Capstone Headwaters

Healthcare IT Q1 2019

TABLE OF CONTENTS MERGER & ACQUISTION OVERVIEW

 M&A Overview Policy changes towards patient-centered healthcare, including the transition  Key Trends & Drivers from fee-for-service to value-based care and the 2019 transparency law requiring hospitals to list standard prices online, have encouraged a revamp of  Deal Spotlight healthcare solutions and organizational needs. The trend towards  Notable Transactions consumerization has bolstered increased focus on Healthcare Information  Select Transactions Technology (HCIT) solutions which are simplified, personalized, and interconnected for tracking and transparency. Despite regulatory hurdles, the  Public Company Data HCITmarketcontinuestodiversify,as seen by the 2018 activity of Amazon  Firm Track Record (NASDAQ:AMZN) in healthcare last year (see page 3). Amazon’s scale and leadership will likely drive a new frontier of retail companies into the space.

In 2018, merger and acquisition (M&A) volume eclipsed its prior historic high with 195 announced or closed transactions. Disclosed deal value doubled year- CONTRIBUTORS over-year to $20.7 billion, bolstered by multi-billion dollar deals involving private equity firm Veritas Capital. The New York firm, which targets tech- David DeSimone enabled solutions companies, acquired payment accuracy analytics provider Director Cotiviti in June ($4.9 billion) and co-invested with Elliot Management in the 617-619-3324 headline acquisition of (NASDAQGS:ATHN) in November for ~$5.7 [email protected] billion (see page 4). Despite Veritas Capital’s appetite in the space, strategic buyers remained the most acquisitive in the HCIT industry and accounted for David Michaels 58.5% of activity compared to 56.0% in 2017. Managing Director 858-926-5950 M&A Activity: Healthcare IT [email protected] 250 195 184 200 182 173 152 150 135 122 100

50

Number ofNumber Transactions 0 2012 2013 2014 2015 2016 2017 2018 Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research 3 www.capstoneheadwaters.com January 2019 Healthcare IT | Q1 2019

KEY TRENDS & DRIVERS

PROJECTED SIZE OF REVENUE CYCLE In 2018, Capstone Headwaters identified 28 transactions $90.4B MANAGEMENT MARKET BY 2022 in the RCM space, accounting for ~15.0% of total HCIT M&A activity. Most notably, two of the largest deals in the HCIT space in 2018 (athenahealth for ~$5.7 billion The global healthcare Revenue Cycle Management (RCM) and Cotiviti for $4.9 billion) both targeted companies market is forecasted to reach $90.4 billion by the end of whose offerings included RCM solutions. 2022, growing at a compound annual growth rate (CAGR) of 12.1%, according to Research and Markets.1 Hospitals Overall, buyers leveraged RCM acquisitions to improve and clinics have felt pressure to implement RCM solutions return on investment (ROI), acquire Core Administration amid increasing out-of-pockets costs, burdensome Processing Systems (CAPS), reduce costs to patients, regulations, and denied reimbursements, according to the ensure regulatory compliance, create more Advisory Board’s biennial Revenue Cycle Survey.2 comprehensive end-to-end service solutions, and improve Hospitals are forced to absorb billions of dollars in unpaid the focus on quality care. Select transactions in this space patient care each year due to missed payments from are included in the table below with additional patients and insurers. According to the American information on pages 4-7. Hospital Association, hospitals have lost more than $620.0 billion in uncompensated care since 2000.3

Uncompensated Patient Care Select 2018 Transactions: RCM

$50.0 Enterprise EV / LTM Date Target Acquirer Value (mm) Revenue EBITDA $40.0 Veritas; 11/12 athenahealth $5,644.0 4.3x 21.3x Evergreen $30.0 Health Conduent 10/31 $98.0 - - $20.0 Solutions Incorporated

TransUnion

Dollars Billions in 10/10 Rubixis --- $10.0 Healthcare

Advanced- Global $0.0 08/02 $700.0 - - MD Payments 2000 2005 2010 2015 ‘17 Advanced- 07/09 --- Source: American Hospital Association Technologies MD

Cotiviti Veritas By centralizing and tracking functions such as coding, 06/19 $4,929.3 6.7x 17.1x Holdings Subsidiary billing, and denials, organizations hope to gain actionable insights to reduce the number of denied insurance claims, Bolder Cognizant 03/12 --- improve patient care, and maximize cash flow. Healthcare Technology

ABILITY Inovalon Despite RCM software’s cost-saving capabilities ~26.0% 03/07 $1,200.0 8.6x 16.6x of all US hospitals still do not have a viable revenue cycle Network Holdings management solution in place, according to a November Revint Black Book Research survey, leaving a large opportunity 02/27 Naveos --- Solutions for expansion in the market.4 The top challenges for hospitals seeking to implement RCM solutions are: 1) the Intermedix 02/26 R1 RCM $460.0 2.4x 9.6x high price and costly maintenance of the software and 2) Corporation the scarcity of skilled professionals who are familiar with BMS Medical using the software. Because of these implementation 02/15 WebPT - - - challenges, many organizations have opted to outsource Management core or bolt-on RCM services over implementing entirely new software. Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research 2 Healthcare IT | Q1 2019

KEY TRENDS & DRIVERS (CONTINUED)

AMAZON FOCUSES ON “LONG-TERM 2018 ORIENTATION” INTO HEALTHCARE

Amazon’s innovative ventures have shaken the foundation of many major markets to date including Retail, Transportation & Logistics, Video Streaming, Home Services, and Food Delivery. Continuing on its new market expansion, the e-commerce giant took its first major foray into healthcare in 2018 in what promises to be the start of an historic shift for the industry.

As shown in the timeline below, Amazon announced at the onset of 2018 that it would form a joint venture to build an employee health benefits program. “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Amazon CEO Jeff Bezos said in the press release.5 “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.” A few months later, Amazon Consumers no longer need to acquired online pharmacy company PillPack for ~$1.0 billion, “ drive to a store to stand in-line causing stocks for major pharmacies including CVS Health and purchase their medical Corporation (NYSE:CVS), Walgreens Boots Alliance devices and supplies. Now, in the (NasdaqGS:WBA), and Rite Aid Corporation (NYSE:RAD) to drop 6.1%, 9.9%, and 11.1% respectively.6 More recently in October, privacy of their home, consumers Amazon launched Choice, its exclusive consumer medical device can review, compare and purchase brand for monitoring glucose levels and hypertension. The the products of their choice. No company will offer affordable devices supported by mobile insurance is required. applications for tracking data and improving health management. ” With its established distribution channels and vast costumer base, - Bob Guest, Arcadia Group CEO Amazon is poised to quickly become an innovative leader in the Press Release7 outpatient market. As the healthcare market responds to the growing threat of Amazon, companies will likely self-assess and choose to either buy or build to gain competitive competencies.

2018 Highlights: Amazon in Healthcare

Corporate giants Amazon, Berkshire Hathaway (NYSE:BRK.A) and JPMorgan Dr. Atul Gawande, renowned Amazon partners with the UK- Chase (NYSE:JPM) partner to create a surgeon, writer and public health based Arcadia Group to launch company that will provide US innovator, appointed CEO of Choice, a consumer medical employees with technology solutions healthcare initiative which will be device brand for diabetes and for simplified, low-cost healthcare. headquartered in Boston. hypertension management.

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.

Amazon acquires PillPack, an online Accenture, Merck, and Amazon Amazon Web Services pharmacy with licenses in all 50 states. Web Services to launch cloud- creates healthcare PillPacks’ direct-to-consumer (D2C) pre- based drug discovery and scientific extension to natural sorted medication shipments will be research platform to help language processor complemented by Amazon’s shipment pharmaceutical and biotech Amazon Comprehend for speed and existing customer channels. companies to collaborate. medical record processing. 3 Healthcare IT | Q1 2019

DEAL SPOTLIGHT

Founded: 1997 Ticker: NasdaqGS:ATHN Headquartered: Watertown, MA 2018 FY Revenue: ~$1.4 Billion

Leading HCIT company athenahealth experienced a transformative year in 2018 following the unsolicited bid from minority stake holder Elliot Management (9.0%) and the subsequent resignation of founder and CEO Jonathan Bush. While Bush stepped down amid personal scandal, the push to privatize and adjust the long-term strategy of athenahealth (the “Company”) was voiced prior to the allegations against the CEO. After months of uncertainty surrounding its next strategic move, athenahealth agreed to be acquired by private equity firms Veritas Capital and Evergreen Coast Capital, an Elliot Management subsidiary, in November 2018 for ~$5.7 billion in cash or $135.0 per share. The public-to-private transaction is projected to close in the first half of 2019.

After the transaction is completed, athenahealth will be combined with the former Value-Based Care Division of GE Health which Veritas acquired in April 2018 for $1.1 billion. Rebranded as Virence Health Technologies, the former GE Healthcare company’s portfolio includes revenue cycle management solutions, ambulatory care management solutions, and workflow management solutions. “Athenahealth is a market leader and a natural and strategic fit with Virence,“ Veritas Capital CEO and Managing Partner Ramzi Musallam explained in a press release.8 “Virence and athenahealth have differentiated and complementary solutions, deep relationships with their respective customer bases, and a shared culture of commitment to innovation.” The combined entity is expected to become a leading, private HCIT company with a far-reaching national provider network and will be led by Virence Chairman and CEO Bob Segert.

The market has largely responded with a “wait and see” Survey: Customer Response to mindset to the announced combination of athenahealth Athenahealth, Virence Merger and Virence, according to a November survey by Reaction Data.9 Of the more than 150 organizations surveyed— which included hospitals and clinics—32.0% were 100% athenahealth customers, 19.0% were Virence customers, 24.0% Likely to stay and 49.0% were not existing customers of either 75% healthcare company. Only a small share (26.0%) of the total surveyed group rated the overall impact of the decision as “positive,” while 29.0% rated it as “negative” 50% 51.0% Wait and see and 45.0% as “neutral.” Additionally, only 24.0% of the existing customers surveyed agreed that they were likely to stay with athenahealth/Veritas after the entities are 25% combined. Despite the hesitation from respondents, if successfully integrated these two leading companies will 25.0% Likely to leave have great potential for new growth. 0% Source: Reaction Data

“ Operating as a private company with Veritas' ownership and support will provide athenahealth with increased flexibility to achieve our purpose of unleashing our collective potential to transform healthcare.

” - , Athenahealth Executive Chairman November 2018 Press Release8

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NOTABLE TRANSACTIONS

Medsphere Systems Corporation acquires HealthLine Solutions (January 2019, Undisclosed)

Healthcare IT solutions provider Medsphere Systems Corporation has acquired HealthLine Solutions. Terms of the deal were not disclosed. Founded in 1996 in Texas, HealthLine Solutions offers healthcare inventory and supply chain management services. The acquisition will complement Medsphere’s integrated electronic health records (EHR) system CareVue as well as its end-to-end revenue cycle management platform RCM Cloud. Acquires “HealthLine applications empower hospitals to increase revenue and lower labor costs while having complete confidence in inventory data, which is why we’re excited about this strategic acquisition,” Medsphere President and CEO Irv Lichtenwald said in a press release.10 “With the addition of supply chain management functionality, the CareVue solution overall, and the RCM component specifically, offer a unique combination of comprehensive and affordable functionality that no other healthcare IT provider has chosen to match.”

3M Company to acquire Technology Business of M*Modal IP LLC (December 2018, $1.0 Billion)

3M Company (NYSE:MMM), a global diversified technology provider, has agreed to acquire the Technology Business of M*Modal IP LLC for an enterprise value of $1.0 billion. M*Modal is a leading provider of cloud-based clinical documentation solutions including medical speech recognition, medical transcription, clinical documentation improvement (CDI), and coding.

“This acquisition builds on our strategic commitment to invest in our Health Information Systems business and expands the capabilities of our revenue cycle management and population health priority To Acquire growth platform,” Mike Vale, 3M Health Care Business Group’s Executive Vice President, said in a press release.11 “Together, we will enable doctors to improve the patient experience, while enhancing documentation accuracy and operational efficiency for both providers andpayers.”

Subject to regulatory approval and customary closing conditions, the deal is projected to be completed in the first half of 2019. At that time, ~750 employees supporting the technology business of M*Modal are expected to join 3M.

Eir Partners acquires DART Chart Systems, LLC (November 2018, Undisclosed)

Eir Partners, an investment company focused exclusively on providing capital to the Healthcare Technology, Payment, and RCM sectors, has acquired DART Chart Systems, a leading revenue cycle management for the Long Term Care market. Terms of the deal were not disclosed.

Acquires John Ansay, who will assume the role of CEO, stated in a press release: “I am excited to bring the DART Chart technology to the next level. With over 10,000 baby boomers retiring every day and rapidly increasing financial pressures in the sector, our technology ensures that no revenue is left on the table. Few companies are as well positioned as DART Chart to manage the complex revenue cycles associated with Medicare, Medicaid and Managed Care Reimbursement in long-term care.”12

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SELECT TRANSACTIONS

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA Technology Bus. Provides healthcare data analytics services to 12/19/18 3M Company $1,000.0 -- of MModal IP physicians and clinicians. Offers application programming interface (API) 12/18/18 PokitDok Change Healthcare --- platform to build modern commerce experiences. Provides cloud-based software solutions to 12/17/18 Cloud Practice Premier Health $5.0 -- streamline medical practices. Remedy New Mountain Offers software solutions to organize and finance 12/12/18 --- Partners Capital & Partners healthcare around a patient’s episode of care. Provides physician services, telemedicine 12/04/18 TripleCare Curavi Health --- equipment, and proprietary . Provides a mobile platform and a sensor 12/03/18 Reciprocal Labs ResMed $225.0 -- technology for respiratory health management. Medical Pay Provides technologies to help insurers and 11/20/18 ProtoLytic --- Review healthcare payers reduce costs. ResMed Offers a fully integrated 11/13/18 MatrixCare $750.0 6.1x 25.0x Operations (EHR) applications for the Long Term Care market. Stanson Premier Healthcare Provides EMR-integrated real time alerts for use in 11/06/18 $66.5 - - Health Solutions the physician’s clinical workflow. Health Solutions Conduent Provides medical claim processing software and 10/31/18 $98.0 - - Plus Incorporated business process outsourcing services. Phoenix Phoenix Offers software to manage telemedicine screening 10/23/18 --- CONNECT Technology for Retinopathy of Prematurity (ROP) disease. Global Cedar Gate Provides alternative payment models and value- 10/23/18 --- Healthcare Technologies based healthcare optimization services. Tabula Rasa Develops software solutions for optimal business 10/19/18 Cognify --- Healthcare performance and participant outcomes. CareSpeak OptimizeRx Provides interactive mobile health messaging for 10/17/18 $9.0 - - Communications Corporation improving medication adherence and care. Censis Develops surgical inventory management 10/16/18 Applied Logic --- Technologies technology for hospitals in the US. New Century Provides specialty benefit management services 10/02/18 Evolent Health $217.0 1.2x 10.9x Health to assist its customers in managing care. Inventory Undisclosed Develops and offers healthcare inventory 09/29/18 --- Optimization Buyer management software solutions. Bankers Develops and offers a system for preparing online 09/25/18 Simple Admit --- Healthcare preoperative health screening forms for patients. LogistiCare Offers a platform to allow healthcare providers to 09/17/18 Circulation --- Solutions use the Uber driver network to drive patients. Business of Provides healthcare technology services including 09/17/18 TriMedx $300.0 - - Aramark outsourcing of clinical engineering services. Connects technologies to leaders representing 09/16/18 Lucro Solutions Valify --- health systems, plans, and employers. Physicians 09/11/18 Fellow Health Provides services. - - - Management Monitors EMR information and keeps clinicians 09/04/18 Herald Health Persistent Systems $5.2 - - informed about their patients with real-time data.

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research 6 Healthcare IT | Q1 2019

SELECT TRANSACTIONS (CONTINUED)

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA Designs and develops virtual reality platform for 09/04/18 MVI Health Penumbra $50.0 - - healthcare applications. Alegeus 08/07/18 Vista Equity Offers healthcare and benefit payment solutions. - - - Technologies viaDirect Provides an online platform for market 07/16/18 PlayMaker --- Solutions intelligence and data analytics. Cotiviti Verscend Provides analytics-driven payment accuracy and 06/19/18 $4,929.3 6.7x 17.1x Holdings Technologies spend management solutions. Offers solutions for population health 06/13/18 Caradigm USA Inspirata --- management including patient engagement. SHYFT Medidata Provides cloud-based data, analytics, and mobile 06/12/18 $195.0 - - Analytics Solutions solutions to the life sciences industry. UX Data Designs products for tracking and monitoring 05/09/18 ChroMedX $5.5 -- Sciences patient compliance and medication adherence. Provides e-mental health platform for 05/08/18 TranQool HumanaCare --- personalized therapy solutions. Allscripts 05/03/18 HealthGrid Designs patient engagement solutions. $110.0 -- Healthcare Provides healthcare analytics solutions 05/01/18 SCIOInspire Exl Service.com $240.0 - - and services. American Well Offers telemedicine solutions for healthcare, 04/30/18 Avizia --- Corporation education, and government customers. InTouch Offers a telemedicine platform to help hospitals 04/30/18 REACH Health --- Technologies overcome time, distance, and resource obstacles. MedFORCE 04/06/18 Ideagen Develops applications for the healthcare industry. $8.7 1.9x - Technologies Division of GE Comprises revenue cycle, ambulatory care and 04/02/18 Veritas Capital $1,050.0 -- Healthcare workforce management software businesses. CMH Services HGS Population Offers health care management services to payers 03/28/18 $14.0 0.2x - Subsidiary Health and risk-bearing entities. Develops software to connect broader healthcare 02/15/18 Flatiron Health Roche Holding $2,173.9 -- community on a shared platform. Offers patient-clinician shared decision making 02/13/18 Twine Health Fitbit $17.5 -- tools and integrated messaging tools. Network Billing Offers healthcare platform that provides access to 01/25/18 IQMax $1.1 -- Systems information through phone devices. Offers shopping, exchange solutions, and 01/22/18 Maestro Health AXA $155.0 -- employee health and benefits management. ProVation Offers procedure documentation solutions for and 01/11/18 Clearlake Capital $180.0 -- Medical clinical decision support solutions. Allscripts Provides cloud-based electronic health records 01/08/18 $100.0 - - Healthcare (EHR) to doctors. Francisco Partners Offers a platform for shopping, enrollment, and 01/04/18 Connecture $108.3 1.4x NM Management retention for health insurance distribution. Offers tools that extract cancer related 01/02/18 AI in Medicine Inspirata --- information and data from clinical documents.

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research 7 Healthcare IT | Q1 2019

PUBLIC COMPANY TRADING & OPERATING DATA

Price % 52 Wk Market Enterprise LTM EV / LTM Company 01/25/19 High Cap Value Revenue EBITDA Margin Revenue EBITDA Corporation $54.46 77.9% $17,943.9 $17,571.5 $5,213.0 $1,256.5 24.1% 3.4x 14.0x

athenahealth, Inc. $134.25 81.9% $5,528.2 $5,482.9 $1,311.4 $264.8 20.2% 4.2x 20.7x

Medidata Solutions, Inc. $67.90 76.4% $4,021.3 $3,917.2 $611.4 $89.4 14.6% 6.4x NM

Allscripts Healthcare Solutions, Inc. $12.15 78.1% $2,122.8 $4,336.3 $2,079.1 $91.1 4.4% 2.1x NM

Omnicell, Inc. $64.68 81.4% $2,563.0 $2,703.7 $775.4 $77.0 9.9% 3.5x NM

Castlight Health, Inc. $2.56 43.0% $357.7 $294.9 $150.9 NM NA 2.0x NM

Inovalon Holdings, Inc. $14.28 96.0% $2,176.5 $3,030.1 $506.0 $101.9 20.1% 6.0x 29.7x

EV = enterprise value; LTM = last twelve months Mean 15.6% 3.9x 21.5x $ in millions, except per share data NM = Not Meaningful Median 14.6% 3.5x 20.7x Harmonic Mean 12.9% 3.2x 19.6x

Last Twelve Month Margin Performance

Gross Margin % EBITDA Margin % 100% 84.1% 75.7% 80% 71.1% 60.7% 60% 54.3% 48.1% 47.3% 40% 24.1% 20.2% 14.6% 20.1% 20% 9.9% 4.4% 0%

-20% -22.5% -40% Cerner Corporation athenahealth Medidata Allscripts Healthcare Omnicell Castlight Health Inovalon

Last Twelve Month 1-Year Revenue Growth

25% 21.3% 21.0%

20% 17.4% 16.0%

15% 12.6% 11.2% 10%

5% 3.0%

0% Cerner Corporation athenahealth Medidata Allscripts Healthcare Omnicell Castlight Health Inovalon

Source: Capital IQ as of January 25, 2019

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FIRM TRACK RECORD: HEALTHCARE

has recapitalized with has been acquired by has been acquired by has been acquired by has been acquired by

a portfolio company of AUDAX GROUP, INC.

has been acquired by has been acquired by has been acquired by has recapitalized with has been acquired by

A PRIVATE INVESTMENT GROUP

has been acquired by has divested assets to has been acquired by has recapitalized with has been acquired by

FIRM TRACK RECORD: TECHNOLOGY

has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by

has been acquired by has been acquired by has been acquired by has been acquired by has recapitalized with

9 Healthcare IT | Q1 2019

CITATIONS

1. Research and Markets,” Revenue Cycle Management Market by Product (Integrated Solutions, Standalone), Function (Claim & Denial, Medical Coding, Insurance Verification), Deployment (Web based, on premise, Cloud based), End User - Global Forecast to 2022),” https://www.researchandmarkets.com/research/s3b3s2/global_revenue?w=5, accessed January 10, 2019. 2. Cision, “Hospital Revenue Cycles Showing Strength But Risks Include Denials,” https://www.prnewswire.com/news- releases/hospital-revenue-cycles-showing-strength-but-risks-include-denials-300555731.html, accessed January 11, 2019. 3. American Hospital Association, “American Hospital Association Uncompensated Hospital Care Cost Fact Sheet,” https://www.aha.org/system/files/2019-01/uncompensated-care-fact-sheet-jan-2019.pdf, accessed January 11, 2019. 4. Cision PR Newswire, “Black Book: More Than a Quarter of U.S. Hospitals Still Lack Feasible RCM Solutions, Despite Overwhelming Evidence of Their Positive Impact,” https://www.prnewswire.com/news-releases/black-book-more-than-a- quarter-of-us-hospitals-still-lack-feasible-rcm-solutions-despite-overwhelming-evidence-of-their-positive-impact- 300758089.html, accessed January 7, 2019. 5. Business Wire, “Amazon, Berkshire Hathaway and JPMorgan Chase & Co. to partner on U.S. employee healthcare,” https://www.businesswire.com/news/home/20180130005676/en/Amazon-Berkshire-Hathaway-JPMorgan-Chase-partner- U.S., accessed January 7, 2019. 6. CNBC, “Walgreens, CVS and Rite-Aid Lose $11.0 Billion in Value After Amazon Buys Online Pharmacy PillPack,” https://www.cnbc.com/2018/06/28/walgreens-cvs-shares-tank-after-amazon-buys-online-pharmacy-pillpack.html, accessed January 9, 2018. 7. Choiceplus, “Amazon Offers an Exclusive Brand of Medical Devices Initially Aimed at Diabetes and Cardiovascular Disease,” https://www.choiceplus.health/press-release, accessed January 7, 2019. 8. Athenahealth, “athenahealth Enters Definitive Agreement to be Acquired by Veritas Capital For $135 Per Share in Cash,” http://newsroom.athenahealth.com/phoenix.zhtml?c=253091&p=irol-newsArticle&ID=2376709, accessed January 6, 2019. 9. Reaction Data, “The Merger: athenahealth + Virence, https://www.reactiondata.com/report/the-merger-athenahealth- virence/?download, accessed January 9, 2019. 10. Medsphere, “Medsphere Acquires HealthLine Solutions, Expands CareVue Platform,” https://www.medsphere.com/resources/news/news-releases/3798-medsphere-acquires-healthline-solutions-expands- carevue-platform, accessed January 6, 2019. 11. MModal, “3M to Acquire M*Modal’s Technology Business,” https://mmodal.com/news/press-release/3m-acquire- mmodals-technology-business/, accessed January 6, 2019. 12. DART Chart, “DART Chart Partners with Eir Partners,” https://www.dartchart.com/about-us/, accessed January 6, 2019.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi- tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any securityof any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary mate- rially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters. The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. This report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information contained herein should not be construed as legal advice.

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HEALTHCARE IT REPORT CONTRIBUTORS

David DeSimone Director [email protected] | 617-619-3384

David DeSimone rejoined the Boston office of Capstone Headwaters in 2015 asaDirectorinthe Technology & Telecom Group. David brings more than 15 years of investment banking experience to Capstone and will help expand the firm’s technology sector coverage in the Northeast. David has worked on equity, debt and M&A transactions collectively valued at more than $4 billion. Previously, David was a member of the Capstone team for nearly sevenyearswhereheledeffortsinthe Technology Solutions vertical as a Vice President and Director. Prior to rejoining Capstone, David served as a Principal at Bowen Advisors, an M&A and strategic advisory firm focused on technology companies including communications and healthcare IT. David has also worked as a Vice President at Boenning & Scattergood, a Philadelphia- based middle market investment bank, where he worked with clients across a variety of industries and developed the firm’s technology practice. He spent his early career working at Needham & Company, Robertson Stephens and J.P. Morgan.

David Michaels Managing Director, Head of Technology & Telecom Practice [email protected] | 858-926-5950

David Michaels is a Managing Director of Capstone Headwaters where he is responsible for managing the firm’s Technology & Telecom Group (TTG). David founded SagePoint Advisors in 2008, a boutique investment banking firm focused on providing M&A advisory services to technology and telecom companies. Prior to founding SagePoint, David was a Co-Founder, Partner and Managing Director at Montgomery & Co., a leading investment bank focused on serving emerging-growth technology companies. David co-founded Montgomery’s investment banking business in 1996 and played an instrumental role in building the business to over $50 million in revenues and 80 employees. He also ran the firm’s Communications and Digital Media Technology practice areas prior to his departure.

2019 2018 2018 2017

TURNAROUND AWARDS

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