In partnership with

WEBINAR M&A and Investing with Covid

Despite Covid-19 deals have still been transacting

Setting the scene

MARCH

Est £300m

APRIL

£NA

JUNE

£NAAPRIL

£240m

M&A and valuations• Could Covid-19 spur consolidation in the sector

• Do you think valuations of care homes will have changed post covid

• Views on valuation levels (£) and multiples

• What influences has the impact on CV19 had on the acquisition multiples of healthcare companies.

• How does a new business with an experienced team obtain finance for care homes?

• How much interest are panellists seeing in investing in emerging markets

• Is there a generic C19-effect to Red Book valuations

• Which segments / sub-sectors of health care /social care will continue to active over next 12-18 months

• With the drop in income/profits, how long before potential sale and leasebacks are back on the agenda for owners and

investors

Lending• What is bank appetite for CBILs funding to care home operators and also for funding new care home developments

• Are banks now open again to process (not just appraise) new applications for borrowing in the care homes sector

Outlook• What do you see as the biggest positive to come out of the Covid-19 Crisis for the social care sector

Key questions from attendees

Live Polling with

Live Q&A themes with

WEBINAR: M&A and Investing with Covid

Sam Gray

Managing Partner

Apposite Capital

Submit your questions at sli.do - Event code: manda

In partnership with

Issy Corbett

Head of Healthcare

M&A

PwC

David Jones

Partner

Deloitte

Derek Breingan

Head of Health & Social

Care Sector

Clydesdale & Yorkshire BankBen Long

Partner

Inflexion

INVESTORS M&A ADVISORS LENDERS

Sam Gray

Managing Partner

Apposite CapitalSubmit

questions at

Sli.do

#manda

Private and Confidential 8

Apposite Capital Highlights

1. Building Healthcare Champions

- Driving growth through better patient outcomes and health economics

- Creating recognised “best-in-class” market leaders in their niche

- Focusing on four key sub-sectors: - i) Health & social care, ii) Digital Health, iii) Medtech & Products, iv) Pharmaceuticals &

Diagnostics

2. One of the largest private equity teams in Europe exclusively focused on

Healthcare companies with EV up to €50 million

3. The European Healthcare lower mid-market remains underserved by private

equity who understand the space

4. Significant competitive advantages through sector specialism and networks

developed over 25 years, and global perspectives

5. Proven investment performance

- 14 year independent track record

- Top quartile performance across 17 exits to date

Private and Confidential

Current Portfolio Overview

9

Description Diagnostic imaging services and standalone clinics

Domiciliary careComplex care

Genetic testing genomics, next generation sequencing

Specialist residential care

Specialist orthopaedic products

NHS and private dentistry services

Medical imaging and oncology software

Sub-sector Healthcare services

Social care Pharma & Diagnostics

Social care Medical products

Healthcare services

Digital health

Country UK UK Spain UK UK UK UK

Stage Growth Buyout Growth Buyout Buyout Buyout Growth

Date Apr-16 Mar-17 May-17 Jul-17 Mar-18 Dec-18 Feb-19

Investment strategy

Roll out strategy across the UK

Selective acquisitions

Managed Services

Private clinics

Teleradiology

Restructure

Improve quality

Digital systems

Buy and build

Increase market share

Expand service offering and footprint

Selective M&A

Carve Out

Strengthen platform

Buy & build strategy

Organic growth in supported living

Create national platform

Build out distribution channels

Expand product portfolio

Selective M&A

Continue to recruit and retain high quality dental practitioners

Buy & build strategy

Increase private patient services

International product roll out

Development of further AI-based software for radiotherapy

Private and Confidential

Key Value Drivers in Healthcare

10

• Pre-COVID - value creation thesis to create better patient outcomes and improved health economics which

address ageing demographics and demand/supply imbalance in healthcare

• Post- COVID - above remains true but demand/supply disconnect is now on steroids and urgency increased

Better patient outcomes Cost efficiency

• Precision and personal medicines

− Genomics, Diagnostics, Person-centred care

• Specialisation

− Fertility, Sports medicine, Cancer clinics

• Access and Lifestyle

− Community setting, Outpatient clinics, Self Pay

• Innovation

− Disruptive care models, Commercial stage innovations and technologies

• Quality and impact

− Best in class providers

− Evidenced patient benefit

• Consolidation in fragmented markets

− Practitioner-owned practices (e.g. Dentistry, physio, etc)

− Healthcare assets (e.g. residential care)

− Sub-scale medical device companies

• Out-of-hospital care settings

− Homecare / outpatient clinics

• Outsourcing to improve productivity

− Corporates: CDMO, pharma/device manufacturing

− Hospitals: Imaging, pathology lab

• Divestment of non-core assets and activities

− Spin out and carve out

DIGITALISATION

EPR, Telehealth, Regulatory tech, Machine learning /AI, Remote monitoring, Sensors, Cloud, Big data

1 2

COVID Sub-Sector Impact

Private & Confidential 11

Diagnostics Digital Health / Healthcare IT

Specialty Pharma / Generics

CDMOs / CMOs

Medical / Regulatory Affairs

Children’s services

ClinicsCROs

Homecare

Elderly Residential care

Drug discovery / pre-clinical

Mental Health

Private hospitals

Positive long-term outlook but facing challenges Fundamentally strong sub-sectors

Weak StrongLong term sub-sector outlook

Mid-term COVID impact

Highly positive

Highly negative

Largely unaffected

Modestly negative

Specialist care

Source: Ernst & Young/Apposite

Traditional Medicaldevices

Infection control

Ben Long

Partner

InflexionSubmit

questions at

Sli.do

#manda

About Inflexion

13

• Active investors in high growth, entrepreneurial businesses

> Current portfolio of 46 investments

> 30 realised investments

• Team of 100 with dedicated resources to support our portfolio’s

diverse growth needs

• European remit with focus on UK, Ireland, Benelux, DACH and

Nordics

• Headquartered in the UK, with portfolio support offices in the US,

Brazil, China and India

• Support business’s growth through international expansion, mergers

and acquisitions, digital expertise, operational improvements, talent

management and access to Inflexion’s network

• Only UK firm ranked in Preqin’s Top Ten ‘Most Consistent Top

Performing Buyout Fund Manager’ since 2013

Flexible approach

Award winning

Well capitalised

• £5.4bn funds under management

with £3.0bn of capital to invest

MINORITY MAJORITY

INVESTMENT

SIZE

£10m - £250m

Realised portfolio

Current portfolio

Our healthcare experience

14

Broader healthcare experience

• Strong Inflexion investment committee

support for investment into the Healthcare sector

• Our sector coverage team consists of 10

individuals, all of whom have appraised the

investment prospects in-depth of a variety of

healthcare platforms

Current market conditions

15

• Overall demonstrated resilience

• Key areas disrupted

• Elective surgery (delayed)

• Acute care (repurposed and pent up demand as

patients avoid hospitals)

• Elderly care (underfunded – as ever)

• Clinical trial starts

• Recovery curve makes pricing tough

• Rapid (oncology, ophthalmology?)

• Mid cycle (orthopedics, veterinary?)

• Late cycle (dental?)

• Credit markets and PE

• Role of credit funds

• Equity underwriting

Current market conditions Outlook

• IFX view: sector has demonstrated its merits once

again

• Deep sector networks and expertise will be key in the

short term

• Relationships with management teams which

are already well established (enabling deals to

be done on VC)

• Opportunistic funding for M&A targets in

industries facing more pressure

• Understanding likely pick up and international

patterns where relevant so can price recovery

• Long term

• Acceleration of existing trends (remote

monitoring and consultations, outpatient

services, virtual trials, care in the community vs

in care settings)

• Risk to returns from influx of new money into the

sector – good for sellers not for buyers

Issy Corbett

Head of Healthcare M&A

PwCSubmit

questions at

Sli.do

#manda

David Jones

Partner

DeloitteSubmit

questions at

Sli.do

#manda

Derek Breingan

Head of Health &

Social Care Sector

Clydesdale & Yorkshire Bank

Submit

questions at

Sli.do

#manda

Classification: Private

Who we are

• Experienced specialist team of 21 with a proven presence and profile across the UK market

• Offering funding and expertise that delivers a real and positive impact for the health and social care sector

• Growing track record of customer acquisition and retention through dedicated relationship management

• Appetite and portfolio includes aged accommodation with care; specialist adult and acute care; early years and residential childcare/education; foster care and primary care

• Expansion of existing PE and non sponsored leverage lending

• Niche product and service offering is SPV development finance and sector related real estate

Classification: Private

During Covid19 the Health and Social Care sector has been one of our most resilient sectors and at £1bn accounts for 12% of our business banking book

Deal Highlights

Classification: Private

• Potential resetting of valuer FMT expectations and deeper EBITDAC sensitivity analysis

• Importance of strong management teams

• Predicted continued investment attraction to health & social care in the UK due to the drivers that existed pre Covid19 and remain.

• Changes in LA commissioning and NHS/CCG management of future clinical capacity accelerating an integrated care model and therefore opportunity

• Ongoing demand for specialist settings for non institutionalised children’s and adult care in the community

• Improve care delivery and accommodation based on learnings from pandemic control and create more viral proof environments for primary care and social care residents and staff

• Growth in technology and alternative care delivery

• More traction in the Retirement Living model of housing

Where is the sector heading?

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