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Acquisition Of JOTEC | 12 Months Ended
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Dec. 31, 2018
Acquisition Of JOTEC [Abstract] |
Acquisition of JOTEC | 4. Acquisition of JOTEC ﻿ Overview ﻿ On December 1, 2017 we acquired JOTEC AG, a Swiss entity that we converted to JOTEC GmbH and subsequently merged with our Swiss acquisition entity, Jolly Buyer Acquisition GmbH (“JOTEC”), and its subsidiaries (the “JOTEC Acquisition”) for a contract value of approximately $225.0 million, subject to certain adjustments. JOTEC is being operated as a wholly-owned subsidiary of CryoLife. In connection with the closing of the JOTEC Acquisition, CryoLife entered into a senior secured credit facility in an aggregate principal amount of $255.0 million, which includes a $225.0 million term loan and a $30.0 million revolving credit facility. See Note 11 for further discussion of the senior secured credit facility. Accounting for the Transaction ﻿ The purchase price of the JOTEC Acquisition totaled approximately $222.2 million, including debt and cash acquired as determined on the date of closing, consisting of $169.1 million in cash and 2,682,754 shares of CryoLife common stock, with a value of $53.1 million on the date of the closing. This purchase price reflects an additional payment related to a working capital true-up calculated and paid to the sellers as defined in the purchase agreement. Upon closing of the JOTEC Acquisition, $22.5 million was paid into an escrow account for any amounts payable for indemnification claims or other payment obligations. We recorded an allocation of the $222.2 million purchase consideration to JOTEC’s tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of December 1, 2017. Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and is not deductible for tax purposes. Goodwill from this transaction has been allocated to our Medical Devices segment. ﻿ The purchase price allocation as of December 1, 2017, reflecting measurement period adjustments made during 2018, is as follows (in thousands): ﻿
﻿ |  |
﻿ | Opening
﻿ | Balance Sheet
﻿Cash and cash equivalents | $ | 4,130
﻿Receivables |  | 13,392
﻿Inventories |  | 16,939
﻿Intangible assets |  | 111,711
﻿Property and equipment |  | 13,051
﻿Goodwill |  | 114,355
﻿Other assets |  | 4,777
﻿Debt acquired |  | (3,808)
﻿Liabilities assumed |  | (52,390)
﻿Total purchase consideration | $ | 222,157
﻿ We incurred transaction and integration costs of $7.4 million and $7.7 million for the years ended December 31, 2018 and 2017, respectively, primarily related to the acquisition, which included, among other costs, expenses related to the termination of international agreements, severance costs, and legal, professional, and consulting costs. These costs were expensed as incurred and were primarily recorded as general, administrative, and marketing expenses on our Consolidated Statements of Operations and Comprehensive (Loss) Income. ﻿ Pro Forma Results ﻿ JOTEC revenues were $4.1 million and the net loss was $1.5 million from the date of acquisition through December 31, 2017. Our unaudited pro forma results of operations for the years ended December 31, 2017 and 2016, assuming the JOTEC acquisition had occurred as of January 1, 2016, are presented for comparative purposes below. These amounts are based on available information from the results of operations of JOTEC prior to the acquisition date and are not necessarily indicative of what the results of operations would have been had the acquisition been completed on January 1, 2016. This unaudited pro forma information does not project operating results post acquisition. ﻿ This unaudited pro forma information is as follows (in thousands, except per share amounts): ﻿ ﻿
﻿ |  |  |  |  |
﻿ | Twelve Months Ended
﻿ | December 31,
﻿ | 2017 |  | 2016
﻿Total revenues | $ | 236,209 |  | $ | 224,896
﻿Net loss |  | (736) |  |  | (1,966)
﻿ |  |  |  |  |
﻿Pro forma loss per common share - basic | $ | (0.02) |  | $ | (0.06)
﻿Pro forma loss per common share - diluted | $ | (0.02) |  | $ | (0.06)
﻿ Pro forma net loss was calculated using a normalized tax rate of approximately 38%.

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