3M 2010 Annual Report Download - page 63

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Goodwill resulting from business combinations is largely attributable to the existing workforce of the acquired
businesses and synergies expected to arise after 3M’s acquisition of these businesses. In-process research and
development associated with these business combinations were not material. Pro forma information related to
acquisitions was not included because the impact on the Company’s consolidated results of operations was not
considered to be material.
In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and
purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations.
These transactions are largely reflected as additional asset purchase and investment activity.
2010 acquisitions:
During 2010, 3M completed ten business combinations. The purchase price paid for these business combinations
(net of cash acquired), contingent consideration paid for pre-2009 business combinations, and the impact of other
matters (net) during 2010 aggregated to $1.830 billion. In addition, the Company recorded a financed liability of 1.7
billion Japanese Yen (approximately $18 million based on acquisition date exchange rates) as non-cash investing
and financing activity, which related to April 2010 acquisition of the A-One branded label business and related
operations (discussed further below).
(1) In January 2010, 3M (Consumer and Office Business) purchased all of the outstanding shares of Incavas
Industria de Cabos e Vassouras Ltda., a manufacturer of floor care products based in Rio Grande do Sul, Brazil.
(2) In April 2010, 3M (Consumer and Office Business) purchased a majority stake in the A-One branded label
business and related operations, which is headquartered in Tokyo, Japan and has manufacturing, distribution and
sales locations around Japan. The terms of this acquisition included embedded mirroring put and call options for a
fixed price and five-year term with respect to the remaining minority shares. Accordingly, 3M recorded this business
combination as an acquisition of all outstanding interests with a corresponding five-year financed liability of 1.7 billion
Japanese Yen relative to the embedded put/call option as of the acquisition date. The Company records interest on
this liability, which is recorded in other liabilities, at an annual rate of 1%.
(3) In May 2010, 3M (Health Care Business) purchased certain assets of J.R. Phoenix Ltd., a manufacturer of hand
hygiene and skin care products for health care and professional use based in Kitchener, Ontario, Canada.
(4) In June 2010, 3M (Industrial and Transportation Business) purchased all of the outstanding shares of MTI
PolyFab Inc., a manufacturer of thermal and acoustic insulation for the aerospace industry. MTI PolyFab Inc. is
based in Mississauga, Ontario, Canada.
(5) In July 2010, 3M (Safety, Security and Protection Services Business) purchased all of the outstanding shares of
Dailys Limited, a supplier of non-woven disposable protective clothing, primarily chemical protective coveralls for
industrial use. Dailys Limited is based in Ellesmere Port, United Kingdom.
(6) In October 2010, 3M (Consumer and Office Business) purchased certain assets of Ross Outdoor Sports
Specialties, LLC, a Colorado-based manufacturer of fly fishing equipment and accessories.
(7) In October 2010, 3M (Health Care Business) purchased all of the outstanding shares of Hangzhou ORJ Medical
Instrument and Material Co., Ltd., a manufacturer of orthodontic supplies based in Hangzhou, China.
(8) In October 2010, 3M (Health Care Business) purchased all of the outstanding shares of Arizant Inc., a
manufacturer of patient warming solutions designed to prevent hypothermia in surgical settings based in Eden
Prairie, Minnesota.
(9) In October 2010, 3M (Safety, Security and Protection Services Business) purchased all of the outstanding shares
of Attenti Holdings S.A., a Tel Aviv, Israel-based supplier of remote people-monitoring technologies used for
offender-monitoring applications and to assist eldercare facilities in monitoring and enhancing the safety of patients.
(10) In October 2010, 3M (Safety, Security and Protection Services Business) acquired a controlling interest in
Cogent Inc. via a tender offer, and in December 2010 completed a second-step merger for the same amount per
outstanding share as the tender offer, thereby acquiring the remaining noncontrolling interest in the company. Cogent
Inc., based in Pasadena, California, is a provider of finger, palm, face and iris biometric systems for governments,
law enforcement agencies, and commercial enterprises. The consideration paid in the preceding table includes $248
million related to the December 2010 acquisition of the remaining noncontrolling interest in Cogent, Inc. Net assets