Ann: 2014 Results announcement, page-6

Hi Pardner,

One needs to consider that the nursecall business is primarily about the sale of plastic "call buttons" and is a relatively "low tech" business, with an element of software and electronics required to support the core nursecall platform (however an essential part of the overall solution being supplied).

IMHO the valuation methodology should be compared with a manufacturing business, rather than a software business in the healthcare space. A $70m market cap, on an EBIT of $3.4m is consistent with valuations of technology business, but inconsistent with a manufacturing business.

By way of comparison, I thought I would share a number of transactions (all available within the public domain).

● Ascom’s acquisition of Miratel – 0.82x Revenue (2012)
● Ascom’s acquisition of GE Teligence – 1.1x Revenue (2012)
● Ascom Market Capitalization CHF261m - 1.2x Revenue (2012) / 8.1 x EBITDA
● Novar’s acquisition of Ackermann – 1.5x Revenue (2001)
● TSV’s acquisition of Austco – 0.86x Revenue $AUD15m + $AUD1.5m Earnout (2006)

Looking at the above, Ascom is likely the most appropriate direct comparison (albeit considerably larger than Azure Healthcare), given that they have acquired three nursecall companies over 24 months and are the largest nursecall company globally.

Given the above, I would suggest a range of $27m to $39m would be consistent with the global valuations.

The company presently has a market capitalization that reflects 2.2x Revenue or 20x EBIT.

Only the passage of time will determine the correct valuation methodology