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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands):

						Fair Value as of December 31, 2021						Fair Value Measurements Using Inputs Considered as:
												Level 1						Level 2						Level 3
Assets:
Derivative assets - designated as cash flow hedges (foreign currency exchange rate “FX”)						$	243					$	—					$	243					$	—
Derivative assets - freestanding instruments (FX)						61						—						61						—
Derivative assets - capped call derivatives						106,629						—						—						106,629
Convertible notes receivable						2,767						—						—						2,767
						$	109,700					$	—					$	304					$	109,396
Liabilities:
Derivative liabilities - designated as cash flow hedges (FX)						$	1,286					$	—					$	1,286					$	—
Derivative liabilities - freestanding instruments (FX)						427						—						427						—
Derivative liabilities - embedded exchange feature						181,700						—						—						181,700
Contingent consideration arrangements						98,382						—						—						98,382
						$	281,795					$	—					$	1,713					$	280,082

						Fair Value as of December 31, 2020						Fair Value Measurements Using Inputs Considered as:
												Level 1						Level 2						Level 3
Assets:
Derivative assets - designated as cash flow hedges (foreign currency exchange rate “FX”)						$	2,893					$	—					$	2,893					$	—
Derivative assets - freestanding instruments (FX)						55						—						55						—
Derivative assets - capped call derivatives						72,302						—						—						72,302
Convertible notes receivable						2,775						—						—						2,775
						$	78,025					$	—					$	2,948					$	75,077
Liabilities:
Derivative liabilities - designated as cash flow hedges (FX)						$	14					$	—					$	14					$	—
Derivative liabilities - freestanding instruments (interest rate swaps)						74						—						74						—
Derivative liabilities - freestanding instruments (FX)						4,073						—						4,073						—
Derivative liabilities - embedded exchange feature						121,756						—						—						121,756
Derivative liabilities - other						4,290						—						—						4,290
Contingent consideration arrangements						103,818						—						—						103,818
						$	234,025					$	—					$	4,161					$	229,864

Schedule of Recurring Fair Value Measurements Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances of our recurring fair value measurements, using significant unobservable inputs (Level 3) (in thousands):

						Capped Call Derivative Asset						Convertible Notes Receivable						Embedded Exchange Feature Derivative Liability						Other Derivative Liabilities						Contingent Consideration Liability Arrangements
December 31, 2019						$	—					$	—					$	—					$	—					$	137,349
Additions						43,096						2,691						74,951						—						—
Payments (1)						—						—						—						—						(12,868)
Changes in fair value (2) (3) (4)						29,206						84						46,805						4,290						(20,463)
Effect of changes in FX						—						—						—						—						(200)
December 31, 2020						72,302						2,775						121,756						4,290						103,818
Additions						—						—						—						—						—
Payments (1)						—						—						—						—						(6,000)
Changes in fair value (2) (4)						34,327						(8)						59,944						(4,290)						564
Effect of changes in FX						—						—						—						—						—
December 31, 2021						106,629						2,767						181,700						—						98,382
Less current portion at December 31, 2021						106,629						2,495						181,700						—						11,552
Long-term portion at December 31, 2021						$	—					$	272					$	—					$	—					$	86,830

(1)During the year ended December 31, 2021, we paid $6.0 million under the contingent consideration arrangement for the acquisition of Miami Instruments, LLC (“Miami Instruments”). During the year ended December 31, 2020, we paid $11.8 million under the contingent consideration arrangement for the acquisition of TandemLife. Additionally, we made final payments under contingent consideration arrangements resulting from the acquisitions of two distributors.

(2)During the year ended December 31, 2021, the contingent consideration change in fair value resulted in a decrease of $8.5 million recorded to cost of sales and an increase of $9.1 million recorded to research and development. During the year ended December 31, 2020, the contingent consideration change in fair value resulted in a decrease of $13.0 million and $7.5 million recorded to cost of sales and research and development, respectively.

(3)The contingent consideration change in fair value during the year ended December 31, 2020 is primarily due to a one-year delay in the projected achievement of a certain regulatory milestone and timing of sales-based earnout payments for ImThera, and the impact of an increase in discount rates utilized in the valuation of contingent consideration. Refer to the tables below for further information regarding the fair value measurements of contingent consideration.

(4)Changes in the fair value of the embedded exchange feature derivative, capped call derivatives and other derivative liabilities are recognized in foreign exchange and other gains/(losses) in the consolidated statements of income (loss).

Schedule of Fair Value of Contingent Consideration by Acquisition

The following table provides the fair value of our Level 3 contingent consideration arrangements by acquisition (in thousands):

						December 31,
						2021						2020
ImThera						$	86,830					$	89,436
TandemLife						11,552						8,809
Miami Instruments						—						5,573
						$	98,382					$	103,818

Significant Unobservable Inputs Related to Contingent Consideration

Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs as of December 31, 2021:

ImThera Acquisition						Valuation Technique						Unobservable Input						Ranges
Regulatory milestone-based payment						Discounted cash flow						Discount rate						3.6%
												Probability of payment						85%
												Projected payment year						2024
Sales-based earnout						Monte Carlo simulation						Risk-adjusted discount rate						12.4%			-			12.8%
												Credit risk discount rate						3.9%			-			4.6%
												Revenue volatility						32.5%
												Probability of payment						85%
												Projected years of earnout						2025			-			2028

The TandemLife business combination involved a contingent consideration arrangement composed of potential cash payments upon the achievement of certain regulatory milestones. The arrangement is a Level 3 fair value measurement and includes the following significant unobservable inputs as of December 31, 2021:

TandemLife Acquisition

Valuation Technique

Unobservable Input

Ranges

Regulatory milestone-based payment

Discounted cash flow

Discount rate

2.4%

Probability of payments

90%

Projected payment years

2022

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Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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