

24.	Subsequent Events

Discontinued Operations and Divestitures

On January 8, 2018, the Company announced that it entered into a definitive agreement to sell its PreveLeak and Recothrom assets to Baxter International, Inc ("Baxter") for approximately $185.0 million, with upfront payment of $153.0 million, inclusive of existing inventory, and the remainder in potential future milestones. Baxter will assume other expenses, including contingent liabilities associated with PREVELEAK®. Baxter is a global medical products company that is committed to advancing surgical innovation with a variety of products and delivery devices used in the surgical suite. The Company expects the sale to close in the first quarter of 2018.

On February 22, 2018, the Company’s Board of Directors authorized commencement of a process to dispose of (1) the Company’s Specialty Generics business comprised of its Specialty Generics segment, with the exception of its external manufacturing operations, (2) certain of the Company’s non-promoted brands business, which is currently reflected in the Specialty Brands segment; and (3) the Company's ongoing, post-divestiture supply agreement with the acquirer of the CMDS business, which is currently reflected in the Other non-operating segment (referred to collectively as the “Specialty Generics Disposal Group”). The Company evaluated the criteria prescribed by GAAP for recording a disposal group as held for sale and discontinued operations. This criteria was not met as of December 29, 2017. Therefore, this disposal group was not presented as a discontinued operation in the accompanying consolidated balance sheets and consolidated statements of income. Beginning in the first quarter of fiscal 2018, the historical financial results attributable to the Specialty Generics Disposal Group will be reflected in the Company’s consolidated financial statements as discontinued operations.

Sucampo Acquisition

On February 13, 2018, the Company acquired Sucampo Pharmaceuticals, Inc. ("Sucampo"). Consideration for the transaction consisted of approximately $1.2 billion, including the assumption of Sucampo's third-party debt ("the Sucampo Acquisition"). The acquisition was funded through the issuance of $600.0 million aggregate principal amount of senior secured notes (as discussed further below), a $900.0 million borrowing under the Revolver and cash on hand. Sucampo's commercialized products include AMITIZA® (lubiprostone), a leading global product in the branded constipation market, and RESCULA® (unoprostone isopropyl ophthalmic solution) 0.15%, which is indicated for ocular hypertension and open-angle glaucoma, and marketed in Japan. In addition, Sucampo has two pipeline products that are currently in Phase 3 development: VTS-270, a development product for Niemann-Pick Type C, a rare, neurodegenerative, and ultimately fatal disease that can present at any age, and CPP-1X/sulindac, a development product for Familial Adenomatous Polyposis under a collaborative agreement between Cancer Prevention pharmaceuticals and Sucampo.

The Company incurred acquisition costs within the consolidated statements of income for fiscal 2017 of $4.2 million, which were included within SG&A.

The Company has not yet completed a preliminary allocation of the total consideration to the identifiable assets acquired and liabilities assumed for the Sucampo Acquisition. However, the Company expects that significant assets acquired will primarily consist of intangible assets, but will also include inventory adjusted to fair value, and that significant liabilities assumed will include the existing Sucampo third-party debt and deferred tax liabilities associated with assets acquired. The Company expects to complete a preliminary allocation of the total consideration during the first quarter of fiscal 2018.

Upon completion of the Sucampo Acquisition, Sucampo’s 3.25% convertible senior notes due 2021 (“the Sucampo Notes”) became eligible to receive increased consideration in conjunction with a make-whole fundamental change, such that each $1,000 principal face amount of Sucampo notes may be converted into $1,221 cash. Under terms of the Indenture dated December 27, 2016 (the “Sucampo Indenture”), between Sucampo and U.S. Bank National Association, the Sucampo Notes may be converted at the option of their holders and be eligible to receive increased consideration during a period of time following consummation of the merger transaction, or remain outstanding and earn the stated 3.25% rate of interest. It is the expectation that all holders will eventually exercise their conversion rights under the Sucampo Indenture. At the time of this filing approximately $73.5 million of the $300.0 million of issued convertible debt remains outstanding.

Sucampo Acquisition Financing

In February 2018, in conjunction with the Sucampo Acquisition, the Company entered into a $600.0 million senior secured term loan. The variable-rate loan bears an interest rate of LIBOR plus 300 basis points and was issued with a discount of 25 basis points. The incremental term loan matures on February 25, 2025 under terms generally consistent with the Company's existing term loan.

Financing Activities

On January 16, 2018, the Company made a $225.0 million voluntary prepayment on its outstanding term loan. In making this payment the Company satisfies certain obligations included within external debt agreements to reinvest proceeds from the sale of assets and businesses within one year of the respective transaction or use the proceeds to pay down debt.

On February 21, 2018, the Company borrowed an additional $25.0 million on its Receivable Securitization, bringing total outstanding borrowings to $225.0 million for this instrument. The Company also made a $275.0 million payment on the 2017 Revolving Credit Facility, bringing total outstanding borrowings to $625.0 million for this instrument.

Commitments and Contingencies

Certain litigation matters occurred in fiscal 2017 or prior, but had subsequent updates in January and February 2018. See further discussion in Note 19 to the consolidated financial statements.