UNDERSTANDING IN THE HEALTHCARE MARKET JUNE 2019 TABLE OF CONTENTS

SECTION PAGE

I. BCA Introduction 1

II. Healthcare Market Dynamics 8

III. What is Private Equity? 13

IV. What is a ? 17

V. Appendix 20 I. BCA INTRODUCTION BCA IS ONE OF THE LARGEST HEALTHCARE BOUTIQUE INVESTMENT BANKS

KEY FACTS 19 $6.4 billion 1 PARTNER-OWNED Total Investment Bankers Total Transaction Value 90% 10.9x 2 RELATIONSHIP-DRIVEN Closure Rate Avg. EBITDA Mult. For Healthcare Services Deals Closed in 2018 3 HEALTHCARE-FOCUSED 100 $85 million Total Transactions Closed Average Transaction Size 4 RESULTS-ORIENTED

RELEVANT HEALTHCARE SERVICES TRANSACTIONS

Recapitalization Sell-Side Recapitalization Recapitalization Recapitalization RecapitalizationSell-Side Recapitalization

Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Recapitalization Led By Led By Led By Sell-Side Advisory Recapitalization Recapitalization Sell-Side Advisory Led by Led by Led by Led By to Led by Led By to

UnitrancheRecapitalization Debt RecapitalizationGrowth Equity RecapitalizationSell-Side Recapitalization Sell-Side Recapitalization

Recapitalization Recapitalization Recapitalization Acquired Recapitalization Debt- Equity Investment Sell-Side Advisory Recapitalization Led By Led By Led By Sell-Side Advisory Led by Led by Led By to Led by to

$113,000,000

1 OUR HEALTHCARE TEAM

EXTENSIVE INDUSTRY KNOWLEDGE & EXPERIENCED INVESTMENT BANKERS 2 3 DEEP BENCH 1 TRANSACTION EXPERIENCE

Kevin Murphy Tom Wylly Nick Carteaux L.A. Galyon John Kibler Dave Meagher John Allgood Managing Partner Senior Partner Partner & Managing Director Partner & Managing Director Managing Director Managing Director Director

Porter Meadors Cook Wylly Becky Gregg John Maher Amanda Phillips Patrick Price Nolan Young Director Director Director Director Director Associate Associate

Kyle Witty Brian Brett Samantha Knee Michael Steedman John Travisano Associate Senior Analyst Senior Analyst Analyst Analyst

2 BCA IS LOCATED IN THE CENTER OF NASHVILLE'S VIBRANT HEALTHCARE ECOSYSTEM

Located in Nashville, Tennessee, BCA has strong relationships with key players across all healthcare verticals.

RCM

Healthcare Technology Pharmacy

Payer IT/Tech-enabled Solutions Behavioral Health NASHVILLE

Dental For-Profit Hospitals

Outsourced Services

3 OUR APPROACH BCA takes an innovative and effective approach to staffing and executing engagements. STAFFING

APPROACHES TRADITIONAL APPROACH OUR APPROACH TRADITIONAL INVESTMENT BANKS BRENTWOOD CAPITAL ADVISORS ▪ Origination and execution performed ▪ Industry bankers focus on Senior Bankers Senior Bankers within industry groups. origination. ▪ Senior bankers focus on origination ▪ Senior M&A bankers lead and while junior bankers handle execute every phase of a transaction. execution. Execution Origination ▪ Result—~90% closure rate and ▪ Result—~40% closure rates. superior values and terms.

Industry Group Industry Execution

Junior Bankers Junior Bankers

ENGAGEMENT & EXECUTION

Origination Process

Healthcare

Diligence Marketing Documentation Technology TRANSACTIONS Pre-Marketing 1st Round Bids Exclusivity 2nd Round bids Closing

Outsourced Services ▪ Each deal is staffed by a six-person deal team. Superior Results and ▪ Executed by dedicated M&A professionals. Industry-Leading We Underwrite Transactions like Buyers. ▪ Skills and practices shared across industry sectors. Closure Rates.

4 STRONG FIT, THOUGHTFUL PROCESS DESIGN, FLAWLESS EXECUTION

Healthcare Buy-side Sell-side Non-Healthcare $10-$25 $26 - $100 83% 7% 93% M&A AND CAPITAL RAISING FOCUSED 17% 22% 53% ▪ 19 investment bankers.

M&A & Equity Debt INDUSTRY MIX TRANSACTION TYPE TRANSACTION SIZE Transactions (#) 81 19

Value ($ in millions) $5,760 $680 >$100 25%

1 - 10 >25 Multi-Step ESIGNING ROCESSES HAT EET PECIFIC RANSACTION EEDS Dual-Path 5% 65% D P T M S T N One-Step 85% 60% 15% ▪ Negotiated, targeted and controlled auctions. Strategic Only 15% 11-25 ▪ Maximize confidentiality, competitive tension 25% and . BUYER ▪ Senior investment banker leadership at every BID MECHANICS # OF PARTICIPANTS OMPOSITION step in the process. C ▪ Extensive transaction experience. ▪ Minimize management distraction. Financial Only 25%

TAKING THE “PULSE” OF THE MARKET EVERY DAY TRANSACTION EXECUTION STAGE ▪ Closed 8 transactions in 2018 and 4 in 2019 2 Deals 7 Deals 4 Deals 2 Deals 4 Deals YTD.

Recap Recap ▪ Project Project Project Project 15 engagements: Predator Onsite Pikes Peak Napa

Project Project Project Project Project Project Project Project ‒ 2 signed but inactive; Marvel Rainforest Robusto Pioneer Brickyard Nighthawk Antman Halo ‒ 7 in pre-marketing, Project Project Project Sale Sale ‒ 4 in marketing; Monopoly Astro Learn ‒ 2 in the process of closing. ▪ Daily contact with buyers. Signed Pre-Marketing Marketing Exclusive/ Closed but Inactive Closing

5 CASE STUDY – CAMELLIA HEALTHCARE (“CAMELLIA”)

COMPANY OVERVIEW

▪ A leading home-based care provider with 34 ▪ Encompass Health (NYSE: EHC) offers both facility-based and offices that offer hospice, home health and home-based patient care through its network of inpatient private duty services in Alabama, Louisiana, rehabilitation hospitals, home health agencies and hospice Sell-Side Advisory to Mississippi and Tennessee. agencies. Encompass’ national footprint spans 128 hospitals and 268 home health & hospice locations in 36 states and Puerto Rico.

SITUATIONAL OVERVIEW BCA STRATEGY Undisclosed ▪ Camellia had been a family-owned and ▪ BCA designed a competitive process that included strategic and operated business for over 40 years financial buyers and articulated Camellia’s unique market Client Testimonial and had grown to become a regional position of being a multi-state platform with three growing lines leader with operations in four states. of business. “Brentwood Capital Advisors has been a ▪ ▪ BCA created offering materials that highlighted the Company’s highly valued and trusted advisor to our With valuations in the sector company for many years, serving improving, BCA was asked to evaluate strong clinical and compliance record as well as its strategic instrumental roles in arranging the strategic alternatives, which included position in difficult to penetrate CON states in the Southeast. capital that allowed us to grow and in this selling all or parts of the Company in a last transaction advising on the sale of our family’s business. We truly value the 100% or majority sale. TRANSACTION RESULT timely, sound and objective advice and ▪ the day-to-day involvement provided by Camellia received several attractive offers from participants that BCA’s senior investment bankers wanted to truncate an intensely competitive process and go throughout every step of our sale of exclusive. process. BCA’s team did a great job designing and executing on a sale ▪ Camellia successfully completed its sale to Encompass Health, strategy that fostered competitive maximizing value for shareholders and creating a positive tension throughout the process and closing a transaction that resulted in the outcome for employees. highest value for or our shareholders and best outcome for our employees and patients.” - Abb Payne CEO, Camellia Healthcare

6 CASE STUDY – ANDERSON REGIONAL MEDICAL CENTER (“ANDERSON”)

COMPANY OVERVIEW

▪ Leading not-for-profit regional medical center based in ▪ National specialty lender of financing solutions Meridian, MS. dedicated exclusively to middle-market companies in the Senior Debt Placement healthcare industry. Led by

SITUATIONAL OVERVIEW BCA STRATEGY $25,000,000 ▪ Recent acquisitions and delays in transitioning provider ▪ Advised Company to conduct a broad process to identify and number negatively impacted liquidity. partner with a new senior lender to refinance and expand its credit facility. ▪ Client Testimonial HIS upgrade in late 2012 temporarily interrupted billing, creating some short-term liquidity issues. ▪ Assisted management in preparing a confidential memorandum and pro-forma analysis that more accurately "This financing from HFG will reflected normal steady state operations. enable Anderson to continue to serve the Eastern Mississippi/Western Alabama region as its largest healthcare provider. We were pleased to work with Brentwood Capital who positioned Anderson with lenders and structured a competitive TRANSACTION RESULT process that resulted in the right ▪ Anderson completed a senior debt refinancing led by HFG. partner in Healthcare Finance Group." ▪ Anderson refinanced existing indebtedness as part of the - Ray Humphreys transaction. CEO, Anderson Regional Medical Center

7 II. HEALTHCARE MARKET DYNAMICS HEALTHCARE MACRO TRENDS

The healthcare market has grown considerably but is in the process of changing.

HEALTHCARE AS A PERCENTAGE OF US GDP OBESITY LEVELS Americans are not getting healthier, physical activity is down and by 2030 half of all adults will be obese. 30% 25% 25% 2010 OBESITY LEVELS 2030P OBESITY LEVELS 20% 18% Not Obese 15% 13% 64% Not Obese Obese 10% 50% Obese 50% 5% 5% 36%

0% 1960 2000 2018 2027P

BABY BOOMERS MEDICARE There were 4.6 working Americans per beneficiary when Medicare launched in 1966, that ratio fill fall to 2.3 by 2030.

5 4.6

4

3 2.3 77M 10k 2 Baby Boomers in US Baby Boomers Retiring per Day 1

0 1966 2030P The Medicare Trust Fund will be depleted by 2026, costs will have to decline.

8 RETAIL AND CONSUMERS IMPACT ON HEALTHCARE

OVERVIEW TRADITIONAL HEALTHCARE EXPERIENCE SATISFACTION

▪ Healthcare systems are increasingly moving away from hospital settings to Per a Business Insider study, 81% of people reported they are dissatisfied with focus on community-based care. their traditional healthcare experience. ▪ Forward-looking hospital systems are aggressively developing distributed, local settings that are smaller, cheaper and more conveniently located. Satisfied ▪ As consumers pay more share of healthcare expenses, cost and quality are going to matter. 19% ▪ Non-traditional companies (not providers or payors) are making healthcare a Dissatisfied focus. Examples include: 81%

HEALTHCARE IS MOVING TO MEET PEOPLE WHERE THEY ARE RETAIL VS TRADITIONAL HEALTHCARE EXPERIENCE

70% 58.60% 60% 50% 40% 30% 20.40% 20% 10% 0% -3.70% -10% -6% 2006 - 2016 2016 - 2026P

Inpatient Visits Outpatient Visits

9 HEALTHCARE INDUSTRY OVERVIEW

▪ The NASDAQ Healthcare Index followed the broader equity market in 1Q19, YTD HEALTHCARE INDEX VS. S&P & NASDAQ rebounding significantly from 4Q18 to end the LTM as of March 31, 2019, mirroring the S&P 500 and NASDAQ. 130% ▪ Following the broader trend of middle-market M&A activity, both the number S&P 500 NASDAQ NASDAQ Healthcare and value of middle-market healthcare transactions declined in 1Q19. − 1Q19 middle-market healthcare M&A activity consisted of $23.5 billion of 120% value across 141 transactions, compared to $27.9 billion from 165 transactions in 4Q18 and $32.4 billion from 220 transactions in 1Q18.

▪ Larger transactions represent a shrinking percentage of middle-market 110% healthcare activity, as investors prioritize add-on acquisitions. ▪ Transactions valued between $25 and 100 million represented ~44% of 1Q19 middle-market healthcare M&A volume compared to ~18% in 4Q18 and ~41% 100% in 1Q18. ▪ Given that healthcare is a relatively recession-resistant industry, middle-market healthcare M&A activity is expected to remain steady throughout 2019 despite the aging economic cycle, though it is not on pace to reach the levels of 2018. 90% Mar-18 Jun-18 Sep-18 Dec-18 Mar-19

Source: PitchBook QUARTERLY MIDDLE-MARKET HEALTHCARE M&A - VOLUME QUARTERLY MIDDLE-MARKET HEALTHCARE M&A - VALUE 300 $50.0 ($B) 251 258 250 220 $40.0 $36.4 $36.2 211 211 $35.7 195 $32.1 $32.4 200 183 $30.4 165 $30.0 $26.4 $27.9 141 $23.5 150 $20.0 100

$10.0 50

0 $0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2017 2018 2019 2017 2018 2019

$25M-$100M $100M-$500M $500M-$1B $25M-$100M $100M-$500M $500M-$1B Source: PitchBook 10 HEALTHCARE CONSOLIDATION

HOSPITAL M&A PHYSICIAN PRACTICE M&A ▪ Hospitals can reduce operating costs and increase rates when acquiring Hospitals acquired 8,000 physician In Jul-12, only 35,700 practices were facilities through economies of scale and eliminating duplicative costs. practices between Jul-16 to Jul-18. considered hospital owned, but that ▪ On top of 5,000 hospital acquisitions number jumped to 80,000 by the In 2007, 52% of community hospitals were part of a system. Today, it is ~67%. from Jul-15 to Jul-16. start of 2018. Total hospital M&A 9,000 90,000 for 2018, average 8,000 80,000 deal size of $400M 115 125 102 90 100 6,000 60,000 75 5,000

50 35,700 25 3,000 30,000 0 2016 2017 2018

0 0 2015 - 2016 2016 - 2018 2012 2018 PAYOR CONSOLIDATION COMPARING HEALTHCARE MARKETS TO OTHER INDUSTRIES

2006 2018 Airline Industry Banks(1)

17% 26% 38% 35%

62% 65% 74% 83%

Top 4 Others Top 4 Others Top 4 Others Top 4 Others (1) Based on deposits held. 11 Buy-and-Build Anatomy of a Successful Buy-and-Build CHALLENGES FACING PHYSICIAN PRACTICES

Physician practices are facing challenges related to consolidation, reimbursement, recruitment and technology

CONSOLIDATION REIMBURSEMENT RECRUITING TECHNOLOGY

▪ Health systems & payers ▪ Shift to value-based ▪ Growing supply/demand ▪ IT infrastructure will be have significantly medicine is driving imbalance for specialists. critical in reporting as consolidated. Independent procedures to the lowest providers move from practices must grow care setting where the ▪ Significant student debt traditional fee for service. significantly to keep pace. patient can receive equal or makes investing in better quality care. partnership/practice more ▪ Expensive and burdensome ▪ Increasing complexity in difficult. EMR integration is taking navigating third-party ▪ Value-based system favors providers’ time away from reimbursement and practices with scale and a ▪ Change in attitudes towards patients. government regulations. full continuum of services. long medical hours – increasing emphasis on ▪ Lack of scale—difficult for ▪ As payers cut work / life balance. small practices to spread the reimbursement rates and cost of required develop stricter criteria for infrastructure. claim submissions, healthcare provider margins are declining.

12 III. WHAT IS PRIVATE EQUITY? WHAT IS A PRIVATE EQUITY FIRM?

OVERVIEW TYPICAL INVESTMENT SIZE

▪ Raise committed capital from institutions and wealthy families. ▪ Most PE firms make an average of 8 investments per fund, and though size may vary, an average investment will be ~10% of a fund. ▪ Seek to buy a majority ownership stake in a practice through a combination of equity from their fund and third-party debt. ▪ Funding capacity can be further increased by limited partners that want to invest additional capital outside of the fund economics. ▪ Increase the value of the practice by investing in growth opportunities, improving efficiencies and assisting with M&A and other strategic initiatives. ▪ The typical investment holding period is five years, though timing can vary from 1 – 10 years and is heavily dependent on the growth of the practice and management’s outlook for the business. ▪ PE firms may receive management fees on the capital they invest in addition to a percentage of the value created by selling the practice for a higher valuation.

MIDDLE MARKET PE ACQUISITION ACTIVITY SAMPLE FUND

$500 3,500 $200 Million 2,971 $450 Fund 2,616 3,000 $400 2,409 2,241 2,257 $350 2,500 1,899 $20 mm Avg. $20 mm Avg. $20 mm Avg. $20 mm Avg. $300 1,676 2,000 Investment Investment Investment Investment $40 mm $250 1,500 Management $200 $20 mm Avg. $20 mm Avg. $20 mm Avg. $20 mm Avg. Fees $150 544 1,000 Investment Investment Investment Investment $100 500 $50 $245 $244 $350 $321 $316 $378 $428 $0 $59 0 2012 2013 2014 2015 2016 2017 2018 2019 ▪ Current shareholders want a partner who can help the practice grow and Deal Value ($B) # of Deals Closed leverage previous experience. ▪ Smaller funds and venture groups tend to be generalists and resource Source: PitchBook. constrained. Note: Middle Market refers to deal sizes between $25 million and $1 billion. ▪ Many physicians have received more value from their rolled equity in the Through 1Q19. “second bite of the apple” by picking the right partner.

13 HEALTHCARE PRIVATE EQUITY FIRMS IN THE U.S.

PRIVATE EQUITY FIRM CONCENTRATION EXAMPLE HEALTHCARE-FOCUSED PRIVATE EQUITY FIRMS Top-tier PE firms are heavily concentrated in three regions of the US: Northeast, Chicago and West Coast.

400+

BCA has interacted with over 400+ PE firms over the past 2 years

14 RECENT PRIVATE EQUITY ACTIVITY

GLOBAL PRIVATE CAPITAL DRY POWDER ▪ Private equity (“PE”) funds invested $59 billion in 544 transactions in 1Q19. ($ in billions) − PE buyers are implementing more intensive due diligence processes as they $2,500 focus on downside risk in the higher price environment. $2,099 − Add-on acquisitions continue to comprise a growing percentage of middle- $2,000 $1,779 market transactions due to persistently high valuation expectations. $1,507 $1,500 $1,362 − Some investors are implementing dividend recaps to boost returns in the $1,226 $1,222 $943 current environment. $1,000 ▪ US PE middle-market exit activity dropped to $27 billion across 137 transactions in 1Q19, representing YoY declines of ~42% and ~46%, respectively. Exit volume $500 activity is expected to increase throughout the year assuming it remains a seller’s market. $0 2012 2013 2014 2015 2016 2017 2018 ▪ PE firms raised $26 billion across 25 new middle-market funds in 1Q19. Mega- funds and growth equity funds account for an increasing percentage of new capital.

MIDDLE-MARKET PE MEDIAN DEAL SIZE MIDDLE-MARKET PE FUNDRAISING ACTIVITY ($M) 167 167 155 143 134 135 $192 $173 105 $155 $155

$130 $130 $128 $110 25 $112 $114 $121 $113 $74 $84 $97 $26 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 Capital Raised ($B) # of Funds Closed Source: PitchBook

15 HOW PRIVATE EQUITY FIRMS ADD VALUE

▪ Private equity (“PE”) firms manage discretionary funds raised from pension and endowment funds, foundations, corporations and wealthy individuals. ▪ Make control and non-control investments in private companies to provide funds for growth, shareholder liquidity, working capital and general corporate purposes. ▪ The typical investment horizon is three to seven years and liquidity is accomplished through a sale, recapitalization or .

Accelerate Growth Improve Profitability ▪ Assist with go-to-market strategy and ▪ Invest in IT infrastructure and reporting. competitive positioning. ▪ Payor relationships. ▪ Expand investment in new product or ▪ Let physicians focus on medicine, driving service line development. efficiency. ▪ Grow sales and marketing resources as healthcare becomes more consumer- oriented. Value Drivers

Leverage Professional Network Provide Additional Capital and Domain Knowledge and Bandwidth for M&A ▪ Help retain and recruit key medical talent ▪ Develop an effective M&A strategy. ▪ Executive relationships. ▪ Assist with deal sourcing and execution. ▪ Financing and advisory resources. ▪ Improved access to capital markets. ▪ Other portfolio companies.

16 IV. WHAT IS A RECAPITALIZATION? STRATEGIC ALTERNATIVES OVERVIEW

100% Status Quo

Post-Transaction Ownership Recapitalization

Full Sale 0%

$0 Liquidity High PROS • No disruption to business. • Capital partner for growth. • Maximize shareholder liquidity. • No shareholder dilution. • Provides significant up front liquidity. • Market process to determine • Retain ownership and operating control. • Opportunity for “2nd bite of the apple”. . • Maximum flexibility to accommodate needs of individual • Eliminates ongoing execution and shareholders. regulatory risk to sellers. • Market process to determine enterprise value.

CONS • No additional growth capital. • Manage the business under financial covenants. • No opportunity for “2nd bite of the • No opportunity to take “chips off the • New partner. apple.” table.” • Potential governance issues. • Total loss of voting control. • Pay taxes at ordinary income rather than • Significant value contingent on future performance. • Significant leadership, cultural and favorable capital gains rates. • Ongoing exposure to business risk. operating change. • All value contingent on future • Key man risk. performance. • Ongoing exposure to business risk.

17 WHAT IS A RECAPITALIZATION (“RECAP”) AND HOW DOES IT BENEFIT YOU? provide an opportunity for shareholders to address decreasing risk appetite and achieve some level of current liquidity, while positioning the practice for future growth.

HOLD & GROW OPPORTUNITY BUILDING OPPORTUNITY

▪ No additional growth capital. Entrepreneur Risk Growth Potential ▪ No opportunity to take “chips off of the Tolerance is High is Lower table.” ▪ Pay taxes on distributions at ordinary income rather than favorable capital STATUS gains rates. QUO ▪ All value contingent on future performance. ▪ Ongoing exposure to business risk.

Growth Potential Entrepreneur Risk is Higher Tolerance is Low TIME

HOLD & GROW OPPORTUNITY RECAPITALIZATION TRANSACTION BUILDING OPPORTUNITY

▪ Capital partner for growth. Private Equity Entrepreneur Risk ▪ Provides significant liquidity. Investment Fuels Tolerance is High Growth Potential ▪ Opportunity for “2nd bite of the apple”. ▪ Maximum flexibility to accommodate BENEFIT needs of individual shareholders. Liquidity Event Reduces OF A ▪ Market process to determine enterprise Risk for Entrepreneur RECAP value.

Growth Potential is Higher TIME 18 PHYSICIAN & MANAGEMENT’S IMPACT ON LONG-TERM VALUE

Compared to transactions in the 1990s, modern day consolidation is focused around partnerships instead of all-cash deals.

Additional “Bites of the Apple” INITIAL RECAP 2 OR RECAP 3 OR RECAP SALE SALE Growth is Growth is Critical Critical Year Year Year 0 5 10+

Total enterprise value is driven Similarly, the initial investor by the initial investor’s must feel comfortable that the perception of how the next next investor will be able to investor will value the Company recap or sell the Company for a in Year 5. similar return in Year 10.

EACH RECAP’S VALUE IS DEPENDENT UPON CREATING LONG-TERM SUSTAINABILITY, WHICH IS CREATED BY SYSTEMATICALLY AND CONSISTENTLY BEING ABLE TO ATTRACT AND RETAIN HIGH QUALITY PHYSICIANS.

Create Long- Centralize Streamline Structured Term HR Recruiting Ownership Value Track

19 V. APPENDIX HEALTHCARE IT SECTOR OVERVIEW

COMMENTARY INDICES RELATIVE PRICE PERFORMANCE

▪ 1Q19 saw the continued evolution of healthcare delivery towards a value-based paradigm. Providers of 130% all types continue to face mounting pressures to enhance clinical quality and operational efficiency while also ensuring patient satisfaction and capturing the patient’s financial responsibility for their 120% bills. HCIT companies garnering the most attention are those that alleviate these pressures in a meaningful and measurable way. In short, providers and payers are increasingly reliant upon 109% technology to take excess cost out of the system and improve care quality and, specifically, patient 110% outcomes. 107% 100% ▪ The ubiquity of data, both clinical and financial, presents the greatest opportunity and challenge for 101% payers and providers to better understand their respective populations and identify opportunities for improvement. More specifically, the growing archive of historical data is creating new compliance and 90% challenges for providers, especially as the care delivery landscape continues to consolidate. In Q1, BCA represented Harmony HIT, a leader in the data extraction and archiving space, in its 80% recapitalization with Primus Capital. Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 ▪ Overall, investor and strategic buyer sentiment remain positive and valuations continue to be elevated HCIT S&P 500 NASDAQ for companies demonstrating consistent growth, profitability, and operating in large and growing markets.

VALUATION ANALYSIS ANALYSIS SELECT M&A TRANSACTIONS ($M, except share prices) ($M) Stock Price % of 52-Week TEV / Revenue TEV / EBITDA Announced TEV LTM Multiple Company Ticker 3/31/19 High Low TEV 2018 2019P 2018 2019P Date Target Acquiror TEV Revenue EBITDA Allscripts MDRX $9.54 64% 112% $2,198 1.3x 1.2x 7.8x 7.0x 3/11/19 Voalte Hill-Rom Holdings 4.5x N/A Cerner CERN $57.21 85% 117% 18,752 3.5x 3.2x 11.8x 10.8x $180 Computer Programs and Systems CPSI $29.69 86% 125% 528 1.9x 1.9x 10.9x 10.3x 2/26/19 OnLife Guidewell Connect 84 2.5x 10.5x Evolent EVH $12.58 43% 104% 966 1.5x 1.1x NM NM 2/20/19 API Healthcare Symplr 290 N/A 14.5x Healthstream HSTM $28.06 88% 122% $739 3.2x 2.9x 17.8x N/A 1/10/19 Providigm HealthStream (NAS: HSTM) 19 N/A N/A HMS Holdings HMSY $29.61 78% 182% 2,612 4.4x 4.0x 16.1x 14.5x Inovalon INOV $12.43 80% 140% 2,651 4.2x 4.1x 14.8x 13.2x 12/19/18 Mmodal 3M 1,000 5.0x 10.0x Medidata MDSO $73.24 82% 122% 4,327 6.8x 5.6x 29.3x 23.2x 12/10/18 Netsmart GI Partners & TA Associates N/A N/A N/A NextGen Healthcare, Inc. NXGN $16.83 71% 128% 1,080 2.0x 2.0x 13.0x 11.2x 11/12/18 athenahealth (NAS: ATHN) Veritas Capital & Evergreen Coast Capital 5,700 4.3x 21.3x Veeva VEEV $126.86 98% 186% 18,715 NM NM NM NM

Average 3.2x 2.9x 15.2x 12.9x Note: Data per SEC filings and PitchBook. Median 3.2x 2.9x 13.9x 11.2x

20 HOME HEALTH AND HOSPICE SECTOR OVERVIEW

COMMENTARY STOCK INDICES PRICE PERFORMANCE In 2019 BCA expects Amedisys (NASDAQ: AMED) and Addus HomeCare (NASDAQ: ADUS) to be active acquirers. ▪ Amedisys closed its acquisition of Compassionate Care Hospice on February 4, 2019 and shortly after on February 19 announced the acquisition of Tulsa, OK-based RoseRock Healthcare. RoseRock is a hospice 164% provider serving 220 patients daily in northeastern Oklahoma. The RoseRock acquisition is consistent with 160% the hospice-focused strategy Amedisys described to BCA during the J.P. Morgan Healthcare Conference in January 2019. We expect Amedisys to remain an active buyer of hospice businesses in 2019. ▪ BCA expects Addus HomeCare to be an active acquirer of personal care businesses in 2019. Addus completed 140% two acquisitions in 2018 and is expected to close its purchase of VIP Health Care Services on June 1, 2019. The VIP transaction adds $50M of annualized revenue, which positions the company to achieve its goal of $100M 120% 109% of annualized acquired revenue in 2019. 107% On the regulatory front, in 1Q19 a bipartisan group of senators, led by Susan Collins (R-ME) and Debbie Stabenow 100% (D-MI), introduced the Home Health Payment Innovation Act (S433). S433 would modify the Patient Driven

Groupings Model (PDGM), which was finalized last year, by: 80% ▪ Requiring the behavioral adjustment to be based on evidence (vs. characteristics in PDGM), adjusting Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 reimbursement rates only after behavioral changes that affect Medicare spending occur; Home Health & Hospice S&P 500 NASDAQ ▪ Creating a phase-in period limiting losses/gains to 2% annually and maintaining budget neutrality; and ▪ Allowing the homebound requirement to be waived when a MA plan or an innovation center program determines that providing at-home care would improve outcomes and reduce spending. S433 will be the priority of the home health industry this year. BCA expects that PDGM will continue to be tweaked until its implementation on January 1, 2020.

VALUATION ANALYSIS PUBLIC COMPANY ANALYSIS SELECT M&A TRANSACTIONS

($M, except share prices) ($M) Stock Price % of 52-Week TEV / Revenue TEV / EBITDA Announced TEV LTM Multiple Company Ticker 3/31/19 High Low TEV 2018 2019P 2018 2019P Date Target Acquiror TEV Revenue EBITDA Addus HomeCare ADUS $63.59 82% 139% $785 1.5x 1.3x 18.0x 15.3x 2/19/19 RoseRock Healthcare Amedisys N/A N/A N/A

Amedisys AMED $123.26 87% 209% 4,130 2.5x 2.1x 21.4x 19.7x 2/5/19 Hospice Connection Traditions Health N/A N/A N/A LHC Group LHCG $110.86 96% 187% 3,676 1.8x 1.7x 19.3x 16.8x 2/4/19 Compassionate Care Hospice Amedisys $340 1.8x 12.6x Chemed Corp CHE $320.07 95% 123% 5,463 3.1x 2.9x 18.3x 16.8x 11/8/18 Hospice Care of South Carolina The Vistria Group 60 1.8x 10.3x

Average 2.2x 2.0x 19.2x 17.2x 11/6/18 VIP Health Care Services Addus Homecare 28 0.6x N/A

Median 2.2x 1.9x 18.8x 16.8x 10/11/18 Affinity Hospice MBF Healthcare Partners 13 0.9x 10.8x

10/10/18 Compassionate Care Hospice Amedisys 340 1.8x 12.6x Note: Data per SEC filings and PitchBook. 21 OUTSOURCED HEALTHCARE SERVICES OVERVIEW

COMMENTARY STOCK INDICES PRICE PERFORMANCE

▪ Hospitals are increasingly outsourcing high-volume emergency department and 130% hospitalist operations to staffing companies due to the quality and cost efficiencies that they provide. 120% 109% 110% − The ED is particularly important as it generally accounts for 40-50% of inpatient 107% admissions. 100%

− The ED management industry remains highly fragmented with the largest players 90% controlling less than 20% of the market. 80% ▪ Team Health Holdings was acquired and taken private by the Blackstone Group in a $6.1 70% billion deal that closed in February 2017. 62% 60% ▪ Envision Healthcare was acquired and taken private by KKR in a $9.9 billion deal that Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 closed in October 2018. Outsourced Healthcare Services S&P 500 NASDAQ

VALUATION ANALYSIS PUBLIC COMPANY ANALYSIS SELECT M&A TRANSACTIONS

($M except share prices) ($M) Stock Price % of 52-Week TEV / Revenue TEV / EBITDA Announced TEV LTM Multiple Company Ticker 3/31/19 High Low TEV 2018 2019P 2018 2019P Date Target Acquiror TEV Revenue EBITDA MedNax MD $27.17 48% 101% $4,405 1.2x 1.2x 7.4x 7.8x 2/11/19 Progressive Emergency Physicians Emergency Care Partners N/A N/A N/A 1/7/19 Emergigroup Physician Associates American Physician Partners Confidential$240 Market#VALUE! Knowledge0.0x Healthcare Services Group HCSG $32.99 68% 111% 2,389 1.2x 1.2x 20.7x 15.1x 11/13/18 Progressive Medical Associates American Physician Partners Confidential$31 Market1.5x Knowledge 9.5x AMN Healthcare AMN $47.09 69% 105% 2,719 1.3x 1.2x 10.1x 9.6x 9/13/18 Emergency Care Partners Varsity Healthcare Partners N/A N/A N/A 7/9/18 Premier Medical Team Health Holdings N/A N/A N/A Cross Country Healthcare CCRN $7.03 54% 104% 318 0.4x 0.4x 10.4x 10.8x 7/6/18 Kalamazoo Emergency Associates American Physician Partners N/A N/A N/A ASGN ASGN $63.49 67% 124% 4,427 1.2x 1.1x 10.7x 8.8x 6/28/18 Sound Physicians Summit Partners $2,150 1.5x 21.2x 6/11/18 Envision Healthcare KKR 9,900 1.1x 14.5x 4/9/18 MedPartners AMN Healthcare Services 195 1.6x 9.8x Northeast Tennessee Emergency Average 1.1x 1.0x 11.8x 10.4x 3/9/18 American Physician Partners ConfidentialN/A MarketN/A Knowledge N/A Physicians Median 1.2x 1.2x 10.4x 9.6x 3/5/18 EmergiNet Team Health Holdings N/A N/A N/A 2/5/18 Emergency Medicine Consultants Team Health Holdings N/A N/A N/A

Note: Data per SEC filings and PitchBook. 22 BEHAVIORAL HEALTH OVERVIEW

COMMENTARY STOCK INDICES PRICE PERFORMANCE

▪ The behavioral health market is large and fragmented at over $300 billion, with attractive 130% underlying industry tailwinds. 120% − Nearly 1 in 25 adults, or 10 million individuals, in the U.S. live with a serious mental 109% illness. 110% 107% ▪ Demand for mental health services continues to surge and outstrip current market 100% capacity. 90% − 60% of adults with mental illness did not receive mental health services in the last year. 80% ▪ Centerbridge Partners announced the acquisition of Civitas Solutions for $1.4 billion in 70% December 2018, valuing the Company at 9.4x EBITDA. 61% 60% Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Behavioral Health S&P 500 NASDAQ

VALUATION ANALYSIS PUBLIC COMPANY ANALYSIS SELECT M&A TRANSACTIONS

($M, except share prices) ($M) Stock Price % of 52-Week TEV / Revenue TEV / EBITDA Announced TEV LTM Multiple Company Ticker 3/31/19 High Low TEV 2018 2019P 2018 2019P Date Target Acquiror TEV Revenue EBITDA 2/26/19 N/A N/A N/A American Addiction Centers AAC $1.84 15% 138% $382 1.2x 1.4x 14.8x 9.4x Mission Treatment Services Acadia Healthcare 12/19/18 Behavioral Health Group The Vistria Group N/A N/A N/A Acadia Healthcare ACHC $29.31 65% 121% 5,701 1.9x 1.8x 9.6x 9.2x 12/18/18 Civitas Solutions Centerbridge Partners $1,400 0.9x 9.4x Universal Health Services, Inc. THC $133.77 94% 122% 16,434 1.5x 1.5x 9.7x 8.9x 12/18/18 Odyssey Behavioral Healthcare Carlyle Group Confidential 192 MarketN/A Knowledge10.0x 11/30/18 Psychiatric Medical Care Consonance Capital Partners BCAN/A Proprietary TransactionN/A N/A Average 1.6x 1.5x 11.4x 9.2x 10/2/18 Ideal Option Varsity Healthcare Partners 100 N/A 10.0x Median 1.5x 1.5x 9.7x 9.2x 9/27/18 Carolina Partners in Mental Healthcare River Cities Capital Funds N/A N/A N/A 6/28/18 Beach House Center for Recovery BelHealth Investment Partners N/A N/A N/A 5/23/18 Elements Behavioral Health Blue Mountain Capital N/A N/A N/A 3/16/18 Addiction Campuses Summit Partners, Silversmith N/A N/A N/A 3/1/18 AdCare American Addiction Centers 85 1.7x 10.0x

Note: Data per SEC filings and PitchBook. 23 ALTERNATIVE SITE / OUTPATIENT SERVICES OVERVIEW

COMMENTARY STOCK INDICES PRICE PERFORMANCE

Investors continue to be attracted to the specialty physician practice management 130% sectors that include a significant surgical / procedural revenue component. 120% ▪ Outpatient specialties such as ophthalmology and gastroenterology are attractive due to 109% an aging population and procedures being done on an outpatient basis. 110% ▪ Investors tend to favor high value and sustainable reimbursement specialties with strong 107% demand like orthopedics, dermatology and vision. 100%

▪ Orthopedics is a subspecialty with increasing market activity, with multiple large 90% platforms exploring strategic alternatives. Enhanced scale gives practices negotiating leverage, allowing them to apply pressure on payers for reimbursement terms. 80% 77% ▪ While we saw only one large platform transaction in 1Q19 (Calera Capital’s 70% recapitalization of Bay State PT), the physical therapy sector continues to consolidate. Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 PE investors and strategic buyers remain active in efforts to capture market share. Alternative Site & Outpatient Services S&P 500 NASDAQ

VALUATION ANALYSIS PUBLIC COMPANY ANALYSIS SELECT M&A TRANSACTIONS ($M except share prices) ($M) Stock Price % of 52-Week TEV / Revenue TEV / EBITDA Announced TEV LTM Multiple Company Ticker 3/31/19 High Low TEV 2018 2019P 2018 2019P Date Target Acquiror TEV Revenue EBITDA 3/1/19 Bay State Physical Therapy Calera Capital N/A N/A N/A American Renal ARA $6.14 26% 106% $853 1.0x 1.0x 4.8x 4.4x 3/1/19 Dermatology & Skin Surgery Schewiger Dermatology (LNK Partners) N/A N/A N/A Davita DVA $54.29 69% 113% 19,134 1.7x 1.7x 8.9x 8.0x 2/20/19 Camulet Dermatology Pinnacle Dermatology (Chicago Pacific) N/A N/A N/A Fresenius FRE $55.87 67% 128% 47,116 1.3x 1.2x 7.0x 4.8x 2/13/19 Gastroenterology Specialists Gastro Health (Audax Group) N/A N/A N/A Encompass Health EHC $58.40 71% 105% 8,274 1.9x 1.8x 9.0x 7.4x 2/5/19 Simply Beautiful Smiles Sun Capital Partners N/A N/A N/A U.S. Physical Therapy USPH $105.03 81% 130% 1,345 3.0x 2.7x 17.7x 15.2x 1/31/19 Dr. Dental Management ABRY Partners N/A N/A N/A Select Medical SEM $14.09 65% 104% 4,954 1.0x 0.9x 7.7x 7.2x 1/24/19 Virginia Eye Consultatnts CEI Vision Partners N/A N/A N/A Surgery Partners Inc. SGRY $11.28 57% 119% 2,486 1.4x 1.4x 7.5x 6.5x 1/24/19 Pappas Phyiscal Therapy Confluent Health N/A N/A N/A 1/10/19 Silverton Skin Institute Pinnacle Dermatology (Chicago Pacific) N/A N/A N/A Average 1.6x 1.5x 8.9x 7.6x 1/7/19 Desert Radiology Radiology Partners (NEA) N/A N/A N/A Median 1.4x 1.4x 7.7x 7.2x 1/1/19 Retina Vitreous Associates of Toledo CEI Vision Partners N/A N/A N/A 1/1/19 California Retina Associates ShoreView Industries N/A N/A N/A

Note: Data per SEC filings and PitchBook. 24