BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2020

Acquisitions

2020 Transactions

On December 31, 2020, the effective date of the transaction, the Company acquired 100% of the outstanding interests of Byte, a privately-held company, for approximately $1.0 billion using cash on hand. Byte is a doctor-directed, direct-to-consumer, clear aligner business. The acquisition is expected to enhance scale and accelerate the growth and profitability of the Company's combined clear aligners business.

The preliminary fair values of the assets acquired and liabilities assumed in connection with the Byte acquisition for the year ended December 31, 2020 were as follows:


(in millions)

Cash and cash equivalents	$	13
Current assets	15
Intangible assets	416
Current liabilities	(32)
Long-term assets (liabilities), net	2
Net assets acquired	414
Goodwill	631
Purchase consideration	$	1,045

The purchase price has been allocated on the basis of the preliminary estimates of fair values of assets acquired and liabilities assumed, which resulted in the recording of $631 million in goodwill. The amount of goodwill is considered to represent the value associated with workforce and synergies the two companies anticipate realizing as a combined company, including alignment with the Company’s existing clear aligner business, and is deductible for tax purposes. Final consideration is subject to a post-closing adjustment for the change in working capital to the date of closing, which is expected to be completed by the end of the first quarter of 2021. Management is continuing to finalize its valuation of certain assets including other intangible assets and will conclude its valuation no later than one year from the acquisition date.

Intangible assets acquired were as follows:


			Weighted Average
			Useful Life
(in millions, except for useful life)	Amount		(in years)

Non-compete agreements	$	16	5
Technology know-how	210		10
Tradenames and trademarks	190		20
Total	$	416

The results of operations for this business upon the effective date of the transaction have been included in the accompanying financial statements. These results, as well as the historical results for the Byte business for the both the years ended December 31, 2020 and 2019, are not material in relation to the Company’s net sales and earnings for those periods. The Company therefore does not believe this acquisition represents a material transaction requiring the supplemental pro-forma information prescribed by ASC 805 and accordingly, this information is not presented.

2018 Transactions

On May 1, 2018, the Company acquired all of the outstanding shares of privately held OraMetrix, Inc. for $120 million, with an additional payment totaling $30 million, subject to meeting certain earn-out provisions. During the year ended December 31, 2019, the Company paid the earn-out provision. OraMetrix specializes in orthodontic treatment planning software, wire bending, and clear aligner manufacturing and is headquartered in Richardson, Texas. The Company recorded $58 million in goodwill related to the fair value of assets acquired and liabilities assumed and the consideration given for the acquisition. The purchase price has been assigned on the basis of the fair values of assets acquired and liabilities assumed. Goodwill is considered to represent the value associated with workforce and synergies the two companies anticipate realizing as a combined company. The goodwill is not expected to be deductible for tax purposes.

Intangible assets acquired were as follows:


			Weighted Average
			Useful Life
(in millions, except for useful life)	Amount		(in years)

Customer relationships	$	18	15
Developed technology and patents	65		15
Tradenames and trademarks	14		Indefinite
Total	$	97

The results of operation for this business have been included in the accompanying financial statements as of the effective date of the transaction. The purchase price has been assigned on the basis of the fair values of assets acquired and liabilities assumed. This transaction was not material to the Company’s net sales and net loss attributable to Dentsply Sirona for the year ended December 31, 2018.

Acquisition-related costs incurred for the year ended December 31, 2020 were $16 million, consisting primarily of legal and professional fees in relation to the Byte acquisition, and are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations. Acquisition-related costs were immaterial for the years ended December 31, 2019 and 2018.

Investment in Affiliates

During the three months ended December 31, 2020, the Company paid $45 million for a minority ownership position in a privately-held dental services company. The investment is recorded as an equity-method investment and recorded in Other non-current assets, net in the Consolidated Balance Sheets. The Company's share of earnings from this investment, which are immaterial to the year ended December 31, 2020, are included in the Other income and expense line item within the Consolidated Statements of Operations.

During the year ended December 31, 2018, the Company sold its direct investment in DIO Corporation, which resulted in a gain of $44 million was recorded in Other expense (income), net in the Consolidated Statements of Operations.