Sectorwatch: Healthcare IT...new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we focus. Dashboard • Summary metrics on the sector

Sectorwatch:Healthcare ITQ3 2019

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Healthcare ITQ3 2019

Sector Dashboard [4]

Public Basket Performance [5]

Operational Metrics [7]

Valuation Comparison [10]

Recent Deals [12]

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only inconjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. Alldata cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7MSecurities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated asconfidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error.

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Overview

7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions, and provide market assessments and benchmarking. As a close knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we focus.

Dashboard• Summary metrics on the sector• Commentary on market momentum by

comparing the most recent 12-month performance against the last 3-year averages.

Public Basket Performance• Summary valuation and operating metrics

for a basket of comparable public companies

Valuation Comparison• Graphical, detailed comparison of valuation

multiples for the public basket

Recent Deals• The most recently announced deals in the

sector

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Dashboard

Operating Metrics

Valuation

Revenue Growth

-2.9% One year revenue growth percentage compared to

revenue growth average percentage for last 3 years.

Pricing / Gross Margin

-0.1% One year gross profit percentage compared to gross

profit percentage average for last 3 years.

Profitability

-2.1% One year EBITDA percentage compared to EBITDA

percentage average for last 3 years.

Current revenue growth rate is less than the average of the last 3 years,

indicating that the market may be flattening, but the average growth rate is still

19%.

Current gross profit margin is less than the average of the last 3 years gross

profit margins by this amount.

Current EBITDA margin is a bit less than the average of the last 3 years EBITDA

margins, which may signal pricing pressure and further consolidation.

13.3%

14.5%

56.5%

0% 20% 40% 60%

Median LTM EBITDA Margin %

Median LTM Revenue Growth %

Median LTM Gross Profit Margin %

4.9x

30.9x

38.1x

58.5x

0x 20x 40x 60x 80x

Median TEV / LTM Revenue

Median TEV / LTM EBITDA

Median TEV / LTM EBIT

Median Price / LTM Earnings

5

Public BasketCompany TEV $m

LTM Rev

$m

Rev

Growth

YoY GP %

EBITDA

%

TEV /

Rev X

TEV /

EBITDA

X # FTEs

Rev /

FTE $k

Cerner Corporation 23,444 5,527 5% 82% 22% 4.2 19.5 29,200 189

Veeva Systems Inc. 23,389 911 25% 73% 29% 25.7 87.9 2,553 357

M3, Inc. 11,831 1,085 18% 57% 27% 11.0 41.3 6,024 180

Medidata Solutions, Inc. 5,478 685 17% 74% 10% 8.0 76.5 1,998 343

HealthEquity, Inc. 5,357 304 25% 64% 34% 17.6 51.9 1,141 267

Teladoc Health, Inc. 4,753 457 63% 68% -6% 10.4 0.0 2,242 204

CompuGroup Medical Societas Europaea 4,169 838 20% 41% 24% 5.0 21.1 4,955 169

Winning Health Technology Group Co., Ltd. 3,198 221 19% 52% 22% 14.9 68.5 4,241 52

Inovalon Holdings, Inc. 3,190 580 34% 74% 27% 5.5 20.6 2,104 276

HMS Holdings Corp. 2,994 605 10% 38% 23% 5.0 21.9 2,500 242

Omnicell, Inc. 2,957 836 10% 48% 13% 3.5 27.4 2,480 337

Allscripts Healthcare Solutions, Inc. 2,517 1,748 15% 47% 5% 1.4 31.7 9,500 184

Pro Medicus Limited 2,166 32 41% 97% 54% 68.6 127.4 - NA

Tabula Rasa HealthCare, Inc. 1,335 221 48% 33% 6% 6.0 106.5 952 232

Agfa-Gevaert NV 1,011 2,510 -7% 32% 5% 0.4 7.6 9,662 260

Benefitfocus, Inc. 983 265 10% 51% -9% 3.7 0.0 1,450 183

Pharmagest Interactive SA 925 170 15% 32% 28% 5.6 20.2 1,012 168

Vocera Communications, Inc. 774 177 4% 62% -3% 4.4 0.0 630 281

HealthStream, Inc. 752 249 12% 58% 13% 3.0 24.1 757 329

Evolent Health, Inc. 692 685 46% 32% -5% 1.0 0.0 3,800 180

Simulations Plus, Inc. 673 33 12% 73% 37% 20.6 56.0 93 351

NNIT A/S 483 460 8% 17% 18% 1.1 6.0 3,214 143

Computer Programs and Systems, Inc. 479 279 -2% 53% 12% 1.7 14.8 2,000 139

Castlight Health, Inc. 364 155 10% 62% -19% 2.3 0.0 470 331

NantHealth, Inc. 263 91 1% 57% -41% 2.9 0.0 543 167

Average 4,167 765 18% 55% 13% 9.3 43.7 3,897 232

Median 2,166 457 15% 57% 13% 5.0 27.4 2,173 218

share price as of 25Jul19

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Public Basket Valuation Trends

Public EBITDA Multiples over Time

Public Revenue Multiples over Time

0x

2x

4x

6x

8x

TEV/Revenue - Median TEV/Revenue - Average

0x

10x

20x

30x

40x

TEV/EBITDA - Median TEV/EBITDA - Average25.9x

4.9x

0x

5x

10x

15x

20x

25x

30x

35x

40x

TEV/EBITDA - Median TEV/Revenue - Median

TEV/EBITDA - Average TEV/Revenue - Average

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Operational Metrics

LTM Revenue Growth %LTM Revenue per

Full Time Employee x 000’s

$- $100 $200 $300 $400

Median

Winning Health Technology…

Computer Programs and…

NNIT A/S

NantHealth, Inc.

Pharmagest Interactive SA

CompuGroup Medical…

M3, Inc.

Evolent Health, Inc.

Benefitfocus, Inc.

Allscripts Healthcare…

Cerner Corporation

Teladoc Health, Inc.

Tabula Rasa HealthCare, Inc.

HMS Holdings Corp.

Agfa-Gevaert NV

HealthEquity, Inc.

Inovalon Holdings, Inc.

Vocera Communications, Inc.

HealthStream, Inc.

Castlight Health, Inc.

Omnicell, Inc.

Medidata Solutions, Inc.

Simulations Plus, Inc.

Veeva Systems Inc.

-10% 10% 30% 50% 70%

Median

Agfa-Gevaert NV


NantHealth, Inc.


Cerner Corporation

NNIT A/S

Benefitfocus, Inc.

HMS Holdings Corp.

Omnicell, Inc.



HealthStream, Inc.




M3, Inc.



HealthEquity, Inc.


Pro Medicus Limited




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Operational Metrics

LTM Gross Profit Margin % LTM EBITDA %

-60% -30% 0% 30% 60%

Median

NantHealth, Inc.



Benefitfocus, Inc.





Agfa-Gevaert NV




HealthStream, Inc.

Omnicell, Inc.

NNIT A/S


Cerner Corporation

HMS Holdings Corp.


M3, Inc.



Veeva Systems Inc.

HealthEquity, Inc.

Pro Medicus Limited

0% 20% 40% 60% 80% 100%

Median

NNIT A/S


Agfa-Gevaert NV



HMS Holdings Corp.



Omnicell, Inc.

Benefitfocus, Inc.



NantHealth, Inc.

M3, Inc.

HealthStream, Inc.



HealthEquity, Inc.


Veeva Systems Inc.




Cerner Corporation

Pro Medicus Limited

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Valuation

TEV / LTM Revenue TEV / LTM EBITDA

0x 20x 40x 60x 80x

Median

Agfa-Gevaert NV


NNIT A/S


Computer Programs…


NantHealth, Inc.

HealthStream, Inc.

Omnicell, Inc.

Benefitfocus, Inc.

Cerner Corporation

Vocera…

HMS Holdings Corp.

CompuGroup…

Inovalon Holdings,…

Pharmagest…

Tabula Rasa…

Medidata Solutions,…


M3, Inc.

Winning Health…

HealthEquity, Inc.


Veeva Systems Inc.

Pro Medicus Limited

0x 30x 60x 90x 120x 150x

Median

Agfa-Gevaert NV

Computer Programs…

Cerner Corporation

Pharmagest…

Inovalon Holdings,…


HMS Holdings Corp.

HealthStream, Inc.

Omnicell, Inc.


M3, Inc.

HealthEquity, Inc.


Winning Health…

Medidata Solutions,…

Veeva Systems Inc.

Tabula Rasa…

Pro Medicus Limited

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Valuation

Price / LTM Earnings Historical Valuation Multiples versus Revenue Growth Rate

0x 30x 60x 90x 120x 150x 180x

Median

NNIT A/S

Computer Programs

and Systems, Inc.

Pharmagest

Interactive SA

CompuGroup Medical

Societas Europaea

Cerner Corporation

HMS Holdings Corp.

Allscripts Healthcare

Solutions, Inc.

HealthEquity, Inc.

Omnicell, Inc.

M3, Inc.

HealthStream, Inc.

Winning Health

Technology Group…


Veeva Systems Inc.

Medidata Solutions,

Inc.

Pro Medicus Limited

-10%

0%

10%

20%

30%

40%

50%

60%

0x

20x

40x

60x

80x

100x

120x

140x

LTM

RG

R%

EBIT

DA(x

)

EBITDA(x) LTM RGR%

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RECENT TRANSACTIONS SUMMARY

In the last twelve months there were transactions totaling $28.3b transactions in the healthcare IT sector. 7 Mile Advisors tracked 1,205 transactions in the sector, including 294 M&A transactions.

All Transactions by RegionAll Transactions by Type M&A Transaction Ranges by Value

Merger & Acquisition Statistics

Valuation Summary

Total Deal Value($mm): $24,406.79

Average Deal Value: $2770.35

Average TEV/Revenue: 4.17 x

Average TEV/EBITDA: 33.29x

Average Day Prior Premium(%): (7.33)%

Average Week Prior Premium(%): (7.43)%

Average Month Prior Premium(%): (12.69)%

Most Active Buyers/Investors by Number of Transactions Most Active Buyers/Investors by Total Transaction Size

Company NameNumber Of Transactions Company Name

Total Transaction Size ($mm)

Koninklijke Philips N.V. (ENXTAM:PHIA) 4 Dassault Systemes Americas Corp. 6,028.46

Tabula Rasa HealthCare, Inc. (NasdaqGM:TRHC) 3 Veritas Capital Fund Management, LLC 5,941.9

Waystar, Inc 3 Evergreen Coast Capital Corp. 5,941.9

WELL Health Technologies Corp. (TSXV:WELL) 3 Ethicon US, LLC 5,750.0

WellSky Corporation 3 3M Company (NYSE:MMM) 1,000.0

Anju Software, Inc. 2 ResMed Operations Inc. 750.0

CompuGroup Medical Societas Europaea (DB:COP) 2 Global Payments Inc. (NYSE:GPN) 700.0

DAYLI BlockChain Co.,LTD. (KOSDAQ:A139050) 2 AlpInvest Partners B.V. 566.61

Definitive Healthcare, LLC 2 TA Associates Management, L.P. 566.61

Doctors' Administrative Solutions, LLC 2 GI GP IV LLC 566.61

Private

Placement0%

Merger/Acquisition

100%

Europe

20%

Asia /

Pacific13%

Africa /

Middle East3%

United

States and Canada

64%

Latin America and

Caribbean0%

Greater than $1

billion1%

$500 -

$999.9mm

1%$100 -

$499.9mm3%

Less than

$100mm24%

Undisclose

d71%

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Recent TransactionsDate Target Buyer / Investor

Total Transaction

Value Target

Revenue TEV /

Revenue TEV /

EBITDA

29Jul19 Waystar, Inc EQT Partners AB; Canada Pension Plan Investment Board; EQT VIII

- - - -

15Jul19 OmniComm Systems, Inc. Anju Software, Inc. 78.79 24.62 3.1x 43.0x

25Jun19 Corepoint Health, LLC Rhapsody - - - -

26Jun19 Sansoro Health, Inc. Datica Health, Inc. - - - -

19Jun19 PatientsLikeMe, Inc. UnitedHealth Group Incorporated - - - -

19Jun19 Nextech Systems, LLC Thomas H. Lee Partners, L.P. - - - -

18Apr19 HemaTerra Technologies, LLC The Riverside Company - - - -

11Jan19 DataCeutics, Inc. NAVITAS LIFE SCIENCES LIMITED 45.00 - - -

10Jan19 Providigm, LLC HealthStream, Inc. 22.15 - - -

1Nov18 MYnd Analytics, Inc. MYnd Analytics, Inc. (nka:Emmaus Life Sciences, Inc.)

- 1.58 - -

2Jan19 JC Griffin LLC DHG Healthcare - - - -

2Jan19 HealthLine Solutions, Inc. Medsphere Systems Corporation - - - -

17Dec18 Cloud Practice Inc. Premier Health Group Inc. 3.74 - - -

14Dec18 Consolo Services Group, LLC WellSky Corporation - - - -

7Dec18 Netsmart LLC. AlpInvest Partners B.V.; TA Associates Management, L.P.; TA XII-B, L.P.; TA XII-A, L.P.; Bay Opportunities LP; TA Investors XII, L.P.; Pacific Opportunity LP; Pacific Opportunity II LP; ACP Accelerate I LLC; ACP Accelerate II LLC; GI GP IV LLC

566.61 - - -

31May18 Advanced Health Media, LLC IQVIA Holdings Inc. - - - -

3Dec18 Reciprocal Labs Corporation ResMed Inc. 225.00 - - -

5Nov18 MatrixCare, Inc. ResMed Operations Inc. 750.00 - - -

23Oct18 Vendor Credentialing Service LLC Clearlake Capital Group, L.P. - - - -

23Oct18 Global Healthcare Alliance, Inc. Cedar Gate Technologies, LLC - - - -

18Sep18 Novellusdx Ltd. Cancer Genetics, Inc. - - - -

14Sep18 Circulation, Inc. LogistiCare Solutions, LLC 45.12 - - -

17Sep18 Connance, Inc. Waystar, Inc - - - -

16Sep18 Lucro Solutions, Inc. Valify, Inc. - - - -

14Sep18 DIMEC Limited Co-op Ventures - - - -

13Sep18 MD International AB Apotek Hjärtat AB 35.97 - - -

5Sep18 Nemaris, Inc. Globus Medical, Inc. 25.20 - - -

13Sep18 Pirana Software & Consulting BV Certara, L.P. - - - -

12Sep18 Wellpass Welltok, Inc. - - - -

11Sep18 Apex Revenue Technologies, LLC RevSpring, Inc. 200.00 - - -

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7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and

private capital transactions and provide market assessments and benchmarking. As a close-knit team with a long history together and a laser

focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets.

Securities offered through 7M Securities LLC.

Leroy Davis, Partner 704.899.5962 [email protected]

Tripp Davis, Partner 704.899.5762 [email protected]

Andy Johnston, Partner 704.899.5961 [email protected]

Ben Lunka, Managing Director 704.496.2995 [email protected]

Jeff Stoecklein, Managing Director 312.796.9330 [email protected]

Mark Landry, Managing Director 561.972.0609 [email protected]

Kristina Sergueeva, Director 704.899.5149 [email protected]

Neil Churman, Director 281.742.9340 [email protected]

John Cooper, Director 704.973.3996 [email protected]

Tim Frye, Director 704.973.3994 [email protected]

Ben Garber, Vice President 412.626.7898 [email protected]

Nicholas Prendergast, Financial Analyst 704.973.3995 [email protected]

Ariail Siggins, Marketing Director 704.981.2908 [email protected]

Emily Halstenberg, Marketing & Sales Coordinator 704.409.9912 [email protected]

Sydney Larese, Associate 704.973.3998 [email protected]

Marty Johnson, Associate 704.973.3999 [email protected]

Rory Julyan, Associate 704.981.2520 [email protected]

Garth Martin, Associate 704.973.3997 [email protected]

Dennis Fox, Associate 704.706.9168 [email protected]

Steve Buffington, Associate 704.960.1828 [email protected]

Brynne Miller, Associate 704.960-1701 [email protected]

CONTACT INFO

Documents

Sectorwatch: Healthcare IT...new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we focus. Dashboard • Summary metrics on the sector