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Acquisitions | 3 Months Ended
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Mar. 31, 2020
Business Combinations [Abstract] |
Acquisitions | 3. Acquisitions FITBONE Asset Purchase Agreement On February 3, 2020, the Company, through a wholly owned subsidiary, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Wittenstein SE (“Wittenstein”), a privately-held German-based company, to acquire assets associated with the FITBONE intramedullary lengthening system for limb lengthening of the femur and tibia bones. Under the terms of the Purchase Agreement, as consideration for the acquired assets, the Company paid $18 million in cash consideration and entered into a manufacturing supply contract with Wittenstein. The Company has accounted for this acquisition as a business combination. The acquisition was completed on March 26, 2020. The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and is subject to completion of the Company’s valuation of the assets acquired and liabilities assumed, which may take up to one year.
(U.S. Dollars, in thousands) |  | Fair Value |  |  | Balance Sheet Classification |  | Assigned Useful Life
Assets acquired |  |  |  |  |  |  |  |
Inventories |  | $ | 528 |  |  | Inventories |  |
Developed technology |  |  | 4,500 |  |  | Intangible assets, net |  | 8 years
Customer relationships |  |  | 800 |  |  | Intangible assets, net |  | 15 years
Trade name |  |  | 600 |  |  | Intangible assets, net |  | 15 years
In-process research and development ("IPR&D") |  |  | 440 |  |  | Intangible assets, net |  | Indefinite
Total identifiable assets acquired |  |  | 6,868 |  |  |  |  |
Goodwill |  |  | 11,132 |  |  |  |  |
Total fair value of consideration transferred |  | $ | 18,000 |  |  |  |  |
The Company recorded goodwill of $11.1 million in connection with the acquisition, which was assigned to the Global Extremities reporting segment. Specifically, goodwill includes synergies associated with the purchase of the acquired assets and is expected to be deductible for tax purposes. The IPR&D intangible asset is considered an indefinite-lived asset until the completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition, this asset is not amortized but, instead, is subject to impairment review and testing provisions. Upon completion of the IPR&D project, the Company will determine the useful life of the asset and begin amortization. In addition, the Company also entered into a Contract Manufacturing and Supply Agreement (“CMSA”) with Wittenstein for an initial term of up to two years to manufacture the FITBONE product line. The Company is accounting for the CMSA as a finance lease. See Note 5 for further discussion of the recognized finance lease. The Company recognized $0.4 million and $0.3 million of acquisition related costs that were expensed during the three months ended March 31, 2020 and 2019, respectively. These costs are included in the condensed consolidated statements of income and comprehensive income (loss) within general and administrative expenses.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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