ACQUISITIONS

On December 31, 2012, the Company entered into a stock purchase agreement to acquire Eleven Blade Solutions, Inc. (Eleven Blade) which was accounted for as an asset acquisition. As a result of this transaction, the Company recorded $10.8 million of intangible assets in the form of intellectual property rights, non-compete agreements with the former employees, owners and consultants of Eleven Blade and the associated deferred tax liabilities. The Company also agreed to pay the previous owners of Eleven Blade future cash consideration on certain product sales over the next five years. The amount of contingent future consideration payable to the previous owners of Eleven Blade is capped at $25 million and is not estimable at this time.

On July 1, 2013, the Company acquired ENTrigue Surgical, Inc. ("ENTrigue"), a privately-held Delaware corporation specializing in ENT sinus surgical products. The Company paid approximately $45 million in cash to the former stockholders of ENTrigue, less an amount placed in escrow to secure the indemnification obligations of the former stockholders of ENTrigue.

The Agreement also provides that the Company will make annual cash payments to the former stockholders of ENTrigue shortly after each of the next five anniversaries of the acquisition date based on the annual net sales of the acquired products. The annual payment shall equal annual net sales growth times the applicable sales growth multiple for the year. The sales growth multiple is 0.6 for years 1-3; 1.1 for year 4; and 1.25 for year 5. For purposes of calculating this multiple, the annual growth of net sales each year is determined by subtracting the highest amount of net sales in any previous year from the net sales in the current year. The range of undiscounted future payments that could be required is currently estimated to be between $2.4 million and $32.2 million. The estimated fair value of the contingent consideration arrangement used for determining total purchase price is $14.5 million, which was estimated by applying the income approach using a Monte Carlo simulation model. That measure is based on valuation inputs that are not observable in the market.

The purchase price was allocated to the assets acquired and liabilities assumed based on estimates of fair values at the date of acquisition and is summarized below (in thousands):



Current assets	$	1,183
Property, plant and equipment	340
Intangible assets	2,386
Goodwill	45,950
Deferred tax assets	10,348
Total assets acquired	60,207
Liabilities	664
Total purchase price	59,543
Cash payments at acquisition date	45,000
Fair value of contingent consideration liability	14,543
Total purchase price	$	59,543

The fair value of the assets and liabilities acquired, including goodwill, is preliminary and therefore may be subject to adjustments. The goodwill of $46.0 million arising from the acquisition is not expected to be deductible for income tax purposes. Subsequent to July 1, 2013, the revenues and expenses of ENTrigue have been included in the Company's consolidated statements of comprehensive income. The Company incurred transaction related expenses of approximately $0.8 million for the year ended December 31, 2013 which have been recorded as general and administrative expenses.

The fair value and weighted-average useful life of the identifiable intangible assets acquired are summarized below (in thousands):



			Weighted-Average Useful Life

Trade names	$	410	9 years
Developed technology	940		12 years
Customer relationships	390		10 years
Distribution agreements	280		3 years
Non-compete agreements	366		5 years
	$	2,386

On June 20, 2012, the Company acquired an orthopedic sales and marketing entity in Finland for $1.3 million. The acquisition did not materially affect the Company's financial position at December 31, 2013 and did not materially affect the results of its operations for the year ended December 31, 2013.