1.0.0.3 false Acquisitions and Divestitures false 1 $ false false shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDPerShare Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Acquisitions and Divestitures 0 cvd_AcquisitionsAndDivestituresAbstract cvd false na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 Acquisitions and Divestitures 1 cvd_AcquisitionsAndDivestituresTextBlock cvd false na duration string Description of business acquisitions and divestitures completed during the period. Acquisition disclosure includes... false false false false false false false false false 1 false false 0 0 <table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td> 6.    Acquisitions and Divestitures                 In August 2009, Covance acquired certain assets and capabilities of Merck & Co., Inc.'s ("Merck") Gene Expression Laboratory ("GEL") located in Seattle, Washington for $9.75 million in cash. Transaction related costs of $0.7 million were included in selling, general and administrative expense in the period incurred. This acquisition expanded Covance's footprint in the genomics testing market and added capabilities in genomics testing and personalized medicine. The tangible assets acquired consisted of property and equipment and were included in Covance's consolidated financial statements beginning in August 2009 based on their estimated fair value of $5.5 million, as determined by a preliminary purchase price allocation. The remaining purchase price of $4.2 million represents the fair value of the acquired assembled workforce, which is a component of goodwill. Results of operations for GEL are reported in Covance's early development segment beginning in August 2009. Covance and Merck also entered into an agreement pursuant to which Merck will purchase at least $145.0 million of genomic analysis services from Covance over a five year period.                 In August 2009, Covance sold its interactive voice and web response ("IVR") service offering, part of Covance's late-stage development segment, to Phase Forward for net cash proceeds totaling $9.7 million and recorded a pre-tax gain of $9.0 million ($5.9 million after tax) on the sale. In addition, Covance and Phase Forward entered into a five-year marketing agreement pursuant to which Covance will receive a referral fee for providing Phase Forward's IVR services to its clients.                 In March 2009, Covance acquired 100% of the stock of Swiss Pharma Contract Ltd. ("Swiss Pharma"), and its 50-bed clinical research facility based in Basel, Switzerland, for cash payments aggregating $19.4 million ($18.3 million net of cash acquired). Additionally, Covance repaid the entire $5.4 million balance of mortgage debt assumed in the Swiss Pharma acquisition. Transaction related costs of $0.5 million were included in selling, general & administrative expense in the period incurred. This acquisition expanded Covance's clinical pharmacology presence in Europe and provided access to special patient populations for Phase I/IIa clinical studies. Swiss Pharma's assets and liabilities acquired were included in the consolidated financial statements beginning in March 2009 based on their estimated fair value. Results of operations for Swiss Pharma are reported in Covance's early development segment beginning in March 2009. In addition to the initial cash consideration of $19.4 million, Covance accrued a liability of $3.4 million for the estimated fair value of future contingent consideration expected to be payable by Covance based upon Swiss Pharma reaching specific performance metrics over the next three years of operations. The potential contingent consideration in this transaction ranges from zero to $4.6 million and is payable in three annual installments based upon operational performance in 2009, 2010 and 2011. The table below summarizes the purchase price allocation for the Swiss Pharma acquisition:                 Estimated fair value of tangible assets and liabilities acquired: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 80%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left" width="11"></td> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="49"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Cash</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">1,008</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times" colspan="2"> Accounts receivable and unbilled, net</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">2,024</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Property and equipment</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">7,461</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times" colspan="2"> Unearned revenue</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(885</td> <td style="FONT-FAMILY: times">)</td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Mortgage debt</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(5,436</td> <td style="FONT-FAMILY: times">)</td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times" colspan="2"> Other net liabilities</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(1,142</td> <td style="FONT-FAMILY: times">)</td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Fair value of intangible assets acquired (7 year weighted average useful life):</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> Customer list (10 year useful life)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">1,243</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> Non-compete agreements (3 year useful life)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">437</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> Order backlog (1 year useful life)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">162</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Goodwill</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">17,959</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times" colspan="2"> Net assets acquired</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">22,831</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr></table></div> </div>                 Intangible assets are being amortized on a straight-line basis over their estimated useful lives. The amortization expense expected to be recorded in future periods is as follows: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 80%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="32"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> 2010</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">270</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> 2011</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">270</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> 2012</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">161</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> 2013</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">124</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> 2014</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">124</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> 2015 and beyond</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">529</td> <td style="FONT-FAMILY: times"> </td></tr></table></div> </div>                 The goodwill of $18.0 million resulting from the acquisition arises largely from the synergies expected from combining the Swiss Pharma operations with our existing European clinical pharmacology operations, as well as from the benefits derived from the assembled Swiss Pharma workforce. None of the goodwill recognized is expected to be deductible for tax purposes.                 In October 2008, Covance acquired certain assets from Eli Lilly and Company ("Lilly") for cash payments totaling $51.6 million (including transaction related costs of $1.6 million). The acquired assets consisted of 450 acres of Lilly's early drug development campus (land, buildings and equipment) located in Greenfield, Indiana ("Greenfield"). In addition, Covance and Lilly entered into a 10-year agreement with a minimum value of $1.6 billion pursuant to which Covance will provide Lilly a broad range of drug development services. The results of operations for Greenfield and the acquired assets, which are now part of Covance's Early Development segment service offering, are included in Covance's consolidated financial statements beginning in October 2008.                 In November 2007, Covance sold its centralized ECG business ("Cardiac Safety Services"), part of Covance's late-stage development segment, to eResearchTechnology Inc. ("eRT") for initial cash proceeds of $35.2 million and a pre-tax gain of $6.6 million ($4.1 million after tax). Simultaneously therewith, Covance entered into a 10-year marketing agreement with eRT under which Covance will continue to offer its clients cardiac safety services. During 2009 and 2008, Covance received additional proceeds from this sale reflecting contingent consideration related to transferred backlog and recognized an additional pre-tax gain of $0.7 million and $4.1 million, ($0.4 million and $2.6 million after tax), respectively. In addition, Covance expects to receive referral fees during the term of the long-term marketing agreement.</td></tr></table> 6.    Acquisitions and Divestitures                 In false false Description of business acquisitions and divestitures completed during the period. Acquisition disclosure includes background, timing, amount and form of consideration paid, recognized assets and liabilities, and details concerning any other related material agreements between the parties. Divestiture disclosure includes the timing, amount and form of consideration received, amount of gain or loss on sale recognized in the period, details concerning any related material agreements between the parties, and the segment in which the divested service offering had been reported. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true