Contract analysis

I. Executive Summary This memorandum analyzes the vertical relationship between Marlowe Asset Management Rehabilitation Holdings LLC ("Marlowe Asset Management Rehab" or "Marlowe Asset Management"), a portfolio company of Ardent Capital Partners III LP ("Ardent Capital" or the "Fund"), and Pinnacle Health Systems, Inc. ("Pinnacle" or "PHS"), the target of Ardent Capital's proposed acquisition of 100% of Pinnacle's ou

II. Background A. The Transaction Ardent Capital Partners III LP, a Delaware limited partnership managed by Ardent Capital Management LLC (a Delaware limited liability company, SEC File No. 801-119247), is acquiring 100% of the outstanding equity of Pinnacle Health Systems, Inc. pursuant to an Equity Purchase Agreement dated January 31, 2024 (the "Purchase Agreement"). The transaction values Pinnacle at an enterprise

III. Identification of the Vertical Relationship A. Nature of the Vertical Nexus The vertical relationship between Marlowe Asset Management Rehab and Pinnacle arises from the natural clinical pathway in which patients who undergo surgical procedures at an ambulatory surgical center are subsequently referred for outpatient physical therapy rehabilitation. This referral pathway is a well-established feature of the post

2. Downstream Referrals (Pinnacle ASCs → Marlowe Asset Management PT Clinics): Patients who undergo surgical procedures at Pinnacle ASCs — particularly orthopedic procedures such as total joint replacement, rotator cuff repair, ACL reconstruction, and spinal surgery — are routinely referred for post-surgical physical therapy rehabilitation. In co-located or geographically proximate settings, the operating surgeon or

IV. Analysis of Referral Patterns A. Methodology To assess the significance of the vertical referral relationship, we analyzed patient referral data provided by Pinnacle management and Marlowe Asset Management Rehab management for the most recent full 12-month period, calendar year 2023 (January 1, 2023 through December 31, 2023). Pinnacle's referral data was provided by Sandra Trevino, Chief Financial Officer of Pin

V. Competitive Effects Analysis A. Applicable Legal and Analytical Framework The competitive effects analysis of vertical mergers is governed by the framework set forth in the U.S. Department of Justice and Federal Trade Commission 2023 Merger Guidelines (the "Merger Guidelines"), which superseded the prior Vertical Merger Guidelines issued in 2020 (subsequently withdrawn by the FTC in 2021). The 2023 Merger Guidelin

VI. Comparison to Merger Guidelines Thresholds The 2023 Merger Guidelines identify certain thresholds and indicators that the agencies use to screen vertical mergers for potential competitive concern. While the Guidelines do not establish a formal numerical safe harbor for vertical mergers in the same manner as the structural presumption for horizontal mergers, the Guidelines indicate that vertical concerns are more

VII. Conclusion Based on the foregoing analysis, we reach the following conclusions:

1. The vertical relationship between Marlowe Asset Management Rehabilitation Holdings LLC and Pinnacle Health Systems, Inc. is limited to clinical referral patterns at 12 co-located or geographically adjacent facilities across three states (Texas, Florida, and Georgia), within three MSAs (Dallas-Fort Worth-Arlington, TX; Tampa-St. Petersburg-Clearwater, FL; and Atlanta-Sandy Springs-Alpharetta, GA).

2. Marlowe Asset Management Rehab's upstream PT referrals account for less than 2% of Pinnacle's total ASC case volume in each of the three affected MSAs, and less than 2% in the aggregate.

3. Pinnacle's downstream post-surgical PT referrals to Marlowe Asset Management clinics represent less than 5% of Pinnacle's total post-surgical PT referral volume in the affected MSAs. These referrals are not exclusive and are not foreclosing of rival PT providers. Referring physicians retain full discretion over PT referral destinations, and patients exercise independent choice among available providers.

4. No vertical theory of competitive harm — whether input foreclosure, customer foreclosure, access to competitively sensitive information, or facilitation of coordination — is supported by the facts. The merged firm would lack both the ability and the incentive to engage in any anticompetitive vertical conduct, and the market conditions in each affected MSA (including the highly fragmented nature of both the ASC and

5. The vertical relationship is competitively insignificant and does not give rise to any substantive antitrust concern under the 2023 Merger Guidelines or any other applicable analytical framework.

6. This analysis supports the firm's overall conclusion that the proposed acquisition of Pinnacle Health Systems, Inc. by Ardent Capital Partners III LP presents no material antitrust risk on vertical grounds. This conclusion is consistent with the preliminary antitrust risk assessment memorandum and the Portfolio Company Overlap Analysis Memorandum dated February 8, 2024.

7. The findings of this memorandum will be incorporated into the voluntary submission white paper to be filed with the FTC Bureau of Competition on February 16, 2024, in support of the request for early termination of the HSR waiting period. Please do not hesitate to contact me if you have any questions or wish to discuss any aspect of this analysis. Respectfully submitted, Monica Reyes Associate, Antitrust & Competi

VIII. Appendices Appendix A: Map of 12 Co-Located / Adjacent Marlowe Asset Management and Pinnacle Facilities The following table identifies each of the 12 Marlowe Asset Management Rehabilitation Holdings LLC outpatient physical therapy clinic locations that are co-located with or geographically adjacent to (within a five-mile radius of) a Pinnacle Health Systems, Inc. ambulatory surgical center, organized by MSA and