TritonSeptember 2012

Overview and Lessons Learnt from Swedish Spotlight on Carema Care

Confidential 2

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Disclaimer

3Confidential Triton

Value oriented, Operational Improvement driven investor

2.5x / 30% IRR objective , vintage and cycle independent

Industry expertise, local presence and international know-

how

Sector Focus : Business Services, Industrials and Consumer/

Health

German-speaking and Nordic countries

Out-of-favour, underperforming, overleveraged companies

€50 to €500 million businesses with significant value

creation potential through operational improvements

Leader in its markets. Founded and owned by its partners

Triton - Invest to Build Better more valuable Businesses

TritonBeteiligungsberatungGmbH`(Frankfurt)

•

Triton AdvisersLimited(Jersey)

TritonAdvisersSweden AB(1)

(Stockholm)

TritonAdvisersUK(London)

TritonAdvisers S.à r.l.(Luxembourg)

1) Triton Advisers Sweden is independent and separate from the Triton group of companies

Triton Focus – Circle of Competence

Business Services Industrials Consumer

Support Services

Wholesaling & Logistics

Industrial Goods

Building & Construction

Energy & Resources

Chemicals

Products & Retail

Health

4Confidential Triton

Invest and create value within our Circle of Competence (CoC)

Investment rationale, insights and

anglesType of Investment

Under-performing or below potential

Corporate carve-outs / ‘orphans’

Under-resourced

Private / public situations

Losses-to-profits / restructurings

Turn-arounds

Separation-of-parts

Complex situations

Debt / balance sheet restructurings

Over-leveraged businesses

Distressed opportunities

Lender(s) seeking new owners

Triton Invest within Circle of

Competence

Out-of-favour / under-resourced

businesses

€50 – €500million enterprise value

Significant realisable value creation

– Operational Improvements

– Buy & Build

– Separation of Parts

Viable realisation alternatives

Value > price + margin of safety

Factual / structured decision making

process

Active ownership / control / follow up

Sectors

Business Services

Support Services

Wholesaling & Logistics

Industrials

Industrial Goods

Building & Construction

Energy & Resources

Chemicals

Consumer

Products & Retail

HealthGeographies

DACHAustria

GermanySwitzerland

NordicsFinland

DenmarkNorwaySweden

31

2

Confidential 5

• Ambea is a private healthcare and care provider in Sweden and Finland owned by Triton, KKR and management

• The business consists of outpatient care, occupational health services, primary care and elderly care

• The Group has three major subsidiaries: Carema Care, Carema Healthcare and Mehiläinen

• Carema Care provides care services and nursing homes for disabled and elderly, Carema Healthcare runs primary care units, specialist healthcare services and psychiatric care operations and Mehiläinen provide privately and publicly funded healthcare services as well as publicly funded social services

• Ambea employs almost 13 000 people and operates 650 units with close to 7 500 care beds across care and health care. Net revenues in 2011 were 978 MEUR

Ambea – a leading private provider of healthcare and care services in the Nordic region

• Carema Care is the largest subsidiary of Ambea

• For a long time a premium provider or care services within the Swedish publicly financed care sector and currently the largest private care provider in Sweden

6Confidential Triton

Everyone is talking about Carema Care – but what really happened?

November 2011Media storm. 45 news

articles daily

May 2012A completely new image

appears. DN’s reporting is the focus

March 2010Triton and KKR acquire

Ambea

Strengthened quality work | New management | Story on Koppargården | Media storm | Conversion of Shareholder Loans | New CEO | Redistribution of resources

7Confidential Triton

Why the massive media attention?

A

PRIVATE EQUITY OWNED, TAX FINANCED, ELDERLY CARE BUSINESS

perceived as

AVOIDING TAXES

while simultaneously

PAY OUT BONUSES BASED ON FINANCIAL RESULTS

is accused for

LACKING IN QUALITY OF CARE

Private alternatives in public sector still controversial

Exposed users that are seen as powerless

Variable salary is an issue that engage

A breadth of interesting players: unknown investors and owners, national politicians sensitive to the debate, local politicians responsible for tenders and ultimately for quality, and 7 500 caretakers across the country

8Confidential Triton

PHASE 1: Carema Care discover deviations and takes action in Spring 2011

The analysis show deviations in deliverables at Koppargården

• Carema Care informs the municipality

• Management that does not meet quality and ethical standards leaves the company

• Errors are corrected and the quality work is strengthened

Discover deviations – takes action

Carema acts on deviations

9Confidential Triton

PHASE 2: The scrutiny starts and escalates in Autumn 2011

Media scrutiny and actions

Challenges

The public’s strong empathy for the residents- everyone has a grandmother or grandfather

Private Equity is perceived as short-term and profit maximizing

There were some quality deviations, but many of the reported incidents were investigated and proven untrue. Media on the other hand were uninterested in these aspects which made it a tough challenge

Media focused on a contradiction between good care and the possibility to make a profit. To explain the links between care quality and long-term return is hard when media has more exciting news to tell and no reason to help you.

The owners go out in a joint ad declaring the conversion of Share Holder Loans to Equity- Nov 9

A forceful outreach by Carema management correct the public opinion On weighing diapers- Dec 22

Carema Care’s President reveal the cancelation of all bonuses on live TV – Nov 10

10Confidential Triton

Key Messages

All instances where quality has lacked are unacceptable

Carema Care aim to offer the highest possible healthcare and care quality

Several powerful actions have been taken to secure quality

Since the new ownership, quality has steadily improved

The owners are prepared to do everything necessary to resolve the situation

Carema and Ambea are taking all necessary action to re-establish the public’s confidence

The owners assume full responsibility

PHASE 3: Forceful actions are taken

Ambea’s immediate actions:• Ambea’s board release action plan• Fast investigations of all potential quality

deviations• Open house at Koppargården for relatives and

media• Carema Care’s president participate in debates

on TV, radio and newspapers• Quality index initiative launched in largest daily

newspapers op-edTriton / KKR’s immediate actions• External quality system evaluation• Decision to appoint CMO• Customer ombudsman and whistle-blower

function• Removal of the bonus system• Public apology and action plan• Conversion of shareholder loans to equity• New Board-level competence• Increased transparency and visibility for Triton 

Media scrutiny begins

Forceful actions taken

Further a

ction is ta

ken

11Confidential Triton

PHASE 4: Media’s scrutiny is reviewed in Spring 2012

Media’s scrutiny is reviewed

• Carema Care initiates an external review of the media’s handling of sources, among other things. Results of the report spreads; leading daily Expressen concludes that Dagens Nyheter (daily leading the scrutiny) has done wrong in several aspects of its review

• Weekly newspaper Dagens Samhälle go back to the sources and find more factual mistakes and that Dagens Nyheter did not portray a balanced picture of what actually happened

• The review spread to other leading media, including dailies Svenska Dagbladet and Sydsvenskan

• Think-tank Timbro, independently from Dagens Samhälle, produced an extensive report regarding the media scrutiny, drawing similiar conslusions to Dagens Samhälle

”It’s time to speak frankly about Carema” – Mats Edman, Editor at Dagens Samhälle

12Confidential Triton

Spring 2012: Continued actions to strengthen confidence

1. Increased transparency

2. Go on the offence

New Ambea CEO Redistribution of resources to the

units to improve deliverables

4. Show expertise and take control over the own agenda

Clear ambition: Carema Care will regain the position as perceived quality leader. Company now winning tenders again.

1. Admit mistakes

2. Increased transparency

• Building relationships• Transparency on website and in press

releases• Member of SVCA• Participates in debates and seminars• Accessibility for the media

From completely unknown to the general public to active participants in the debate. Remain as long-term and

dedicated owners.