Medtronic 2012 Annual Report Download - page 93

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$497 million. Medtronic had previously invested in Salient and held an 8.9 percent ownership position in
the company. Net of this ownership position, the transaction value was approximately $452 million. Based
upon the acquisition valuation, the Company acquired $154 million of technology-based intangible assets
that had an estimated useful life of 12 years at the time of acquisition, $44 million of IPR&D, $49 million
of net tangible liabilities, and $348 million of goodwill. The value attributable to IPR&D has been capitalized
as an indefinite-lived intangible asset. The IPR&D primarily relates to the future launch of Salient’s
concentric wire product. Acquired goodwill is not deductible for tax purposes.
The Company accounted for the acquisition of Salient as a business combination. During fiscal year
2012, the Company recorded minor adjustments to other intangible assets, goodwill, and long-term deferred
tax liabilities as a result of finalizing the valuation for fair value of intangible assets acquired. The Company
recorded the identifiable assets acquired and liabilities assumed at fair value as follows:
(in millions)
__________
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20
Property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . 11
IPR&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
______
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 578
______
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Long-term deferred tax liabilities, net . . . . . . . . . . . . . . . 38
______
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
______
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 497
______
______
PEAK Surgical, Inc.
On August 31, 2011, the Company acquired PEAK Surgical, Inc. (PEAK). PEAK develops and markets
tissue dissection devices incorporating advanced energy technology. Total consideration for the transaction
was approximately $113 million. Medtronic had previously invested in PEAK and held an 18.9 percent
ownership position in the company. Net of this ownership position, the transaction value was approximately
$96 million. Based upon the acquisition valuation, the Company acquired $74 million of technology-based
intangible assets that had an estimated useful life of 12 years at the time of acquisition, $17 million of net
tangible liabilities, and $56 million of goodwill. Acquired goodwill is not deductible for tax purposes.
The Company accounted for the acquisition of PEAK as a business combination. The Company
recorded the identifiable assets acquired and liabilities assumed at fair value on the acquisition date
as follows:
(in millions)
__________
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5
Property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . 5
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
______
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
______
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Long-term deferred tax liabilities, net . . . . . . . . . . . . . . . 17
______
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
______
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 113
______
______
Other Acquisitions and Acquisition-Related Items
During fiscal year 2012, the Company recorded $12 million of acquisition-related items, including
charges of $45 million, related to the change in fair value of contingent milestone payments associated with
76
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)