1.0.0.3 false Acquisitions of Businesses 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 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Acquisitions of Businesses [Abstract] 0 mhs_AcquisitionsOfBusinessesAbstract mhs false na duration string Acquisitions of Businesses Footnote Disclosure false false false false false true false false false 1 false false 0 0 false false Acquisitions of Businesses Footnote Disclosure false 3 Acquisitions of Businesses 1 us-gaap_BusinessCombinationDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div><div><h1 style="margin-top: 0in; margin-right: 0in; margin-bottom: 11.0pt; margin-left: 0in; text-indent: 0in; font-size: 11.0pt; font-family: 'Times New Roman','serif'; text-transform: uppercase; letter-spacing: -.15pt;"><a name="_AUC56ea971ef802446faaee299621d6f5fd">3.   ACQUISITIONS OF BUSINESSES</a></h1> Europa Apotheek Venlo B.V. On April 28, 2008, the Company acquired a majority interest in Europa Apotheek, a privately held company based in the Netherlands that primarily provides mail-order pharmacy services in Germany. The cost of the acquisition was approximately $126.8 million in cash and a $24.1 million purchase obligation, with additional potential future consideration for achieving performance targets.  The Company believes this acquisition leverages its proven proprietary technologies and ability to deliver customized solutions to meet the challenges of managing healthcare costs and improving clinical care abroad. The transaction was accounted for under the provisions of FASB’s business combinations standard. The purchase price was allocated based upon the fair value of net assets acquired at the date of the acquisition. A portion of the excess of the purchase price over tangible net assets acquired, amounting to $112.8 million, has been allocated to goodwill, and $43.9 million has been allocated to intangible assets, which are being amortized using the straight-line method over an estimated weighted average useful life of 9.1 years.  Additionally, there is a deferred tax liability of $11.1 million associated with the fair value amounts allocated to intangible assets.  Europa Apotheek’s operating results from the date of acquisition of April 28, 2008 through December 26, 2009 are included in the accompanying audited consolidated financial statements. Pro forma financial statement results including the results of Europa Apotheek would not differ materially from the Company’s historically reported financial statement results.   PolyMedica Corporation. On October 31, 2007, the Company acquired all of the outstanding common stock of PolyMedica for $1.3 billion in cash. PolyMedica is a leading provider of diabetes care through its Liberty brand, including blood glucose testing supplies, prescriptions and related services. Previously in 2006, Medco formed a multi-pronged alliance with PolyMedica, enabling Medco to become the direct mail dispensing pharmacy for their members, and provide PolyMedica’s Medicare Part B solution to Medco clients. This acquisition supports the Company’s ability to deliver advanced, specialized pharmacy services by treating patients at the disease level. Under the terms of the Agreement and Plan of Merger dated August 27, 2007, PolyMedica shareholders received $53 in cash for each outstanding share of PolyMedica common stock.  The Company funded the transaction on October 31, 2007 through a combination of bank borrowings from its existing $2 billion revolving credit facility and cash on hand.   The transaction was accounted for under the provisions of FASB’s business combinations standard. The purchase price was allocated based upon the fair value of net assets acquired at the date of the acquisition. A portion of the excess of the purchase price over tangible net assets acquired was allocated to intangible assets, consisting of the Liberty trade name of $392.0 million with an estimated 35-year life, customer relationships of $119.9 million with an estimated 8-year life, non-compete agreements of $26.8 million with an estimated 3-year life, and customer lists of $2.8 million with an estimated 4-year life.  These assets are included in intangible assets, net, in the consolidated balance sheets. The purchase price for PolyMedica was primarily determined on the basis of management’s expectations of future earnings and cash flows, and resulted in the recording of goodwill of $1.0 billion, which is not tax deductible. In accordance with the FASB standard, the goodwill is not being amortized.   PolyMedica’s operating results from the date of acquisition of October 31, 2007 through December 26, 2009, are included in the accompanying consolidated financial statements. The unaudited pro forma results of operations of the Company and PolyMedica, prepared based on the purchase price allocation for PolyMedica described above and as if the PolyMedica acquisition had occurred at the beginning of fiscal year 2007, would have been as follows ($ in millions, except for per share amounts):   <div align="center"> <table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" style="font-size: 10.0pt; font-family: 'Calibri','sans-serif'; border-collapse: separate; border: none;"> <tr> <td width="319" valign="top" style="width: 239.4pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;">   Fiscal Year </td> <td colspan="2" valign="bottom" style="border-top: 0px; border: none; border-bottom: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt;"> 2007 (Unaudited) </td> </tr> <tr> <td width="319" valign="bottom" style="width: 239.4pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> Pro forma total net revenues............................................... </td> <td width="16" valign="bottom" style="width: 11.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> $ </td> <td width="74" valign="bottom" style="width: 55.8pt; border: none; border-top: 0px; padding: 0in 5.4pt 0in 5.4pt;">   44,982.5 </td> </tr> <tr> <td width="319" valign="bottom" style="width: 239.4pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> Pro forma net income ............................................................ </td> <td width="16" valign="bottom" style="width: 11.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> $ </td> <td width="74" valign="bottom" style="width: 55.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;">        887.4 </td> </tr> <tr> <td width="319" valign="bottom" style="width: 239.4pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;">   </td> <td width="16" valign="top" style="width: 11.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;">   </td> <td width="74" valign="bottom" style="width: 55.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;">   </td> </tr> <tr> <td width="319" valign="bottom" style="width: 239.4pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> Pro forma basic earnings per common share................... </td> <td width="16" valign="top" style="width: 11.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> $ </td> <td width="74" valign="bottom" style="width: 55.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> 1.61 </td> </tr> <tr> <td width="319" valign="bottom" style="width: 239.4pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> Pro forma diluted earnings per common share................ </td> <td width="16" valign="top" style="width: 11.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> $ </td> <td width="74" valign="bottom" style="width: 55.8pt; border: none; padding: 0in 5.4pt 0in 5.4pt; border-top: 0px;"> 1.58 </td> </tr> </table> </div>   The above per share data has been retrospectively adjusted to reflect the January 24, 2008 two-for-one stock split. See Note 1, “Background and Basis of Presentation,” for more information. The pro forma financial information above is not necessarily indicative of what the Company’s consolidated results of operations actually would have been if the PolyMedica acquisition had been completed at the beginning of fiscal year 2007. In addition, the pro forma information above does not attempt to project the Company’s future results of operations.   Critical Care. On November 14, 2007, Accredo acquired Critical Care, one of the nation’s largest providers of home-based and ambulatory specialty infusion services, for approximately $220 million in cash. This acquisition expands Accredo’s capabilities and market presence related to infused agents. The transaction was accounted for under the provisions of FASB’s business combinations standard. The purchase price has been allocated based upon the fair value of net assets acquired at the date of the acquisition. A portion of the excess of the purchase price over tangible net assets acquired, amounting to $121.4 million, was allocated to goodwill, and $68.0 million was allocated to intangible assets, which are being amortized using the straight-line method over an estimated weighted average useful life of approximately 13.8 years. These assets are included in intangible assets, net, and goodwill, respectively, in the consolidated balance sheets. The Company retained third-party valuation advisors to conduct analyses of the assets acquired and liabilities assumed in order to assist the Company with the purchase price allocation. These analyses were used by management in the determination of the final allocation. Pro forma financial statement results including the results of Critical Care would not differ materially from our historically reported financial statement results. </div></div> 3.   ACQUISITIONS OF BUSINESSES Europa Apotheek Venlo B.V. On April 28, 2008, the Company acquired a majority interest in Europa Apotheek, a false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true