful preparation, cooling and long-term patient
care in liquid nitrogenNA
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Source: Capital IQ
M&A Activity
April 2016 March 2016 January 2016 December 2015 November 2015 November 2015 September 2015