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Business Combination (Tables)

9 Months Ended

Oct. 02, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

The total purchase consideration was calculated as follows (in millions, except value per share data and Ortho Exchange Ratio):

Total Ortho shares subject to exchange						237.487
Ortho Exchange Ratio						0.1055
QuidelOrtho shares issued						25.055
Value per Quidel share as of May 26, 2022						$	99.60
Fair value of stock consideration						$	2,495.5
Fair value of replacement equity awards (1)						47.9
Cash consideration (2)						1,747.7
Total purchase consideration						$	4,291.1

(1)			Represents the fair value of replacement stock options (which include options with time-based, performance-based, and both performance- and market-based vesting conditions), restricted stock units (“RSUs”) and restricted stock outstanding as of May 27, 2022 that are attributable to service prior to the Combinations. The terms of the replacement awards are substantially similar to the former Ortho equity awards for which they were exchanged. The portion of the fair value of the replacement equity awards attributable to service after the Combinations is $46.6 million and will be recognized as compensation expense based on the vesting terms of the replacement equity awards.
(2)			Represents cash consideration of $7.14 per share paid to Ortho shareholders and holders of vested Ortho stock options on the closing date of the Combinations for 237.5 million outstanding Ortho shares and 7.3 million vested Ortho stock options.

The components of the preliminary purchase price allocation on the closing date of the Combinations are as follows:

(In millions)						Amounts Recognized as of Acquisition Date (as previously reported)						Measurement Period Adjustments						Amounts Recognized as of Acquisition Date (as adjusted)
Cash and cash equivalents						$	234.5					$	—					$	234.5
Accounts receivable						240.6						—						240.6
Inventories						386.8						—						386.8
Property, plant and equipment						767.5						157.8						925.3
Goodwill						2,291.3						(190.7)						2,100.6
Intangible assets						3,133.0						95.0						3,228.0
Prepaid expenses and other assets						287.9						4.4						292.3
Total assets						7,341.6						66.5						7,408.1
Accounts payable						(135.0)						—						(135.0)
Accrued payroll and related expenses						(80.7)						(0.4)						(81.1)
Long-term borrowings, including current portion (1)						(2,268.4)						—						(2,268.4)
Deferred tax liability						(215.4)						(62.8)						(278.2)
Other current and non-current liabilities						(351.0)						(3.3)						(354.3)
Total liabilities						(3,050.5)						(66.5)						(3,117.0)
Total purchase consideration						$	4,291.1					$	—					$	4,291.1

(1) Immediately following the closing of the Combinations, the Company repaid long-term borrowings assumed, which consisted of $1,608.4 million aggregate principal amount related to Ortho’s Dollar Term Loan and Euro Term Loan Facilities, $240.0 million aggregate principal amount of 7.375% Senior Notes due 2025 and $405.0 million aggregate principal amount of 7.250% Senior Notes due 2028. The 7.375% and 7.250% Senior Notes were fully discharged following the Combinations. The Company recorded a $23.5 million loss on extinguishment in connection with the Combinations, representing the difference between the reacquisition value, inclusive of $35.9 million of redemption premium, and the net carrying value of the extinguished debt.

Assignment of Goodwill by Reportable Segment

The preliminary assignment of goodwill by reportable segment as of the closing date of the Combinations is as follows (in millions):

North America			$	1,170.2
EMEA			376.0
China			114.4
Other			440.0
			$	2,100.6

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table sets forth the amounts assigned to the identifiable intangible assets acquired (in millions, except years):

Intangible Asset

Amortization Period

Fair Value of Assets Acquired

Customer relationships

20 years

$

1,775.0

Developed technology

15 years

903.0

Trademarks

15 years

373.0

In-process research and development

Not amortized

177.0

$

3,228.0

Pro Forma Financial Information

The following unaudited supplemental pro forma financial information shows the combined results of operations of the Company as if the Combinations had occurred on January 4, 2021, the beginning of the periods presented:

						Three Months Ended												Nine Months Ended
(In millions)						October 2, 2022						October 3, 2021						October 2, 2022						October 3, 2021
Pro forma total revenues						$	783.8					$	1,032.3					$	3,184.7					$	2,583.5
Pro forma net (loss) income						50.2						225.2						549.5						340.2

X

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

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