Medtronic 2011 Annual Report Download - page 46

42 Medtronic, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
(continued)
On August 12, 2010, we acquired ATS Medical. ATS Medical is a
leading developer, manufacturer, and marketer of products and
services focused on cardiac surgery, including heart valves
and surgical cryoablation technology. Under the terms of the
agreement, ATS Medical shareholders received $4.00 per share in
cash for each share of ATS Medical common stock that they
owned. Total consideration for the transaction was approximately
$394 million which includes the assumption of existing ATS
Medical debt and acquired contingent consideration.
On June 2, 2010, we acquired substantially all of the assets of
Axon Surgical (Axon), a privately-held company. Prior to the
acquisition, we distributed a large portion of Axon’s products. We
believe this acquisition will allow us to bring to market the next
generation of surgeon-directed and professionally supported
spinal neuromonitoring technology and expand the availability
of this technology. Total consideration for the transaction, net of
cash acquired, was $62 million, which includes the settlement of
existing Axon debt.
In April 2010, we acquired Invatec. Under the terms of the
agreement, the transaction included an initial up-front payment
of $350 million, which included the assumption and settlement
of existing Invatec debt. The agreement also included potential
additional payments of up to $150 million contingent upon
achievement of certain milestones. Invatec is a developer of
innovative medical technologies for the interventional treatment
of cardiovascular disease.
In April 2009, we acquired CoreValve. Under the terms of the
agreement, the transaction included an initial up-front payment
of $700 million plus potential additional payments contingent
upon achievement of certain clinical and revenue milestones.
CoreValve develops percutaneous, catheter-based transfemoral
aortic valve replacement products that are approved in certain
markets outside the U.S.
In February 2009, we acquired Ventor, a development stag e
company focused on transcatheter heart valve technologies for
the treatment of aortic valve disease. Total consideration for the
transaction, net of cash acquired, was approximately $308 million,
of which $307 million was expensed as IPR&D since technological
feasibility of the underlying project had not yet been reached and
such technology has no future alternative use. This acquisition
adds two technologies to our transcatheter valve portfolio: a
minimally invasive, surgical transapical technology and a next
generation percutaneous, transfemoral technology.
In February 2009, we also acquired Ablation Frontiers. Under
the terms of the agreement, the transaction included an initial
up-front payment of $225 million plus potential additional
payments contingent upon achievement of certain clinical and
revenue milestones. Total consideration for the transaction was
approximately $235 million including the assumption and
settlement of existing Ablation Frontiers debt and payment of
direct acquisition costs. Ablation Frontiers develops radio frequency
ablation solutions for treatment of atrial fibrillation. Ablation
Frontiers’ system of ablation catheters with a radio frequency
generator is currently approved in certain markets outside the U.S.
In November 2008, we acquired CryoCath. Under the terms of
the agreement, CryoCath shareholders received $8.75 Canadian
dollars per share in cash for each share of CryoCath common
stock that they owned. Total consideration for the transaction,
net of cash acquired, was approximately $352 million U.S. dollars
including the purchase of outstanding CryoCath common stock,
the assumption and settlement of existing CryoCath debt and
the payment of direct acquisition costs. CyroCath develops
cryotherapy products to treat cardiac arrhythmias. CryoCath’s
Arctic Front product is a minimally invasive cryo-balloon catheter
designed specifically to treat atrial fibrillation and is currently
approved in markets outside the U.S.
In July 2008, we acquired Restore. Under the terms of th e
agreement, Restore shareholders received $1.60 per share in cash
for each share of Restore common stock that they owned. Total
consideration for the transaction, net of cash acquired, was
approximately $29 million. Restore’s Pillar System provides us with
a minimally invasive, implantable medical device used to treat the
soft palate component of sleep breathing disorders, including
mild to moderate obstructive sleep apnea and snoring.
The pro forma impact of the above acquisitions was not
significant, individually or in the aggregate, to our results for the
fiscal years ended April 29, 2011, April 30, 2010, or April 24, 2009.
The results of operations related to each company acquired have
been included in our consolidated statements of earnings since
the date each company was acquired.
In addition to the acquisitions above, we periodically acquire
certain tangible or intangible assets from enterprises that do not
otherwise qualify for accounting as a business combination. These
transactions are largely reflected in the consolidated statements
of cash flows as a component of investing activities under
purchase of intellectual property.
New Accounting Pronouncements
Information regarding new accounting pronouncements is
included in Note 1 to the consolidated financial statements.