Medtronic 2014 Annual Report Download - page 88
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Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
assumption and settlement of existing TYRX debt and direct acquisition costs. Total consideration for the transaction was
approximately $222 million, which included estimated fair values for product development-based and revenue-based contingent
consideration of $25 million and $35 million, respectively. The product development-based contingent consideration includes a
future potential payment of $40 million upon achieving certain milestones, and the revenue-based contingent consideration
payments equal TYRX’s actual annual revenue growth for the Company’s fiscal years 2015 and 2016. Based upon the
preliminary acquisition valuation, the Company acquired $94 million of technology-based intangible assets with an estimated
useful life of 14 years and $132 million of goodwill. The acquired goodwill is not deductible for tax purposes.
The Company accounted for the acquisition of TYRX as a business combination using the acquisition method of accounting.
The assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date. During the
fourth quarter of fiscal year 2014, the Company recorded minor adjustments to goodwill and long-term deferred tax liabilities,
net. The fair values of the assets acquired and liabilities assumed are as follows:
(in millions)
Current assets $6
Property, plant, and equipment 1
Intangible assets 94
Goodwill 132
Total assets acquired 233
Current liabilities 4
Long-term deferred tax liabilities, net 7
Total liabilities assumed 11
Net assets acquired $ 222
Cardiocom, LLC
On August 7, 2013, the Company acquired Cardiocom, LLC (Cardiocom), a privately-held developer and provider of integrated
solutions for the management of chronic diseases such as heart failure, diabetes, and hypertension. Cardiocom’s products and
services include remote monitoring and patient-centered software to enable efficient care coordination and specialized telehealth
nurse support. Total consideration for the transaction was approximately $193 million. Based upon the acquisition valuation, the
Company acquired $61 million of customer-related intangible assets with an estimated useful life of 7 years and $123 million of
goodwill. The acquired goodwill is deductible for tax purposes.
The Company accounted for the acquisition of Cardiocom as a business combination using the acquisition method of
accounting. The assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date.
The fair values of the assets acquired and liabilities assumed are as follows:
(in millions)
Current assets $14
Property, plant, and equipment 7
Intangible assets 61
Goodwill 123
Total assets acquired 205
Current liabilities 12
Total liabilities assumed 12
Net assets acquired $ 193
80