August 2020

HEALTHCARE IT INDUSTRY UPDATE TELEHEALTH ADVANCES BY YEARS IN COVID-19 LOCKDOWN

CONTACTS

David DeSimoneManaging Director617-619-3324ddesimone@capstoneheadwaters.com

David MichaelsManaging Director858-926-5950dmichaels@capstoneheadwaters.com

The Healthcare Information Technology (IT) industry is undergoing anaccelerated growth phase as the pandemic pushes the Healthcare industry toinnovate and meet patient demand despite limitations on in-person visits. Theneed for immediate remote solutions, such as healthcare monitoring andmedication management, has accelerated technology adoption timelines andpolicy changes around telemedicine.

COVID-19 has shifted hospital service demand as intensive care unit (ICU)admissions have soared, elective medical procedures have been canceled, androutine clinical visits have been postponed or held virtually. Hospitals nowface extreme financial strain which is projected to result in more than $323billion in losses this year, according to a June report by the American HospitalAssociation.1 This decline is primarily due to a dramatic drop in both inpatient(-19.5%) and outpatient (-35.5%) volume relative to 2019 baselines. The needto address revenue losses and curtail costs is expected to be an immediatedriver of technology adoption. Additionally, government mandates forinteroperability and electronic health records (EHRs), the shift from fee-for-service to value-based care, and the encroachment of tech-savvynontraditional healthcare players such as Amazon (Nasdaq:AMZN) on theHealthcare industry are long-term pressures favoring healthcare technology.

TABLE OF CONTENTS

Industry Outlook Segment Highlight M&A Overview Notable Transactions Select Transactions IPO Activity COVID-19 Impacts Public Company Data Report Contributors Firm Track Record

INDUSTRY OUTLOOK

2

HEALTHCARE IT INDUSTRY UPDATETELEHEALTH ADVANCES BY YEARS IN COVID-19 LOCKDOWN

Telehealth Stocks Outperform Broader Healthcare IT Index

0

50

100

150

200

250

1/31 2/29 3/31 4/30 5/31 6/30 7/31

HCIT Index Teledoc Health One Medical

Stoc

k Pr

ice

Inde

x (Ja

nuar

y 31

= 10

0)

Index includes: ASCN, BEAT, BNFT, CSLT, CERN, CHNG, EVH, HSTM, INOV, MDRX, OMCL, ONEM, PINC, TDOC, VCRA, IQV

Source: Capital IQ and Capstone Research

March 11: World Health Organization declares COVID-19 a pandemic

SEGMENT HIGHLIGHT: TELEHEALTH

Prior to the health crisis, the global Telehealth market wasvalued at $5.6 billion with a projected compound annualgrowth rate (CAGR) of 24% between 2019 and 2025,according to PitchBook.2 However, since the outbreak,telehealth has emerged as a tool to combat and containthe virus and has helped to ease the burden on traditionalhealthcare systems. Telehealth providers have reported50-175x the number of pre-COVID visits, according toMcKinsey & Co.3 As a result, the U.S. Telehealth market isslated to grow 64% year-over-year (YOY) and at a five-year CAGR of 38.2% according to Frost & Sullivan.4

As summarized below, the Centers for Medicare &Medicaid Services (CMS) has made more than 80temporary emergency policy changes to MedicareTelehealth services under the Coronavirus Preparednessand Response Supplemental Appropriations Act and 1135waiver. These relaxed policies are likely to be in place forat least 12-18 months and guarantee telehealth access to~65 million Americans. The U.S. Health and HumanServices (HHS) Department further augmented thisdevelopment with the launch of telehealth.hhs.gov inApril. On the regulatory side, the crisis has causedtelemedicine to advance seven to eight years in atruncated timeframe while also creating newopportunities for innovation and collaboration, HHSDeputy Secretary Eric Hagan, told Rock Health. 5

While many regulatory changes are short-term, thisadoption period is expected to create broader acceptance

PROJECTED YEAR-OVER-YEAR GROWTH FOR TELEHEALTH

Temporary COVID-19 Changes to Medicare Telehealth

64.3%

3

Healthcare IT | August 2020

Access Telehealth from Anywhere Beneficiaries can receive telehealth services without leaving their homes.

Visits Via Common Technology Visits can be held on smartphones and tablets using common platforms like FaceTime and Skype.

Reimbursable Audio-Only SessionsAudio-only visits, now including behavioral health and patient education services, are reimbursable.

New Patients Eligible for TelehealthNo existing relationship required between patient and provider to have virtual visits.

Reduce or Waive Cost-SharingNo penalty for a physician to limit or eliminate co-pays or deductibles.

All Providers Eligible Physicians and all healthcare professionals can bill Medicare for telehealth care.

I believe telemedicine, at least on the regulatory side and on the flexibilities, it’s advanced seven or eight years in about a month and a half and the use of it has skyrocketed.

of telehealth services and set a positive reimbursementtrend. In May, 76% of surveyed consumers said that theywere interested in using telehealth going forwardcompared to just 11% reported telehealth usage in 2019.This shift could result in $250 billion of annual healthcarespending on telehealth, according to McKinsey & Co.

The Telehealth market is still highly dynamic andfragmented, with medical device manufacturers,software/application providers, and telehealth serviceproviders addressing the sector and seeking collaborationto enhance the quality of care to patients. The rapidlychanging tech environment has had a significant positiveimpact on the overall market as patients and cliniciansseek out remote healthcare platforms with innovative andadvanced features that are easy to use.

Source: Centers for Medicare & Medical Services, American Medical Association, Advisory Board,

- HHS Deputy Secretary Eric HarganRock Health Interview

Source: McKinsey & Co.

11% usage of telehealth services in 2019

76% interested in telehealth services going forward in 2020

Shifting Consumer Sentiment

“”

29.7%

57.7%

6.3%6.3%

STRATEGIC

PublicPrivate

FINANCIAL

DirectAdd-on

MERGER & ACQUISITON OVERVIEW

4

Merger and acquisition (M&A) activity has slowed acrossNorth America as the timeline for the pandemic andeconomic recovery lengthens. Across all industries in Q2,2,025 deals totaling $336.8 billion in value closed for YOYdeclines of 33.1% and 26.7%, respectively, according toPitchBook.6 Sectors within the Healthcare and Technologyindustries, however, have been bright spots, not onlyshowing resilience, but benefiting from the demand forhealthcare services and remote needs during COVID-19.

Capstone’s historic M&A database shows that theHealthcare IT industry has flourished under the currentmarket conditions. Through July, 175 transactions havebeen announced or closed across the U.S. and Canada—a36.7% increase over the 128 closed through July 2019.Based on the 40 disclosed transactions, the average dealsize YTD has equaled $323.3 million or 3.6x revenue.

Private (57.7%) and public (29.7%) buyers have been themost acquisitive, accounting for 87.4% of deals year-to-date (YTD) compared to 58.3% in all of 2019. Privateequity (PE) buyers were noticeably less active YTD,comprising just 13% of deal activity compared to 42% inall of 2019. One notable disclosed PE deal has beenVeritas Capital’s announced platform acquisition of DXCTechnology Company’s (NYSE:DXC) U.S. State and LocalHealth and Human Services Business in March. Thebusiness, which provides end-to-end technology solutionsto the government, is slated to be valued at $5 billion or3.6x revenue.

As shown in the table below, a number of private andpublic players have already made two or more acquisitionsto-date in 2020 as they seek to build nimble andinnovative services to gain market share.

Monthly Transactions

Year-To-Date Buyer Breakdown

Note: Year-to-date ended July 30Source: Capital IQ, PitchBook, FactSet, and Capstone Research

2320 17 14 16

20 19

44

27 26

1318

29

18

0

10

20

30

40

50

602019 2020

Num

ber o

f Tra

nsac

tions

Active 2020 Buyers

(NYSE:AMN)

(Nasdaq:EXAS) (Nasdaq:HCAT) (Nasdaq:HSTM)

Healthcare IT | August 2020

NOTABLE TRANSACTIONS

5

Acquires Assets of

Deal Overview: Walmart (NYSE:WMT) has acquired the technology platform, patents, and keyintellectual property of CareZone for an estimated $200 million dollars. Founded in 2012, CareZone is adigital medication management platform designed to simplify personal health. The platform offersautomated reminders for prescription refills, tracks appointments, ships medication direct-to-consumer,and enables individuals to scan prescription bottles and insurance cards through a mobile app.CareZone raised $50 million of series C1 venture funding in May 2018 in a deal led by New EnterpriseAssociations valuing the company at an estimated $550 million, according to PitchBook.

The acquisition of the technology platform and capabilities furthers Walmart’s Health & Wellnessmission to lower healthcare costs and offer omni-channel healthcare options for its customers andemployees. The deal follows Walmart’s 2019 partnership with Doctor On Demand. The deal expandedthe retail giant’s 2020 employee medical plan in select locations to include telehealth options.7

Industry Trend: Large corporations are challenging traditional healthcare providers by bringinginnovative healthcare solutions in-house. By offering healthcare solutions to their own employees,companies can pilot nontraditional healthcare models. In addition to its employee telehealth solutions,Walmart has opened health care clinics across the U.S., including a super center in 2019 offering keyhealth care services including primary care, dental, laboratory tests, hearing, behavioral health, andwellness education under one roof.

Similarly, Amazon launched Amazon Care, a healthcare program for its employees in September 2019.Currently being piloted on its Seattle employees, the virtual clinic enables users to contact a nurse ordoctor via text, in-app video, or web portal, with additional options for follow-up in-home nurse visits.In July, Amazon announced a partnership with healthcare provider Crossover Health, Inc. to createemployee Neighborhood Health Centers near Amazon fulfillment locations.

Walmart Expands Health & Wellness Offerings with Medication Management Technology(June 2020, $200 Million)

To Acquire

Deal Overview: Optum, a subsidiary of UnitedHealth Group Inc (NYSE:UNH), has agreed to acquiretelehealth provider AbleTo. The deal is expected to close for $470 million or ~10x AbleTo’s forwardrevenue. Optum previously became a stakeholder in the company in 2018, after making anundisclosed investment in AbleTo via its venture capital arm.

Founded in 2008, AbleTo is a virtual behavioral healthcare company based in New York with serviceoptions for individuals, employers, and health plans. The company offers customized remote telehealthoptions including digital emotional health, motivational and behavioral coaching, and sessions withlicensed cognitive behavioral therapists. AbleTo completed its first acquisition last year with app-baseddigital therapy provider Joyable (March, undisclosed).

The acquisition is Optum’s second in the digital healthcare space, following its December 2019purchase of cloud-based patient remote monitoring (RPM) startup Vivify Health Inc. (undisclosed). Theacquisition of AbleTo will further diversify Optum’s healthcare solutions and strengthen its marketposition as a tech-enabled healthcare service provider.

Industry Trend: Almost 50% of the U.S. population will develop a mental illness or disorder thatrequires behavioral therapy in their lifetime, according to the Center for Disease and Control.8 At thesame time, treatment needs remain largely unmet, with more than 55% of adults with significantbehavioral health ailments going untreated, according to the 2020 State of Mental Health in America.9Telehealth has become a growing way to increase access to and reach unmet healthcare needs.

Optum Diversifies with Virtual Counseling & Therapy Provider (April 2020, $470 Million)

Healthcare IT | August 2020

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

08/29/20 Livongo Health (NasdaqGS:LVGO)

Teladoc Health (NYSE:TDOC)

Offers a platform that provides cellular-connected devices, coaching, and facilitates access to medications. 18,254.6 70.8x -

07/29/20 SOC Telemed Healthcare Merger (Nasdaq:HCCO)

Offers a telemedicine platform including teleNeurology telePsychiatry, and teleICU, remote monitoring service. $721.0 - -

07/29/20 On.Demand Platform

BioTelemetry (Nasdaq:BEAT)

Comprises a remote patient monitoring (RPM) and coaching platform. - - -

07/20/20 Business of DXC Technology Dedalus Holding Comprises healthcare and diagnostic

software solutions. $525.0 - -

07/20/20 Digitech Computer & R1 RCM EMS Bus. Sarnova Offers revenue cycle management (RCM) software for

emergency medical services transport industry. $140.0 2.1x 10.8x

07/09/20 healthfinch Health Catalyst(Nasdaq:HCAT)

Offers software to enable electronic protocols for prescription refills processes and integrates EMRs. $40.0 - -

06/26/20 inui Healthy.io Develops medical devices designed to help consumers manage their health and detect health conditions. $9.0 - -

06/15/20 Assets of CareZone

Walmart (NYSE:WMT)

Includes the technology platform, patents, and key intellectual property of CareZone. ~$200.0 - -

06/10/20 Mobilewellbeing Predictmedix (CNSX:PMED)

Designs and develops healthcare applications for prevention and the management of various diseases. - - -

06/10/20 Client Outlook Mach7 Technologies (ASX:M7T)

Enables healthcare workers to access, manipulate, and collaborate in real-time over medical images. $28.7 4.7x -

05/28/20 Assets of Global Med Technologies Hemasoft America Comprises blood donor management software

solution assets. $28.0 2.5x -

05/21/20 Mindleap Health Mydecine (CNSX:MYCO)

Operates a digital health platform that helps people connect with mental health specialists. $3.5 - -

05/20/20 Indivica WELL Health (TSX:WELL)

Provides electronic medical records software and services to clinics. $4.5 3.4x -

05/19/20 Physera Omada Health Designs an application to connects patients suffering from musculoskeletal injuries with physical therapists. $30.0 - -

05/04/20 Business of Change Healthcare

Kaufman, Hall & Associates

Comprises data and analytics solutions for the Healthcare industry. $55.0 - -

04/27/20 AbleTo Optum Operates a tech-enabled behavioral healthcare platform to integrate behavioral and medical healthcare. $470.0 ~10.0x -

04/16/20 Gaido Health Biofourmis Offers post-discharge oncology patient monitoring using wearables and machine learning. - - -

03/31/20 Carie Health Emerald Organic (OTCPK:EMOR)

Develops a cloud-based end-to-end telehealth software platform that connects users/patients with doctors. - - -

03/24/20 Reliabill Coronis Health Provides revenue cycle management software for healthcare providers. - - -

03/16/20 Jolokia NexTech AR (CNSX:NTAR) Provides interactive video solutions. $4.8 4.8x -

03/11/20 DeepHealth RadNet(NasdaqGM:RDNT)

Uses machine learning to distill insights from medical experts into software to assist radiologists. $42.4 - -

03/10/20 YouScript Incorporated

Invitae Corporation (NYSE:NVTA)

Develops precision prescribing software solutions for health care providers. $79.3 - -

03/10/20 Business of DXC Technology

Veritas Capital Fund Management

Develops technology-enabled solutions for administration and operations of health programs. $5,000.0 3.6x -

Source: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS

6

Healthcare IT | August 2020

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

03/10/20 eCaring HouseWorks Offers an icon-based population health management system for personal health record management. - - -

03/09/20 HcT2 HealthStream (Nasdaq:HSTM)

Offers a communication and scheduling solution for nurses. $25.0 - -

03/04/20 LiveBetter Ginger.io Provides mental health conversational app experience paired with engaging and evidence-based activities. - - -

02/28/20 Decision Resources Clarivate Analytics Provides research, analytics, and healthcare data

analysis platform. $957.2 4.6x 20.1x

02/24/20 Connexient Everbridge (Nasdaq:EVBG)

Develops MediNav, a turn-by-turn mobile indoor navigation software for the Healthcare market. $26.4 - -

02/18/20 Able Health Health Catalyst(Nasdaq:HCAT)

Provides cloud-based pay-for-performance and risk adjustment solutions for care managers and physicians. $25.3 - -

02/13/20 B4Health AMN Healthcare (NYSE:AMN)

Develops vendor management system (VMS) software for healthcare facilities. $31.9 - -

02/13/20 Simplificare Flywire Payments Corporation

Operates an online financial engagement platform that enables patients to track and pay medical bills. $100.0 - -

02/03/20 Trinity Healthcare Technologies

WELL Health (TSX:WELL)

Offers software solutions including open-source EMR, KIOSK, integration, and revenue cycle management. $7.2 3.6x

01/29/20 Stratus Video AMN Healthcare (NYSE:AMN)

Provides video, phone, and onsite interpretation, telehealth interoperability, and translation solutions. $475.0 4.0x 14.0x

01/27/20 Chatter Research Stingray Business Develops a real-time customer research and feedback application for retail and hospitality businesses. $12.2 - -

01/21/20 Excel Medical Electronics

Hill-Rom Holdings(NYSE:HRC)

Develops remote monitoring platform and other systems for healthcare industry. $30.0 - -

01/15/20 DoctorsForMe Human Longevity Provides artificial intelligence-based healthcare solution that enables a patient to reach out to a doctor. - - -

01/14/20 Business of NantHealth

Masimo Corporation (Nasdaq:MASI)

Comprises software including DCX device connectivity, VCX patient vitals, and HBox connectivity hub. $47.3 - -

01/13/20 Intelligent InSites Infor Develops automation software solutions for the Healthcare industry. - - -

01/13/20 Lucina Health Unified Women’s Healthcare

Delivers women's maternity analytics platform to health plans, Medicaid providers, and public entities. - - -

01/12/20 InTouch Technologies

Teladoc Health (NYSE:TDOC)

Provides technology-enabled solutions to healthcare organizations for the delivery of clinical care virtually. $599.7 7.1x -

01/10/20 SCI Solutions R1 RCM (Nasdaq:RCM) Develops SaaS-based solutions for healthcare providers. $200.0 - -

01/10/20 Valify HCA Healthcare(NYSE:HCA)

Develops a web-based solution that allows healthcare organizations to identify, benchmark, and track savings. - - -

01/10/20 Tonic Solutions SCI Solutions Develops and operates an online medical data collection platform. - - -

01/09/20 CompIQ Solutions Hoover Rehabilitation Develops Medical Bill Review (MBR) software. - - -

01/08/20 CareCloud MTBC (Nasdaq:MTBC)

Offers cloud-based practice management, electronic health record, and medical billing software solutions. $34.2 - -

01/08/20 Yaro Virgin Pulse Operates as a mobile-first digital navigation and health literacy platform. - - -

Source: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS (CONTINUED)

7

Healthcare IT | August 2020

Valuation Total Raised Current Enterprise NotableCompany Date At IPO (mm) At IPO (mm) Value (mm) Investors Stock Price

Filed 07/15/20 NA NA NA

• Andreessen Horowitz• Carrick Capital • Comcast Ventures

NA

07/15/20 $6,600.0 $913.5 $6,300.0

• Centerbridge Partners

• Nvx Holdings• Seyen Capital

07/02/20 $1,040.0 $220.5 $1,720.0• Andreessen Horowitz• Carrick Capital • McKesson Ventures

Filed06/01/20 NA NA $971.8 • Allianz X

• SV Health investors NA

01/31/20 $1,690.0 $281.8 $3,641.2 • Alphabet• The Carlyle Group

INITIAL PUBLIC OFFERING ACTIVITY

8

Source: Capital IQ, Rock Health, and PitchBook

While early 2020 showed promise for several planned Healthcare IT initial public offerings (IPOs), filing dates were largely delayed. Select companies have still been able to tap into the public markets, however, including telehealth companies One Medical (see first earnings release on following page) and AmWell.

(Nasdaq:ONEM)

IPO Watch List

(Nasdaq:GOCO)

(Nasdaq:ACCD)

Healthcare IT | August 2020

$0$10$20$30$40$50$60

01/31/20 03/31/20 05/31/20 07/31/200

5

10

15Volume (mm) Price

COVID-19 IMPACTS ON TOP PUBLIC PLAYERS

“Our One Medical model has demonstrated that it performs in bothordinary and extraordinary times. We have extended our digitalsolutions, expanded in-person care and testing services, grown ourgeographic reach, added more members and enterpriserelationships, advanced our health network partnerships, andlaunched our worksite re-entry program.”

- Amir Dan Rubin, CEO, President, & Chair10

First Quarter Results Ending March 31:• Membership increase of 25% YOY to 455,000• Net Revenue increase of 25% increase YOY to $78.8 million• Adjusted EBITDA loss of $13.5 million, or 17% of total net revenue

Analysis:One Medical ended its first quarter as a public company with $375.3million in cash and short-term securities and $2.2 million in debt.Following a strong January and February, impacts of COVID-19became apparent and in-office visits went down to 55% of pre-pandemic levels in April, according to the earnings call.11 To preservecapital, One Medical cut discretionary spending and ceased hiringnonclinical roles. The company still intends to open ~25 new officesthis year, while shifting its staffing model to remote and in office stafflong term. For Q2, the company projected revenue between $56-$66million. Its next earnings release is scheduled for August 12.

Source: Company Earnings, FactSet, and Capstone Research9

Trading Data (07/29/2020):

Stock Price $218.25

52 Week High $228.95

EV/EBITDA NM

EV/Revenue 23.6x

Market Capitalization $17,253.4 mm

Ratio Analysis

Current Ratio 6.1

Net Debt/EBITDA 1.7

“Even as we continue to battle the coronavirus in the U.S. and otherhard-hit countries, we are also seeing sustained demand in areasthat are no longer considered hotspots. In some states where thecurve has flattened, we are still seeing twice as many patient visitsas last year.”

- Jason Gorevic, CEOX

Second Quarter Results Ending June 30:• Revenue increased 85% YOY to $241 million• Total visits increased 203% YOY to 2.8 million• Positive adjusted EBITDA of $26.3 million compared to

$6.3 million in Q2 2019

Analysis:Teladoc has experienced a strong year in part due to COVID-19impacts. The company has seen sustained momentum in the U.S. andinternationally, with visits 40% higher than pre-COVID numbers. Thecompany closed its acquisition of InTouch Health in July for $599.7million and projects its revenue to grow 35% this year, according toTeladoc’s Q2 press release.12 In its Q3 guidance, Teladoc expectsreview in the range of $275-$285 million and total visits between 2.5-2.7 million. For the full year, the company has projected $980-$995million in revenues with total visits nearing or eclipsing 10 million.

Note: Dotted line indicates date after WHO declared COVID-19 a pandemic on March 11

(NYSE:TDOC)

(Nasdaq:ONEM)

Trading Data (07/29/2020):

Stock Price $31.03

52 Week High $44.87

EV/EBITDA NM

EV/Revenue 12.5x

Market Capitalization $3.8 Billion

Ratio Analysis

Current Ratio 4.8

Net Debt/EBITDA 4.3

$0$50

$100$150$200$250$300

01/31/20 03/31/20 05/31/20 07/31/200

5

10

15Volume (mm) Price

Healthcare IT | August 2020

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 08/06/20 High Cap Value Revenue EBITDA Margin Revenue EBITDAAccolade, Inc. $37.97 98.1% $1,852.5 $2,073.5 $132.5 NM NA 15.6x NM

Allscripts Healthcare Solutions, Inc. $8.84 74.8% $1,440.6 $2,404.8 $1,718.1 $112.7 6.6% 1.4x 21.3x

Ascom Holding AG $11.27 92.6% $405.5 $429.5 $292.1 NM NA 1.5x NM

BioTelemetry, Inc. $42.75 76.5% $1,461.4 $1,573.9 $412.0 $106.3 25.8% 3.8x 14.8x

Benefitfocus, Inc. $12.57 44.5% $403.4 $581.8 $287.1 NM NA 2.0x NM

Castlight Health, Inc. $1.29 72.1% $194.3 $167.1 $146.5 NM NA 1.1x NM

Cerner Corporation $69.31 85.7% $21,166.0 $22,241.6 $5,613.8 $1,169.9 20.8% 4.0x 19.0x

Change Healthcare Inc. $12.38 70.5% $3,760.7 $8,767.4 $891.0 $0.0 0.0% 9.8x NM

Evolent Health, Inc. $13.00 99.7% $1,111.2 $1,312.7 $942.6 NM NA 1.4x NM

HealthStream, Inc. $22.50 75.6% $719.9 $604.8 $247.3 $36.7 14.8% 2.4x 16.5x

GoHealth, Inc. $17.45 66.5% $5,472.0 $6,268.7 $611.4 $82.9 13.6% 10.3x NM

Inovalon Holdings, Inc. $25.24 98.2% $3,921.1 $4,867.3 $656.3 $179.8 27.4% 7.4x 27.1x

Omnicell, Inc. $68.09 71.8% $2,911.7 $2,835.3 $906.4 $100.9 11.1% 3.1x 28.1x

One Medical (1LifeHealthcare) $30.27 67.5% $3,817.9 $3,604.6 $292.0 NM NA 12.3x NM

Premier, Inc. $34.37 85.9% $2,460.0 $2,542.9 $1,273.1 $559.8 44.0% 2.0x 4.5x

Teladoc Health, Inc. $202.01 79.8% $16,409.0 $16,079.1 $716.3 NM NA 22.4x NM

Vocera Communications, Inc. $32.40 95.7% $1,037.6 $924.4 $188.5 NM NA 4.9x NM

IQVIA Holdings Inc. $160.75 95.0% $30,746.8 $42,670.8 $10,939.0 $1,768.0 16.2% 3.9x 24.1x

Mean 18.0% 6.1x 19.4x

Median 15.5% 3.9x 20.2x

Harmonic Mean NA 2.9x 14.2x

PUBLIC COMPANY TRADING & OPERATING DATA

EV = enterprise value; LTM = last twelve months$ in millions, except per share dataNM = Not Meaningful

45% 46% 45%

60%50%

61%

82%

50%

22%

62%70% 75%

48%38%

69% 64% 62%

33%40%

-2%-11%

3% 5%

-5%

2% 0%

29%

-1%

0%

12%8%

31%

48% 45%

7%2%

-20%

0%

20%

40%

60%

80%

100%

120%Gross Margin Revenue Growth

Last Twelve Month Performance

Source: Capital IQ as of August 6, 2020

10

Healthcare IT | August 2020

HEALTHCARE IT REPORT CONTRIBUTORS

Sarah DohertyVice President of Research sdoherty@capstoneheadwaters.com | 617-619-3310

Sarah joined Capstone Headwaters in 2016 and has more than eight years of research and writingexperience. She oversees the firm’s corporate Research Team, which produces more than 150 reportsannually on middle-market M&A activity. Sarah specializes in the Healthcare, Education & Training,and Aerospace, Defense, Government, & Security industries. Previously, Sarah was the Data GraphicsSpecialist at a think tank in Washington, D.C., where she collaborated with economists and industryexperts to analyze and present data for congressional testimonies and research publications. Prior tothat, she covered the economy, healthcare, and Capitol Hill as a reporter. Sarah holds a BA inJournalism and Political Science from Biola University and is a certified Market Research Analystthrough the International Institute of Market Research and Analytics.

11

David MichaelsManaging Director, Head of Technology, Media, & Telecom Practicedmichaels@capstoneheadwaters.com | 858-926-5950

David Michaels is a Managing Director of Capstone Headwaters where he is responsible for managingthe firm’s Technology, Media & Telecom Group. David founded SagePoint Advisors in 2008, aboutique investment banking firm focused on providing M&A advisory services to technology andtelecom companies. Prior to founding SagePoint, David was a Co-Founder, Partner and ManagingDirector at Montgomery & Co., a leading investment bank focused on serving emerging-growthtechnology companies. David co-founded Montgomery’s investment banking business in 1996 andplayed 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 hisdeparture. David has intimate knowledge of the strategic landscape, market dynamics and technologyunderpinnings of several high technology market segments including Mobile Software & Services,Consumer Internet, E-Commerce, Enterprise SaaS, Cloud & Infrastructure Software and Consumer, IT &Telecom Hardware.

David DeSimoneManaging Directorddesimone@capstoneheadwaters.com | 617-619-3384

David DeSimone rejoined the Boston office of Capstone Headwaters in 2015 as a Director in theTechnology & Telecom Group. David brings more than 15 years of investment banking experience toCapstone and will help expand the firm’s technology sector coverage in the Northeast. David has workedon equity, debt and M&A transactions collectively valued at more than $4 billion. Previously, David was amember of the Capstone team for nearly seven years where he led efforts in the Technology Solutionsvertical as a Vice President and Director. Prior to rejoining Capstone, David served as a Principal at BowenAdvisors, an M&A and strategic advisory firm focused on technology companies includingcommunications 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 avariety of industries and developed the firm’s technology practice. He spent his early career working atNeedham & Company, Robertson Stephens and J.P. Morgan.

Healthcare IT | August 2020

FIRM TRACK RECORD

Healthcare IT | August 2020

Artificial Intelligence & Machine Learning

corporate sale(in market)

CONFIDENTIAL

Sensor Technology

corporate sale(in market)

CONFIDENTIAL

corporate sale(in market)

CONFIDENTIAL

Artificial Intelligence & Machine Learning

has been acquired by

has partnered with

has been acquired by

has been acquired by

a portfolio company ofAUDAX GROUP, INC.

has been recapitalized by

has been acquired by

has been acquired by

has been acquired by

has been acquired by

has been acquired by

has recapitalized with

has been acquired by

has received debt financing from

has been acquired by

has been acquired by

has been acquired by

12

CITATIONS

1. American Hospital Association, “New AHA Report: Losses Deepen for Hospitals & Health Systems,” https://www.aha.org/press-releases/2020-06-30-new-aha-report-losses-deepen-hospitals-health-systems, accessed July 29, 2020.

2. PitchBook, “Healthtech: Q4 2019,” https://files.pitchbook.com/website/files/pdf/PitchBook_Q4_2019_Emerging_Tech_ Research_Healthtech.pdf, accessed July 29, 2020.

3. McKinsey & Company, “Telehealth: A Quarter-Trillion-Dollar Post-COVID-19 Reality?” https://www.mckinsey.com, accessed July 30, 2020.

4. Cision, “Telehealth to Experience Massive Growth with COVID-19 Pandemic,” https://www.prnewswire.com/news-releases/telehealth-to-experience-massive-growth-with-covid-19-pandemic-says-frost--sullivan-301058678.html, July 29, 2020.

5. Rock Health, “Podcast: Opportunities In Healthcare’s New Regulatory Era: Dr. Karen DeSalvo & Eric Hargan,” https://rockhealth.com/podcast-opportunities-in-healthcares-new-regulatory-era-dr-karen-desalvo-eric-hargan/, accessed July 29, 2020.

6. PitchBook, “North American M&A Report: Q2 2020,” https://files.pitchbook.com/website/files/pdf/PitchBook _Q2_2020_North_American_MA_Report.pdf, accessed July 23, 2020.

7. Walmart, “New Associate Benefits Aim to Simplify Health Care and Focus on Appropriate Care,” https://corporate.walmart.com/newsroom/2019/10/03/new-associate-benefits-aim-to-simplify-health-care-and-focus-on-appropriate-care,accessed July 27, 2020.

8. Centers for Disease Control and Prevention, Data and Publications, https://www.cdc.gov/mentalhealth/data_publications/index.htm, accessed July 28, 2020.

9. Mental Health in America, “State of Mental Health in America, 2020,” https://mhanational.org/issues/state-mentalhealth-America, accessed March 3, 2020.

10. One Medical, “One Medical Announces Results for First Quarter 2020,” https://investor.onemedical.com/news-releases/news-release-details/one-medical-announces-results-first-quarter-2020, accessed July 28, 2020.

11. One Medical, “1 Life Healthcare (Q1 2020 Earnings),” https://investor.onemedical.com/static-files/b8de9a89-5c0f-4b1c-af30-d2e47a846b86, accessed July 28, 2020.

12. Teladoc, “Teladoc Health Reports Second-Quarter 2020 Results,” https://s21.q4cdn.com/672268105/files/ doc_financials/2020/q2/EPR-Q2-2020-0729-pdf, accessed July 30, 2020.

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 ofany 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 security ofany 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 thegeneral information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation orneeds of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for allinvestors. 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 reliedupon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to varymaterially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subjectto 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. Thisreport may not be copied or reproduced in any form or redistributed without the prior written consent of Capstone Headwaters. The information containedherein should not be construed as legal advice.

13

Healthcare IT | August 2020

INTEGRATED CRISIS MANAGEMENT SOLUTIONS

BUILD REALIZE SUPPORTGROW

As a firm, we have mobilized our collective resources to deliver an integrated solution to business owners navigating throughthese times. We can help frame your decisions, access capital to protect your position, and provide specialty transactionexpertise to capture opportunities as they arise.

Our full-service capabilities help companies through every aspect of the business, supported by dedicated industry experts,market intelligence, and private equity coverage.

Financial Advisory

We specialize in performance improvement and value creation

in difficult situations.

Board Advisory • Strategic Blueprinting• Evaluate Capital Adequacy• Performance Tracking• Management Accountability• Communication

Operational Effectiveness • Cost Structure Management• Operational Assessment• Management Assessment• Sales Augmentation• Organizational Optimization

Crises Management • Turnaround / Interim Mgmt.• Corporate Restructuring• Bankruptcy Protection

Capital Access

We help manage through new or existing lenders or investors and

secure an optimal solution.

Debt Financing• Bridge / Interim Financing• ABL and Cash Flow Revolvers• 1st and 2nd Lien Term Loans• Subordinated Debt• Sale-Leasebacks

Equity Financing • Growth Equity• Secondary Equity Recaps• Structured Equity• Acquisition Financing• Investor Management

Alternatives • Creditor Mediation• DIP and Exit Financing • Government Support Programs

Mergers & Acquisitions

We can assist opportunist acquisitions, execute sales, and

navigate distressed transactions.

Strategic Acquisitions• Target Identification• Valuation & Structure• Buy-Side Due Diligence• Quality of Earnings• Buy-Side M&A Execution

Sales & Divestitures• Corporate Valuation• Market Assessment• Transaction Readiness• Sell-Side M&A Execution• Asset Divestiture

Distressed Transactions• Business Unit Divestiture• Distressed M&A• §363 Sale

WE ARE ENGINEERED TO MEET THE FULL LIFECYCLE DEMANDS OF PRIVATE COMPANIES

12TO LEARN MORE ABOUT OUR SERVICES AND SPEAK TO A MEMBER OF OUR TEAM CONTACT US.

12

www.capstoneheadwaters.com

Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. Thefirm has a rich 18+ year history of achieving extraordinary results for middle market entrepreneurs, business owners,investors, and creditors. The firm offers a fully integrated suite of corporate finance services, including merger & acquisition,debt & equity placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisoryservices.

Headquartered in Boston, Capstone Headwaters has over 170 professionals across 17 offices in the U.S. with 16 dedicatedindustry groups. Capstone has been recognized consistently as one of the top investment banks to work for and “U.S. MiddleMarket Firm of the Year.”

BUILT FOR THE MIDDLE MARKET

UNITED STATES

170+ professionals17 offices

Boston Boise Burlington Chicago Dallas Denver Greenwich HoustonLos Angeles New York Orange County Philadelphia San Diego San Francisco St Louis TampaWashington DC

INTERNATIONAL

450+ professionals60+ offices in 40 countries

Asia: China India Japan Latin America: Argentina Brazil Chile Colombia Mexico Peru

Africa: Congo Egypt Ghana Ivory Coast Mauritius Morocco Senegal South AfricaEurope: Belgium Bosnia Croatia Czech Republic Finland France Germany Herzegovina

Hungary Ireland Italy London Netherlands Norway Poland Russia Serbia Slovenia Spain Sweden Switzerland Turkey United Kingdom