Disposition

12 Months Ended

Sep. 28, 2019

Disposal Groups, Including Discontinued Operations and Collaborative Agreement [Abstract]

Blood Screening Business

On December 14, 2016, the Company entered into a definitive agreement to sell the assets of its blood screening business to its long-time commercial partner, Grifols for a sales price of $1.85 billion in cash, subject to adjustment based on an estimated closing amount of inventory. The divestiture was completed on January 31, 2017, and the Company received $1.865 billion. The sale resulted in a gain of $899.7 million recorded in the second quarter of fiscal 2017 within operations in the Consolidated Statements of Operations. As a result of this disposition and proceeds received, the Company recorded a tax obligation of $649.5 million, which was paid in fiscal 2017. Upon the closing of the transaction, the Company's existing collaboration agreement with Grifols terminated, and a new collaboration agreement was executed as part of this transaction pursuant to which the Company provides certain research and development services to Grifols. In addition, the Company agreed to provide transition services to Grifols over the following two to three years depending on the nature of the respective service, including the manufacture of inventory. The Company has also agreed to sell Panther instrumentation and certain supplies to Grifols as part of a long term supply agreement. In determining the accounting for the multiple elements of the overall arrangement, the Company allocated $13.1 million of the proceeds to these elements based on their estimated fair values.

The Company determined this disposal did not qualify to be reported as a discontinued operation as the blood screening business was deemed not to be strategic to the Company and has not had and will not have a major effect on the Company's operations and financial results. Under the previous collaboration agreement, the Company performed research and development activities and manufacturing, while Grifols performed the commercial and distribution activities. The blood screening business was embedded within the Company's molecular diagnostics business, and the Company retains ownership and will continue to use the intellectual property for the underlying technology of its molecular diagnostics assays and instrumentation.

Income from operations of the disposed business noted below represents the pretax profit of the business as it was operated prior to the date of disposition. The operating expenses include only those that were incurred directly by and were retained by the disposed business and are now incurred by Grifols. As noted above, the Company is performing a number of transition services and the financial impact from these services are not included in income from operations presented below. The Company has in effect served as a contract manufacturer of assays for Grifols since disposition. Income from operations of the disposed business prior to the divestiture for the year ended September 30, 2017 was as follows:



	Years Ended
	September 30, 2017
Income from operations	$	45.8

Under the long term supply agreement, transition services agreement to manufacture assays and perform research and development services, the Company recognized revenue of $58.5 million, $55.4 million and $44.0 million, respectively, in fiscal 2019, 2018 and 2017.

Prior Collaboration Agreement with Grifols

Under its prior collaboration agreement with Grifols, the Company manufactured blood screening products, while Grifols was responsible for marketing, sales and service of those products, which Grifols sold under its trademarks. The Company was entitled to recover 50% of its manufacturing costs incurred in connection with the collaboration and received a percentage of the blood screening assay revenue generated under the collaboration. The Company’s share of revenue from assays it sold to Grifols was 50%. The Company recognized product revenue, and collaborative research and license revenue, which is included within services and other revenues, under the prior collaboration agreement. The Company recognized revenue of $96.5 million under this collaboration agreement in fiscal 2017.

Sale of Medical Aesthetics - Assets Held-for-Sale

On November 20, 2019, the Company entered into a definitive agreement to sell its medical aesthetics business to Clayton Dubilier & Rice for a sales price of $205.0 million in cash, subject to certain adjustments, which is expected to result in net cash proceeds of approximately $138 million. The sales price is subject to further adjustment until closing, which is expected to be near around the end of calendar 2019. The definitive agreement contains representations and warranties and covenants customary for a transaction of this nature, and the completion of the sale is subject to customary closing conditions. However, the Company cannot assure that it will be able to complete this transaction on a timely basis, if at all. The Company has agreed to provide various transition services, including manufacturing inventory. As a result of this transaction, the Medical Aesthetics asset group will be designated as assets held-for-sale in the first quarter of fiscal 2020. Assets held-for sale comprise the following as of September 28, 2019:



Assets:	September 28, 2019
Cash	$	11.1
Accounts Receivable	62.1
Inventory	84.6
Prepaid expenses and other current assets	4.9
Property, plant, and equipment	14.1
Intangible assets	60.6
Other assets	4.9
Total assets held-for-sale	$	242.3

Liabilities:
Accounts payable	$	15.0
Accrued expenses	28.3
Deferred revenue	15.9
Deferred income tax liabilities	22.4
Capital lease obligations	20.9
Total liabilities held-for-sale	$	102.5