Significant Q4 Transactions

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December 1, 2010 ‐ Laboratory Corporation of

America Holdings (NYSE: LH) completed its

acquisition of Genzyme Genetics, a business

unit of Genzyme Corp. (NASDAQ: GENZ),

for $925 million.

November 18, 2010 ‐ Cardinal Health (NYSE:

CAH) announced plans to acquire Kinray,

Inc. for $1.3 billion.

November 17, 2010 ‐ St. Jude Medical Inc.

(NYSE: STJ) signed a definitive agreement to

acquire AGA Medical Holdings, Inc.

(NasdaqGS: AGAM) for $1.1 billion.

November 12, 2010 ‐ Community Health

Systems, Inc. (NYSE: CYH) made an offer to

acquire Tenet Healthcare Corp. (NYSE: THC)

for $2.9 billion. Tenet Healthcare Corp.

operates general acute care hospitals and

related healthcare facilities.

November 1, 2010 ‐ St. Davidʹs Healthcare

Partnership, LP acquired substantially all of

the assets of Heart Hospital of Austin from

MedCath Corporation (Nasdaq: MDTH) and

its physician partners for gross proceeds of

approximately $40 million.

October 21, 2010 ‐ Ventas Inc. (NYSE: VTR)

signed a definitive agreement to acquire Atria

Senior Living Group, Inc. $3.1 billion.

October 1, 2010 ‐ VHS Of Phoenix Inc. /

Vanguard Health Systems acquired the assets

of Arizona Heart Hospital, LLC from

MedCath Corp. (NasdaqGS: MDTH) and

physician investors for gross proceeds of

approximately $34 million.

October 1, 2010 ‐ Avera McKennan acquired

Sioux Falls Hospital Management, Inc. from

MedCath Corp. (NasdaqGS:MDTH) for

approximately $20 million. Sioux Falls

Hospital Management, Inc. was the indirect

owner of a one‐third ownership interest

which held management rights in Avera

Heart Hospital of South Dakota.

For additional information, contact the NCA Healthcare investment banking team:

Edward R. Casas, MD Senior Managing Director Head of Navigant Capital Advisors 847/583-1619

ecasas@ncacf.com Gregory Hagood Managing Director

Investment Banking Practice Area Leader 404/504-2017 ghagood@ncacf.com Michael Lane Managing Director 312/583-2132 mlane@ncacf.com Matthew M. Caine, CFA Director 404/504-2010 mcaine@ncacf.com Kim Brady Managing Director 847/583-1718 kbrady@ncacf.com Neil Luria Managing Director 216/321-5606 nluria@ncacf.com S. Waite Popejoy Director 404/504-2016 wpopejoy@ncacf.com Jerry Chang

Director, Valuation Services 404/602-3462

jmchang@ncacf.com

The NCA Healthcare Services Quarterly

Dialogue contains news, statistics, and

trends impacting select companies

within the Healthcare Services sector.

Analysis is further organized to include:

(i) Alternate Site, (ii) Diagnostic Services,

(iii) Distribution, (iv) Equipment &

Supplies, (v) Information Technology,

(vi) Hospital Providers, (vii) Long‐Term

Care & Senior Living, and (viii) Managed

Care companies.

Significant Q4 Transactions

December 30, 2010 ‐ McKesson Corporation

(NYSE:MCK), a healthcare services and IT

company, completed its acquisition of US

Oncology for approximately $2.2 billion.

December 13, 2010 ‐ HCP, Inc. (NYSE: HCP)

signed a definitive agreement to acquire the

real estate assets of Manor Care, Inc. for $6.1

billion. Manor Care, Inc., Real Estate Assets

comprises 338 post‐acute, skilled nursing and

assisted living facilities.

December 12, 2010 ‐ Thermo Fisher Scientific,

Inc. (NYSE: TMO) entered into an agreement

to acquire Dionex Corp. (NasdaqGS: DNEX)

for $2.1 billion. Dionex Corporation designs,

manufactures, markets, and services analytical

instrumentation.

RESTRUCTURING • MERGERS, ACQUISITIONS & DIVESTITURES • PRIVATE PLACEMENTS • VALUATION

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December 31, 2010

To The Friends and Clients of Navigant Capital Advisors (“NCA”):

We are pleased to share with compliments our Healthcare Services Quarterly Dialogue for Q4 2010.

The healthcare industry posted $206.5 billion in deals consisting of 913 transactions, according to preliminary figures from Irving Levin Associates and was the second most active sector in the overall 2010 M&A market (energy and power was the most active M&A market in 2010). The NCA hospital provider and long‐term care universe both outperformed the S&P 500 with returns in excess of 15% versus returns of the S&P 500 of approximately 13%.

The three largest sectors in terms of M&A dollar volume were biotechnology with $56.0 billion, medical devices with $41.5 billion and pharmaceuticals with $38.1 billion. There were sizable volumes of deal activity in facility‐based sectors with hospitals generating $17.4 billion and long‐term care posting $11.7 billion in M&A for the year.

A few of the more notable transactions announced during the quarter include:

• HCP, Inc.’s (NYSE: HCP) agreement to acquire the real estate assets of Manor Care, Inc. for $6.1 billion;

• Ventas Inc.’s (NYSE: VTR) definitive agreement to acquire Atria Senior Living Group, Inc. for $3.1 billion;

• Community Health Systems, Inc.’s (NYSE: CYH) offer to acquire Tenet Healthcare Corp. (NYSE: THC) for $2.9 billion;

• McKesson Corporation’s (NYSE:MCK) acquisition of US Oncology for approximately $2.2 billion;

• Thermo Fisher Scientific, Inc.’s (NYSE: TMO) agreement to acquire Dionex Corp. (NasdaqGS: DNEX) for $2.1 billion;

• Cardinal Health’s (NYSE: CAH) agreement to acquire Kinray, Inc. for $1.3 billion; and

• St. Jude Medical Inc.’s (NYSE: STJ) agreement to acquire AGA Medical Holdings, Inc. (NasdaqGS: AGAM) for $1.1 billion.

The long‐term care sector is poised to continue its strong deal volumes into 2011 largely due to the increasing cost of compliance. With the new requirements enacted through the Patient Protection and Affordable Care Act, skilled nursing facilities (and possibly assisted living facilities in the future) will see compliance costs rise, making it difficult for smaller independent facilities to absorb and more attractive to merge with larger regional or national chains. Aging facilities, low interest rates, aging baby boomers and increasing valuations will also likely contribute to increased M&A deal volume in the sector into 2011.

Hospitals are also likely to see continued strong M&A activity going forward as hospitals consolidate to improve bargaining positions with vendors, capture market share and increase cost efficiencies. Additionally, this sector will adjust to provide services based on the population shift highlighted by the new U.S. Census data.

We continue to work closely with our extensive Navigant Consulting National Healthcare Practice to provide investment banking services to a wide array of healthcare firms and investors. The industry leading Healthcare Practice provides a great resource for our clients. We welcome your comments and hope that you continue to find our Healthcare Services Quarterly Dialogue informative.

Matt Caine, CFA Michael Lane

Director Managing Director

Navigant Capital Advisors Navigant Capital Advisors

mcaine@ncacf.com mlane@ncacf.com

(404) 504‐2010 (312) 583‐2132

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Navigant

Consulting’s

Healthcare

Practice

Navigant Consulting‘s Healthcare practice

assists organizations throughout the

continuum of care: providers, payers and

life science companies. We help clients

achieve profitable growth, operate

efficiently, deploy capital effectively, and

proactively manage risk.

Our clients include hospitals, health

systems, physician practices, health plans,

managed care organizations,

pharmaceutical companies, biotech

companies, medical device manufacturers,

state and federal government agencies,

corporate legal departments and law

firms.

We have established a robust practice

comprised of professionals who include

hospital, health plan and healthcare

financing program executives as well as

CPAs, PhDs, MDs, RNs, PharmDs, and

other clinical professionals. We are

committed to working with clients to

deliver successful and sustainable

solutions.

Services for Providers

Healthcare providers face challenges from

multiple directions, including rising costs,

declining reimbursement, increased

regulation and decreased financial

stability. Our professionals bring together

operational, strategic and physician

integration capabilities to help position

clients for success.

Our services include:

Strategy

Facilities and real estate solutions

Performance improvement

Revenue cycle

Supply chain

Services for Payers

The Navigant team is uniquely positioned

in that we assist and have experience with

payers of all types – state, federal,

commercial and international – to address

complex pricing and reimbursement

challenges, develop new programs, and

manage existing programs.

Policy evaluation and implementation

Financing alternatives

Actuarial analyses and support

Payment system design, development

and implementation

Process transformation and

improvement initiatives

Organization change management

Product development and assessment

Operational support

Compliance monitoring

Services for Life Sciences

Navigant’s Life Sciences practice serves

pharmaceutical, bio‐technology and

medical device companies. Our team of

life sciences experts helps clients

worldwide identify, plan, launch and

sustain a wide range of medical products,

from blockbuster drugs to specialty

pharmaceuticals to niche medical devices.

Brand/marketing strategy

Forecasting and modeling

Licensing and partnering strategy

Managed markets strategy

New product planning

Business planning excellence

Advocacy planning

Contacts:

Dave Zito

Leader, Healthcare Practice 312.583.5871 dzito@navigantconsulting.com David Burik Providers 312.583.4148 dburik@navigantconsulting.com Catherine Sreckovich Payers 312.583.5747 csreckovich@navigantconsulting.com Eduardo Schur Life Sciences 609.896.4027 eschur@navigantconsulting.com Kevin Cornish Healthcare Litigation 602.528.8090 kcornish@navigantrconsulting.com

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HEALTHCARE

SERVICES

QUARTERLY

DIALOGUE

Fourth

Quarter

2010

Navigant’s

Perspective:

1 Healthcare

Reform

and

Beyond:

New

Realities

for

the

New

Normal

Market

Summary

5 Healthcare

Industry

Stock

Market

Value

Index

7 NCA

Healthcare

Services

Universe

–

8 Public

Company

Equity

Market

Value

Analysis

Alternate

Site

11 Diagnostic

Services

13 Healthcare

Distributors

17 Healthcare

Equipment

and

Supplies

20 Healthcare

Information

Technology

23 Hospital

Providers

26 Long

‐

Term

Care

/

Senior

Living

30 Managed

Care

34 Healthcare

Industry

Transactions

36 Distressed

Market

Indicators

40 Notes

/

Subscription

Form

44

©2011 Navigant Capital Advisors, LLC. All rights reserved. Navigant Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned broker/dealer of Navigant Consulting, Inc. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See www.navigantconsulting.com/licensing for a complete listing of private investigator licenses.

NCA gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. NCA makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. (Officers, directors and employees of Navigant Consulting, Inc. and its subsidiaries may have positions in the securities of the companies discussed.) This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. NCA or its affiliates may from time to time provide investment banking or related services to these companies. Like all NCA employees, the authors of this publication receive compensation that is affected by overall firm profitability.

(6)

Navigant’s

Perspective:

Healthcare

Reform

and

Beyond:

New

Realities

for

the

New

Normal

by Kevin C. “Casey” Nolan, Managing Director, Navigant Consulting, Washington, D.C.

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(8)

(9)

(10)

Market

Summary

Major

Equity

Market

Indices

Index 12/31/2010 3 Months Ago 1 Year Ago 2 Years Ago 3 Months Ago 1 Year Ago 2 Years Ago

Dow Jones Industrial 11,577.5 10,788.1 10,428.1 8,776.4 7.3% 11.0% 31.9% NASDAQ Composite 2,652.9 2,368.6 2,269.2 1,577.0 12.0% 16.9% 68.2% Russell 2000 783.7 676.1 625.4 499.5 15.9% 25.3% 56.9% S&P 500 1,257.6 1,141.2 1,115.1 903.3 10.2% 12.8% 39.2% Wilshire 5000 13,290.0 11,947.1 11,497.4 9,087.2 11.2% 15.6% 46.2%

S&P Healthcare Index 364.8 353.8 362.2 309.4 3.1% 0.7% 17.9%

% Change From

60.0 80.0 100.0 120.0 140.0 160.0 180.0 Relative Performance (%) Dow Jones Industrial Average (^DJI) NASDAQ Composite (^COMP) Russell 2000 (^RUT) S&P 500 Index (^SPX) Wilshire 5000 S&P Healthcare (^HCX)

(11)

Market

Summary

(cont.)

Benchmark

Interest

Rates

Interest Rate 12/31/2010 1‐Year Ago

Prime Rate 3.25% 3.25% 1‐Month Libor 0.26% 0.23% 3‐Month Libor 0.30% 0.25% 6‐Month Libor 0.46% 0.43% 12‐Month Libor 0.78% 0.98% 2‐Year Treasury 0.59% 1.14% 10‐Year Treasury 3.31% 3.84% 30‐Year Treasury 4.35% 4.64% 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

Interest Rates (% Yield)

LIBOR - 3 months U.S. Treasury - 10 years

Interest

Rate

Spreads

Term Treasury YTM YTM Spread (BPS) YTM Spread (BPS) YTM Spread (BPS) YTM Spread (BPS) 3‐Month 0.16% 0.62% 46 1.44% 128 2.74% 258 3.44% 328 6‐Month 0.23% 0.72% 49 1.52% 129 2.78% 255 3.45% 322 2‐Year 0.64% 1.39% 75 2.26% 162 3.49% 285 4.26% 362 5‐Year 2.03% 2.94% 91 3.88% 185 5.37% 334 6.38% 435 10‐Year 3.42% 4.33% 91 5.29% 187 6.92% 350 8.34% 492

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Healthcare

Industry

Stock

Market

Value

Index

S&P Healthcare Index vs. the Dow Jones Industrial Average during the last 12 months

80.0 90.0 100.0 110.0 120.0 130.0 140.0 Relative Performance (%)

Dow Jones Industrial Average (^DJI) S&P Healthcare Index (^HCX)

S&P Healthcare Index vs. the Nasdaq Composite during the last 12 months

NASDAQ Composite (^COMP) S&P Healthcare Index (^HCX)

S&P Healthcare Index vs. the S&P 500 during the last 12 months

(13)

NCA

Healthcare

Services

Universe

–

Public

Company

Equity

Market

Value

Analysis

Market Capitalizations % Change

Segments/Companies Ticker as of 12/31/2010 ($mm) 3‐Month 6‐Month 12‐Month

Alternate Site:

Ame disys Inc. AMED 972.4 41.8% ‐22.5% ‐28.4%

AmSurg Corp. AMSG 648.1 20.9% 17.6% ‐4.0%

DaVita, Inc. DVA 6,754.4 ‐4.6% 4.1% 12.5%

Fre se nius Me dical Care AG & Co. KGAA DB:FME 13,131.2 ‐3.7% ‐0.3% 18.8%

Gentiva He alth Se rvices Inc. NasdaqGS:GTIV 794.7 22.0% ‐12.6% 0.4%

Inte gramed Ame rica Inc. INMD 101.5 ‐9.4% 5.8% 46.2%

IPC The Hospitalist Company, Inc. IPCM 634.4 42.9% 55.8% 18.2%

Lincare Holdings Inc. LNCR 2,619.0 6.5% ‐18.9% 3.5%

Rehabcare Group Inc. RHB 591.0 17.2% 9.3% ‐21.2%

Diagnostic Services:

Alliance Healthcare Se rvice s, Inc. AIQ 224.0 ‐7.3% 5.1% ‐24.4%

Bio‐Refe rence Laboratories Inc. BRLI 617.2 6.3% 0.1% 14.1%

Laboratory Corp. of Ame rica Holdings LH 8,941.5 10.9% 13.7% 12.5%

Pharmace utical Product De ve lopme nt Inc. PPDI 3,225.8 9.5% 7.1% 16.5%

Que st Diagnostics Inc. DGX 9,174.9 2.6% 2.5% ‐17.8%

RadNe t, Inc. RDNT 104.3 17.5% 19.7% 41.3%

Healthcare Distributors:

Ame risource Be rge n Corporation ABC 9,429.0 11.0% 5.1% 25.3%

Cardinal He alth, Inc. CAH 13,368.7 16.0% 9.9% 14.3%

Henry Schein Inc. HSIC 5,664.6 5.7% 12.9% 19.0%

McKe sson Corporation MCK 17,810.6 10.3% 2.0% 6.3%

Me dcoHealth Solutions Inc. MHS 26,003.1 15.2% 3.3% ‐14.7%

Omnicare Inc. OCR 2,943.7 4.3% 3.3% 2.0%

Owens & Minor Inc. OMI 1,864.0 3.4% 4.1% 3.7%

PSS World Medical Inc. PSSI 1,248.9 3.5% 3.3% ‐7.4%

Ste ricycle, Inc. SRCL 6,921.2 16.8% 24.7% 48.9%

Thermo Fishe r Scientific, Inc. TMO 22,004.4 12.8% 9.3% 13.0%

Healthcare Equipment and Supplies:

Abbott Laboratorie s ABT 74,060.0 ‐8.2% 2.6% ‐11.3%

Baxter Inte rnational Inc. BAX 29,497.6 5.8% 21.1% ‐16.6%

Be cton, Dickinson and Company BDX 19,122.9 11.2% 21.2% 2.3%

Boston Scientific Corporation BSX 11,507.0 23.7% 30.8% ‐15.4%

CardioNet, Inc. BEAT 113.4 4.2% ‐14.2% ‐20.0%

Johnson & Johnson JNJ 169,855.8 ‐0.5% 4.3% ‐4.4%

Me dtronic, Inc. MDT 39,815.2 9.8% 1.4% ‐18.0%

Sie mens AG SIE 81,042.7 20.2% 25.8% 45.2%

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NCA

Healthcare

Services

Universe

–

Public

Company

Equity

Market

Value

Analysis

(cont.)

Market Capitalizations % Change

Segments/Companies Ticker as of 12/31/2010 ($mm) 3‐Month 6‐Month 12‐Month

Healthcare Information Technology:

Allscripts He althcare Solutions, Inc. MDRX 3,605.5 4.74% 52.8% 22.8%

athenahe alth, Inc. ATHN 1,404.3 24.6% 62.4% ‐7.9%

Cerner Corp. CERN 7,849.5 13.3% 25.8% 16.6%

Compute r Programs & Syste ms Inc. CPSI 513.5 10.0% 14.4% 1.6%

HMS Holdings Corp. HMSY 1,785.1 11.2% 21.3% 39.2%

icad Inc. ICAD 62.1 ‐22.8% ‐28.9% ‐10.6%

Me dAsse ts, Inc. MDAS 1,172.1 ‐3.5% ‐11.1% ‐2.3%

Omnicell Inc. OMCL 476.4 11.4% 25.3% 27.7%

Quality Systems Inc. QSII 2,021.8 5.5% 20.6% 12.4%

SXC He alth Solutions, Corp. SXC 2,592.4 13.5% 8.2% 50.9%

Vital Image s Inc. VTAL 196.0 3.2% 6.4% 8.0%

WebMD He alth Corp. WBMD 3,058.5 5.3% 23.0% NA

Hospital Providers:

Community Health Syste ms, Inc. CYH 3,458.5 18.8% 7.8% 4.5%

Health Manage ment Associates Inc. HMA 2,390.9 24.5% 22.9% 32.4%

Lifepoint Hospitals Inc. LPNT 1,936.8 1.9% 11.6% 8.7%

Te ne t He althcare Corp. THC 3,248.2 41.8% 54.6% 25.3%

Unive rsal He alth Se rvices Inc. UHS 4,223.3 11.8% 14.0% 40.7%

Long‐Term Care / Senior Living:

Advocat Inc. AVCA 30.1 ‐7.4% 7.4% ‐31.1%

Brookdale Se nior Living Inc. BKD 2,580.9 31.6% 44.1% 19.6%

Capital Se nior Living Corp. CSU 181.4 25.7% 35.1% 32.7%

Emeritus Corp. ESC 858.3 27.5% 33.9% 16.6%

The Ensign Group, Inc. ENSG 516.8 38.7% 50.9% 63.0%

Kindre d He althcare Inc. KND 725.3 41.1% 43.1% 0.5%

National He althcare Corp. NHC 628.2 23.0% 32.6% 27.1%

Skille d Healthcare Group, Inc. SKH 339.4 128.5% 32.4% 22.0%

Sun Healthcare Group Inc. SUNH 315.7 N/A N/A N/A

Sunrise Senior Living Inc. SRZ 306.6 59.8% 97.5% 84.7%

Managed Care:

Aetna Inc. AET 12,207.1 ‐7.5% 8.9% ‐11.2%

CIGNA Corporation CI 9,931.9 0.3% 15.6% 3.0%

Coventry He alth Care Inc. CVH 3,920.1 22.7% 49.9% 9.1%

Expre ss Scripts Inc. ESRX 28,487.0 7.8% 10.5% 20.0%

Health Ne t Inc. HNT 2,607.7 ‐1.6% 7.7% 7.7%

Humana Inc. HUM 9,213.8 8.4% 18.5% 23.6%

Me dcoHealth Solutions Inc. MHS 26,003.1 15.2% 3.3% ‐14.7%

Unitedhe alth Group, Inc. UNH 39,718.8 0.6% 23.0% 12.1%

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NCA

Healthcare

Services

Universe

–

Public

Company

Equity

Market

Value

Analysis

(cont.)

60.0 70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 Relative Performance (%) Alternate Site Diagnostic Services Distributors Equipment & Supplies Information Technology Hospital Providers Long-Term Care / Senior Living Managed Care S&P 500 Index (^SPX)

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

3-Month Return 6-Month Return 12-Month Return

NCA Healthcare Services Universe - Index Returns

Alternate Site Diagnostic Services Distributors Equipment & Supplies Information Technology Hospital Providers Long-Term Care / Senior Living Managed Care

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Alternate

Site

60 70 80 90 100 110 120 130 140

Relative Price Chart

Alternate Site NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Valuation Metrics

Recent Shares Market Enterprise Last Twelve Months Stock Price Outstanding 52‐Week 52‐Week Capitalization Value EV/ EV/ EV/ Company Ticker (12/31/2010) (mm) High Low ($mm) ($mm) Revenue EBITDA EBIT

Alternate Site Amedisys Inc. AMED $33.50 29.0 $64.28 $22.82 $972.4 $1,038.6 0.63x 4.0x 4.6x AmSurg Corp. AMSG 20.95 30.9 23.33 16.35 648.1 1,059.1 1.51x 4.2x 4.7x DaVita, Inc. DVA 69.49 97.2 74.61 56.58 6,754.4 9,982.8 1.57x 8.3x 10.3x Fresenius Medical Care AG & Co. KGAA DB:FME 0.00 302.0 46.39 35.68 13,131.2 17,233.5 1.45x 7.3x 9.2x Gentiva Health Services Inc. GTIV 26.60 29.9 30.88 18.93 794.7 1,791.1 1.39x 10.6x 11.9x Integramed America Inc. INMD 8.66 11.7 10.24 7.01 101.5 65.0 0.28x 4.0x 6.8x IPC The Hospitalist Company, Inc. IPCM 39.01 16.3 40.00 21.17 634.4 585.2 1.68x 14.8x 15.9x Lincare Holdings Inc. LNCR 26.83 97.6 33.45 22.55 2,619.0 2,918.0 1.77x 6.6x 8.9x Rehabcare Group Inc. RHB 23.70 24.9 34.88 15.88 591.0 1,002.7 0.80x 7.1x 8.9x High 1.77x 14.8x 15.9x Low 0.28x 4.0x 4.6x Mean 1.23x 7.4x 9.0x Median 1.45x 7.1x 8.9x

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Alternate

Site

(cont.)

Fourth

Quarter

2010

News

December 30, 2010 ‐ Hanger Orthopedic Group, Inc. (NYSE: HGR), a provider of orthotic and

prosthetic patient care services, completed its previously announced offer to exchange all of its outstanding $200 million aggregate principal amount of 7 1/8% Senior Notes due 2018 for new 7 1/8% Senior Notes due 2018 that have been registered under the Securities Act of 1933. All of the outstanding Senior Notes due 2018 were tendered in the exchange offer, which expired on December 28, 2010.

December 24, 2010 ‐ Sverica International and John V. Capotorto acquired The Center for Wound

Healing, Inc. (OTCBB: CFWH) from Bison Capital Asset Management, LLC and other

shareholders for approximately $15 million. The Center for Wound Healing, Inc. develops and manages wound care centers.

December 22, 2010 ‐ Chicago Growth Partners acquired Advanced Pain Management Holdings

from Excellere Partners. Golub Capital provided $27 million of capital in the form of senior subordinated notes and an equity co‐investment in support of the acquisition of Advanced Pain Management. Advanced Pain Management provides minimally invasive, diagnostic, and therapeutic services to enable patients to restore function and relieve pain.

December 22, 2010 ‐ AccentCare, Inc. acquired Guardian Home Care, Inc., a provider of home

healthcare services, from Texas Home Health, Inc. The financial terms of the deal were not disclosed.

October 1, 2010 ‐ DaVita Inc. (NYSE: DVA), a provider of kidney care, signed a new $3 billion

senior secured credit agreement. The credit agreement establishes a $250 million senior secured revolving loan facility maturing in October 2015, a $1 billion senior secured term loan A facility maturing in October 2015 and a $1.75 billion senior secured term loan B facility maturing in October 2016.

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Alternate

Site

(cont.)

Benchmarking

Fresenius Medical Care AG & Co. KGAA $11,921.9 Rehabcare Group Inc. 56.0%

DaVita, Inc. 6,366.2 Gentiva Health Services Inc. 20.7%

Lincare Holdings Inc. 1,652.9 IPC The Hospitalist Company, Inc. 17.4%

Amedisys Inc. 1,645.5 Amedisys Inc. 13.6%

Gentiva Health Services Inc. 1,292.1 Integramed America Inc. 10.2%

Rehabcare Group Inc. 1,258.8 Fresenius Medical Care AG & Co. KGAA 9.0%

AmSurg Corp. 701.3 AmSurg Corp. 7.4%

IPC The Hospitalist Company, Inc. 348.4 DaVita, Inc. 6.1%

Integramed America Inc. 234.0 Lincare Holdings Inc. 6.0%

AmSurg Corp. 32.2% AmSurg Corp. 35.8%

Lincare Holdings Inc. 19.8% Lincare Holdings Inc. 20.5%

Fresenius Medical Care AG & Co. KGAA 15.7% Fresenius Medical Care AG & Co. KGAA 19.9%

DaVita, Inc. 15.3% DaVita, Inc. 18.9%

Amedisys Inc. 13.8% Amedisys Inc. 15.7%

Gentiva Health Services Inc. 11.6% Gentiva Health Services Inc. 13.0%

IPC The Hospitalist Company, Inc. 10.6% IPC The Hospitalist Company, Inc. 11.3%

Rehabcare Group Inc. 9.0% Rehabcare Group Inc. 11.2%

Integramed America Inc. 4.1% Integramed America Inc. 7.0%

IPC The Hospitalist Company, Inc. 0.0% IPC The Hospitalist Company, Inc. 0.0x

Integramed America Inc. 16.0% Amedisys Inc. 0.7x

Amedisys Inc. 18.5% Integramed America Inc. 1.0x

AmSurg Corp. 29.5% AmSurg Corp. 1.2x

Lincare Holdings Inc. 32.8% Lincare Holdings Inc. 1.5x

Fresenius Medical Care AG & Co. KGAA 44.3% Fresenius Medical Care AG & Co. KGAA 2.5x

Rehabcare Group Inc. 45.0% DaVita, Inc. 2.8x

DaVita, Inc. 55.1% Rehabcare Group Inc. 2.9x

Gentiva Health Services Inc. 63.5% Gentiva Health Services Inc. 6.4x

(Debt/Capitalization) (Total Debt/EBITDA)

PROFITABILITY PROFITABILITY

(EBIT Margin %) (EBITDA Margin %)

SIZE HISTORICAL GROWTH

(Revenue in $mm) (Annual Revenue)

(19)

Diagnostic

Services

60 70 80 90 100 110 120 130 140

Diagnostic Services NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Diagnostic Services Alliance Healthcare Services, Inc. AIQ $4.24 52.8 $5.98 $3.32 $224.0 $788.5 1.64x 5.3x 17.8x Bio‐Reference Laboratories Inc. BRLI 22.18 27.8 24.67 15.42 617.2 637.0 1.39x 10.6x 13.2x Laboratory Corp. of America Holdings LH 87.92 101.7 89.48 69.49 8,941.5 10,215.5 2.10x 8.9x 10.3x Pharmaceutical Product Development Inc. PPDI 27.14 118.9 29.69 20.86 3,225.8 2,695.3 1.87x 12.4x 17.8x Quest Diagnostics Inc. DGX 53.97 170.0 61.72 40.80 9,174.9 11,996.4 1.63x 7.6x 9.0x RadNet, Inc. RDNT 2.82 37.0 4.20 1.80 104.3 597.7 1.12x 6.5x 15.8x High 2.10x 12.4x 17.8x Low 1.12x 5.3x 9.0x Mean 1.62x 8.5x 14.0x Median 1.63x 8.2x 14.5x

(20)

Diagnostic

Services

(cont.)

Fourth

Quarter

2010

News

December 23, 2010 – Behrman Capital through its Behrman Capital IV, L.P. acquired Atherotech, Inc., a cardio‐

diagnostic company. Financial terms of the transaction were not disclosed.

December 16, 2010 – Gen‐Probe Inc. (NasdaqGS: GPRO) acquired GTI Diagnostics, Inc. from The Riverside

Company and individual investors for $53 million. GTI Diagnostics, Inc. develops, manufactures, markets and sells medical diagnostic assays for transplantation, blood bank, and coagulation laboratories for diagnoses, blood typing, and antibody identification applications.

December 16, 2010 – Therapy Partners acquired Rehabilitex, Inc., a provider of rehabilitation care services. The

financial terms of the transaction were undisclosed.

December 10, 2010 – Radiation Therapy Services Inc. is offering to exchange $310 million of registered 9.875%

Senior Subordinated Notes due 2017, for $310 million of unregistered Senior Subordinated Notes due 2017. Radiation Therapy Services Holdings, Inc., through its subsidiaries, develops and operates radiation therapy centers that provide radiation treatment services to cancer patients.

December 3, 2010 – Opto Circuits (India) Ltd. (BSE: 532391) acquired Cardiac Science Corporation (NasdaqGM:

CSCX) for approximately $55 million. Cardiac Science Corporation develops, manufactures, and markets diagnostic and therapeutic cardiology products.

November 18, 2010 – Sekisui Medical Co. Ltd. agreed to acquire substantially all of the assets of Genzyme

Diagnostics from Genzyme Corp. (NasdaqGS: GENZ) for approximately $270 million. Genzyme Diagnostics manufactures intermediates for diagnostic manufacturers and clinical laboratories. The company’s product offering comprises diagnostic intermediates/critical raw materials, finished reagent kits that are used in clinical chemistry analyzers, and point of care rapid tests.

November 8, 2010 – Sonic Healthcare Ltd. (ASX: SHL) acquired CBLPath, Inc. from Galen Partners and other

investors for approximately $120 million. CBLPath, Inc. provides anatomic pathology and molecular diagnostic laboratory services. The company offers breast, dermato, endocrine, gastrointestinal, head and neck, hemato, ophthalmic, podiatric, and uro pathology diagnoses.

October 22, 2010 – GE Healthcare Ltd. acquired Clarient, Inc. (NasdaqCM: CLRT) from Oak Investment Partners

XII, L.P., a fund of Oak Investment Partners, Safeguard Scientifics, Inc. (NYSE: SFE) and other investors for approximately $450 million. Clarient, Inc., together with its subsidiaries, provides oncology diagnostic services to community pathologists, oncologists, biopharmaceutical companies, and researchers.

October 20, 2010 – Quest Diagnostics Incorporated (NYSE: DGX), a provider of diagnostic testing, information

and services, announced that its Board of Directors increased the companyʹs share repurchase authorization by $250 million. During the first three quarters of 2010, the company repurchased approximately 15 million shares of common stock for $750 million, fully utilizing its previous authorization, which was granted in January, 2010. The company had approximately 170 million shares outstanding as of September 30, 2010.

(21)

Diagnostic

Services

(cont.)

Benchmarking

Quest Diagnostics Inc. $7,393.2 Bio‐Reference Laboratories Inc. 26.3%

Laboratory Corp. of America Holdings 4,873.6 Laboratory Corp. of America Holdings 4.8%

Pharmaceutical Product Development Inc. 1,439.5 RadNet, Inc. 2.9%

RadNet, Inc. 535.0 Pharmaceutical Product Development Inc. 1.3%

Alliance Healthcare Services, Inc. 480.6 Quest Diagnostics Inc. ‐0.2%

Bio‐Reference Laboratories Inc. 458.0 Alliance Healthcare Services, Inc. ‐6.1%

Laboratory Corp. of America Holdings 20.3% Alliance Healthcare Services, Inc. 31.1%

Quest Diagnostics Inc. 18.2% Laboratory Corp. of America Holdings 23.7%

Bio‐Reference Laboratories Inc. 10.6% Quest Diagnostics Inc. 21.7%

Pharmaceutical Product Development Inc. 10.5% RadNet, Inc. 17.2%

Alliance Healthcare Services, Inc. 9.2% Pharmaceutical Product Development Inc. 15.2%

RadNet, Inc. 7.1% Bio‐Reference Laboratories Inc. 13.0%

Pharmaceutical Product Development Inc. 0.0% Pharmaceutical Product Development Inc. 0.0x

Bio‐Reference Laboratories Inc. 19.8% Bio‐Reference Laboratories Inc. 0.6x

Laboratory Corp. of America Holdings 37.1% Laboratory Corp. of America Holdings 1.2x

Quest Diagnostics Inc. 44.9% Quest Diagnostics Inc. 2.0x

Alliance Healthcare Services, Inc. 94.0% Alliance Healthcare Services, Inc. 4.4x

RadNet, Inc. 120.3% RadNet, Inc. 5.6x

(22)

Healthcare

Distributors

60 70 80 90 100 110 120 130 140

Distributors NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Healthcare Distributors AmerisourceBergen Corporation ABC $34.12 276.3 $34.72 $25.66 $9,429.0 $9,114.4 0.12x 7.7x 8.4x Cardinal Health, Inc. CAH 38.31 349.0 39.29 29.69 13,368.7 12,796.5 0.13x 7.6x 9.0x Henry Schein Inc. HSIC 61.39 92.3 62.63 50.96 5,664.6 6,371.2 0.87x 10.2x 12.1x McKesson Corporation MCK 70.38 253.1 71.49 57.23 17,810.6 17,039.6 0.16x 7.0x 8.4x MedcoHealth Solutions Inc. MHS 61.27 424.4 66.94 43.45 26,003.1 30,079.3 0.47x 10.4x 12.4x Omnicare Inc. OCR 25.39 115.9 30.63 19.14 2,943.7 4,801.2 0.78x 7.3x 9.5x Owens & Minor Inc. OMI 29.43 63.3 32.80 25.68 1,864.0 1,927.5 0.24x 8.2x 9.3x PSS World Medical Inc. PSSI 22.60 55.3 24.45 18.15 1,248.9 1,422.1 0.72x 9.1x 11.2x Stericycle, Inc. SRCL 80.92 85.5 82.16 50.62 6,921.2 7,891.8 5.81x 18.8x 21.3x

Thermo Fisher Scientific, Inc. TMO 55.36 397.5 57.40 41.74 22,004.4 23,230.4 2.14x 11.0x 17.5x

High 5.81x 18.8x 21.3x

Low 0.12x 7.0x 8.4x

Mean 1.14x 9.7x 11.9x

(23)

Healthcare

Distributors

(cont.)

Fourth

Quarter

2010

News

December 21, 2010 ‐ Thermo Fisher Scientific, Inc. (NYSE: TMO) acquired TKA

Wasseraufbereitungssysteme GmbH. TKA Wasseraufbereitungssysteme GmbH provides laboratory water purification systems. Financial terms of the transaction were not disclosed.

December 16, 2010 ‐ Omnicare, Inc. (NYSE:OCR) announced the expiration and final results of its

previously announced offer to purchase up to $525 million aggregate principal amount of its 3.25% Convertible Senior Debentures due 2035 at a purchase price equal to $950 per $1,000 of the principal amount. Pursuant to the offer, approximately $748 million aggregate principal amount of the debentures were validly tendered and not withdrawn and Omnicare accepted for payment $525 million aggregate principal amount of such debentures.

November 30, 2010 ‐Thermo Fisher Scientific, Inc. (NYSE: TMO) signed a definitive agreement to

acquire Lomb Scientific Pty. Ltd. from Anacacia Capital Pty Limited and other shareholders. The financial terms of the deal were not disclosed. Lomb Scientific Pty., Ltd. offers laboratory

consumables, chemicals, and instrumentation to the scientific community, serving science laboratories, universities, hospitals, pathology, and research companies.

November 19, 2010 ‐ PSS World Medical, Inc. (Nasdaq: PSSI) signed an agreement to acquire

Linear Solutions, Inc. Linear Medical Solutions Inc., a healthcare services company, provides ancillary revenue solutions for physician practices. Financial terms of the transaction were not disclosed.

October 14, 2010 ‐ Henry Schein, Inc. (Nasdaq: HSIC), a provider of healthcare products and

services to office‐based practitioners, announced an agreement to acquire Provet Holdings Limited (ASX: PVT), Australasiaʹs largest distributor of veterinary products.

(24)

Healthcare

Distributors

(cont.)

Benchmarking

McKesson Corporation $109,899.0 Stericycle, Inc. 19.4% Cardinal Health, Inc. 98,159.6 Henry Schein Inc. 15.1% AmerisourceBergen Corporation 77,954.0 MedcoHealth Solutions Inc. 11.8% MedcoHealth Solutions Inc. 64,283.3 Thermo Fisher Scientific, Inc. 9.4% Thermo Fisher Scientific, Inc. 10,847.0 AmerisourceBergen Corporation 8.6% Owens & Minor Inc. 8,093.9 McKesson Corporation 2.6% Henry Schein Inc. 7,289.3 Owens & Minor Inc. 1.7% Omnicare Inc. 6,127.5 Cardinal Health, Inc. 0.8% PSS World Medical Inc. 1,974.7 Omnicare Inc. ‐1.2% Stericycle, Inc. 1,359.4 PSS World Medical Inc. ‐3.4%

Stericycle, Inc. 27.2% Stericycle, Inc. 30.9% Thermo Fisher Scientific, Inc. 12.2% Thermo Fisher Scientific, Inc. 19.5% Omnicare Inc. 8.3% Omnicare Inc. 10.8% Henry Schein Inc. 7.2% Henry Schein Inc. 8.6% PSS World Medical Inc. 6.3% PSS World Medical Inc. 7.8% MedcoHealth Solutions Inc. 3.8% MedcoHealth Solutions Inc. 4.5% Owens & Minor Inc. 2.6% Owens & Minor Inc. 2.9% McKesson Corporation 1.8% McKesson Corporation 2.2% Cardinal Health, Inc. 1.4% Cardinal Health, Inc. 1.7% AmerisourceBergen Corporation 1.4% AmerisourceBergen Corporation 1.5%

Thermo Fisher Scientific, Inc. 12.3% Owens & Minor Inc. 0.9x Henry Schein Inc. 18.6% McKesson Corporation 0.9x Owens & Minor Inc. 19.9% Henry Schein Inc. 1.0x McKesson Corporation 25.1% Thermo Fisher Scientific, Inc. 1.0x Cardinal Health, Inc. 29.0% AmerisourceBergen Corporation 1.1x AmerisourceBergen Corporation 31.3% PSS World Medical Inc. 1.3x PSS World Medical Inc. 32.5% Cardinal Health, Inc. 1.3x Omnicare Inc. 36.8% MedcoHealth Solutions Inc. 1.7x Stericycle, Inc. 48.0% Stericycle, Inc. 2.3x MedcoHealth Solutions Inc. 53.0% Omnicare Inc. 3.3x

(25)

Healthcare

Equipment

and

Supplies

60 70 80 90 100 110 120 130 140

Equipment & Supplies NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Healthcare Equipment and Supplies

Abbott Laboratories ABT $47.91 1,545.8 $56.79 $44.59 $74,060.0 $89,005.9 2.53x 9.9x 13.9x Baxter International Inc. BAX 50.62 582.7 61.88 40.25 29,497.6 31,824.6 2.48x 9.1x 11.2x Becton, Dickinson and Company BDX 84.52 226.3 85.50 66.47 19,122.9 19,068.2 2.59x 8.7x 11.4x Boston Scientific Corporation BSX 7.57 1,520.1 9.79 5.04 11,507.0 16,920.0 2.15x 8.9x 15.7x CardioNet, Inc. BEAT 4.68 24.2 10.16 4.00 113.4 70.5 0.57x NM NM Johnson & Johnson JNJ 61.85 2,746.3 66.20 56.86 169,855.8 160,283.8 2.56x 8.2x 9.7x Medtronic, Inc. MDT 37.09 1,073.5 46.66 30.80 39,815.2 46,836.2 2.98x 8.2x 9.5x Siemens AG SIE 0.00 869.8 95.14 61.16 81,042.7 86,430.7 1.11x 8.1x 11.4x St. Jude Medical Inc. STJ 42.75 342.5 42.98 34.00 14,643.6 15,780.2 3.14x 9.8x 11.4x High 3.14x 9.9x 15.7x Low 0.57x 8.1x 9.5x Mean 2.23x 8.9x 11.8x Median 2.53x 8.8x 11.4x

(26)

Healthcare

Equipment

and

Supplies

(cont.)

Fourth

Quarter

2010

News

December 28, 2010 ‐ CAIRE, Inc. acquired SeQual Technologies, Inc. from First Analysis Corporation, Ascension

Health Ventures, LLC, Seneca Health Partners, Dunrath Capital, Inc. and other shareholders for $60 million. SeQual Technologies, Inc. develops medical oxygen systems, and provides medical oxygen concentrators and devices that separate oxygen from air to provide supplemental breathing oxygen for individuals with chronic lung diseases.

December 15, 2010 ‐ icad Inc. (NasdaqCM: ICAD) signed a definitive agreement to acquire Xoft, Inc. for

approximately $53 million. Xoft, Inc. develops electronic brachytherapy (eBx) systems for radiation oncology applications.

December 14, 2010 ‐ JZ Capital Partners Limited (LSE: JZCP) sold its stake in GHW Holdings Inc. for

approximately $30 million. GHW Holdings, Inc. manufactures and distributes orthodontic products.

December 13, 2010 ‐ Endologix Inc. (NasdaqGM: ELGX) acquired Nellix Endovascular, Inc. from a group of

investors for approximately $68 million. Nellix Endovascular, Inc. is a medical device company that develops endograft products for treatment of abdominal aortic aneurysms and thoracic aortic aneurysms.

November 22, 2010 ‐ Medtronic, Inc. (NYSE: MDT) signed a merger agreement to acquire the remaining 89%

stake in Ardian, Inc. from Advanced Technology Ventures, Split Rock Partners, LLC, Morgenthaler, Emergent Medical Partners and other shareholders for approximately $710 million. Ardian, Inc., a medical device company, develops catheter‐based treatment for diseases related to sympathetic hyperactivity, including hypertension, chronic kidney disease, metabolic syndrome, and heart failure.

November 19, 2010 ‐ Boston Scientific Corporation (NYSE: BSX) signed a definitive merger agreement to acquire

the remaining 86% stake in Sadra Medical, Inc. from a group of investors for approximately $390 million. Sadra Medical, Inc. is a medical device company that develops new therapies for the treatment of aortic valve disease and offers transcatheter aortic valve replacement systems.

November 5, 2010 ‐ CardioNet, Inc. (NasdaqGM: BEAT) entered into a definitive merger agreement to acquire

Biotel Inc. (OTCBB: BTEL) for $11 million. Biotel, Inc., through its subsidiaries, engages in the development, manufacture, testing, and marketing of medical devices and related software products.

November 4, 2010 ‐ Nexus Dx, Inc. acquired International Technidyne Corporation from Thoratec Corp.

(NasdaqGS: THOR) for $55 million. International Technidyne Corporation develops, manufactures, and markets point‐of‐care hemostasis management products for use in hospitals, physicianʹs offices, and the home.

October 28, 2010 ‐ Stryker Corp. (NYSE: SYK) signed a definitive agreement to acquire the Neurovascular

division from Boston Scientific Corporation (NYSE: BSX) for $1.5 billion. The transaction subsequently closed on January 3, 2011. Boston Scientific Corporation’s Neurovascular Division provides patients and physicians with devices for the treatment of neurovascular disease which includes detachable coils, stents, microcatheters, and guidewires.

(27)

Healthcare

Equipment

and

Supplies

(cont.)

Benchmarking

Siemens AG $75,978.0 Abbott Laboratories 13.6% Johnson & Johnson 62,494.0 St. Jude Medical Inc. 8.8% Abbott Laboratories 33,989.0 Becton, Dickinson and Company 5.5% Medtronic, Inc. 15,723.0 Baxter International Inc. 4.8% Baxter International Inc. 12,815.0 Medtronic, Inc. 4.2% Boston Scientific Corporation 7,883.0 Johnson & Johnson 3.2% Becton, Dickinson and Company 7,372.3 Siemens AG ‐0.9% St. Jude Medical Inc. 5,017.8 Boston Scientific Corporation ‐2.8% CardioNet, Inc. 124.5 CardioNet, Inc. ‐12.1%

Medtronic, Inc. 31.2% Medtronic, Inc. 36.3% St. Jude Medical Inc. 27.6% St. Jude Medical Inc. 32.3% Johnson & Johnson 26.6% Johnson & Johnson 31.2% Becton, Dickinson and Company 22.8% Becton, Dickinson and Company 29.6% Baxter International Inc. 21.8% Abbott Laboratories 28.4% Abbott Laboratories 21.2% Baxter International Inc. 27.1% Boston Scientific Corporation 13.7% Boston Scientific Corporation 24.0% Siemens AG 9.5% Siemens AG 13.4% CardioNet, Inc. ‐15.4% CardioNet, Inc. ‐5.6%

CardioNet, Inc. 0.0% CardioNet, Inc. 0.0x Johnson & Johnson 18.0% Johnson & Johnson 0.6x Becton, Dickinson and Company 23.8% Becton, Dickinson and Company 0.8x St. Jude Medical Inc. 32.2% St. Jude Medical Inc. 1.2x Boston Scientific Corporation 35.4% Baxter International Inc. 1.4x Siemens AG 40.6% Medtronic, Inc. 1.8x Medtronic, Inc. 41.6% Abbott Laboratories 1.9x Baxter International Inc. 41.9% Siemens AG 2.0x Abbott Laboratories 46.6% Boston Scientific Corporation 3.2x

(28)

Healthcare

Information

Technology

60 70 80 90 100 110 120 130 140

Information Technology NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Healthcare Information Technology

Allscripts Healthcare Solutions, Inc. MDRX 19.27 187.1 22.55 15.65 3,605.5 4,016.7 5.70x 32.0x 38.4x athenahealth, Inc. ATHN 40.98 34.3 47.82 21.51 1,404.3 1,317.5 5.71x 44.3x NM Cerner Corp. CERN 94.74 82.9 97.76 72.05 7,849.5 7,403.4 4.08x 15.6x 21.2x Computer Programs & Systems Inc. CPSI 46.84 11.0 49.49 33.92 513.5 498.4 3.25x 16.0x 17.1x HMS Holdings Corp. HMSY 64.77 27.6 67.10 43.13 1,785.1 1,719.1 6.10x 21.8x 26.9x icad Inc. ICAD 1.35 46.0 2.44 1.26 62.1 43.9 1.67x NM NM MedAssets, Inc. MDAS 20.19 58.1 25.08 16.54 1,172.1 1,357.0 3.57x 12.5x 21.0x Omnicell Inc. OMCL 14.45 33.0 15.38 10.93 476.4 297.8 1.34x 17.3x 34.8x Quality Systems Inc. QSII 69.82 29.0 71.81 51.30 2,021.8 1,914.9 5.72x 20.9x 22.4x SXC Health Solutions, Corp. SXC 42.60 60.9 46.06 23.22 2,592.4 2,201.0 1.18x 19.3x 22.5x Vital Images Inc. VTAL 13.98 14.0 16.92 12.20 196.0 70.6 1.19x NM NM WebMD Health Corp. WBMD 51.06 59.9 52.81 37.64 3,058.5 2,785.9 5.53x 26.4x 31.2x High 6.10x 44.3x 38.4x Low 1.18x 12.5x 17.1x Mean 3.75x 22.6x 26.2x Median 3.82x 20.1x 22.5x

(29)

Healthcare

Information

Technology

(cont.)

Fourth

Quarter

2010

News

December 30, 2010 ‐ HEALTHCAREfirst Inc. acquired CareFacts, Inc. The financial terms of the deal were

not disclosed. CareFacts Information Systems, Inc. develops software solutions for home care and the hospice industry.

December 22, 2010 ‐ Dell Inc. (NasdaqGS: DELL) agreed to acquire InSiteOne, Inc. from Allegra Partners,

Primus Capital Funds and others. The financial terms of the transaction were not disclosed. InSiteOne, Inc. provides medical data archiving, storage, and disaster‐recovery solutions to the healthcare industry.

December 7, 2010 ‐ Aetna Inc. (NYSE: AET) entered into an agreement to acquire Medicity, Inc. for

approximately $500 million. The transaction subsequently closed January 3, 2011. Medicity Inc. develops enterprise‐class software applications and data integration solutions for the healthcare market.

November 30, 2010 ‐ MD On‐Line, Inc. acquired Healthware Solutions, LLC. The financial terms of the

deal were not disclosed. Healthware Solutions, LLC develops software to access medical records for medical practices.

November 17, 2010 ‐ CompuGroup Holding USA, Inc. entered into an agreement to acquire HealthPort

LLC for $18 million. HealthPort LLC provides practice management software, electronic health records, and revenue cycle management services to doctors in physician practices, community health centers, and hospitals.

November 1, 2010 ‐ MedLink International, Inc. (OTCBB: MLKN.A) acquired substantially all of the assets

of MedAppz LLC for approximately $8 million. MedAppz, LLC provides an integrated suite of software for ambulatory care medical practice for scheduling, HER, and billing.

October 29, 2010 ‐ Conjoin Group and Actis Capital, LLP acquired PHNS, Inc. from Ferrer Freeman &

Company, LLC, Richard Kneipper and other shareholders for $250 million. PHNS, Inc., a hospital services company, provides information technology and business process solutions for hospitals, healthcare providers, and other businesses.

(30)

Healthcare

Information

Technology

(cont.)

Benchmarking

SXC Health Solutions, Corp. $1,864.8 SXC Health Solutions, Corp. 44.8%

Cerner Corp. 1816.3 athenahealth, Inc. 33.9%

Allscripts Healthcare Solutions, Inc. 704.5 HMS Holdings Corp. 31.0% WebMD Health Corp. 504.1 Allscripts Healthcare Solutions, Inc. 28.5%

MedAssets, Inc. 380.1 WebMD Health Corp. 22.8%

Quality Systems Inc. 317.9 Quality Systems Inc. 17.9%

HMS Holdings Corp. 282.0 MedAssets, Inc. 15.4%

athenahealth, Inc. 230.6 Computer Programs & Systems Inc. 14.2%

Omnicell Inc. 219.8 Cerner Corp. 8.7%

Computer Programs & Systems Inc. 143.9 Omnicell Inc. ‐0.5%

Vital Images Inc. 59.4 Vital Images Inc. ‐0.9%

icad Inc. 26.3 icad Inc. ‐10.3%

Quality Systems Inc. 25.4% MedAssets, Inc. 28.5%

HMS Holdings Corp. 22.7% HMS Holdings Corp. 28.0%

Cerner Corp. 19.2% Quality Systems Inc. 27.2%

WebMD Health Corp. 17.7% Cerner Corp. 26.1%

Computer Programs & Systems Inc. 17.0% WebMD Health Corp. 21.0% MedAssets, Inc. 17.0% Computer Programs & Systems Inc. 18.4% Allscripts Healthcare Solutions, Inc. 14.8% Allscripts Healthcare Solutions, Inc. 17.8%

athenahealth, Inc. 8.6% athenahealth, Inc. 12.9%

SXC Health Solutions, Corp. 5.2% Omnicell Inc. 7.6%

Omnicell Inc. 3.8% SXC Health Solutions, Corp. 6.1%

Vital Images Inc. ‐6.1% Vital Images Inc. 0.7%

icad Inc. ‐11.1% icad Inc. ‐4.7%

Computer Programs & Systems Inc. 0.0% Computer Programs & Systems Inc. 0.0x

HMS Holdings Corp. 0.0% HMS Holdings Corp. 0.0x

icad Inc. 0.0% icad Inc. 0.0x

Omnicell Inc. 0.0% Omnicell Inc. 0.0x

Quality Systems Inc. 0.0% Quality Systems Inc. 0.0x

SXC Health Solutions, Corp. 0.0% SXC Health Solutions, Corp. 0.0x

Vital Images Inc. 0.0% Vital Images Inc. 0.0x

Allscripts Healthcare Solutions, Inc. 0.3% Allscripts Healthcare Solutions, Inc. 0.0x

Cerner Corp. 6.2% Cerner Corp. 0.3x

athenahealth, Inc. 6.6% athenahealth, Inc. 0.4x

WebMD Health Corp. 11.5% WebMD Health Corp. 0.8x

MedAssets, Inc. 27.9% MedAssets, Inc. 1.7x

LEVERAGE LEVERAGE

(31)

Hospital

Providers

60 70 80 90 100 110 120 130 140

Hospital Providers NASDAQ Composite (^COMP) S&P 500 Index (^SPX)

Hospital Providers Community Health Systems, Inc. CYH $37.37 92.5 $42.30 $25.63 $3,458.5 12,651.2 1.00x 7.4x 11.3x Health Management Associates Inc. HMA 9.54 250.6 9.88 6.13 2,390.9 5,404.5 1.08x 7.4x 11.4x Lifepoint Hospitals Inc. LPNT 36.75 52.7 39.61 28.48 1,936.8 3,320.1 1.05x 6.5x 9.5x Tenet Healthcare Corp. THC 6.69 485.5 6.86 3.92 3,248.2 7,294.2 0.80x 7.4x 12.2x Universal Health Services Inc. UHS 43.42 97.3 44.04 28.40 4,223.3 5,477.7 1.03x 7.5x 10.6x High 1.08x 7.5x 12.2x Low 0.80x 6.5x 9.5x Mean 0.99x 7.2x 11.0x Median 1.03x 7.4x 11.3x

(32)

Hospital

Providers

(cont.)

Fourth

Quarter

2010

News

December 31, 2010 ‐ Ascend Health Corporation acquired Behavioral Hospital of Bellaire and

Mayhill Hospital. Financial terms of the transaction were not disclosed. Ascend Health Corporation operates behavioral health facilities for children, adolescents, adults, and seniors.

December 29, 2010 ‐ Ark Holdings, Inc., an owner and operator of 35 post‐acute care hospitals

which offer long term healthcare services, acquired 18 skilled nursing facilities located in South Carolina, North Carolina and Georgia. The financial terms of the transaction were undisclosed.

December 21, 2010 ‐ Medical Properties Trust Inc. (NYSE: MPW) agreed to acquire three long‐

term acute care hospital facilities for approximately $100 million. The three facilities include Triumph Hospital Clear Lake (110 beds), Triumph Hospital Tomball (75 beds), and Northland Long‐Term Acute Care Hospital (35 beds).

December 21, 2010 ‐ Phoebe Putney Memorial Hospital, Inc. offered to acquire Palmyra Medical

Center from HCA, Inc. for approximately $200 million. Palmyra Park Hospital, Inc. operates as a healthcare facility in Southwest Georgia.

December 15, 2010 ‐ Vanguard Health Systems signed a definitive agreement to acquire Holy

Cross Hospital. Holy Cross Hospital operates as a not‐for‐profit healthcare facility serving the residents of Chicago. It offers emergency care, inpatient, outpatient, and surgical services, as well as primary care services at affiliate locations. The financial terms of the transaction were

undisclosed.

December 10, 2010 ‐ Grubb & Ellis Healthcare REIT II, Inc. acquired Humble Surgical Hospital,

LLC for $13 million. Humble Surgical Hospital, LLC operates as a multi‐specialty surgical hospital. It offers surgical services in the areas of ENT, orthopedics, ophthalmology, podiatry, plastics, pain management, chiropractics, spine, and gastroenterology.

November 18, 2010 ‐ North Country Health Services (“NCHS”), based in Bemidji, MN, and

Sanford Health, based in Fargo, ND and Sioux Falls, SD, announced the NCHS Board of Trustees has signed a Letter of Intent to combine the two entities to create a new, integrated health care delivery system. The financial terms of the transaction were not disclosed. Non‐profit Sanford Health has 30 hospitals and more than 18,000 employees — the largest employer in North and South Dakota. NCHS is an acute‐care hospital with approximately 80 beds.

November 17, 2010 ‐ Prime Healthcare Services, Inc. acquired Alvarado Hospital Medical Center,

Inc. from Plymouth Health LLC for $40 million. Alvarado Hospital Medical Center, Inc. operates a general acute hospital in California.

Significant Q4 Transactions

Navigant

Consulting’s

Healthcare

Practice











































HEALTHCARE

SERVICES

QUARTERLY

DIALOGUE

Fourth

Quarter

2010

Navigant’s

Perspective:

1

Healthcare

Reform

and

Beyond:

New

Realities

for

the

New

Normal

Market

Summary

5

Healthcare

Industry

Stock

Market

Value

Index

7

NCA

Healthcare

Services

Universe

–

8

Public

Company

Equity

Market

Value

Analysis

Alternate

Site

11

Diagnostic

Services

13

Healthcare

Distributors

17

Healthcare

Equipment

and