Medtronic 2013 Annual Report Download - page 68

75732me_10K.indd 53 6/25/13 6:39 PM
Table of Contents
Interest rates on advances on our lines of credit are determined by a pricing matrix, based on our long-term debt ratings assigned
by S&P Ratings Services and Moody’s. Facility fees are payable on the credit facilities and are determined in the same manner
as the interest rates. The agreements also contain customary covenants, all of which we remain in compliance with as of April 26,
2013.
Acquisitions
Fiscal Year 2013
On November 1, 2012, we acquired Kanghui, a Chinese manufacturer and distributor of orthopedic products in trauma, spine,
and joint reconstruction. Total consideration for the transaction was approximately $816 million. The total value of the
transaction, net of Kanghui's cash, was approximately $797 million.
Fiscal Year 2012
On August 31, 2011, we acquired Salient. Salient develops and markets devices for haemostatic sealing of soft tissue and bone
incorporating advanced energy technology. Salient’s devices are used in a variety of surgical procedures including orthopedic
surgery, spine, open abdominal, and thoracic procedures. Total consideration for the transaction was approximately $497 million.
We had previously invested in Salient and held an 8.9 percent ownership position in the company. In connection with the acquisition
of Salient, we recognized a gain on our previously-held investment of $32 million, which was recorded within acquisition-related
items in the consolidated statements of earnings in the second quarter of fiscal year 2012. Net of this ownership position, the
transaction value was approximately $452 million.
On August 31, 2011, we acquired PEAK. PEAK develops and markets tissue dissection devices incorporating advanced energy
technology. Total consideration for the transaction was approximately $113 million. We had previously invested in PEAK and
held an 18.9 percent ownership position in the company. In connection with the acquisition of PEAK, we recognized a gain on
our previously-held investment of $6 million, which was recorded within acquisition-related items in the consolidated statements
of earnings in the second quarter of fiscal year 2012. Net of this ownership position, the transaction value was approximately $96
million.
Fiscal Year 2011
On January 13, 2011, we acquired privately-held Ardian. We had previously invested in Ardian and held an 11.3 percent ownership
position. Ardian develops catheter-based therapies to treat uncontrolled hypertension and related conditions. Total consideration
for the transaction was $1.020 billion which includes the estimated fair value of revenue-based contingent consideration of $212
million. The terms of the transaction included an up-front cash payment of $717 million, excluding our pro-rata share in Ardian,
plus potential future commercial milestone payments equal to the annual revenue growth beginning in fiscal year 2012 through
the end of our fiscal year 2015. We recognized a gain of $85 million on our previously-held investment, which was recorded within
acquisition-related items in the consolidated statements of earnings in the third quarter of fiscal year 2011.
On November 16, 2010, we acquired Osteotech. Osteotech develops innovative biologic products for regenerative medicine. Under
the terms of the agreement, we paid shareholders $6.50 per share in cash for each share of Osteotech common stock that they
owned. Total consideration for the transaction was approximately $123 million.
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 included the assumption of existing ATS Medical debt
and acquired contingent consideration.
On June 2, 2010, we acquired substantially all of the assets of Axon, a privately-held company. Prior to the acquisition, we
distributed a large portion of Axon’s products. This acquisition has helped us bring to market the next generation of surgeon-
directed and professionally supported spinal and cranial neuromonitoring technologies, thereby expanding the availability of these
technologies. Total consideration for the transaction, net of cash acquired, was $62 million, which included the settlement of
existing Axon debt.
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 26, 2013, April 27, 2012, or April 29, 2011. 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.
50