EXAC Exactech, Inc. (delisted)

ABOUT THIS PROXY STATEMENT

This statement constitutes a proxy statement for Exactech, Inc. under Section 14(a) of the Securities Exchange Act of 1934. In addition, it constitutes a notice of meeting with respect to the special meeting of Exactech shareholders.

The Company and Parent have entered into an Agreement and Plan of Merger dated October 22, 2017, by and among the Company, Parent and Osteon Merger Sub, Inc. (the “ Original Merger Agreement ”) which was subsequently amended by that certain Amendment No. 1 to the Agreement and Plan of Merger, dated December 3, 2017 (the “ Amendment to Merger Agreement ”). Accordingly, unless otherwise expressly stated otherwise, all discussions in this proxy statement concerning the merger, the merger agreement, and all transaction documentation, including all discussions concerning the events leading thereto, the applicable proceedings of the board, the fairness opinion, and all other considerations, all relate to the Original Merger Agreement, as amended by the Amendment to Merger Agreement, as it may be amended or supplemented from time to time (the “ Merger Agreement ”).

You should rely only on the information contained in or incorporated by reference into this proxy statement. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement. This proxy statement is dated January [•], 2018. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this proxy statement is accurate as of any date other than the date of such information. The mailing of this proxy statement to Exactech shareholders will not create any implication to the contrary.

This proxy statement will not constitute an offer to sell, or the solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation.

Unless otherwise indicated or as the context otherwise requires, all references in this proxy statement to:

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SUMMARY TERM SHEET

This Summary Term Sheet discusses the material information contained in this proxy statement, including with respect to the Merger Agreement, the merger and the other agreements entered into in connection with the merger. We encourage you to read carefully this entire proxy statement, including its annexes and the documents referred to or incorporated by reference in this proxy statement, as this Summary Term Sheet may not contain all of the information that may be important to you in deciding how to vote your shares of Common Stock. The items in this Summary Term Sheet include page references directing you to a more complete description of that topic in this proxy statement.

The Parties to the Merger Agreement

Exactech, Inc.

2320 N.W. 66 ^th Court

Gainesville, Florida 32653

(352) 377-1140

Exactech is a leading developer and producer of orthopaedic implant devices and surgical instrumentation for extremities and large joints. The Company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech’s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech markets its products in the United States, in addition to more than 30 markets in Europe, Latin America, Asia and the Pacific.

Osteon Holdings, L.P.

c/o TPG Capital, L.P.

301 Commerce Street

Suite 3300

Fort Worth, TX 76102

(415) 438-6893

Parent is a Delaware limited partnership and an affiliate of TPG. TPG is a leading global alternative asset firm founded in 1992 with more than $73 billion of assets under management and offices in Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul and Singapore. TPG’s investment platforms are across a wide range of asset classes, including private equity, growth venture, real estate, credit, and public equity. TPG aims to build dynamic products and options for its investors while also instituting discipline and operational excellence across the investment strategy and performance of its portfolio.

Osteon Merger Sub, Inc.

c/o TPG Capital, L.P.

301 Commerce Street

Suite 3300

Fort Worth, TX 76102

(415) 438-6893

Merger Sub is a Florida corporation and a wholly owned subsidiary of Parent that was formed by Parent solely for the purpose of facilitating the merger in accordance with the terms and subject to the conditions of the Merger Agreement. To date, Merger Sub has not conducted any activities other than those related to its formation and completion of the transactions contemplated by the Merger Agreement. At the Effective Time, Merger Sub will cease to exist.

The Merger

In the merger, each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than Rollover Shares, appraisal shares and shares held by the Company in treasury), will be converted into the right to receive the Merger Consideration. At the Effective Time, the Company will become a wholly owned subsidiary of Parent.

The Special Meeting

Time, Place and Purpose of the Special Meeting

The special meeting will be held on February [•], 2018, starting at 10 a.m., local time, at the Hilton UF Conference Center, 1714 SW 34th Street, Gainesville, Florida 32607. At the special meeting, you will be asked to vote on the proposal to approve the Merger Agreement. The Merger Agreement provides that at the Effective Time of the merger, Merger Sub will be merged with and into the Company with the Company surviving as a wholly owned subsidiary of Parent (the “ Surviving Corporation ”). Our shareholders will also be asked to (i) approve by non-binding, advisory vote, certain compensation that will or may become payable to the Company’s named executive officers in connection with the merger and (ii) approve the proposal to adjourn the special meeting, if necessary or appropriate, for, among other reasons, the solicitation of additional proxies in the event there are insufficient votes at the time of the special meeting to approve the proposal to approve the Merger Agreement.

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Record Date and Quorum

You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of Common Stock at the close of business on January [•], 2018, which we have fixed as the record date for the special meeting (the “ Record Date ”). Each share of Common Stock that you owned on the Record Date entitles you to one vote. As of the Record Date, there were 14,423,864 shares of Common Stock issued and outstanding and entitled to vote at the special meeting. Holders of a majority of the votes entitled to be cast at the special meeting must be present, in person or by proxy, at the special meeting to achieve the required quorum for the transaction of business at the special meeting. Therefore, the presence in person or by proxy of our shareholders holding at least 7,211,933 shares of Common Stock will be required to establish a quorum.

If less than a majority of outstanding shares of Common Stock entitled to vote is represented at the special meeting, a majority of the shares represented may adjourn the special meeting and reschedule it for another date, time or place. If the new date, time or place is announced at the special meeting before an adjournment is taken, we do not need to give notice of the new date, time or place.

Vote Required

If a quorum is present, approval of the proposal to approve the Merger Agreement requires the affirmative vote of holders (in person or by proxy) of a majority of the outstanding shares of Common Stock entitled to vote thereon at the special meeting.

If a quorum is present, approval, by non-binding, advisory vote, of certain compensation that will or may become payable to the Company’s named executive officers in connection with the merger will be approved if the number of votes cast at the special in favor of such proposal exceeds the number of votes cast opposing such proposal. The outcome of this vote is not binding on the Company.

If a quorum is present, approval of the proposal to adjourn the special meeting, if necessary or appropriate, for, among other reasons, the solicitation of additional proxies requires that the number of votes cast at the special meeting, whether in person or by proxy, in favor of adjournment exceeds the number of votes cast opposing adjournment.

Board Recommendation of the Merger Agreement

The Board recommends that you vote “ FOR ” approval of the proposal to approve the Merger Agreement, “ FOR ” approval of the proposal to approve, by non-binding, advisory vote, of certain compensation that will or may become payable to the Company’s named executive officers in connection with the merger and “FOR” approval to adjourn the special meeting, if necessary or appropriate, for, among other reasons, the solicitation of additional proxies.

Proxies and Revocation

Any shareholder of record entitled to vote at the special meeting may submit a proxy by telephone, over the Internet, by returning the enclosed proxy card in the accompanying prepaid reply envelope, or may vote in person by appearing at the special meeting. If your shares of Common Stock are held in “street name” by your bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or to vote in person at the special meeting, or do not provide your bank, brokerage firm or other nominee with voting instructions, as applicable, your shares of Common Stock will not be voted on any of the proposals described in this proxy statement, which will have the same effect as a vote “AGAINST” the proposal to approve the Merger Agreement, but will not affect the outcome of any other proposal.

If you are a shareholder of record, you have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is voted at the special meeting by:

Your attendance at the special meeting will not by itself revoke a previously granted proxy.

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If you hold your shares of Common Stock in street name, you may submit new voting instructions by contacting your bank, brokerage firm or other nominee. You may also vote in person at the special meeting if you obtain a legal proxy from your bank, brokerage firm or other nominee.

Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger

After careful consideration of various factors described in the section entitled “The Merger — Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger,” at a meeting held on December 2, 2017, all of the Company’s independent, non-employee directors, constituting a majority of the Board, by unanimous vote, (i) approved the execution, delivery and performance of the Merger Agreement, (ii) determined that entering into the Merger Agreement was fair to and in the best interests of the Company and its shareholders and that the Merger Agreement is advisable, (iii) recommended that the Company’s shareholders approve and adopt the Merger Agreement and directed that the Merger Agreement be submitted to the Company’s shareholders for approval at a duly held meeting of such shareholders for such purpose and (iv) elected, to the extent necessary, to make the execution, delivery or performance of the Merger Agreement or the consummation of the merger or the other transactions contemplated by the Merger Agreement not to be subject to any state takeover law or similar law that might otherwise apply to such execution, delivery, performance or consummation. The preceding actions taken by the Board on December 2, 2017 are referred to herein as the “ Board Actions .” Dr. Petty and Mr. Petty recused themselves from voting on the Board Actions.

See “ The Merger — Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger ” beginning on page 29.

In considering the recommendation of the Board of Directors with respect to the proposal to approve the Merger Agreement, you should be aware that the interests of our directors and employees, including certain of our executive officers (“ Named Executive Officers ”), in the merger that may be different from, or in addition to, those of other shareholders of the Company. The Board was aware of these interests, considered them and took them into account, together with other factors, in determining whether to approve and adopt the Merger Agreement and recommend that our shareholders vote for the approval of the Merger Agreement. ( See “ Special Factors — Interests of the Company’s Directors and Executive Officers in the Merger ” beginning on page 46.

Opinion of Financial Advisor

Pursuant to an engagement letter, dated October 13, 2017, the Company retained J.P. Morgan as its financial advisor in connection with the proposed merger.

At the meeting of the Board on December 2, 2017, J.P. Morgan rendered its oral opinion to the Board that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, the consideration to be paid to the holders of the Common Stock in the proposed merger was fair, from a financial point of view, to such shareholders. J.P. Morgan confirmed this oral opinion by delivering its written opinion to the Board, dated December 2, 2017.

The full text of the written opinion of J.P. Morgan dated December 2, 2017, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. The Company’s shareholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Board of Directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the consideration to be paid in the proposed merger and did not address any other aspect of the proposed merger. The opinion does not constitute a recommendation to any shareholder of the Company as to how such shareholder should vote with respect to the proposed merger or any other matter. For a description of the opinion that the Board of Directors received from J.P. Morgan, see “Opinion of Financial Advisor” beginning on page 34 of this proxy statement.

Financing of the Merger

The Merger Agreement does not contain any financing-related contingencies or financing conditions to consummation of the merger . On October 22, 2017, we entered into the Original Equity Commitment Letter with the Fund and Parent. On December 3, 2017, we entered into the Amendment to Equity Commitment Letter with the Fund and Parent. Pursuant to the Equity Commitment Letter, upon the terms and conditions specified therein, the Fund will commit to purchase or will directly or indirectly cause the purchase of, equity securities of Parent with an aggregate price not to exceed $737,057,000, which will be used to either (i) fund the payment, in full, of the Merger Consideration and all other amounts required to be paid by Parent at the Closing under the Merger Agreement, including all fees and expenses required to be paid by Parent thereunder or (ii) under certain circumstances fund the payment to up to $737,057,000 in monetary damages required to be paid by Merger Sub in accordance with the Merger Agreement . The Company is a direct party to the Equity Commitment Letter and is entitled thereunder and under the Merger Agreement to specifically enforce the performance by the Fund of its obligations thereunder and to cause Parent to enforce against the Fund the performance by the Fund of its obligations thereunder.

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The foregoing summary of the Equity Commitment Letter is qualified in its entirety by reference to the copy of such letter attached as an exhibit to the Schedule 13E-3 filed with the SEC in connection with the merger and incorporated herein by reference.

Interests of the Company’s Directors and Executive Officers in the Merger

Aside from their interests as shareholders of the Company, certain of our officers and directors have certain interests in the merger that may be different from, or in addition to, your interests as a shareholder generally . In particular, as is described elsewhere in this proxy statement, pursuant to the terms of the Rollover and Voting Agreement, the Rollover Investors have agreed to exchange immediately prior to the Effective Time, a portion of their shares of Common Stock, constituting the Rollover Shares, for equity interests of Parent in connection with the merger . In considering the recommendation of the Board that you vote to approve the Merger Agreement and the merger, you should be aware of these interests . The Board was aware of these interests, considered them and took them into account, together with other factors, in determining whether to approve the Merger Agreement and recommend that you vote for approval of the Merger Agreement . The interests of our directors and employees, including our executive officers, in the merger that may be different from, or in addition to, those of other shareholders of the Company include, but are not limited to:

Material U.S. Federal Income Tax Consequences of the Merger

The exchange of shares of Common Stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes . In general, a U.S. Holder (as defined below under the heading “ Special Factors — Material U.S. Federal Income Tax Consequences of the Merger ” beginning on page 52) who receives cash in exchange for shares of Common Stock pursuant to the merger will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before the deduction of any withholding tax) and the shareholder’s adjusted tax basis in the shares exchanged for cash pursuant to the merger .

Payments made to a Non-U.S. Holder (as defined below under the heading “ Special Factors — Material U.S. Federal Income Tax Consequences of the Merger ” beginning on page 52) with respect to the shares of Common Stock that are exchanged for cash pursuant to the merger generally will not be subject to U.S. federal income or withholding tax, subject to certain exceptions. You should read “ Special Factors — Material U.S. Federal Income Tax Consequences of the Merger ” beginning on page 52 for definitions of “U.S. Holder” and “Non-U.S. Holder,” and for a more detailed discussion of the U.S. federal income tax consequences of the merger. You should consult your own tax advisor regarding the particular tax consequences (including the state, local or non-U.S. tax consequences) of the merger to you in light of your own particular circumstances.

Regulatory Approvals and Notices

The merger is subject to the HSR Act, which provides that certain transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the DOJ and FTC and applicable waiting period requirements have been satisfied.

Exactech and Parent filed pursuant to the HSR Act a Notification and Report Form for Certain Mergers and Acquisitions with the DOJ and the FTC on November 9, 2017. On November 17, 2017, each of Parent and Exactech received early termination of the waiting period required by the HSR Act.

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The Merger Agreement

Treatment of Common Stock, Stock Options and Restricted Stock (page  63 )

No Solicitation and the Company’s Fiduciary Exceptions Thereto

Until the Effective Time or, if earlier, the termination of the Merger Agreement, the Company will not and will cause each of its subsidiaries and the Company’s and its subsidiaries respective Representatives to not:

However, if at any time prior to obtaining the Company Shareholder Approval (but not thereafter), we or any of our Representatives receives a written Alternative Proposal from any Person or group of Persons, which Alternative Proposal did not result from any breach of our “No Solicitation” obligations set forth above, the Company and its Representatives may (i) furnish, pursuant to an Acceptable Confidentiality Agreement, information (including non-public information) with respect to the Company and its subsidiaries to the Person or group of Persons who has made such Alternative Proposal and (ii) engage in or otherwise participate in discussions or negotiations with the Person or group of Persons making such Alternative Proposal, if the Board determines (A) that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under Florida law and (B) in good faith, After Consultation (as defined under the heading “ The Merger Agreement — Terms of the Merger Agreement — ” beginning on page  62), that such Alternative Proposal constitutes or would reasonably be expected to result in a Superior Proposal (as defined under the heading “ The Merger Agreement — Terms of the Merger Agreement — No Solicitation and the Company’s Fiduciary Exceptions Thereto” beginning on page 66), then the Company will be permitted to:

We will promptly (and, in any event, within 24 hours) notify Parent if we or any of our Representatives receive any Alternative Proposal and keep Parent reasonably informed of any material changes to the terms thereof.

Except as expressly permitted by the Merger Agreement, the Board will not (each, an “ Adverse Recommendation Change ”):

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Prior to obtaining the Company Shareholder Approval, but not after, in the case of a Superior Proposal, the Board may make an Adverse Recommendation Change if the Board has determined in good faith, After Consultation, (i) that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under Florida Law and (ii) that such Alternative Proposal constitutes a Superior Proposal; provided , however , that prior to taking such action:

provided , further , however , (i) that any change to the price or other material change to the material terms of such Superior Proposal will require a new written notice to be delivered by the Company to Parent consistent with the content requirements described above and a new two business day period and negotiation period will commence, (ii) the Company has complied in all material respects with its “No Solicitation” obligations, and (iii) purported termination of the Merger Agreement will be void and of no force and effect, unless the Company termination is made in accordance with the termination provisions of the Merger Agreement and the Company pays Parent the applicable termination fee in accordance with the Merger Agreement prior to or concurrently with such termination.

Conditions to the Merger

The obligations of each party to effect the merger is subject to the satisfaction or waiver on or prior to the Effective Time of the following conditions:

The Company’s obligation to effect the merger is subject to the satisfaction (or waiver) on or prior to the Effective Time of the following conditions:

Parent and Merger Sub’s obligation to effect the merger is subject to the satisfaction (or waiver) on or prior to the Closing Date of the following conditions:

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Termination

The Merger Agreement may be terminated in the following circumstances:

Termination Fee and Expenses

The Merger Agreement contemplates that we will pay to Parent a nonrefundable cash termination fee equal to $25,797,000 as follows:

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Except as specifically provided for in the Merger Agreement, all fees and expenses incurred in connection with the merger and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such fees or expenses, whether or not such transactions are consummated.

Market Price of Our Common Stock

The closing price of our Common Stock on the Nasdaq Global Market on October 20, 2017, the last trading day prior to the public announcement of the Original Merger Agreement, was $32.00 per share. The closing price of our Common Stock on the Nasdaq Global Market on December 1, 2017, the last trading day prior to the public announcement of the Amendment to the Merger Agreement, was $42.35 per share. The Merger Consideration of $49.25 per share represents a premium of approximately 53.9% over the closing price per share on October 20, 2017 and of approximately 16.3% over the closing price per share on December 1, 2017. On [•], the most recent practicable date before this proxy statement was mailed to our shareholders, the closing price for our Common Stock on the Nasdaq Global Market was $[•] per share. You are encouraged to obtain current market quotations for our Common Stock in connection with voting your Common Stock.

Appraisal Rights

Under Florida law, if you do not wish to accept the Merger Consideration provided for in the Merger Agreement and you do not vote for the approval of the Merger Agreement, you are entitled to appraisal rights under the FBCA. This means that you are entitled to have the fair value of your shares of Common Stock determined by a court of competent jurisdiction in Florida and to receive payment based on that valuation in lieu of the right to receive the Merger Consideration. The ultimate amount you receive in an appraisal proceeding may be less than, equal to or more than the Merger Consideration.

To properly exercise your appraisal rights, you must submit a written demand for appraisal to us before the vote is taken on the Merger Agreement and you must not vote in favor of the proposal to approve the Merger Agreement. Your failure to follow exactly the procedures specified under the FBCA may result in the loss of your appraisal rights. See “ Appraisal Rights ” beginning on page 87 and the text of the Florida appraisal rights statute reproduced in its entirety as Annex C hereto. If you hold your shares of Common Stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your bank, brokerage firm or nominee. In view of the complexity of the FBCA, shareholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

Delisting and Deregistration of Our Common Stock

If the merger is completed, our Common Stock will be delisted from the Nasdaq Global Market and deregistered under the Exchange Act and we will no longer file periodic reports with the SEC on account of our Common Stock.

Litigation Relating to the Merger ( see page 55)

A putative class action lawsuit was filed on December 14, 2017 in the United States District Court, Northern District of Florida, purportedly on behalf of Exactech shareholders against Exactech and William Petty, David W. Petty, James G. Binch, William B. Locander, Richard C. Smith, Fern S. Watts, and W. Andrew Krusen, Jr., all of whom are Exactech directors. Parent, Merger Sub and TPG are also named as defendants.

In addition, another putative class action was filed on December 22, 2017 in the United States District Court, Northern District of Florida against Exactech, James G. Binch, Albert H. Burstein, W. Andrew Krusen, Jr., William B. Locander, David W. Petty, William Petty, Richard C. Smith, and Fern S. Watts, all of whom are Exactech directors. Parent, Merger Sub and TPG are also named as defendants.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to address briefly some commonly asked questions regarding the merger, the Merger Agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the “Summary Term Sheet” and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, which you should read carefully and in their entirety. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 90.

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Payments made to a Non-U.S. Holder who receives cash in exchange for shares of Common Stock pursuant to the merger will generally be exempt from U.S. federal income tax, subject to certain exceptions. A Non-U.S. Holder may, however, be subject to backup withholding with respect to the cash payments made pursuant to the merger, unless the holder certifies that it is not a U.S. person or otherwise establishes a valid exemption from backup withholding tax.

You should read “ Special Factors— Material U.S. Federal Income Tax Consequences of the Merger ” beginning on page 52 for definitions of “U.S. Holder” and “Non-U.S. Holder,” and for a more detailed discussion of the U.S. federal income tax consequences of the merger.

You should consult your own tax advisor regarding the particular tax consequences (including the state, local or non-U.S. tax consequences) of the merger to you in light of your own particular circumstances.

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If you hold shares of Common Stock in “street name” (that is, in a brokerage account or through a bank or other nominee) and you plan to vote in person at the special meeting, you will need to bring a valid picture identification and evidence of your stock ownership, such as your most recent brokerage statement reflecting your stock ownership as of the Record Date, or a legal proxy from your broker or nominee.

Shareholders of record will be verified against an official list available in the registration area at the meeting. We reserve the right to deny admittance to anyone who cannot adequately show proof of share ownership as of the Record Date.

Telephone Voting : You may vote by calling the toll-free telephone number indicated on your proxy card. Please follow the voice prompts that allow you to vote your shares and confirm that your instructions have been properly recorded.

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Internet Voting : You may vote by logging on to the website indicated on your proxy card. Please follow the website prompts that allow you to vote your shares and confirm that your instructions have been properly recorded.

Return Your Proxy Card by Mail : You may vote by completing, signing and returning the proxy card in the postage-paid envelope provided with this proxy statement. The proxy holders will vote your shares according to your directions. If you sign and return your proxy card without specifying choices, your shares will be voted by the persons named in the proxy in accordance with the recommendations of the Board of Directors as set forth in this proxy statement.

Vote at the Meeting : You may cast your vote in person at the special meeting. Written ballots will be passed out to shareholders or legal proxies who want to vote in person at the meeting.

Telephone and Internet voting for shareholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on [•]. Telephone and Internet voting is convenient, provides postage and mailing cost savings and is recorded immediately, minimizing the risk that postal delays may cause votes to arrive late and therefore not be counted.

Even if you plan to attend the special meeting, you are encouraged to vote your shares by proxy. You may still vote your shares in person at the meeting even if you have previously voted by proxy. If you are present at the meeting and desire to vote in person, your previous vote by proxy will not be counted.

If you do not instruct your bank, brokerage firm or other nominee to vote your shares of Common Stock, your shares will not be voted on any of the proposals described in this proxy statement, which will have the same effect as a vote “AGAINST” the proposal to approve the merger, but will not affect the outcome of any other proposal.

If a quorum is present, approval, by non-binding, advisory vote, of certain compensation that will or may become payable to the Company’s named executive officers in connection with the merger will be approved if the number of votes cast at the special in favor of such proposal exceeds the number of votes cast opposing such proposal. The outcome of this vote is not binding on the Company.

If a quorum is present, approval of the proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies requires that the number of votes cast at the special meeting, whether in person or by proxy, in favor of adjournment exceeds the number of votes cast opposing adjournment.

Pursuant to Florida law, abstentions are counted as present for purposes of determining the presence of a quorum; however, abstentions will not be counted as votes cast “FOR” or “AGAINST” any proposal; however, because the proposal to approve the Merger Agreement requires the affirmative vote of a majority of our outstanding shares of Common Stock entitled to vote thereon at the special meeting, an abstention will have the same effect as a vote “AGAINST” the proposal to approve the Merger Agreement.

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Abstentions will have no effect on the voting results for any other proposal described in this proxy statement.

Broker “ non-votes ”

Under applicable exchange rules, if a broker, bank or other institution that holds shares in “street name” for a customer does not receive voting instructions from that customer, the broker may vote on only certain “routine” matters. For “non-routine” matters, which include all proposals contained in this proxy statement, a broker may not vote on such matters unless it receives voting instructions from the customer for whom it holds shares of Common Stock. A broker “non-vote” occurs when a broker does not receive such voting instructions from its customer on “non-routine” matters. Broker non-votes are counted for purposes of determining the presence of a quorum; however, they will not be counted as votes cast “FOR” or “AGAINST” any proposal and will have no effect on the voting results for any proposal, other than the proposal to approve the Merger Agreement, for which a broker non-vote will have the effect of a vote “AGAINST” approval of the Merger Agreement.

Because all proposals in this proxy statement are considered “non-routine” matters under applicable exchange rules, we urge you to give voting instructions to your broker.

If any “routine” matters are properly brought before the special meeting, then brokers holding shares in street name may vote those shares in their discretion for any such routine matters.

Your attendance at the special meeting will not by itself revoke a previously granted proxy.

If you hold your shares of Common Stock in street name, you may submit new voting instructions by contacting your bank, brokerage firm or other nominee. You may also vote in person at the special meeting if you obtain a legal proxy from your bank, brokerage firm or other nominee.

American Stock Transfer & Trust Company

6201 15 ^th Avenue

Brooklyn, NY 11219

If your shares of Common Stock are held in “street name”, they may not be voted if you do not provide the bank, brokerage firm or other nominee with voting instructions. Currently, banks, brokerage firms or other nominees have the authority under the Nasdaq Global Market rules to vote shares of Common Stock for which their customers do not provide voting instructions on certain “routine” matters.

However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, which include all proposals described in this proxy statement, and, as a result, absent specific instructions from the beneficial owner of shares of Common Stock held in street name, banks, brokerage firms or other nominees are not empowered to vote those shares.

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The use of cameras, recording devices and other electronic devices will be prohibited at the special meeting.

In addition, we have retained MacKenzie Partners, Inc. to assist in the solicitation. We will pay fees not greater than $15,000 plus reasonable out-of-pocket expenses for their assistance. We will indemnify MacKenzie Partners, Inc. against any losses arising out of its proxy soliciting services on our behalf.

This information is also available free of charge at www.sec.gov , an Internet site maintained by the SEC that contains reports, proxy and information statements, and other information regarding issuers that is filed electronically with the SEC. Shareholders may also read and copy any reports, statements and other information filed by us with the SEC at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room. In addition, shareholders may obtain free copies of the documents filed with the SEC by contacting us at (352) 377-1140 or by sending a written request to Exactech, Inc., 2320 N.W. 66th Court, Gainesville, Florida 32653.

Our SEC filings are available in print to any shareholder who requests a copy at the phone number or address listed above.

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SPECIAL FACTORS

Background of the Merger

The Board and Exactech’s senior management regularly review and assess Exactech’s operating strategy, financial performance, risk profile, regulatory environment, prospects and competitive position, as well as strategic and financial alternatives intended to enhance shareholder value. During the past several years, the Company received several unsolicited communications from third parties regarding potential Company sale transactions. Because Exactech was continuing to execute its strategic business plan and was not actively engaged in exploring strategic alternatives at that time, no non-public Company information was exchanged and no substantive discussions regarding the terms of a potential sale or business combination transaction ever ensued with any of such parties.

From 2015 through 2017, the Board assessed Exactech’s mix of operating businesses, capital structure, investments and liquidity, and made strategic acquisitions and investments designed to expand and diversify its products and broaden and expand its sales and distribution channels. In January 2015, Exactech acquired Blue Ortho SAS, a France-based computer-assisted surgical technology development and manufacturing firm, which produces Exactech’s Exactech GPS ^® (Guided Personalized Surgery) technology. In December 2015, Exactech obtained a $150 million revolving credit facility through a senior lender syndicate led by J.P. Morgan Chase Bank. In February 2016, Exactech acquired Exactech Australia, Exactech’s independent distributor, and in October 2016 Exactech acquired a 24.55% interest in Orthopedic Designs North America, Inc., a company involved in the development, manufacture and distribution of screw and rod fixation devices used in orthopaedic trauma applications. In 2017, with the goal of increasing productivity, enhancing profitability of its worldwide business and eliminating non-core, low margin businesses, Exactech consummated several strategic divestments, including the sale of its spine products business in January 2017, the divestiture of its majority ownership in Exactech (Taiwan) in June 2017, and the sale of its China subsidiary in September 2017.

In addition, in July 2015 and intermittently thereafter, Exactech met with J.P. Morgan Securities LLC, an affiliate of J.P. Morgan Chase Bank, to identify and discuss potential value enhancement strategies.

In March 2017, representatives of a non-U.S. private equity firm and one of its portfolio companies which conducts orthopaedic implant device operations – whom we refer to collectively as “Party A” – met with the Company’s Executive Chairman, Chief Executive Officer and certain other of the Company’s executives at the Company’s principal offices in Gainesville, Florida to discuss a possible combination of the businesses of the Company and Party A. Later in March 2017, the Company’s Chief Executive Officer and Chief Financial Officer met with representatives of Party A in San Diego, California to further discuss a possible combination of the businesses of the Company and Party A. Although general discussion ensued about how Party A’s business and the Company’s business were complementary in certain limited respects, members of the Company’s management team, including the Company’s Executive Chairman did not believe that sufficient operating synergies would result from a hypothetical combination between the Company and Party A’s orthopaedic portfolio company and, accordingly, that a potential transaction between the two companies would not be in the best interests of the Company’s shareholders and other constituents. At the meeting, no non-public Company information was exchanged with Party A and neither the structure for nor terms of a possible transaction were ever discussed. Intermittently over the following couple of months, representatives of Party A contacted the Company’s Executive Chairman and Chief Executive Officer via e-mail to seek to resume the general discussions that occurred in late-March but no further meetings or discussions took place. Party A was informed in June 2017 that the Company was committed to executing the Board’s long-term strategy and management’s business plan and was not interested in pursuing further discussions with Party A about a possible sale, business combination or other transaction.

On April 4, 2017, Daniel Hann, former Senior Vice President, Business Development of Biomet, Inc., who is a current TPG advisor, contacted Exactech Chief Executive Officer and President David Petty via telephone to request a meeting on May 1, 2017 with members of Exactech’s management team. Exactech had previously worked with Mr. Hann in 2004-2011 when he was with Biomet and when Exactech and Biomet were co-investors in Dimicron, Inc., a company developing diamond bearing technology for total hip applications. Mr. Hann served as the Dimicron project director for Biomet and worked closely with the Exactech project team. While the Dimicron project was ultimately unsuccessful, Exactech’s project team developed strong respect for Mr. Hann’s leadership and industry knowledge. On this call, Mr. Hann indicated that he and certain partners affiliated with TPG wanted to meet with Exactech to discuss potential strategies that could capitalize on certain issues affecting Exactech and others in the industry due to the consolidation of, and cost reduction initiatives by, certain of Exactech’s competitors. Exactech thought it would be productive to discuss conditions and trends in the industry with an industry leader whose experience it both trusted and respected. No determination was made by the Company’s independent directors that the Company was for sale.

On May 1, 2017, Exactech Executive Chairman, Dr. William Petty, Exactech President and Chief Executive Officer, David Petty, and Exactech Senior Vice President-Strategic Initiatives, Bruce Thompson, met at Exactech’s headquarters in Gainesville, Florida, with Mr. Hann and Jeffrey Binder, the former President and CEO of Biomet and also a TPG advisor. At this meeting, Messrs. Hann and Binder informed Exactech’s executive team in attendance that TPG wanted to explore potential opportunities between Exactech and TPG’s healthcare portfolio companies, including a possible investment or strategic transaction. Exactech informed TPG that it was continuing to execute its strategic business plan and was not currently exploring strategic alternatives, including any potential sale or business combination transaction, but was willing to listen to TPG’s investment thesis and views about the Company’s industry.

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On June 21, 2017, Dr. and Mr. Petty and Exactech’s Chief Financial Officer, Joel Phillips, met in Gainesville, Florida with Mr. Binder and Todd Sisitsky, Managing Partner of TPG Capital North America, to further discuss industry consolidation trends and TPG’s general overview of the orthopaedics industry, as well as the Company’s relatively small scale relative to its competitors with greater resources, access to capital and product diversification and the fact that the Common Stock was consistently trading at multiples lower than many of the Company’s peers. TPG also presented to the Company an outline of potential transaction opportunities. These conversations continued on July 24, 2017 when Dr. Petty, Mr. Petty, Exactech Vice President for Administration and Corporate Secretary, Betty Petty, and Mr. Phillips, met at Jackson Hartsfield Airport in Atlanta, Georgia with Messrs. Sisitsky, Binder and Hann, as well as Kendall Garrison, a Principal of TPG. At the time, however, the Company was continuing to execute its strategic business plan and the Board had not determined to pursue a possible sale or business combination transaction.

The Company’s lead independent, non-employee director was informed of the June 21, 2017 and July 24, 2017 meetings on July 29, 2017.

As a result of discussions with Messrs. Binder and Hann in June and July 2017, members of Exactech’s senior management informed the Company’s independent directors that a potential transaction with TPG and/or one of its portfolio company affiliates (with Messrs. Hann and Binder involved as advisors) at a robust premium could be in the best interests ° of the Company’s shareholders at a time when the Common Stock, as of June 21, 2017, was trading at 97% of the 52-week high, but was nevertheless consistently below the trading multiples of the Company’s peers. It was noted that this asymmetry was a source of frustration for the Board, the Company’s management team and the Company’s shareholders. At this time TPG informed Exactech that it was important for Mr. Binder to have a central role in any potential transaction (should discussions progress) and that on July 11, 2017 one of the Company’s competitors announced a search for new senior executives. TPG informed Exactech that Mr. Binder could become a primary candidate for such position. TPG also informed Exactech that if any transaction with the Company were to ensue, it desired to engage in substantive discussions and, if warranted deal term negotiations, promptly so as not to jeopardize Mr. Binder’s availability to play a central role in the Company.

In late-July 2017, the Company’s lead independent director, Mr. Binch, contacted representatives of TPG to discuss entering into a confidentiality and standstill agreement to facilitate the exchange of non-public Company information. Mr. Binch advised TPG that no determination had been made by the Company’s independent directors that the Company was for sale but that the Company was interested in continuing preliminary discussions about a possible transaction.

Throughout the period from early-August through the date of the execution of the Merger Agreement, Greenberg Traurig, legal counsel to the Company, engaged in frequent consultation with the Company’s lead independent director and the Company’s other independent, non-employee directors with respect to the communications and course of dealing with TPG and its advisors and, ultimately (once substantive discussions progressed), with respect to the negotiating strategy with TPG.

On August 8, 2017, TPG and the Company entered into a confidentiality and standstill agreement to facilitate TPG’s due diligence investigation of the Company and to commence substantive discussions to explore whether the parties had any mutual interest in engaging in a transaction and whether such a transaction was feasible.

Throughout the remainder of August 2017, representatives of TPG held several meetings with members of Exactech’s management team and conducted customary business, legal and operational due diligence to assist TPG in determining whether a transaction was feasible. Specifically:

At the conclusion of the meeting, after the representatives of TPG exited, Exactech’s Board authorized management to respond to a due diligence questionnaire furnished by TPG at the meeting.

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On September 8, 2017, Mr. Sisitsky called Dr. Petty to inform him that TPG intended to submit to the Board a non-binding indication of interest with respect to a proposed transaction. Dr. Petty asked the Board to be available for a special telephonic meeting on September 13, 2017.

At the September 13, 2017 Board meeting, Messrs. Sisitsky, Binder, Schilling and Garrison attended certain portions of that meeting by invitation, along with Exactech officers Dr. Miller, Messrs. Thompson and Phillips, Mrs. Petty and Ms. Edwards. All members of the Board were in attendance, in addition to representatives of Greenberg Traurig. The representatives from TPG outlined for the Board their assessment of Exactech, including their perceptions regarding Exactech’s financial prospects and value, and concluded with a discussion of the written indication of interest TPG presented to the Board during the meeting.

TPG proposed a $39.00 per share cash offer to acquire 100% of the outstanding Common Stock in a statutory merger transaction. The $39.00 price indication represented an approximate 30% premium to Exactech’s then-most recent $30.10 Common Stock closing sale price, an approximate 30% premium to Exactech’s 30-day and 90-day average Common Stock prices, and an approximate 41% premium to the 52-week average price of the Common Stock. TPG expressed its willingness and desire to expeditiously negotiate a mutually acceptable definitive merger agreement, its willingness to provide a commitment to finance the transaction entirely with an equity investment made by one of its multi-billion dollar affiliated funds, and the fact that there would be no financing contingency or conditions in the definitive merger agreement. Additionally, TPG indicated that it was willing to agree to certain merger agreement remedies in favor of the Company that would more closely approximate the contract provisions and closing certainty inherent in a merger agreement with a strategic (i.e., operating company) purchaser. These provisions included certain rights to specifically enforce against TPG and its affiliates the terms of any such agreement. TPG noted its strong desire to expedite its completion of business, financial and legal due diligence, to the extent the Board determined to work with TPG and commit its resources to negotiate a definitive merger agreement and other transaction documentation promptly, because TPG desired to employ for the post-closing Company the services of Mr. Binder, who was rumored to be engaged in evaluating employment opportunities with a number of industry leaders. Specifically, TPG suggested completion of confirmatory due diligence and execution of definitive transaction documentation within the ensuing 10-14 days. TPG also noted that in view of the situation involving Mr. Binder and the fact that its $39.00 price indication represented a significant premium to the unaffected price of the Common Stock that it was not willing to participate in a “competitive” pre-signing process were the Company intending to undertake such a process, but also indicated its willingness to agree to a “go-shop” provision in any definitive merger agreement to allow Exactech to actively solicit potential alternative acquisition proposals from third parties for a reasonable period of time after the signing and announcement of such agreement.

After TPG’s representatives exited the telephonic meeting, the Board reviewed and discussed TPG’s indication of interest, the Company’s prospects, the risks inherent in and the Board’s overall expectations associated with the execution of management’s current business plan and operating strategy, the regulatory and competitive environment in which the Company was currently operating, the Company’s stand-alone (i.e., remain independent) strategy and the availability of other potential financial and strategic alternatives to enhance shareholder value, and what the process for a potential sale transaction would entail. At the Board’s request, Greenberg Traurig addressed the Board’s fiduciary duties generally and in the context of a potential sale transaction. Because TPG’s proposal provided for the acquisition of 100% of the outstanding Common Stock for cash (and did not require any equity participation in the post-closing ownership of the Company by the Company’s founding and management shareholders), and because a majority of the Board consisted of independent, non-employee directors, and the founding and other management-shareholders did not hold, own or control a majority of the voting power represented by the outstanding Common Stock, the Board concluded, in consultation with Greenberg Traurig, that it was unnecessary to establish a formal special committee of independent directors in connection with TPG’s indication of interest. However, the Board determined, in consultation with Greenberg Traurig, that the Company’s independent directors would exclusively design the strategy for, and would lead and execute any transaction process that might ensue, regarding a potential sale transaction, if the Board decided to continue discussions with TPG, and that the Company’s independent directors would exclusively negotiate the terms of all transaction documentation if a transaction were pursued. The Board then discussed the need to formally engage a globally recognized, “bulge bracket”, financial advisor to assist and advise the Board in understanding the strategic and financial alternatives available to the Company and to potentially conduct a valuation of the Company using customary methodologies to assist the Board in properly assessing TPG’s $39.00 price indication. The Board discussed its various relationships with investment banking firms that it had used over the years for M&A and capital markets transactions. The Board noted that Exactech had previously engaged J.P. Morgan for certain transactions, which resulted in J.P. Morgan’s development of considerable knowledge of management’s business plan and operating strategy, and that other regional investment banking firms that the Company had used in certain transactions lacked the experience and depth to advise the Board with respect to a sale of the Company as an entirety and to interact with TPG’s principals. The Board also observed that J.P. Morgan’s issuer health care and medical device industry expertise and coverage was among the most extensive in the United States. The Board then directed

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Mr. Binch to contact J.P. Morgan’s global chairman of investment banking and head of its healthcare industry practice to discuss engagement terms, pursuant to which J.P. Morgan would potentially serve as the Company’s financial advisor and advise the Board in its consideration of TPG’s indication of interest. Mr. Binch was further directed to work with Greenberg Traurig to assist with such engagement.

The Board then discussed its belief that TPG’s $39.00 price indication did not adequately reflect Exactech’s intrinsic values. Further discussion ensued regarding the methods by which a sale of control process might be executed and the risks of market leaks if a prolonged and widespread pre-signing process was pursued including impacts on the Company’s employees and independent contractors. The Board did not make a determination at this time whether to pursue a competitive sale process and resolved to discuss the matter again following the engagement of J.P. Morgan.

This same day, TPG transmitted to the Board and its representatives at Greenberg Traurig a proposed draft merger agreement for a potential sale of control of the Company.

On September 14, 2017, the Company’s lead independent director contacted representatives of J.P. Morgan to initiate discussions regarding their potential engagement as Exactech’s financial advisor. In that no formal determination had been made by the Company’s independent directors to enter into a transaction with TPG or any other party, after consultation with Greenberg Traurig, TPG’s legal advisors were contacted and informed that any review and consideration of a proposed merger agreement was premature at that time and that the Company was continuing to execute its strategic business plan and was not currently exploring a sale transaction. Accordingly, TPG was informed that the draft agreement would not be reviewed by the Board or by Greenberg Traurig and that the transmission thereof by e-mail should be “recalled.”

During approximately the next two weeks, representatives of J.P. Morgan met in-person and held telephonic discussions with the Company’s independent directors, the Company’s Executive Chairman, the Company’s President and Chief Executive Officer, the Company’s Secretary, the Company’s General Counsel and certain other members of management who were present at the invitation of such directors to assist J.P. Morgan in reviewing certain historical and projected financial information prepared by the Company’s management team. At the same time, several drafts of a proposed engagement letter for the retention of J.P. Morgan were exchanged by representatives of J.P. Morgan, Mr. Binch and Greenberg Traurig.

On September 27, 2017, the Board held a telephonic meeting which was attended by all Board members, the same Exactech officers who attended the September 13, 2017 telephonic Board meeting, representatives of Greenberg Traurig and representatives of J.P. Morgan. J.P. Morgan presented an overview of Exactech, including consensus street estimates and sell-side analysts’ respective price targets. At the meeting, TPG’s deal consummation history and overall reputation in both the private equity industry and as an M&A transaction counterparty were discussed. It was noted that TPG was one of the most active and well-known global private equity firm sponsors, with approximately $75 billion in portfolio assets under management. The Board concluded that TPG was both a very credible and seemingly highly motivated buyer and that it had the ability to negotiate and execute a transaction (such as the one outlined in TPG’s September 13, 2017 indication of interest) quickly and with minimal disruption to the Company’s management team and day-to-day operation of the Company’s business, and that given TPG’s size, liquidity and extensive access to capital, it could easily finance and complete the acquisition of a company of Exactech’s size. At the meeting, J.P. Morgan disclosed to the Board the various capital markets, senior credit and M&A advisory transactions that J.P. Morgan and its commercial banking affiliates had worked on for TPG and its affiliates in the prior two years, as well as the compensation received in connection with such transactions, which compensation in the aggregate was between 15x and 20x the amount of the compensation J.P. Morgan would receive from the Company under the terms of the proposed engagement. The Board considered this information, but also considered that in light of J.P. Morgan being one of the largest investment banks in the world and because J.P Morgan is one of the most active financial advisors in U.S. and worldwide M&A transactions, the amount of fees received from TPG over the last two years was unlikely to be material to or to influence J.P. Morgan’s financial assessment of any transaction that might ensue between Exactech and TPG. Accordingly, the Board determined that J.P. Morgan’s engagement history with TPG and its affiliates was not a basis for creating any lack of independence or conflict of interest for purposes of any proposed transaction with TPG.

J.P. Morgan then provided a general overview of TPG’s September 13, 2017 indication of interest, noting the approximately 25% premium represented by TPG’s $39.00 price indication relative to the September 22, 2017 price of the Common Stock, as well as the proposed 100% “equity backstopped” financing contemplated by TPG for the transaction.

J.P. Morgan then presented to the Board its preliminary valuation analysis, which included references to two sets of financial projections previously provided to J.P. Morgan by Exactech’s management: (i) a management “base case” (which management used to plan and forecast the Company’s day-to-day business operations based on the most current information available to management, including reasonable assumptions as to business risk and unlevered free cash flows) that was considered the most accurate and reliable estimate of the Company’s prospects; and (ii) an illustrative “upside case” (containing aggressive growth estimates and speculative assumptions, which were considered far less realistic and highly unlikely to be achieved). The Board noted that, for purposes of its assessment of the Company’s intrinsic value and J.P. Morgan’s preliminary financial analysis, management’s “upside case” forecasts were inherently unreliable and not a material input for the Board’s overall analyses or J.P. Morgan’s financial analysis of TPG’s offer.

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At Mr. Binch’s request, Greenberg Traurig addressed the fiduciary duties of the Company’s directors generally and in the context of a proposed sale of control transaction, and Greenberg Traurig further addressed the various methods to execute a potential sale of control. Discussion next ensued with respect to the potential strategic and financial purchaser candidates who might be ready, willing and able to execute and complete a sale transaction involving the Company. Following discussion among the directors and J.P. Morgan, the directors determined that it was highly unlikely that there were any natural strategic purchasers who would be willing to pursue an acquisition of the Company within a reasonable timeframe and at a price in excess of $39.00 per share of Common Stock, and that engaging in a pre-signing market check to “test” TPG’s $39.00 price indication would risk a leak of the process and, therefore, risk TPG’s continued interest in acquiring the Company. Moreover, it was noted that on several occasions TPG informed the Company that in view of the situation involving Mr. Binder and the fact that TPG’s $39.00 price indication represented a significant premium to the unaffected Common Stock price, TPG was not willing to participate in a competitive pre-signing process were the Company to undertake the same. It was discussed that the Company’s peer group of operating companies did not have a significant product line concentration or business segments in the Company’s space, and therefore, that it would be difficult for a peer company to create combined company synergies sufficient to justify paying a meaningful control premium for the Company. It was further noted that TPG had repeatedly indicated that retaining the post-closing services of Mr. Binder was central to its desire to acquire the Company and that Mr. Binder might not be available if a prolonged pre-signing process ensued.

The Board further discussed that TPG did not request exclusivity in negotiations, which meant the Company could respond to any acquisition or business combination proposals that might be presented to Exactech prior to entering into any definitive merger agreement with TPG. It was further observed that the Company was trading at a 52-week high, which created an artificial cap on the premium a purchaser candidate might be willing to pay in light of the Company’s price volatility and that, while the Company was relatively unlevered (on a debt-to-equity basis), it was currently generating stagnant cash flows, which could make it more difficult for a potential financial buyer to use debt financing to create the returns on equity typically sought by a private equity sponsor. In this regard, it was again noted that TPG was willing to structure the acquisition with 100% equity financing and to provide other terms reasonably consistent with that of a strategic (i.e., operating company) purchaser candidate.

The Board concluded that, based upon management’s base case financial forecast and analysis, J.P. Morgan’s preliminary financial analysis and the other preliminary financial analyses it had reviewed, the Board should negotiate for a higher price. The Board noted that although no decision to sell Exactech or to pursue any particular transaction had been or could be made at that time, in view of TPG’s excellent reputation and track record of completing high premium deals in Exactech’s industry, TPG’s apparent high motivation to complete an acquisition of Exactech without any debt financing or regulatory risks, and the likelihood that TPG may be willing and able to pay maximum current value on overall deal terms that are fair to and in the best interests of Exactech’s shareholders, Mr. Binch, as lead independent director, should contact TPG and inform it that its $39.00 price indication was not a sufficient price upon which the Board could proceed and that a minimum price per share “in the 40s” would be required for the Board to engage in any further transaction discussions. The Board also instructed management to deliver to TPG its upside case financial projections. Even though the Board viewed the base case financial projections as being the only reliable and, therefore, material forecasts for the Board’s and J.P. Morgan’s review and consideration, the Board believed that J.P. Morgan and management could use the upside case projections in discussions with TPG to seek to obtain a higher price from TPG for the Exactech shareholders in the proposed transaction.

On that same day, Mr. Binch contacted Mr. Sisitsky to convey the Board’s conclusions as discussed at the September 27, 2017 meeting.

On October 11, 2017, TPG delivered to Mr. Binch a revised indication of interest, proposing a $41.00 per share cash purchase price for 100% of the outstanding Common Stock. Mr. Binch distributed TPG’s proposal to the full Board, J.P. Morgan and Greenberg Traurig and called a special telephonic meeting of the Board to discuss TPG’s revised proposal, including the increase in TPG’s proposed purchase price.

On October 13, 2017, the Company formally retained J.P. Morgan as its financial advisor in connection with the proposed merger pursuant to the terms of an engagement letter entered into on such date.

On October 14, 2017, the Board held a special telephonic meeting to discuss TPG’s increased price proposal. In attendance were the same parties who attended the September 27, 2017 special telephonic meeting of the Board. At the meeting, J.P. Morgan presented to the Board an updated preliminary valuation analysis to reflect TPG’s increased $41.00 per share price. The Board then discussed with J.P. Morgan and Greenberg Traurig Exactech’s implied value relative to TPG’s $41.00 price indication and noted that, although Exactech’s performance had been strong in all but one quarter over the preceding 21-month period, the Common Stock price had declined materially from time to time despite Exactech’s positive overall performance. The risks of such decline in the absence of a current value maximizing transaction were next discussed.

Based on J.P. Morgan’s updated preliminary valuation analysis, the Board concluded that, although TPG’s $41.00 per share price indication was at the higher end of the Company’s implied equity value range, that price likely did not represent TPG’s highest and best offer and that, consistent with the Board’s fiduciary duties, the Board should seek to obtain from TPG a higher price. Accordingly, the Board authorized and instructed Mr. Binch to inform TPG that the Board was still not willing to proceed with negotiating a merger agreement and equity commitment letter based on TPG’s $41.00 price indication and to ask TPG to submit its highest and best offer.

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After the meeting, Mr. Binch asked Mr. Sisitsky to reconsider TPG’s $41.00 price indication and submit to the Board TPG’s highest and best offer. Later that same day TPG delivered to Mr. Binch a revised “final proposal” consisting of a dual-price offer: (x) $41.25 per share (if a “go shop” period was included in the definitive merger agreement in addition to customary post-signing fiduciary-out provisions) and (y) $42.00 per share (if no “go-shop” period was included in the definitive merger agreement and only customary post-signing fiduciary-out provisions were included). TPG’s proposal also indicated that it required a 4% termination fee if Exactech terminated the agreement in favor of a superior proposal. TPG’s proposal was accompanied by a draft merger agreement and a draft of the equity commitment letter to be provided by one of TPG’s affiliated funds with approximately $10 billion of capital commitments. Mr. Binch distributed the revised indication of interest to the full Board, J.P. Morgan and Greenberg Traurig and called a special telephonic meeting of the Board to discuss TPG’s latest proposal.

On October 18, 2017, the Board held a special telephonic meeting to discuss TPG’s revised indication of interest. In attendance were the same parties who attended both the September 27, 2017 and October 14, 2017 special telephonic meetings of the Board. J.P. Morgan delivered to the Board an update of its previous preliminary valuation analysis to address each of TPG’s revised $41.25 (“go-shop”) and $42.00 (no “go-shop”) per share offer prices.

The Board noted that TPG’s latest offer did not contain a request for pre-signing exclusivity, meaning that Exactech was unrestricted in its ability to respond to any third party proposal or offer received by the Company during the period of negotiations with TPG. The Board discussed its belief, informed by discussions with its financial advisor, that it was highly unlikely that any potential strategic buyer would be ready, willing or able to submit a proposal to acquire Exactech at a price matching or exceeding TPG’s latest price proposals. Additionally, it was noted that a strategic operating company would not be able to move as expeditiously as TPG with respect to a potential transaction, in part because of TPG’s sense of urgency created by the risk of losing the services of Mr. Binder for the post-closing Company. Greenberg Traurig reiterated that any definitive merger agreement to be entered into with TPG would contain reasonable “window shop” exceptions to the Company’s “No Shop” covenant and fiduciary termination provisions to enable Exactech to enter into a definitive agreement for a superior proposal under certain customary circumstances.

The Board discussed whether there was any possibility that TPG would be willing to further increase its offer price, even incrementally, and whether it believed that TPG was sincere in its statement that its most recent price indication structure was, in fact, its “final” and best offer. Based upon the Board’s assessment of Exactech’s intrinsic value, after consultation with J.P Morgan and Greenberg Traurig, the fact that $42.00 (at the high end/no “go-shop”) and $41.25 (at the low end/“go-shop”) did, in fact, appear to represent TPG’s best and final offer prices and appeared to be the maximum control premium available to the Company, the fact that any further delay could jeopardize TPG’s willingness to proceed with the transaction based, in significant part, on the risk that Mr. Binder would no longer be available to TPG to work with the post-closing Company (which, as TPG repeatedly informed the Company, would cause TPG to abandon any plans to acquire Exactech), the risk that the price of the Common Stock could decline significantly depending on its historic volatility, the risks inherent in the execution of management’s business plan and operating strategy, and the lack of any viable strategic or financial alternative to management’s current stand-alone (i.e., remain independent) plan to enhance, over time, shareholder value to a level approximating the value implied by TPG’s latest deal price indications, the Board concluded that requesting another price increase would not result in any further increase and would jeopardize the potential transaction.

At the Board’s request, Greenberg Traurig addressed the Board’s fiduciary duties in the context of the proposed transaction with TPG and the history of discussions and actions leading to TPG’s most recent price proposal. Greenberg Traurig next addressed the utility and success rate of post-signing “go-shops” and the function and utility of standard fiduciary outs, termination rights, reasonable break up fee amounts and trigger events, and “window shop” provisions, in public company merger agreements.

The Board further reviewed J.P. Morgan’s updated preliminary valuation analysis and concluded that a $42.00 per share offer price was a compelling price, which the Board believed represented the maximum current value available for the Company, and that it would not be productive to contact potential alternate strategic purchaser candidates at this stage given the inherent risks in doing so. After further discussion regarding the terms, merits and risks of TPG’s latest proposal and the fact that the opportunity to deliver maximum current value to Exactech’s shareholders may not present itself again for a long time (or ever) if the transaction proposed by TPG were abandoned, the Board authorized and instructed Mr. Binch to inform TPG that the Board was willing to commence negotiation of a mutually acceptable merger agreement at $42.00 per share (and to forgo a post-signing “go-shop” period, so long as the Company retained customary fiduciary termination rights and corresponding “window shop” provisions in the definitive merger agreement), but that the Board would not agree at that time to any termination fee amount or the circumstances under which it would become payable.

Dr. Petty then advised the independent directors that he, Mrs. Petty and David Petty, in their capacities as founding and management shareholders, desired the ability to participate, side-by-side with TPG, as minority investors in Parent at the Effective Time and to exchange a yet- to- be determined portion of their shares of Common Stock for new equity interests in Parent pursuant to the “rollover equity component” of the transaction, which TPG had previously indicated in its acquisition proposals that it was willing to discuss and accommodate but was not requiring as part of any transaction.

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Dr. Petty then informed the Board that he and the other founding and management shareholders engaged their own counsel to negotiate any and all such arrangements, including the terms of the Rollover and Voting Agreement. As a result of Dr. Petty’s statement of intentions, the independent, non-employee directors (i.e., Messrs. Binch, Krusen, Smith and Locander, and Ms. Watts) requested an immediate executive session with only the independent, non-employee directors and Greenberg Traurig present.

In executive session, the independent, non-employee directors discussed whether the proposed transaction was fair to and in the best interests of Exactech’s shareholders in light of the merger consideration that (depending on the outcome of any discussions or negotiations between the Company’s founding and management-shareholders and TPG that could then ensue) may be made available to Exactech’s affiliate shareholders, but not to Exactech’s non-affiliate shareholders, and the potential conflict of interest that could arise if the management group were to exchange a portion of their shares of Common Stock for equity interests in the Parent. Greenberg Traurig discussed certain procedural safeguards that could be implemented in conjunction with the potential transaction, including establishing a formal special committee and requiring that the transaction with TPG be conditioned upon the affirmative approval of the holders of a majority of the outstanding non-affiliate shares of Common Stock. Greenberg Traurig next presented the SEC’s Rule 13E-3 disclosure requirements that would now be applicable in view of the decision of the Company’s founding and management shareholders to exchange a portion of their Common Stock for equity interests in Parent. Discussion next ensued regarding the independence and disinterestedness of each of Exactech’s non-employee, outside directors, the fact that it was very unlikely that TPG would agree to a “majority-of-the-non-affiliate shares” voting condition, the downside risk that such a voting condition could present should arbitrageurs, hedge funds and other investors with short-term investment interests accumulate shares of Common Stock after the announcement of the merger agreement, the fact that the Company’s founding and management shareholders did not hold, own or control a majority of the voting power attributable to the outstanding Common Stock, and the risks inherent in any further delay in the transaction process with TPG (which could cause TPG to abandon the transaction given TPG’s desire to have Mr. Binder involved in a central role with the post-transaction Company), it was determined that formation of a formal special committee was not required or practical under the circumstances and that the delay inherent in the establishment thereof could actually risk the consummation of a transaction that was negotiated at arms’-length and that provided what the Board believed to be maximum current value for the Company’s non-affiliate shareholders.

It was also noted that the negotiating strategy, to date, with respect to TPG’s several indications of interest (which resulted in two significant price increases) was designed, led and executed exclusively by the Company’s independent directors (with the participation therein of the Company’s management team solely to help facilitate TPG’s due diligence investigation, in each case in the presence of one or more of the Company’s independent directors, Greenberg Traurig and J.P. Morgan), that the parties had already concluded their price negotiations, that any ensuing negotiation of the merger agreement, financing documents and overall terms of the proposed transaction would be directed exclusively by the Company’s independent directors in consultation with Greenberg Traurig and J.P. Morgan, the fact that TPG’s several indications of interest never required or conditioned the transaction on there being any minimum (or any) amount of Rollover Shares and that the Company’s executive team and TPG’s representatives were informed by the Company’s independent directors that no discussions or negotiations regarding any potential post-closing equity or employment arrangements for any member of the Company’s management team were permitted to occur prior to the time a firm price per share to be paid to the Company’s non-affiliate shareholders was accepted by the independent directors. It was further noted that the independent, non-employee directors have, to date, understood their authority and role as bargaining agents and guardians of the economic and voting interests of Exactech’s non-affiliate shareholders.

Ultimately, the independent, non-employee directors concluded that because TPG’s $42.00 per share cash offer price to shareholders was both final and acceptable to the independent, non-employee directors, management should be granted permission at this time to discuss separately with TPG post-closing equity participation, employment and other arrangements. However, to ensure that the negotiation of any arrangements with management would not delay or be allowed to constitute either a pre-signing or closing condition to the proposed acquisition, the independent directors also determined that if the members of the management group were unable to reach an agreement with TPG regarding the material terms of their post-closing arrangements in the ensuing 48 hours, that the independent, non-employee directors, constituting a majority of the Board, were prepared to authorize and recommend proceeding with a 100% cash merger transaction with TPG at $42.00 per share, assuming that an acceptable merger agreement can be agreed with TPG that is advisable, fair to and in the best interests of Exactech’s non-affiliate shareholders.

After the meeting was concluded, Mr. Binch called Mr. Sisitsky and informed him that the Board had authorized management and Greenberg Traurig to commence the negotiation of a merger agreement (providing for the acquisition of the Common Stock, other than any Rollover Shares and Appraisal Shares, at $42.00 per share) and that TPG was now permitted to speak with Exactech’s founding shareholders and management team regarding post-closing equity participation, employment and other arrangements, which could in no event be a condition to the merger or result in any delay in signing an otherwise mutually acceptable definitive merger agreement. Mr. Binch instructed Greenberg Traurig to begin negotiations of a proposed merger agreement.

On October 14, 2017, together with its final proposal, TPG had delivered to the Board a proposed merger agreement, containing terms and conditions consistent with such proposal.

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Between October 19, 2017, the date Greenberg Traurig delivered a revised draft of the Original Merger Agreement to Ropes & Gray, and October 22, 2017, representatives of Exactech management, Greenberg Traurig, TPG and Ropes & Gray exchanged seven drafts of the Original Merger Agreement, as well as multiple issues lists, and held multiple telephonic conferences to discuss and negotiate the terms and conditions of the Original Merger Agreement. Among other things, the parties negotiated: (i) the definitions of Acceptable Confidentiality Agreement, Adverse Recommendation Change, Alternative Proposal, Company Material Adverse Effect and Superior Proposal, all of which relate specifically to Exactech’s ability to respond to, investigate and take certain actions in respect of an unsolicited alternative topping bid transaction, as well as the Company’s and Parent’s right to terminate the Original Merger Agreement under certain circumstances; (ii) the amount of the termination fee, together with the circumstances under which it would become payable; (iii) the scope and precise terms of the Company’s representations and warranties, including the exceptions thereto and the qualifiers in respect thereof and the relationship thereof to Parent’s closing obligations under the Original Merger Agreement; (iv) the Company’s operating covenants between signing and closing; (v) the parties’ mutual and unilateral conditions to closing and the provisions pursuant to which the parties would be permitted to terminate the Original Merger Agreement, including those termination provisions triggering payment of the termination fee; (vi) the Company’s covenant to cooperate with respect to Parent’s financing efforts; (vii) the Company’s no-solicitation (i.e. “No Shop” ) covenant, the “window shop” exceptions thereto, and the ability of the Company to furnish information to, and to engage in discussions and negotiation with, the unsolicited proponent of any unsolicited Alternative Proposal that the Board determined in good faith, after consultation with its legal and financial advisors, constituted or would reasonably be expected to result in a Superior Proposal; (viii) the standard by which the Board could exercise its “fiduciary out” in the Original Merger Agreement and cause the Company to terminate the Original Merger Agreement; (ix) the ability and circumstances under which the Board could make an Adverse Recommendation Change, and the consequences under the Original Merger Agreement with respect thereto and that Florida law does not permit a “force the vote” provision; (x) the Company’s ability to communicate with its shareholders and inform them of any changes in circumstances or facts, as required by the Board’s fiduciary duties and applicable law, and the circumstances under which any such communication would constitute an Adverse Recommendation Change; (xi) the Company’s rights to terminate the merger agreement in order to accept and enter into a definitive agreement for a Superior Proposal; (xii) the procedural requirements for, and circumstances pursuant to which, Parent could match or top a Superior Proposal before the Company would be entitled to terminate the Original Merger Agreement and pay or cause to be paid to Parent the termination fee; (xiii) the procedural requirements for and circumstances pursuant to which Parent can negotiate with the Company to amend the Original Merger Agreement to obviate the reasons for the Board to terminate the Original Merger Agreement in response to an Intervening Event; (xiv) the Company’s covenants to prepare and file with the SEC the Proxy Statement and Schedule 13E-3 and to provide notice and convene the special meeting and solicit votes to obtain the Shareholder Approval; (xv) the level of efforts required for the parties to take certain actions required by the Original Merger Agreement, such as the filing with the FTC and DOJ of the required merger notification forms under the HSR Act; and (xvi) the Company’s ability to specifically enforce the Original Merger Agreement in the event of Parent’s failure to perform its obligations thereunder and the circumstances under which the Company could seek monetary damages against Parent and the Fund in the case of a material breach of the Original Merger Agreement.

Additionally, during this time, the parties negotiated the terms and conditions of the Original Equity Commitment Letter, including the Company’s rights and remedies in respect thereof and its ability to cause the funding contemplated thereby to occur.

At noon on October 22, 2017, the Board held a special telephonic meeting at which Greenberg Traurig presented a comprehensive summary of all the material terms and conditions of the proposed definitive Original Merger Agreement (including the progression and outcome of the negotiation of a number of previously open business and legal issues) and of the Original Equity Commitment Letter, and updated its previous presentation to the Board regarding the fiduciary duties of the Company’s directors in the context of a sale of control transaction such as the merger. Greenberg Traurig presented a summary of the Original Rollover and Voting Agreement and the implications thereof and noted that, although the Company was not a direct party to such agreement, that Greenberg Traurig had reviewed several drafts thereof and communicated with respect thereto to Ropes & Gray and to counsel to the founding shareholders. After a question and answer period ensued with respect to Greenberg Traurig’s presentation, an illustrative transaction timeline was next discussed regarding the SEC filing and review process involved with the merger (and a “going-private” transaction) and discussion continued regarding the Company’s disclosure obligations (and the limitations thereon) following the initial public announcement of a merger and going-private transaction. Following another question and answer session the Board meeting was adjourned until later in the day.

Late afternoon on the same day, the previously adjourned Board meeting was resumed with all of the same directors, management employees and representatives of Greenberg Traurig in attendance from earlier in the day, with the addition of several representatives from J.P. Morgan. At this meeting, representatives of J.P. Morgan presented to and reviewed with the Board its updated financial analysis of the $42.00 per share merger consideration. At the conclusion of such review, and following a question and answer period with respect to J.P. Morgan’s financial analysis, J.P. Morgan rendered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated October 22, 2017, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, the consideration to be paid to the holders of the Common Stock in the proposed merger, was fair, from a financial point of view, to such shareholders.

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After deliberation and discussion by the Board, in consultation with J.P. Morgan and Greenberg Traurig, regarding the terms of the proposed definitive merger agreement and consideration of all of the business, financial, legal, Company-specific, macro-economic, industry, and structural and procedural matters set forth below under “Reasons for the Merger Transactions; Recommendation of the Board of Directors; Fairness of the Merger”, all of the Company’s independent, non-employee directors, constituting a majority of the Board, adopted the Original Merger Agreement and the merger and determined that the Original Merger Agreement and the merger were advisable, fair to and in the best interests of the Company and the holders of the Common Stock. Dr. Petty and Mr. Petty recused themselves from voting in their capacities as directors with respect to the Original Merger Agreement and the merger.

After having duly adopted such resolutions and approving the Original Merger Agreement, the Board was asked to consider a proposal for the payment of an aggregate of $600,000 of severance compensation to the Company’s independent, non-employee directors as compensation for their efforts in leading, overseeing and negotiating the various acquisition proposals submitted to the Company by TPG and the terms of the Original Merger Agreement and the Original Equity Commitment Letter, in consultation with Greenberg Traurig. All of the members of the Board adopted resolutions authorizing the severance payment.

The Board next discussed with Greenberg Traurig the potential for plaintiff “strike suits” that may be filed against the Company, its officers and directors, J.P. Morgan and Parent following the public announcement of the Original Merger Agreement. Greenberg Traurig noted that such litigation is common in public company mergers and that such litigation may be commenced in multiple jurisdictions. To avoid unnecessary risk, uncertainty and expense from having to defend against potentially concurrent multi-jurisdictional litigation in, and to reduce the risk of potentially inconsistent rulings and misinterpretations of Florida corporate law arising from, multiple (non-Florida) courts, the Board adopted an exclusive forum provision to Exactech’s Bylaws whereby, unless the Company otherwise consents, the exclusive venue for commencing certain types of intra-corporate disputes, derivative litigation and other actions involving the Company and its officers and directors are the state courts of the State of Florida or, if no state court located within the State of Florida has jurisdiction, the United States District Court for the Northern District of Florida.

Following this meeting, Greenberg Traurig and Ropes & Gray finalized various technical and conforming changes in the Original Merger Agreement.

Later in the evening on the same day, the Company, Parent and Merger Sub entered into the Original Merger Agreement and the Original Equity Commitment Letter and the Company’s founding shareholders and an investment vehicle controlled by such shareholders entered into the Rollover and Voting Agreement with Parent.

On October 23, 2017, prior to the opening of trading on the Nasdaq Global Market, the transaction was announced via press release and the Company filed with the SEC its Current Report on Form 8-K disclosing the execution of the Original Merger Agreement, the Original Rollover and Voting Agreement, and the Original Equity Commitment Letter.

By letter dated November 6, 2017, Party A submitted to the Company an unsolicited, non-binding proposal to acquire 100% of the outstanding Common Stock at a price of $49.00 per share in cash (“ Party A’s Initial Alternative Transaction Proposal ”). The Company promptly furnished to TPG and its representatives a copy of Party A’s Initial Alternative Transaction Proposal as required by the terms of the Original Merger Agreement.

Party A’s Initial Alternative Transaction Proposal proposed, among other things, an acquisition of 100% of the outstanding Common Stock by means of a statutory merger transaction involving one or more of Party A’s affiliates. Party A’s Initial Alternative Transaction Proposal contemplated 100% equity backstopped financing, was subject to the completion of Party A’s business, financial and legal due diligence investigation of the Company, confirmation of its $49.00 price indication, the negotiation by Party A and the Company of a mutually acceptable merger agreement and financing documents, Party A’s arrangement of firm financing commitments for the transaction, the approval of the transaction by Party A’s investment committee, and the receipt of any foreign antitrust agency approval. Further, Party A’s Initial Alternative Transaction Proposal indicated that while it is not a condition to Party A’s Initial Alternative Transaction Proposal, Party A would be open to the Petty family rolling over a portion of theirs shares as part of Party A’s Initial Alternative Transaction Proposal.

On the afternoon of November 8, 2017, the Board convened a special meeting to review Party A’s Initial Alternative Transaction Proposal, in consultation with Greenberg Traurig and J.P. Morgan. At the meeting, the Board received a presentation from Greenberg Traurig with respect to the substantive and procedural requirements of, and the Company’s contractual obligations to TPG pursuant to, the Company’s “no shop” covenant and the “window shop” exceptions and “fiduciary outs” thereto contained in the Original Merger Agreement. Greenberg Traurig further addressed the Board’s fiduciary duties in the context of the pending merger with TPG and the Alternative Transaction Proposal, as well as the Board’s disclosure obligations to the holders of Common Stock. J.P. Morgan then provided the Board with an overview of Party A, including its recent M&A transaction history, fund size and structure.

In view of Party A’s $49.00 price indication, the Board determined, in consultation with Greenberg Traurig, that to satisfy its fiduciary duties to the Company’s shareholders it needed to be further and fully informed about Party A’s reputation, intentions, transaction rationale, execution capability, plans for the Company and the relative merits and risks of Party A’s Initial Alternative Transaction Proposal.

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Specifically, the Board noted that it required further specificity with respect to and confirmation of Party A’s proposed 100% equity backstopped acquisition financing, the nature of any substantive foreign antitrust agency approvals or filings that could be required (because of Party A’s non-U.S. citizenship), the scope of Party A’s due diligence requirements and its overall expectations (including its anticipated timing for the completion thereof), whether and when Party A expected to submit to the Company any proposed modifications to the Original Merger Agreement and the Original Equity Commitment Letter, and Party A’s intentions with respect to funding the payment of the Termination Fee in the event of a fiduciary termination of the Original Merger Agreement. The Board then directed Greenberg Traurig and J.P. Morgan to contact Party A’s legal counsel and financial advisor to seek such further specificity and confirmation and to report to the Board promptly thereafter the substance of their discussions, together with any impressions such Company advisors might become aware of regarding Party A and its willingness and ability to timely execute and consummate with certainty a transaction constituting a Superior Proposal (as defined in the Merger Agreement).

Immediately after the Board meeting, representatives of Greenberg Traurig and J.P. Morgan contacted Party A’s legal counsel and financial advisor, respectively, to communicate the Board’s requirements.

On the morning of November 14, 2017, in response to the Board’s previously communicated requirements, Party A submitted to the Company, with copies to Greenberg Traurig and J.P. Morgan, correspondence containing (i) a reaffirmation of Party A’s Initial Alternative Transaction Proposal, (ii) proposed revisions to the Original Merger Agreement, (iii) a new proposed form of the Original Equity Commitment Letter from two Party A-affiliated funds (providing that the equity financing would be funded severally, and not jointly, by the two funds), and (iv) a business, legal and financial due diligence request list and an approximately 14-working day timetable for the anticipated completion thereof. Party A indicated that it was prepared to discuss and negotiate with the Company a merger agreement and equity commitment letter in tandem with its business, financial and legal due diligence investigation. In its correspondence, Party A reiterated that it would agree (in any definitive merger agreement and equity commitment letter entered into with the Company) to fund any transaction with 100% equity financing if debt financing was not available at the time of closing and all conditions to closing were otherwise satisfied. Party A also informed the Company that it did not intend to pay the Termination Fee that would become due and payable by the Company at the time the Original Merger Agreement would be terminated in order for the Company to enter into a definitive merger agreement with Party A providing for a Superior Proposal. Party A did state, however, that it would provide funding of the Termination Fee upon consummation of its proposed transaction with the Company.

Late in the afternoon on November 14, 2017, the Board convened a special telephonic meeting with all of the Company’s directors in attendance, as well as representatives of Greenberg Traurig. At the meeting, Greenberg Traurig presented an analysis of Party A’s mark-up of the Original Merger Agreement, the new proposed form of Equity Commitment Letter and an assessment of Party A’s due diligence requirements and timing. Greenberg Traurig further addressed the Board’s fiduciary duties in the context of the pending sale of control of the Company and the operation and implications of various provisions in the Merger Agreement, including the definition of “Acceptable Confidentiality Agreement” in the Original Merger Agreement, “window shop” exceptions to the Company’s “no solicitation” covenant, TPG’s right to be promptly informed (and to receive copies of all material documentation) in respect of Party A’s Initial Alternative Transaction Proposal and any Superior Proposal, TPG’s “matching rights” in respect of any Superior Proposal, the provisions enabling the Company to make certain public and factual communications to its shareholders (including statements made in this proxy statement), the ability of the Company to make an Adverse Recommendation Change and the implications thereof, and the mechanics of the Termination Fee provisions, and the scope and operation of the confidentiality and standstill agreement previously entered into with TPG in August 2017.

Following further discussion of Party A’s Initial Alternative Transaction Proposal, in consultation with representatives of Greenberg Traurig, the Board determined that that the failure of the Company to engage in substantive transaction discussions with Party A and to facilitate a comprehensive due diligence examination of the Company by Party A would reasonably be expected to be inconsistent with the fiduciary duties of the Company’s directors under applicable law. Accordingly, as permitted by the Original Merger Agreement, the Board authorized Greenberg Traurig to furnish to Party A an Acceptable Confidentiality Agreement to facilitate Party A’s due diligence investigation of the Company and to commence substantive discussions with Party A of the draft transaction documentation furnished by Party A to the Company.

Immediately following the November 14, 2017 Board meeting, the Company’s lead independent director informed TPG of the Board’s intentions regarding Party A and Party A’s Initial Alternative Transaction Proposal and, as required by the Merger Agreement, TPG was furnished with copies of all documentation and materials furnished to the Company by Party A. Greenberg Traurig then furnished to Party A an Acceptable Confidentiality Agreement which was substantially identical to the Confidentiality Agreement entered into previously with TPG.

After several days of negotiations by Greenberg Traurig and Party A’s legal advisors, an Acceptable Confidentiality Agreement was executed by the Company and Party A on November 18, 2017 and Party A was provided access to various Company information in a virtual due diligence data room.

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Business and financial representatives of Party A and the Company (including members of the Company’s executive management team), as well as representatives of J.P. Morgan and Party A’s financial advisors, met in Gainesville, Florida on November 20, 2017 and November 21, 2017 to discuss the Company’s products and services, operating strategy, financial prospects, business risks, sales and distribution network and other matters.

On November 30, 2017, a regularly scheduled year-end meeting of the Board was convened, which all of the Company’s directors attended. Also attending the meeting, at the invitation of the Board, were the Company’s Chief Financial Officer and General Counsel. At the meeting, among other things, management summarized the due diligence process conducted to date by Party A and its representatives and conveyed various impressions derived from their interactions and course of dealing with Party A.

In the afternoon on December 1, 2017, Party A transmitted to the Company a letter stating that it was highly committed to a proposed transaction and that it was continuing to make progress towards submitting to the Company on or prior to December 13, 2017 a binding offer at the completion of its due diligence review of the Company, subject to final approval by Party A’s investment committee. As required by the Merger Agreement, TPG was promptly furnished with a copy of such non-binding letter.

During the early evening on December 1, 2017, Greenberg Traurig transmitted to Party A’s legal counsel comments to Party A’s proposed revisions of the Original Merger Agreement and comments to the proposed form of new Equity Commitment Letter that Party A furnished to the Company on November 14, 2017. With certain exceptions, such comments primarily deleted various revisions proposed by Party A and its legal counsel which, after consultation with Greenberg Traurig and J.P. Morgan, the Board determined negatively impacted the prompt availability and absolute certainty of Party A’s equity financing and, in their totality, materially and negatively impacted the overall consummation certainty of Party A’s Alternative Transaction Proposal.

Later that evening and after the Company’s receipt of Party A’s reaffirmation of its non-binding proposal, TPG submitted to the Company, with copies to Greenberg Traurig and J.P. Morgan, an offer letter together with a proposed amendment to each of the Original Merger Agreement, the Original Equity Commitment Letter and the Original Rollover and Voting Agreement. These revised agreements provided, among other things, the following material improvements to the aforementioned transaction agreements (i) an increased price per share of $49.25 to be paid for each share of the Common Stock (other than the Rollover Shares), which represented an increase of approximately 17.26% over the pending $42.00 of Original Merger Consideration, (ii) deletion of the “No Company Material Adverse Effect” closing condition and (iii) removal of the Company’s previous contractual obligations to cooperate with TPG and assist it with any potential debt financing that TPG may seek to obtain to fund the merger. TPG advised the Company that these changes were intended to expedite consummation of the merger and to ensure maximum closing certainty for the Company. The offer letter stated that as a condition to providing such materially improved terms, TPG’s proposal had to be accepted, definitively documented and publicly announced prior to the opening of trading of the Common Stock on the Nasdaq Global Market on December 4, 2017 and the Company was required to file its preliminary proxy statement and the related Schedule 13E-3 promptly after such public announcement.

Later that night, after its review of the offer letter and the revised financing and other transaction agreements submitted to the Company by TPG, and following discussions thereof with the Company’s non-employee directors, Greenberg Traurig provided to Ropes & Gray various comments to such agreements. A special telephonic meeting of the Board was scheduled for early the next morning.

On December 2, 2017, a special telephonic meeting of the Board was convened. All of the Company’s directors were present and participated in the meeting and, at the Board’s invitation, certain members of the Company’s management team and representatives of Greenberg Traurig and J.P. Morgan participated. The Company’s management team discussed the status of Party A’s due diligence review to date, together with their impressions and observations regarding the overall course of dealings with Party A’s representatives over the past couple of weeks. The Company’s lead independent director also related his impressions of the process and communications with Party A to date.

Greenberg Traurig then summarized the comments to the Merger Agreement and Equity Commitment Letter that were received from Party A on November 14, 2017 and the scope and nature of the Company’s and Greenberg Traurig’s responses thereto transmitted to Party A’s representatives on December 1, 2017. Greenberg Traurig next summarized the material terms and conditions of TPG’s proposed amendments to the Original Merger Agreement and the Original Equity Commitment Letter, and updated its previous presentations to the Board regarding the fiduciary duties of the Company’s directors in the context of the sale of control transaction pending under the Original Merger Agreement. The Company’s Executive Chairman then summarized the proposed new terms of the Original Rollover and Voting Agreement and disclosed that he and the Company’s founding shareholders had been approached by and had held discussions with TPG during the previous few days to inquire whether such shareholders would be willing to exchange, in connection with the merger, a portion of their shares of Common Stock for a new class of equity securities in the Parent to enable TPG to pay in the merger substantially increased cash consideration to all non-affiliate holders of the Company’s common stock. Discussion then ensued regarding the mechanics of these proposed new rollover share arrangements.

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Greenberg Traurig then addressed the timing of the pending Merger with Parent and Merger Sub and noted that if the Amendment to Merger Agreement and Amendment to Equity Commitment Letter were adopted by the Board and entered into by the Company, and if the Amendment to Rollover and Voting Agreement were entered into among the Company’s founding shareholders, certain management shareholders and Parent, that all of the fiduciary provisions of the Merger Agreement would remain in effect and unchanged, except that the Termination Fee would be proportionately increased to $25,797,000 to reflect the increased aggregate equity value of the merger. It was further noted that the voting covenants of the shareholder parties to the Amendment to Rollover and Voting Agreement similarly would remain in effect and unchanged.

Representatives of J.P. Morgan then presented to and reviewed with the Board its updated financial analysis of the $49.25 per share merger consideration now being offered by TPG. At the conclusion of such review, and following a question and answer period with respect to J.P. Morgan’s financial analysis, J.P. Morgan rendered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated December 2, 2017, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, the consideration to be paid to the holders of the Common Stock in the proposed merger, was fair, from a financial point of view, to such shareholders, as more fully described below in the section “ Opinion of Financial Advisor ” beginning on page 41 of this proxy statement.

After further deliberation and discussion by the Board, in consultation with J.P. Morgan and Greenberg Traurig, regarding the terms of the proposed definitive merger agreement, as amended, and consideration of all of the business, financial, legal, Company-specific, macro-economic, industry, and structural and procedural matters set forth below under “ Reasons for the Merger Transactions; Recommendation of the Board of Directors; Fairness of the Merger ”, all of the Company’s independent, non-employee directors, constituting a majority of the Board, adopted the Amendment to Merger Agreement and the Amendment to Equity Commitment Letter, determined that the Merger Agreement, as amended, and the merger were advisable, fair to and in the best interests of the Company and the holders of the Common Stock, and resolved to recommend that the Company’s shareholders vote to approve the Merger Agreement and the merger. Dr. Petty and Mr. Petty recused themselves from voting in their capacities as directors with respect to the Merger Agreement, as amended, and the merger.

Following this meeting, Greenberg Traurig and Ropes & Gray finalized various technical and conforming changes in the Merger Agreement and the Rollover and Voting Agreement.

On December 3, 2017, the Company, Parent and Merger Sub entered into the Amendment to the Merger Agreement and the Amendment to the Equity Commitment Letter and the Company’s founding shareholders, an investment trust controlled by such shareholders, and certain additional shareholder members of the Company’s management team entered into the Amendment to Rollover and Voting Agreement with Parent.

Prior to the opening of trading of Common Stock on the Nasdaq Global Market on December 4, 2017, the Merger Agreement was announced via press release. Promptly thereafter the Company filed with the SEC this proxy statement in preliminary form and the related Schedule 13E-3, as well as a Current Report on Form 8-K disclosing the execution of the Merger Agreement, the Rollover and Voting Agreement and the Equity Commitment Letter.

On December 7, 2017 Party A submitted to the Company, with copies to Greenberg Traurig and J.P. Morgan, a revised proposal (“ Party A’s Revised Alternative Transaction Proposal ”) to, among other things, (i) acquire 100% of the outstanding Common Stock at an increased price of $54.00 per share in cash, (ii) pay directly to TPG any Termination Fee resulting from the Company’s termination of the Merger Agreement in order for the Company to enter into a definitive merger agreement with Party A providing for a Superior Proposal, (iii) delete the “No Company Material Adverse Effect” closing condition contained in the previous version of the proposed merger agreement to be entered into between Party A and the Company, and (iv) remove the Company’s debt financing cooperation covenant contained in the previous version of the proposed merger agreement to be entered into between Party A and the Company. The latter two proposed changes were designed to match the terms of the now-amended and improved Merger Agreement with TPG. Party A also made certain Company-favorable changes to the version of the equity commitment letter it previously submitted to the Company. Party A’s Revised Alternative Transaction Proposal reiterated that Party A would be open to the Rollover Investors rolling over a portion of their shares in the Company as part of Party A’s Revised Alternative Transaction Proposal. As required by the Merger Agreement, TPG was promptly furnished with copies of Party A’s Revised Alternative Transaction Proposal.

On December 8, 2017, the Board convened a special telephonic meeting with all of the Company’s directors in attendance, as well as representatives of Greenberg Traurig. At the meeting, Greenberg Traurig presented an analysis of Party A’s Revised Alternative Transaction Proposal (including Party A’s proposed revisions to the proposed merger agreement to be entered into with the Company and its proposed equity commitment letter). Greenberg Traurig further addressed the Board’s fiduciary duties in the context of the pending sale of control of the Company and the operation and implications of various provisions in the Merger Agreement, including the definition therein of “Acceptable Confidentiality Agreement”, the “window shop” exceptions to the Company’s “no solicitation” covenant, TPG’s right to be promptly informed (and to receive copies of all material documentation) in respect of Party A’s Revised Alternative Transaction Proposal and any Superior Proposal, TPG’s “matching rights” in respect of any Superior Proposal, the provisions enabling the Company to make certain public and factual communications to its shareholders (including statements made in this proxy statement), the ability of the Company to make an Adverse Recommendation Change and the implications thereof, the scope and operation of the Termination Fee provisions in the Merger Agreement, and the scope and operation of the confidentiality and standstill agreement previously entered into with TPG in August 2017.

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Following further discussion of Party A’s Revised Alternative Transaction Proposal, in consultation with representatives of Greenberg Traurig, the Board authorized Greenberg Traurig to continue substantive discussions with Party A regarding the draft transaction documentation furnished by Party A to the Company and to seek clarification of certain drafting points in the documentation providing for Party A’s Revised Alternative Transaction Proposal.

On December 9, 2017, Party A confirmed in a letter addressed to the Board on such date that Party A’s Revised Alternative Transaction Proposal would remain irrevocable until 12:01 a.m. on December 15, 2017. Party A distributed for the first time a draft voting support agreement to be entered into by the Company’s founding shareholders, certain members of the management team and an investment trust controlled by the Petty family, and revised drafts of the other proposed documentation comprising Party A’s Revised Alternative Transaction Proposal. The revised documentation provided by Party A included clarifications to the drafting points discussed between Greenberg Traurig and counsel to Party A.

As required by the Merger Agreement, on December 10, 2017, TPG was furnished with copies of the revised documentation for Party A’s Revised Alternative Transaction Proposal. On such date, counsel to the Petty family informed representatives of Greenberg Traurig that the Petty family would not be entering into any agreement with Party A to vote their shares in favor of any merger agreement providing for Party A’s Revised Alternative Transaction Proposal.

On December 11, 2017, following a request by Party A for the Company’s independent directors to schedule a telephonic conference among Party A, the Company’s founding shareholders and certain members of the Company’s management team, Party A initiated such call to discuss, among other things, Party A’s general plans for the pro forma combined company and certain related post-closing integration and operational matters. At that telephonic meeting, Dr. Petty notified Party A, among other things, that the Petty family had informed the Board that none of the Petty family shareholders nor the family investment trust controlled by the Petty family would agree to exchange (or rollover) any of their shares of Common Stock for equity securities in any Party A affiliate-owner of the Company and that none of such parties would enter into any agreement to vote their shares for the approval of any merger agreement providing for Party A’s Revised Alternative Transaction Proposal.

On December 12, 2017, the Board convened a special telephonic meeting with all of the Company’s independent directors in attendance, as well as representatives of Greenberg Traurig, to discuss the status of pending negotiations with Party A and the position on voting taken by the Petty family. Dr. William Petty and Mr. David Petty were recused from the meeting. Greenberg Traurig informed the Company’s independent directors that, except for the voting support agreement, the documentation for Party A’s Revised Alternative Transaction Proposal was substantially completed. The independent directors instructed Greenberg Traurig to discuss with counsel to the Petty family whether there was any possibility that the Petty family shareholders might be inclined to reverse their position with respect to entering into a voting support agreement with Party A.

By letter dated December 13, 2017, Party A reconfirmed Party A’s Revised Alternative Transaction Proposal but, for the first time, expressly conditioned Party A’s Revised Alternative Transaction Proposal on obtaining voting support agreements from the Company’s founding shareholders and the investment trust controlled by the Petty family to vote all of their shares for the adoption of a merger agreement with Party A. Party A did not include this express voting condition in any of its prior proposal letters to the Company.

On December 14, 2017, the Board convened a special telephonic meeting with all of the Company’s independent directors in attendance, as well as representatives of Greenberg Traurig, to discuss Party A’s correspondence to the Company on December 13, 2017. At the meeting, Mr. Binch informed the other independent directors that, as requested by the independent directors, the Petty family’s counsel was contacted to inquire about whether the Petty family would reverse their position as to entering into a voting support agreement with Party A. Mr. Binch reported that the Company’s Executive Chairman, the Company’s President and Chief Executive Officer, another member of the Petty family and the investment trust controlled by the Petty family firmly reiterated that they would not enter into any agreement with Party A to vote for any merger agreement and merger transaction involving the Company and Party A.

The independent directors discussed the implications of the voting support agreement condition expressly included in Party A’s December 13 ^th reconfirmation of Party A’s Revised Alternative Transaction Proposal and the fact that, despite the independent directors attempts to persuade the Petty family to change their mind, that the voting condition being imposed by Party A would not and could not be satisfied. The independent directors further discussed whether there was any likelihood Party A would withdraw the newly imposed condition but concluded that such a request would be futile.

Accordingly, due to the fact that the voting support agreement condition expressly included in Party A’s December 13 ^th reconfirmation of Party A’s Revised Alternative Transaction Proposal would not be satisfied, the Board could not make an affirmative determination that Party A’s Revised Alternative Transaction Proposal constituted a Superior Proposal.

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Later in the afternoon of December 14, 2017, Mr. Binch informed Party A’s principal partner that the Company’s independent directors are committed to obtaining maximum value for the Company’s non-affiliate shareholders but that the Company’s independent directors had been notified by the Company’s Executive Chairman that he, the Company’s President and Chief Executive Officer, the Company’s Secretary and an investment trust controlled by the Petty family would not agree to enter into a voting support agreement with Party A despite the Company’s independent directors’ efforts to persuade the Petty family to reverse their voting decision. Because Party A did not yet respond to Mr. Binch and in light of the failure of Party A’s voting condition and Party A’s impending December 15, 2017, 12:01 a.m., EST, deadline regarding the revocation of Party A’s Revised Alternative Transaction Proposal, Greenberg Traurig was instructed to inform Party A’s counsel that the Company’s independent directors considered Party A’s Revised Alternative Transaction Proposal withdrawn and void.

Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger

In evaluating the merger, the Merger Agreement, and the other transactions and agreements contemplated thereby, the Board consulted its legal and financial advisors, consulted with management and considered a number of factors, including, but not limited to, the following potentially positive factors (which are not intended to be exhaustive and are not listed in any relative order of importance):

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The Board also considered a number of factors that are discussed below relating to the procedural safeguards that it believes were and are present to ensure the fairness of the merger and to permit the Board to represent effectively the interests of the Company’s non-affiliate shareholders. These procedural safeguards, which are not intended to be exhaustive and are not listed in any relative order of importance are discussed below:

The Board also considered a variety of uncertainties, risks and potentially negative factors in its deliberations concerning the merger, including the factors discussed below, concerning the Merger Agreement and the merger (which are not intended to be exhaustive and are not listed in any relative order of importance):

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The Board also considered the following factors in the Merger Agreement which are intended to expedite consummation of the merger and to ensure maximum closing certainty:

The Board did not consider the liquidation value of Company’s assets because the Board considers Company to be a viable going concern business that will continue to operate regardless of whether the merger is consummated, where value is derived from cash flows generated from its continuing operations. In addition, the Board believes that the value of Company’s assets that might be realized in a liquidation would be significantly less than its going concern value for the reasons that (i) liquidation sales generally result in proceeds substantially less than the sales of a going concern; (ii) it is impracticable to determine a liquidation value given the significant execution risk involved in any breakup of a company; (iii) an ongoing operation has the ability to continue to earn profit, while a liquidated company does not, such that the “going-concern value” will be higher than the “liquidation value” of a company because the “going concern value” includes the liquidation value of a company’s tangible assets as well as the value of its intangible assets, such as goodwill; and (iv) a liquidation process would involve additional legal fees, costs of sale and other expenses that would reduce any amounts that shareholders might receive upon liquidation. Furthermore, Company has no intention of liquidation and the merger will not result in the liquidation of Company. The Board believes the analyses and additional factors it reviewed provided an indication of the Company’s going concern value. The Board also considered the historical market prices of the Common Stock. The Board did not seek to determine a pre-merger going concern value for the Common Stock to determine the fairness of the Merger Consideration to the Company’s non-affiliate shareholders. The Board believes that the trading price of the Common Stock at any given time represents the best available indicator of the Company’s going concern value at that time, so long as the trading price at that time is not impacted.

After considering the foregoing potentially negative and potentially positive factors, the Board concluded that the uncertainties, risks and potentially negative factors relevant to the merger were outweighed by the potential benefits that it expected the non-affiliate shareholders would achieve as a result of the merger.

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The foregoing discussion of information and factors considered by the Board is not intended to be exhaustive and may not include all of the factors considered by the Board. In view of the wide variety of factors considered by the Board, the Board found it impracticable to quantify or otherwise assign relative weights to the foregoing factors in reaching its conclusions. In addition, individual members of the Board may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The Board adopted J.P. Morgan’s opinion and analyses, among other factors considered, in reaching its determination as to the fairness of the transactions contemplated by the Merger Agreement, including the merger. The Board recommended that the Board approve, and the Board approved, the Merger Agreement based upon the totality of the information presented to it.

In considering the recommendation of the Board of Directors with respect to the proposal to approve the Merger Agreement, you should be aware that certain of our officers and directors have certain interests in the merger that may be different from, or in addition to, your interests as a shareholder generally. The Board was aware of these interests, considered them and took them into account, together with other factors, in determining whether to approve the Merger Agreement and recommending that our shareholders vote for the approval of the Merger Agreement. See the section entitled “ Special Factors — Interests of the Company’s Directors and Executive Officers in the Merger ” beginning on page 46. The Board of Directors, on behalf of the Company, further believes that the merger is fair to the Company’s “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act.

ACCORDINGLY, ALL OF THE COMPANY’S INDEPENDENT, NON-EMPLOYEE DIRECTORS, CONSTITUTING A MAJORITY OF THE COMPANY’S BOARD, RECOMMEND THAT YOU VOTE “FOR” APPROVAL OF THE MERGER AGREEMENT, “FOR” APPROVAL, BY NON-BINDING ADVISORY VOTE, OF CERTAIN COMPENSATION THAT WILL OR MAY BECOME PAYABLE TO THE COMPANY’S NAMED EXECUTIVE OFFICERS IN CONNECTION WITH THE MERGER AND “FOR” APPROVAL TO ADJOURN THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, FOR, AMONG OTHER REASONS THE SOLICITATION OF ADDITIONAL PROXIES IN THE EVENT THERE ARE INSUFFICIENT VOTES CAST AT THE SPECIAL MEETING TO APPROVE THE PROPOSAL TO APPROVE THE MERGER AGREEMENT AND THE MERGER.

Opinion of Financial Advisor

Pursuant to an engagement letter, dated October 13, 2017, the Company retained J.P. Morgan as its financial advisor in connection with the proposed merger.

At the meeting of the Board on December 2, 2017, J.P. Morgan rendered its oral opinion to the Board that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, the consideration to be paid to the holders of the Common Stock in the proposed merger was fair, from a financial point of view, to such shareholders. J.P. Morgan has confirmed its oral opinion by delivering its written opinion to the Board, dated December 2, 2017, that, as of such date, the consideration to be paid to the holders of the Common Stock in the proposed merger was fair, from a financial point of view, to such shareholders.

The full text of the written opinion of J.P. Morgan, dated December 2, 2017, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The Company’s shareholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the consideration to be paid in the proposed merger and did not address any other aspect of the proposed merger. J.P. Morgan expressed no opinion as to the fairness of the consideration to the holders of any other class of securities, holders of the Rollover Shares, creditors or other constituencies of the Company or as to the underlying decision by Company to engage in the proposed merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The opinion does not constitute a recommendation to any shareholder of the Company as to whether or how such shareholder should vote with respect to the proposed merger or any other matter.

In arriving at its opinion, J.P. Morgan, among other things:

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In addition, J.P. Morgan held discussions with certain members of the management of the Company and Parent with respect to certain aspects of the proposed merger, and the past and current business operations of the Company, the financial condition and future prospects and operations of the Company, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by the Company or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of the Company or Parent under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of the Company to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the proposed merger and the other transactions contemplated by the Merger Agreement will be consummated as described in the Merger Agreement. J.P. Morgan also assumed that the representations and warranties made by the Company, Parent and Merger Sub in the Merger Agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to the Company with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the proposed merger will be obtained without any adverse effect on the Company or on the contemplated benefits of the proposed merger.

The projections furnished to J.P. Morgan for the Company were prepared by Company management. The Company does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the proposed merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of Company management, including, without limitation, factors related to general economic, market and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding management’s projections, please refer to the section entitled “Projected Financial Information” beginning on page 44 of this proxy statement.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the consideration to be paid to the holders of the Common Stock in the proposed merger, and J.P. Morgan has expressed no opinion as to the fairness of any consideration paid in connection with the proposed merger to the holders of any other class of securities, holders of the Rollover Shares, creditors or other constituencies of the Company or as to the underlying decision by the Company to engage in the proposed merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed merger, or any class of such persons relative to the consideration to be paid to the holders of the Common Stock in the proposed merger or with respect to the fairness of any such compensation . J.P. Morgan expressed no opinion as to the price at which the Common Stock will trade at any future time.

The terms of the Merger Agreement were determined through arm’s length negotiations between the Company and Parent, and the decision to enter into the Merger Agreement was solely that of the Board. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Board or Company management with respect to the proposed merger or the consideration.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodology in rendering its opinion to the Board on December 2, 2017. The following is a summary of the material financial analyses utilized by J.P. Morgan in connection with providing its opinion to the Board and does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The financial analyses summarized below include information presented in tabular format. The tables are not intended to stand alone and, in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

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Public Trading Multiples . Using publicly available information, J.P. Morgan compared selected financial data of the Company with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be sufficiently analogous to the Company. The companies selected by J.P. Morgan were:

None of the selected companies reviewed is identical to the Company. However, these companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of the Company based on business sector participation, financial metrics and form of operations. However, certain of these companies may have characteristics that are materially different from those of the Company. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the selected companies differently than they would affect the Company.

Using publicly available information, J.P. Morgan calculated, for each selected company, the ratio of the company’s firm value (calculated as the market value of the Common Stock on a fully diluted basis, plus preferred equity, any debt and minority interest, less cash and cash equivalents) to the consensus equity research analyst estimate for the company’s EBITDA (calculated as earnings before interest, taxes, depreciation and amortization) for the year ending December 31, 2018 (the “ 2018E FV/EBITDA ”). J.P. Morgan determined, in its professional judgment, that any ratios less than 0.0x or greater than 20.0x were not meaningful (“ NM ”) to the analysis.

Results of the analysis are as follows:

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Based on the results of this analysis, J.P. Morgan selected a multiple reference range for 2018E FV/EBITDA of 9.0x –14.0x. After applying such range to the projected adjusted EBITDA for the Company for the year ending December 31, 2018 based on projections provided by the Company’s management, the analysis indicated the following implied per share equity value range for the Common Stock, rounded to the nearest one quarter US dollar:

The range of implied per share equity value for Common Stock was compared to the Company’s closing share price of $32.00 on October 20, 2017, the Nasdaq trading day immediately preceding the execution of the Original Merger Agreement, and the proposed Merger Consideration of $49.25 per share of Common Stock.

Selected Transaction Analysis . Using publicly available information, J.P. Morgan reviewed selected transactions involving acquired businesses and assets that, for purposes of J.P. Morgan’s analysis, may be considered similar to the Company’s business or assets. Specifically, J.P. Morgan reviewed the following transactions:

None of the selected transactions reviewed was identical to the proposed merger. However, the transactions selected were chosen because certain aspects of the transactions, for purposes of J.P. Morgan’s analysis, may be considered similar to the proposed merger and the businesses involved in these transactions operated in the medical device and supply industry. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the transactions differently than they would affect the proposed merger.

Using publicly available information, J.P. Morgan calculated, for each selected transaction, the ratio of the target company’s firm value to the target company’s EBITDA for the twelve-month period prior to announcement of the applicable transaction (“ FV/LTM EBITDA ”).

Results of the analysis are as follows:

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Based on the results of this analysis, J.P. Morgan selected a multiple reference range for FV/LTM EBITDA of 9.0x – 13.5x and applied it to the Company’s LTM adjusted EBITDA as of October 31, 2017. This analysis indicated the following implied per share equity value range for the Common Stock, rounded to the nearest one quarter US dollar:

The range of implied per share equity value for the Common Stock was compared to the Company’s closing share price of $32.00 on October 20, 2017, the Nasdaq Global Market trading day immediately preceding the execution of the Original Merger Agreement and the proposed Merger Consideration of $49.25 per share of Common Stock.

Discounted Cash Flow Analysis . J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining an implied fully diluted equity value per share of Common Stock. A discounted cash flow analysis is a method of evaluating an asset using estimates of the future unlevered cash flows generated by the asset and taking into consideration the time value of money with respect to those cash flows by calculating their “present value”. The “ unlevered free cash flows ” refers to a calculation of the future cash flows generated by an asset without including in such calculation any debt servicing costs. Specifically, unlevered free cash flow represents unlevered net operating profit after tax, adjusted for depreciation and amortization, capital expenditures and changes in net working capital. “ Present value ” refers to the current value of the cash flows generated by the asset, and is obtained by discounting those cash flows back to the present using a discount rate that takes into account macro-economic assumptions and estimates of risk, the opportunity cost of capital and other appropriate factors. “ Terminal value ” refers to the present value of all future cash flows generated by the asset for periods beyond the projections period.

J.P. Morgan calculated the unlevered free cash flows that the Company is expected to generate during fiscal years 2017 through 2023 based upon financial projections prepared by Company management. For unlevered free cash flows, please refer to the section entitled “ Projected Financial Information ” beginning on page 44 of this proxy statement. J.P. Morgan also calculated a range of terminal values of the Company at the end of the seven- year period ending in 2023 by applying a perpetual growth rate ranging from 2.5% to 3.5% to the unlevered free cash flow of the Company during the terminal period of the projections. For the unlevered free cash flows of the Company during the terminal period, please refer to the section entitled “ Projected Financial Information ” beginning on page 44 of this proxy statement. The unlevered free cash flows for fiscal years 2018 through 2023 and the range of terminal values were then discounted to present values as of December 31, 2017 using a range of discount rates from 8.5% to 9.5%. This discount rate range was based upon J.P. Morgan’s analysis of the weighted-average cost of capital of the Company.

Based on the foregoing, this analysis indicated the following implied per share equity value range for the Common Stock, rounded to the nearest one quarter US dollar:

The range of implied per share equity value for the Common Stock was compared to the Company’s closing share price of $32.00 on October 20, 2017, the Nasdaq trading day immediately preceding the execution of the Original Merger Agreement, and the proposed Merger Consideration of $49.25 per share of Common Stock.

Miscellaneous . The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of the Company. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

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Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary is identical to the Company, and none of the selected transactions reviewed was identical to the proposed merger. However, the companies selected were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of the Company. The transactions selected were similarly chosen because certain aspects of the transactions, for purposes of J.P. Morgan’s analysis, may be considered similar to the proposed merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the selected companies differently than they would affect the Company and the transactions differently than they would affect the proposed merger.

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise the Company with respect to the proposed merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with the Company and the industries in which it operates.

J.P. Morgan received a fee from the Company of $2 million, which was payable upon the earlier of public announcement of the proposed merger or delivery by J.P. Morgan of its opinion. For services rendered in connection with the proposed merger, the Company has agreed to pay J.P. Morgan an additional fee of approximately $9 million upon the closing of the merger. J.P. Morgan may also receive a fee from the Company in the event that the Company receives a break-up fee in connection with the termination or abandonment of the proposed merger, or failure of the merger to occur. In addition, the Company has agreed to reimburse J.P. Morgan for certain of its expenses incurred in connection with its services, including the fees and disbursements of counsel, and has agreed to indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement.

During the two years preceding the date of J.P. Morgan’s opinion, and as disclosed to the Board at the time of J.P. Morgan’s engagement by the Company, J.P. Morgan and its affiliates have had commercial or investment banking relationships with the Company and affiliates of TPG for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included J.P. Morgan acting as lead arranger and lead bookrunner on the Company’s facility agreement in December 2015, as joint lead arranger and bookrunner on the affiliates of TPG facility agreement in August 2016, as joint lead bookrunner on the initial public offering of equity securities by TPG Pace Holdings in June 2017, and as passive bookrunner on the initial public offering of equity securities by TPG RE Finance Trusts in July 2017. Further, during such period, J.P. Morgan and its affiliates have provided debt and equity underwriting, financial advisory and loan syndication services to portfolio companies of TPG that are unrelated to the proposed merger. J.P. Morgan has been paid in the aggregate between 15x and 20x the amount of the compensation J.P. Morgan would receive from the Company under the terms of this engagement in respect of such other engagements with TPG. In addition, J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of the Company, Parent and such portfolio companies, for which J.P. Morgan receives customary compensation or other financial benefits. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 2% of the outstanding Common Stock of the Company. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities of the Company for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities.

Position of the Rollover Investors as to Fairness of the Merger

Under SEC rules governing “going-private” transactions, each of the Rollover Investors is required to express its belief as to the fairness of the proposed merger to the unaffiliated shareholders. Each of the Rollover Investors is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Rollover Investors as to the fairness of the merger are not intended and should be not be construed as a recommendation to any shareholder of the Company as to how to vote on the proposal to approve the Merger Agreement. The Rollover Investors have interests in the merger that are different from, and/or in addition to, those of the unaffiliated shareholders of the Company by virtue of its continuing interests in Parent after the completion of the merger. These interests are described under “Special Factors-Interests of the Company’s Directors and Executive Officers in the Merger beginning on page 46 .

None of the Rollover Investors has performed, or engaged a financial advisor to perform, any valuation or other analysis for the purposes of assessing the fairness of the merger to the Company’s unaffiliated shareholders. The merger was approved by a majority of the directors on the Board who are not employees of the Company. Dr. Petty, the Company’s Executive Chairman, and Mr. Petty, the Company’s President and Chief Executive Officer, each of whom is a Rollover Investor and a director of the Company, recused themselves from voting in their respective capacities as directors with respect to the Merger Agreement and the merger. Based on the knowledge and analysis of the Rollover Investors of available information regarding the Company, as well as discussions with the

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Company’s management regarding the Company and its business and the factors considered by, and the analysis and resulting conclusions of, the Board discussed under “-Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger” beginning on page 29 (which analysis and conclusions the Rollover Investors adopt), each of the Rollover Investors believes that the merger is substantively and procedurally fair to the Company’s unaffiliated shareholders based on its consideration of the factors enumerated below under “Position of Parent and Merger Sub as to Fairness of the Merger” , among others.

The Rollover Investors believe that these factors provide a reasonable basis for their belief that the merger is fair to the Company’s unaffiliated shareholders. This belief should not, however, be construed as a recommendation to any of the Company shareholders to approve the Merger Agreement. The Rollover Investors do not make any recommendation as to how shareholders of the Company should vote their shares of Common Stock relating to the merger.

In their consideration of the fairness of the proposed merger, the Rollover Investors did not find it practicable to, and did not, appraise the assets of the Company to determine the liquidation value for the Company’s unaffiliated shareholders (i) because of their belief that liquidation sales generally result in proceeds substantially less than sales of a going concern, (ii) because of the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, (iii) because they considered the Company to be a viable going concern and (iv) because the Company will continue to operate its business following the merger. None of the Rollover Investors considered the net book value, which is an accounting concept, for purposes of determining the fairness of the per share Merger Consideration to the Company’s unaffiliated shareholders because, in their view, it does not reflect, or have any meaningful impact on, either the market trading prices of common stock or the Company’s value as a going concern. Each of the Rollover Investors note, however, that the merger consideration of $49.25 is higher than the net book value of the Company per share of $6.15 as of October 20, 2017 and the net book value of the Company per share of $6.19 as of December 1, 2017.

Position of Parent and Merger Sub as to Fairness of the Merger

Under a possible interpretation of the SEC rules governing “going-private” transactions, each of the Fund, Parent and Merger Sub may be deemed to be affiliates of the Company and required to express their beliefs as to the fairness of the merger to the unaffiliated shareholders of the Company. The Fund, Parent and Merger Sub believe that the merger (which is the Rule 13e-3 transaction for which a Schedule 13E-3 Transaction Statement has been filed with the SEC) is fair to the Company’s unaffiliated shareholders on the basis of the factors described under “ Special Factors - Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger ” beginning on page 29, and the additional factors described below.

In this section and in the section captioned “ Special Factors—Position of the Rollover Investors as to the Fairness of the Merger ” beginning on page 39, we refer to the Rollover Investors, each of whom has committed to contribute a portion of the shares of Company Common Stock owned by him, her or it to Parent in connection with the merger and after the merger will be an equity holder in Parent. Dr. Petty, the Company’s Executive Chairman, and Mr. Petty, the Company’s President and Chief Executive Officer, each of whom is a director of the Company, recused themselves from voting in their respective capacities as directors with respect to the Merger Agreement and the merger.

The Fund did not participate in the deliberations of the Board regarding, or receive advice from the Company’s legal advisor or financial advisors as to, the fairness of the merger. The Fund has not performed, or engaged a financial advisor to perform, any valuation or other analysis for the purposes of assessing the fairness of the merger to the Company’s unaffiliated shareholders. Based on these entities’ knowledge and analysis of available information regarding the Company, as well as discussions with members of the Company’s senior management regarding the Company and its business and the factors considered by, and findings of, the Board discussed in this proxy statement in the section entitled “ Special Factors - Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger ” beginning on page 29 (which findings the Fund adopts). The Fund believes that the merger is substantively fair to the Company’s unaffiliated shareholders. In particular, the Fund considered the following:

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The Fund did not establish, and did not consider, a pre-merger going concern value of the Common Stock as a public company for the purposes of determining the per share Merger Consideration or the fairness of the per share Merger Consideration to the unaffiliated shareholders because, following the merger, the Company will have a significantly different capital structure. However, to the extent the pre-merger going concern value was reflected in the per share price of the Common Stock before the public announcement of the signing of the Original Merger Agreement, the per share Merger Consideration of $49.25 represented a premium to the going concern value of the Company. In addition, the Fund did not consider net book value because they believe that net book value, which is an accounting concept, does not reflect, or have any meaningful impact on, either the market trading prices of the Common Stock value as a going concern. The Fund does note, however, that the per share merger consideration of $49.25 is higher than the net book value of the Company per share of $6.15 as of October 20, 2017 and than the net book value of the Company per share of $6.19 as of December 1, 2017. The Fund did not consider liquidation value in determining the fairness of the merger to the unaffiliated shareholders because of their belief that liquidation sales generally result in proceeds substantially less than sales of a going concern, because of the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, because they considered the Company to be a viable, going concern and because the Company will continue to operate its business following the merger.

Fund believes that the merger is procedurally fair to the Company’s unaffiliated shareholders based upon the following factors:

The foregoing discussion of the information and factors considered and given weight by the Fund in connection with the fairness of the merger agreement and the merger is not intended to be exhaustive but is believed to include all material factors considered by it. The Fund did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching its position as to the fairness of the Merger Agreement and the merger. Rather, the Fund made the fairness determinations after considering all of the foregoing as a whole. The Fund believes these factors provide a reasonable basis upon which to form their belief that the merger is fair to the Company’s unaffiliated shareholders. This belief should not, however, be construed as a recommendation to any Company shareholder to adopt the Merger Agreement. The Fund does not make any recommendation as to how shareholders of the Company should vote their shares of Common Stock relating to the merger.

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Neither Parent nor Merger Sub participated in the deliberations of the Board regarding, or received advice from the Company’s legal advisor or financial advisors as to, the fairness of the merger to the Company’s unaffiliated shareholders. Based on these entities’ knowledge and analysis of available information regarding the Company, as well as discussions with members of the Company’s senior management regarding the Company and its business and the factors considered by, and findings of, the Board and discussed in this proxy statement in the sections entitled “ Special Factors — Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger ” Parent and Merger Sub believe that the merger is fair to the Company’s unaffiliated shareholders. In addition, as entities jointly owned by the Fund, Parent and Merger Sub considered the same factors considered by, and adopted the analyses of, the Fund, as discussed above in this proxy statement.

Parent and Merger Sub believe that these factors provide a reasonable basis for their belief that the merger is fair to the Company’s unaffiliated shareholders. This belief should not, however, be construed as a recommendation to any of the Company shareholders to approve the Merger Agreement. Parent and Merger Sub do not make any recommendation as to how shareholders of the Company should vote their shares of Company common stock relating to the merger. Parent and Merger Sub attempted to negotiate the terms of a transaction that would be most favorable to them, and not to the shareholders of the Company, and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such shareholders. None of the Fund, Parent or Merger Sub believes that it has or had any fiduciary duty to the Company or its shareholders, including with respect to the merger and its terms.

Purposes and Reasons of Exactech for the Merger

The Company’s purpose for engaging in the merger is to enable its shareholders to receive $49.25 per share in cash, without interest and less any applicable withholding taxes, which represents a premium of approximately 53.9% above the closing price of the Common Stock on October 20, 2017, the last trading day before the public announcement of the signing of the Original Merger Agreement, a premium of approximately 16.3% above the closing price of the Common Stock on December 1, 2017, the last trading day before the public announcement of the signing of the Amendment to Merger Agreement, a premium of approximately 50.5% over the Company’s $32.73 volume weighted average price per share of the Common Stock for the 30-day period ended October 20, 2017, and a premium of approximately 75.4% over the volume weighted average closing price of the Common Stock for the 1-year period that ended on October 20, 2017. The Company believes its long-term objectives can best be pursued as a private company. The Company has determined to undertake the merger at this time based on the analyses, determinations and conclusions of the independent directors of the Board described in detail above under “ Special Factors —Reasons for the Merger; Recommendation of the Board of Directors; Fairness of the Merger ” beginning on page 29.

Purposes and Reasons of the Rollover Investors for the Merger

Under the SEC rules governing “going private” transactions, each of the Rollover Investors is an affiliate of the Company, and, therefore, is required to express its purposes and reasons for the merger to the Company’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. Each of the Rollover Investors is making the statements in this section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of each of the Rollover Investors should not be construed as a recommendations to any Company shareholder as to how that shareholders should vote on the proposal to adopt the Merger Agreement.

Each of the Rollover Investors believes that it is in the best interests of the Company to operate as a privately held entity. The Rollover Investors believe that, as a privately held entity, the Company will have greater operational flexibility to pursue alternatives than it would have as a public company, and management will be able to concentrate on long-term growth, reducing the focus on the quarter-to-quarter performance often emphasized by the public equity market’s valuation of the Common Stock. Each of the Rollover Investors also believe that the merger will provide the Company with flexibility to pursue transactions with a risk profiled that may be unacceptable to many public shareholders, and that these transactions can be more effectively executed as a private company.

Although each of the Rollover Investors believes that there will be significant opportunities associated with the Rollover Investors’ contribution to Parent of the Rollover Shares, each of the Rollover Investors realizes that there are also substantial risks (including the risks and uncertainties relating to the prospects of the Company) and that such opportunities may not ever be fully realized.

If the merger is completed, the Company will become a wholly owned subsidiary of Parent, and the Common Stock will cease to be publicly traded. For the Rollover Investors, the purpose of the merger is to effectuate the transactions contemplated by the Merger Agreement and the Rollover and Voting Agreement, which will allow the Rollover Investors to own equity interests of Parent and to bear the rewards and risks of such ownership after the merger is completed and the Common Stock ceases to be publicly traded. The Rollover Investors believe that structuring the transaction in such manner is preferable to other alternative transaction structures because (i) it will enable Parent to acquire all of the outstanding shares of the Company at the same time, (ii) it will allow the Company to cease to be a publicly registered and reporting company, (iii) it represents an opportunity for the Company’s unaffiliated shareholders to immediately realize the value of their investment in the Company and (iv) it allows the Rollover Investors to continue to own indirect equity interests in the Company after the merger and to bear the rewards and risks of such ownership after the merger. The Rollover Investors did not consider any other alternative transaction structures or other alternative means to accomplish the purposes set forth above because no other alternatives would enable them to continue their respective investments in the Company and allow the Company to cease to be a publicly registered and reporting company.

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Purposes and Reasons of Parent and Merger Sub for the Merger

Under a possible interpretation of the SEC rules governing “going-private” transactions, each of the Fund, Parent and Merger Sub may be deemed to be affiliates of the Company and, therefore, required to express their reasons for the merger to the Company’s unaffiliated shareholders, as defined in Rule 13E-3 of the Exchange Act. The Fund, Parent and Merger Sub are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13E-3 and related rules under the Exchange Act. For the Fund, Parent, Merger Sub, the purpose of the merger is to enable Parent to acquire control of the Company, in a transaction in which the unaffiliated shareholders will be cashed out for $49.25 per share, so Parent will bear the rewards and risks of the ownership of the Company after shares of Company common stock cease to be publicly traded.

Plans for the Company after the Merger

Upon consummation of the merger, the Company will cease to have publicly traded equity securities and will instead be a wholly owned subsidiary of Parent. Following consummation of the merger, Parent may seek to buy or combine the Company with target companies that provide earnings and growth synergies, however no such contracts, arrangements, plans, proposals, commitments or understanding currently exist. Although presently there are no such contracts, arrangements, plans, proposals, commitments or understandings regarding any such transactions, TPG and certain of its affiliates (including Parent) may seek, from and after the Effective Time, to acquire target companies or assets that operate in the Company’s industry.

Certain Effects of the Merger

If the Merger Agreement is approved by the requisite vote of the Company’s shareholders and all other conditions to the closing of the merger are either satisfied or waived, Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent.

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At the Effective Time, each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than Rollover Shares, appraisal shares and shares held by the Company in treasury) will be converted into the right to receive the Merger Consideration. All such shares of Common Stock, when so converted, will no longer be outstanding and shall automatically be canceled and will cease to exist, and each holder of a certificate (or evidence of shares in book-entry form) that immediately prior to the Effective Time represented any such shares of Common Stock will cease to have any rights with respect thereto, except the right to receive the Merger Consideration.

Each Stock Option, to the extent outstanding and unexercised as of immediately prior to the Effective Time, whether vested or unvested, will be cancelled immediately prior to the Effective Time, and in consideration for such cancellation, the holder thereof will be entitled to receive an amount in cash, without interest, equal to the Option Consideration. Each Stock Option with a per share exercise price that is equal to or greater than the Merger Consideration will be cancelled immediately prior to the Effective Time with no consideration payable to the holder thereof. As of the Effective Time, each outstanding Stock Option will no longer be outstanding and will automatically be cancelled and each holder thereof will cease to have any rights with respect thereto, other than the right to receive the Option Consideration.

Each share of Restricted Stock that is outstanding immediately prior to the Effective Time will become fully vested as of immediately prior to the Effective Time and will be treated as an outstanding share of Common Stock for purposes of this Agreement and the holder thereof will be entitled to receive the Merger Consideration with respect thereto, less applicable withholdings.

The Common Stock is currently registered under the Exchange Act and is quoted on the Nasdaq Global Market under the symbol “EXAC.” As a result of the merger, the Company will be a privately held corporation and there will be no public market for its Common Stock. After the merger, the Common Stock will cease to be quoted on Nasdaq Global Market and price quotations with respect to sales of Common Stock in the public market will no longer be available. In addition, the registration of the Common Stock under the Exchange Act will be terminated and the Company will no longer file periodic reports with the SEC with respect to the Common Stock. Termination of registration of our Common Stock under the Exchange Act will reduce the information required to be furnished by the Company to our shareholders and the SEC, and would make certain provisions of the Exchange Act, such as the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with shareholders’ meetings pursuant to Section 14(a) of the Exchange Act, no longer applicable to the Company.