U N D E R S TA N D I N G YO U R VA L U E & P R E PA R I N G - PowerPoint PPT Presentation

U N D E R S TA N D I N G YO U R VA L U E & P R E PA R I N G F O R A M E R G E R , A C Q U I S I T I O N O R J O I N T V E N T U R E NOVEMBER 2019 54 Chapel Street, Charleston, South Carolina 29403 | info@belaygroup.com

T H E B E L A Y G R O U P Agenda For Today I. O v e r v i e w o f T h e B e l a y G r o u p II. H o w C o m p a n i e s Ar e Va l u e d III. P r e p a r i n g f o r A M e r g e r, Ac q u i s i t i o n , o r J o i n t Ve n t u r e 2 Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.

T H E B E L A Y G R O U P I Overview of The Belay Group

I OVERVIEW OF THE BELAY GROUP T H E B E L A Y G R O U P The Belay Group’s Healthcare Practice PRACTICE OVERVIEW THE BELAY TEAM • 10+ years of healthcare services transaction experience MIDDLE MARKET HEALTHCARE ADVISORY • Founded The Belay Group Headquartered in Charleston, SC • University of Georgia, Masters in Accountancy (honors) • Primarily responsible for deal leadership, development of Healthcare-Focus Client-Driven process structure, engagement with potential buyers, and negotiation of transaction documents Solely dedicated to Strong devotion to Marc Anderson strategic advisory for making sure our client’s Managing Director middle market, healthcare interests are strategically service and HCIT planned and achieved • 8+ years of healthcare services transaction experience companies • Joined The Belay Group in 2016; previously at Lazard • Vanderbilt University, MBA • Primarily responsible for oversight of process and implementation, engagement with potential buyers, and management of due diligence process Hunter Atkins Director • 5+ years of healthcare services transaction experience • Joined The Belay Group in 2017; previously at Lazard • Kenan Flagler Business School – UNC Chapel Hill High-Touch Solutions • Primarily responsible for financial analysis and M&A More than two decades of collective senior banker focus modeling, preparation of marketing materials, and on advisory services to middle market companies management of data room and diligence requests seeking strategic and M&A advisory Matt Schembri Associate 4 Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.

I OVERVIEW OF THE BELAY GROUP T H E B E L A Y G R O U P Leading Healthcare Focused Investment Bankers FOUNDING HISTORY ONE-STOP SHOP OFFERING FOR CLIENTS Belay offers a complete, one-stop shop for businesses and their owners. Whether the need is strategy or consulting, capital for The Belay Group was founded on the belief that growth, or to sell or make an acquisition – Belay is here to help! today’s middle market businesses and their owners Strategy / desire a unique, experience-based advisory 1 Valuations approach to best address specific needs at Operational consulting transformational points in their life cycle Business development Growth strategy 2 Valuations & Fairness Opinions Buy-Side We are experienced entrepreneurs and advisory M&A Capital Raise professionals who work to leverage our deep M&A Expertise in acquiring Venture capital knowledge, experience, and broad network of One-Stop businesses/competitors Private equity on behalf of our clients Private debt contacts to assist each client in achieving their Shop with favorable terms Revolving credit strategic and financial goals Joint venture 4 Sell-Side M&A We have more than two decades of collective 3 Expertise in selling businesses to qualified focus on advisory services to lower middle market buyers and achieving healthcare companies significant premiums for shareholders 5 Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.

I OVERVIEW OF THE BELAY GROUP T H E B E L A Y G R O U P Comprehensive Focus Across The Healthcare Continuum Belay’s service offering spans all aspects of the healthcare continuum, from provider -based businesses to healthcare IT Physician Pharma Services Outsourced Facilities and Services and Lab Services and IT Alternative Site • • • • Urgent care Contract research Revenue cycle / EMR Post-acute care • • • • Physical therapy Contract manufacturing Digital health Mental health • • • • Dermatology Specialty pharmacy Telemedicine Specialty hospitals • • • • Podiatry Infusion services Managed care ASCs • • • • Multi-specialty Diagnostic laboratory Healthcare staffing Home care • • • • And more! And more! And more! And more! Belay pride’s itself on its ability to pivot to individual client needs with the proper craftsmanship to achieve the best out come 6 Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.

I OVERVIEW OF THE BELAY GROUP T H E B E L A Y G R O U P With Particular Expertise as the Leading Advisor in the Urgent Care Sector… SELECT URGENT CARE TRANSACTIONS BELAY CAPABILITIES Urgent Care is an integral part of Belay’s franchise • One of first banks to research and identify disruptive forces HAS BEEN HAS BEEN HAS BEEN HAS BEEN HAS BEEN within urgent care and dedicate ACQUIRED BY ACQUIRED BY ACQUIRED BY ACQUIRED BY ACQUIRED BY intensive focus on cultivating Undisclosed Buyer relationships with all stakeholders November 2018 August 2018 March 2018 October 2017 September 2018 • Constantly in conversations with the industry’s leading CEOs and management teams • Worked with institutional Arizona Operations investors, MCOs, and health HAS BEEN HAS BEEN HAS BEEN HAS BEEN HAS BEEN systems that are developing ACQUIRED BY ACQUIRED BY ACQUIRED BY ACQUIRED BY ACQUIRED BY practice management strategies KEY STATS April 2017 March 2017 December 2016 November 2016 July 2016 ✓ 1+ dozen Urgent Care specific engagements Nevada Operations ✓ ~$500 million combined HAS BEEN HAS BEEN HAS BEEN HAS BEEN HAS BEEN enterprise value in ACQUIRED BY ACQUIRED BY ACQUIRED BY RECAPITALIZED BY RECAPITALIZED BY completed transactions ✓ 90%+ of engagements successfully completed November 2015 November 2014 August 2013 July 2012 June 2012 7 Source: Includes transactions managed by Belay team members as lead banker while at Belay and predecessor firms. Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.

T H E B E L A Y G R O U P II How Companies Are Valued

II HOW COMPANIES ARE VALUED T H E B E L A Y G R O U P What Is Valuation? & “Valuing a business is part art and part science.” - Warren Buffett 9 Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.

II HOW COMPANIES ARE VALUED T H E B E L A Y G R O U P Summary Of Common Approaches To How A Company Is Valued Typically a buyer will use a number of factors to build their own projection model and various valuation methodologies to triangulate a value for a business. In healthcare, depending on the party, some will be required to use some industry standards including AICPA and IRS guidance which can cause variations in derived values FUNDAMENTAL METHODS RELATIVE METHODS COMMENTS • Asset Approach: Generally less applicable to asset-light businesses like Asset or Cost Income Market ambulatory practices Approach Approach Approach • Income Approach: discounted cash flow analysis Comparable Capitalization Book Value of Companies of Earnings Intrinsic value of the company’s − Assets Market (Historical) unlevered free cash flow growing into Multiples perpetuity Discounted Liquidation • Market Approach: comparable company Cash Flows Comparable Value and precedent transaction analyses (Projections) Transaction Trading multiples for selected public − Multiples physician-based companies Replacement Value Selected precedent M&A transaction − Market Value multiples for similar target companies (for Quoted • Securities) Leveraged Buyout Approach: a company Leveraged is purchased with a combination of equity Buyout and debt, such that the company's cash flow Approach is the collateral used to secure and repay the borrowed money 10 Securities offered through TCFG Wealth Management, LLC Member: FINRA, MSRB and SIPC.