Acquisitions and License Agreements (Tables)

12 Months Ended

Sep. 25, 2015

Schedule of Fair Value of Identifiable Assets Acquired and Liabilities Assumed

The following amounts represent the preliminary allocation of the fair value of the identifiable assets acquired and liabilities assumed for the Therakos Acquisition and Ikaria Acquisition and final allocation of the fair value of the identifiable assets acquired and liabilities assumed for the Cadence Acquisition, Questcor Acquisition and CNS Therapeutics acquisition:



	Therakos		Ikaria		Questcor		Cadence		CNS Therapeutics
Cash	$	41.3	$	77.3	$	445.1	$	43.2	$	3.6
Inventory	23.5		26.3		67.9		21.0		—
Intangible assets	1,170.0		1,971.0		5,601.1		1,300.0		91.9
Goodwill (non-tax deductible)	437.2		792.4		1,789.4		318.1		24.5
Other assets, current and non-current⁽¹⁾	42.1		172.9		274.3		18.0		9.7
Total assets acquired	1,714.1		3,039.9		8,177.8		1,700.3		129.7
Current liabilities	24.7		32.6		168.9		48.8		4.0
Unpaid purchase consideration (current)	—		—		128.8		—		—
Other liabilities (non-current)	0.6		9.1		186.8		—		—
Deferred tax liabilities, net (non-current)	324.3		623.6		1,906.8		292.3		27.1
Contingent consideration (non-current)	—		—		—		—		6.9
Total debt	344.8		1,121.0		—		30.0		—
Total liabilities assumed	694.4		1,786.3		2,391.3		371.1		38.0
Net assets acquired	$	1,019.7	$	1,253.6	$	5,786.5	$	1,329.2	$	91.7


(1)	This amount includes $22.0 million, $73.8 million, $87.3 million, $14.7 million and $3.3 million of accounts receivable for the Therakos Acquisition, Ikaria Acquisition, Questcor Acquisition, Cadence Acquisition, and CNS Therapeutics, respectively, which is also the gross contractual value.

Schedule of Reconciliation of Total Consideration

The following reconciles the total consideration to net assets acquired:



	Therakos		Ikaria		Questcor			Cadence		CNS Therapeutics
Total consideration, net of cash	$	978.4	$	1,176.3	$	5,470.2		$	1,286.0	$	95.0
Plus: cash assumed in acquisition	41.3		77.3		445.1			43.2		3.6
Total consideration	1,019.7		1,253.6		5,915.3			1,329.2		98.6
Less: unpaid purchase consideration	—		—		(128.8		)	—		—
Less: contingent consideration	—		—		—			—		(6.9		)
Net assets acquired	$	1,019.7	$	1,253.6	$	5,786.5		$	1,329.2	$	91.7

Schedule of Earnings by Acquiree

Financial Results - The amount of net sales and earnings included in the Company's results for the periods presented were as follows:



Net sales	2015			2014
Ikaria	$	191.9		$	—
Questcor	1,125.9			129.2
Cadence	263.0			124.4
	$	1,580.8		$	253.6
Operating income (loss)
Ikaria	$	47.1		$	—
Questcor	223.3			17.4
Cadence	(97.3		)	(66.9		)
	$	173.1		$	(49.5	)

Schedule of Acquisition Cost

Acquisition-Related Costs - Acquisition-related costs incurred in fiscal 2015 and 2014 for each of the fiscal 2015 and 2014 acquisitions discussed above were as follows:



Acquisition-related costs	2015		2014
Therakos	$	22.5	$	—
Ikaria	30.9		—
Questcor	—		47.5
Cadence	—		17.6
	$	53.4	$	65.1

Business Combination Intangible Asset Amortization By Acquiree [Table Text Block]

The amount of amortization on acquired intangible assets included within operating income (loss) for the periods presented was as follows:



Intangible asset amortization	2015		2014
Ikaria	$	57.1	$	—
Questcor	301.4		34.9
Cadence	162.5		85.9
	$	521.0	$	120.8

During fiscal 2015 and 2014, the Company recognized $44.1 million and $25.7 million, respectively, of expense primarily associated with fair value adjustments of acquired inventory. This expense was included within cost of sales.

Schedule of Intangible Assets Acquired

Intangible assets acquired consist of the following:



Therakos	Amount		Amortization Period
Completed technology	$	1,170.0	15 years

The completed technology intangible asset relates to extracorporeal photopheresis treatment therapies. The fair value of the intangible asset was determined using the income approach, which is a valuation technique that provides an estimate of the fair value of the asset based on market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with each asset or its projected cash flows. The completed technology intangible asset utilized a discount rate of 17.0%. Based on the Company's preliminary estimate, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce, future product and device development, anticipated synergies and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. All assets acquired are included within the Company's Specialty Brands segment.



Ikaria	Amount		Amortization Period
Completed technology	$	1,820.0	15 years
Trademark	70.0		22 years
In-process research and development - terlipressin	81.0		Non-Amortizable
	$	1,971.0

The completed technology and trademark intangible assets relate to Inomax. The fair value of the intangible assets were determined using the income approach. The cash flows were discounted at various discount rates commensurate with the level of risk associated with each asset or its projected cash flows. Completed technology, trademark and in-process research and development ("IPR&D") terlipressin intangibles utilized discount rates of 14.5%, 14.5%, and 17.0%, respectively. The IPR&D discount rate for terlipressin was developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in the FDA approval process and risks associated with commercialization of a new product. Based on the Company's preliminary estimate, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce, future product and device development, anticipated synergies and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. All assets acquired are included within the Company's Specialty Brands segment.



Questcor	Amount		Weighted-Average Amortization Period
Completed technology	$	5,343.3	18 years
Trademark	5.2		13 years
Customer relationships	34.3		12 years
In-process research and development - Synacthen	218.3		Non-Amortizable
	$	5,601.1

The completed technology intangible asset relates to Acthar. The trademark and customer relationship intangible assets relate to BioVectra, Inc., a wholly-owned subsidiary of Questcor. The in-process research and development relates to the U.S. development of Synacthen, a synthetic pharmaceutical product. The fair value of the intangible assets were determined using the income approach. The cash flows were discounted at various discount rates commensurate with the level of risk associated with each asset or its projected cash flows. Completed technology, customer relationships, trademark and in-process research and development intangibles utilized discount rates of 14.5%, 10.0%, 10.0% and 16.0%, respectively. The in-process research and development discount rate was developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in the FDA approval process and risks associated with commercialization of a new product. Based on the Company's preliminary estimate, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce, anticipated synergies and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. The majority of assets acquired are included within the Company's Specialty Brands segment. Assets related to BioVectra, Inc. are included within the Company's Specialty Generics segment.



Cadence	Amount		Amortization Period
Completed technology	$	1,300.0	8 years

The completed technology intangible asset relates to Ofirmev, the rights to which have been in-licensed from Bristol-Myers Squibb Company ("BMS"). The fair value of the intangible asset was determined using the income approach. The cash flows were discounted at a 13.0% rate. For more information on the BMS license agreement, refer to "License Agreement" below. The excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce, anticipated synergies and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. All assets acquired are included within the Company's Specialty Brands segment.



CNS Therapeutics	Amount		Weighted-Average Amortization Period
Completed technology	$	73.1	13 years
Trademark	0.2		3 years
In-process research and development	18.6		Non-Amortizable
	$	91.9

Schedule of Pro Forma Information

The following unaudited pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the acquisition occurred on the assumed date, nor is it necessarily an indication of future operating results. In addition, the unaudited pro forma information does not reflect the cost of any integration activities, benefits from any synergies that may be derived from the acquisition or revenue growth that may be anticipated.



	2015		2014
Net sales	$	3,755.8	$	3,598.1
Income (loss) from continuing operations	359.9		(63.1		)

Basic earnings (loss) per share from continuing operations	$	3.11	$	(0.55	)
Diluted earnings (loss) from per share continuing operations	3.07		(0.55		)