XML 32 R14.htm IDEA: XBRL DOCUMENT v3.19.3
Acquisitions
 9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Acquisitions ACQUISITIONS
We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. Cash paid for acquisitions, net of cash acquired, was $281 and $770 in the nine months 2019 and 2018. Acquisition and integration related charges, including the amortization of inventory stepped up to fair value, was $32 and $8 in the three months and $223 and $49 in the nine months 2019 and 2018.
In March 2019 we completed the acquisition of OrthoSpace, Ltd. for total cash consideration of $110 with future milestone payments of up to an additional $110. OrthoSpace is a medical device company specializing in orthopaedic biodegradable technology for the treatment of irreparable rotator cuff tears. Goodwill attributable to the acquisition was $114 and is not deductible for tax purposes.
In November 2018 we completed the acquisition of K2M Group Holdings, Inc. (K2M) for $27.50 per share, or an aggregate purchase price of approximately $1,380. K2M is a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. K2M is part of our Spine business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes.
In February 2018 we completed the acquisition of Entellus Medical, Inc. (Entellus) for $24.00 per share, or an aggregate purchase price of $697, net of cash acquired. Entellus is focused on delivering superior patient and physician experiences through products designed for the minimally invasive treatment of various ear, nose and throat (ENT) disease states. Entellus is part of our Neurotechnology business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes.
The purchase price allocations for K2M and OrthoSpace are preliminary and are based on estimates and assumptions that are subject to change within the measurement period. The purchase price allocation for the acquisition of Entellus was completed in 2019.
Purchase Price Allocation of Acquired Net Assets
 
2018
 
K2M
 
Entellus
Tangible assets:
 
 
 
Accounts receivable
$
58

 
$
17

Inventory
131

 
14

Other assets
122

 
62

Contingent consideration
—

 
(79
)
Other liabilities
(247
)
 
(76
)
Intangible assets:
 
 
 
Customer relationship
34

 
33

Distributor relationship
1

 
—

Trade name
10

 
—

Developed technology and patents
475

 
261

Internally developed software
2

 
—

Goodwill
794

 
465

Purchase price, net of cash acquired
$
1,380

 
$
697

Weighted-average life of intangible assets
14

 
16


Estimated Amortization Expense
Remainder
of 2019
2020
2021
2022
2023
$
114

$
442

$
424

$
414

$
393


In October 2019 we completed the acquisition of Mobius Imaging and Cardan Robotics for cash consideration of approximately $370 and future development and commercial milestones of up to $130. Mobius is a leader in point-of-care imaging technology focused on integrating advanced imaging technologies into medical workflow.  Cardan is working to develop innovative robotics and navigation technology systems for surgical and interventional radiology procedures. Mobius and Cardan will be part of our Spine business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes. The preliminary purchase price allocation for this acquisition will be performed during the fourth quarter 2019.