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Acquisitions | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s Consolidated Financial Statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations. The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2019 acquisitions and is also in the process of obtaining valuations of certain property, plant and equipment, acquired intangible assets and certain acquisition-related liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required. The following briefly describes the Company’s acquisition activity for the three years ended December 31, 2019. On February 25, 2019, the Company entered into an Equity and Asset Purchase Agreement (the “GE Biopharma Purchase Agreement”) with GE to acquire the GE Biopharma Business for a cash purchase price of approximately $21.0 billion, subject to certain adjustments, and the assumption of approximately $0.4 billion of pension liabilities (the “GE Biopharma Acquisition”). The GE Biopharma Business, to be known as Cytiva following the closing of the acquisition, is a leading provider of instruments, consumables and software that support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs. Though the timing of obtaining the final regulatory approvals necessary to close the GE Biopharma Acquisition is uncertain, the Company continues to make progress with respect thereto and expects to close the transaction in the first quarter of 2020. The acquisition is expected to provide additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the business’ geographic and product line diversity, including new product and service offerings that complement the Company’s current biologics workflow solutions. As a condition to obtaining certain regulatory approvals for the closing of the transaction, the Company expects it will be required to divest certain of its existing product lines that in the aggregate generated revenues of approximately $170 million in 2019. The Company plans to finance the GE Biopharma Acquisition with approximately $3.0 billion of proceeds from the March 1, 2019 underwritten public offerings of its Common Stock and Mandatory Convertible Preferred Stock (“MCPS”), approximately $10.8 billion of proceeds from the issuance of euro-denominated and U.S. dollar-denominated long-term debt in the second half of 2019, and approximately $7.2 billion from the aggregate of proceeds from commercial paper borrowings and cash on hand. Refer to Note 11 for additional information related to the issuance of debt and to Note 19 for additional information related to the March 1, 2019 public offerings. During 2019, the Company acquired five businesses for total consideration of $331 million in cash, net of cash acquired. The businesses acquired complement existing units of each of the Company’s three segments. The aggregate annual sales of these five businesses at the time of their acquisition, in each case based on the companies’ revenues for its last completed fiscal year prior to the acquisition, were $72 million. The Company preliminarily recorded an aggregate of $217 million of goodwill related to these acquisitions. On April 13, 2018, the Company acquired Integrated DNA Technologies, Inc. (“IDT”), a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a purchase price of approximately $2.1 billion, net of cash acquired. IDT had revenues of approximately $260 million in 2017, and is now part of the Company’s Life Sciences segment. The Company financed the acquisition of IDT with available cash and proceeds from the issuance of commercial paper. The Company recorded approximately $1.2 billion of goodwill related to the IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses. In addition to the IDT acquisition, during 2018, the Company acquired one other business for total consideration of $95 million in cash, net of cash acquired. The business acquired complements an existing unit of the Environmental & Applied Solutions segment. The aggregate annual sales of this business at the time of its acquisition, based on the company’s revenues for its last completed fiscal year prior to the acquisition, were $53 million. The Company recorded an aggregate of $63 million of goodwill related to this acquisition. During 2017, the Company acquired nine businesses for total consideration of $386 million in cash, net of cash acquired. The businesses acquired complement existing units of the Life Sciences and Environmental & Applied Solutions segments. The aggregate annual sales of these nine businesses at the time of their respective acquisitions, in each case based on the companies’ revenues for its last completed fiscal year prior to the acquisition, were $160 million. The Company recorded an aggregate of $265 million of goodwill related to these acquisitions. The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition ($ in millions):
| 2019 |  | 2018 |  | 2017
Trade accounts receivable | $ | 9.0 |  |  | $ | 41.1 |  |  | $ | 21.6 |
Inventories | 9.3 |  |  | 14.8 |  |  | 20.9 |
Property, plant and equipment | 3.9 |  |  | 88.4 |  |  | 9.0 |
Goodwill | 217.1 |  |  | 1,275.4 |  |  | 264.8 |
Other intangible assets, primarily customer relationships, trade names and technology | 113.6 |  |  | 850.7 |  |  | 154.5 |
Trade accounts payable | (3.2 | ) |  | (6.7 | ) |  | (9.9 | )
Other assets and liabilities, net | (18.4 | ) |  | (66.5 | ) |  | (75.1 | )
Net assets acquired | 331.3 |  |  | 2,197.2 |  |  | 385.8 |
Less: noncash consideration | — |  |  | (23.9 | ) |  | — |
Net cash consideration | $ | 331.3 |  |  | $ | 2,173.3 |  |  | $ | 385.8 |
The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the individually significant acquisition in 2018 discussed above, and all of the other 2018 acquisitions as a group ($ in millions):
| IDT |  | Others |  | Total
Trade accounts receivable | $ | 36.0 |  |  | $ | 5.1 |  |  | $ | 41.1 |
Inventories | 14.8 |  |  | — |  |  | 14.8 |
Property, plant and equipment | 88.2 |  |  | 0.2 |  |  | 88.4 |
Goodwill | 1,212.6 |  |  | 62.8 |  |  | 1,275.4 |
Other intangible assets, primarily customer relationships, trade names and technology | 811.0 |  |  | 39.7 |  |  | 850.7 |
Trade accounts payable | (5.5 | ) |  | (1.2 | ) |  | (6.7 | )
Other assets and liabilities, net | (55.0 | ) |  | (11.5 | ) |  | (66.5 | )
Net assets acquired | 2,102.1 |  |  | 95.1 |  |  | 2,197.2 |
Less: noncash consideration | (23.9 | ) |  | — |  |  | (23.9 | )
Net cash consideration | $ | 2,078.2 |  |  | $ | 95.1 |  |  | $ | 2,173.3 |
During 2018, the Company incurred acquisition-related transaction costs and change in control payments of $15 million associated with the IDT acquisition. In addition, the Company’s earnings for 2018 reflect the pretax impact of $1 million of nonrecurring acquisition date fair value adjustments to inventory related to the IDT acquisition. Transaction-related costs for the anticipated GE Biopharma Acquisition were $93 million for the year ended December 31, 2019. Transaction-related costs and acquisition-related fair value adjustments attributable to other acquisitions were not material for the years ended December 31, 2019, 2018 and 2017. Pro Forma Financial Information (Unaudited) The unaudited pro forma information for the periods set forth below gives effect to the 2019 and 2018 acquisitions as if they had occurred as of January 1, 2018. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions except per share amounts):
| 2019 |  | 2018
Sales | $ | 17,919.9 |  |  | $ | 17,222.7 |
Net earnings from continuing operations | 2,429.2 |  |  | 2,385.3 |
Diluted net earnings per share from continuing operations (a) | 3.26 |  |  | 3.36 |
(a) Diluted net earnings per share from continuing operations is calculated by adding the interest on the Company’s LYONs to net earnings from continuing operations and deducting the MCPS dividends from net earnings from continuing operations. The acquisition-related transaction costs of $15 million in 2018 associated with the IDT acquisition were excluded from pro forma net earnings from continuing operations in 2018.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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