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These excerpts taken from the CVS 8-K filed Feb 13, 2007. About Caremark Caremark is a leading pharmaceutical services company, providing through its affiliates comprehensive drug benefit services to over 2,000 health plan sponsors and their plan participants throughout the U.S. The company's clients include corporate health plans, managed care organizations, insurance companies, unions, government agencies and other funded benefit plans. In addition, Caremark is a national provider of drug benefits to eligible beneficiaries under the Medicare Part D program. The company operates a national retail pharmacy network with over 60,000 participating pharmacies, seven mail service pharmacies, the industry's only FDA-regulated repackaging plant and 21 licensed specialty pharmacies for delivery of advanced medications to individuals with chronic or genetic diseases and disorders. Additional information about Caremark is available at www.caremark.com and at www.cvscaremarkmerger.com.
Caremark
The companies that Evercore deemed to have certain characteristics that are similar to those of Caremark were Medco Health Solutions and Express Scripts. The analysis of current stock price to earnings as of October 31, 2006 indicated that, for the selected peer group, the ratio of current stock price to estimated 2007 earnings per share ranged from 16.6x to 17.1x. This compared to a current stock price as a multiple of estimated 2007 earnings per share ratio of 17.4x for Caremark, based on publicly available IBES research estimates as of October 31, 2006. The analysis of financial multiples as of October 31, 2006 indicated that, for the selected peer group, enterprise value as a multiple of estimated 2007 EBITDA ranged from 9.4x to 10.1x. This compared to enterprise value as a multiple of estimated 2007 EBITDA of 9.7x for Caremark, based on publicly available research estimates as of October 31, 2006. The analysis of current stock price to earnings as of February 9, 2007 indicated that, for the selected peer group, the ratio of current stock price to estimated 2007 earnings per share ranged from 18.4x to 18.9x. This compared to a current stock price as a multiple of estimated 7 2007 earnings per share ratio of 21.6x for Caremark, based on publicly available IBES research estimates as of February 9, 2007. The analysis of financial multiples as of February 9, 2007 indicated that, for the selected peer group, enterprise value as a multiple of estimated 2007 EBITDA ranged from 10.4x to 11.0x. This compared to enterprise value as a multiple of estimated 2007 EBITDA of 12.2x for Caremark, based on publicly available research estimates as of February 9, 2007. Using a selected multiple range of 17.0x to 20.0x estimated 2007 earnings per share, based on peer group trading multiples as of October 31, 2006, the peer group trading analysis of Caremark yielded an implied valuation range for the Caremark common stock of $48.18 to $56.68 per share. Using a selected multiple range of 19.0x to 22.2x estimated 2007 earnings per share, based on peer group trading multiples as of February 9, 2007, the peer group trading analysis of Caremark yielded an implied valuation range for the Caremark common stock of $53.85 to $62.35 per share. Using selected multiples of 9.5x to 10.5x estimated 2007 EBITDA, based on peer group trading multiples as of October 31, 2006, the peer group trading analysis of Caremark yielded an implied valuation range for Caremark common stock of $48.12 to $52.97 per share. Using a selected multiple range of 10.5x to 11.5x estimated 2007 EBITDA, based on peer group trading multiples as of February 9, 2007, the peer group trading analysis of Caremark yielded an implied valuation range for Caremark common stock of $52.97 to $57.83 per share. Evercore calculated implied exchange ratios by taking the minimum Caremark implied share price over the average CVS implied share price, and the maximum Caremark implied share price over the average CVS implied share price. Based on the peer group trading analysis for both CVS and Caremark, Evercore calculated implied exchange ratios after giving effect to the payment of the Caremark special cash dividend ranging from 1.223x to 1.416x based on peer group trading multiples as of October 31, 2006 and excluding synergies and 1.652x to 1.846x based on peer group trading multiples as of February 9, 2007 and including synergies. Evercore selected the peer groups above because their businesses and operating profiles are reasonably similar to that of CVS and Caremark, as applicable. However, because of the inherent differences between the businesses, operations and prospects of CVS and Caremark, on the one hand, and the businesses, operations and prospects of the selected peer groups on the other, no company is exactly the same as CVS or Caremark. Therefore, Evercore believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the peer group trading analysis. Accordingly, Evercore also made qualitative judgments concerning differences between the financial and operating characteristics and prospects of CVS and Caremark and the companies included in the peer group trading analysis that would affect the public trading values of each company in order to provide a context in which to consider the results of the quantitative analysis. These qualitative judgments related primarily to the differing sizes, growth prospects, profitability levels and degree of operational risk between CVS and Caremark, on the one hand, and the companies included in the peer group trading analysis.
This excerpt taken from the CVS 8-K filed Jan 18, 2007. Caremark”),
and Twain MergerSub Corp., a Delaware corporation and wholly owned subsidiary
of CVS (“ These excerpts taken from the CVS 8-K filed Nov 2, 2006. Caremark”), and Twain MergerSub Corp., a Delaware corporation and wholly owned subsidiary of CVS (“ For Caremark Investor Relations: Craig Hartman, (615) 743-6653 Media Relations: Robert Mead/Nina Devlin, Brunswick Group, (212) 333-3810 # # # 6 | ||||||||||||||||||||||||||||||