Restructuring Activities

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Post-Divestiture Restructuring Plan

In conjunction with the divestiture of our former Surgical & Infection Prevention business, we began a three-phase restructuring plan (the “Plan”) intended to align our organizational structure (“Organizational Alignment”), information technology platform (“IT Transformation”) and supply chain and distribution channels (“Cost Transformation”) to be more appropriate for the size and scale of our remaining Medical Devices business. Organizational Alignment and IT Transformation are substantially complete. In the three months ended March 31, 2020, expenses were incurred only for the final phase, Cost Transformation.

The Cost Transformation phase was initiated in June 2019, and is intended to optimize the Company’s procurement, manufacturing, and supply chain operations. The Company expects to incur between $11.0 million and $13.0 million to execute the Cost Transformation, primarily consulting and other expenses that will be expensed as incurred. The Company also expects to spend between $8.0 million to $12.0 million of incremental capital through 2021 and expects to complete the Cost Transformation by the end of 2021. In the three months ended March 31, 2020, we incurred $0.5 million of costs included in “Cost of products sold” and plan-to-date we have incurred $2.8 million of costs related to Cost Transformation.

In the three months ended March 31, 2019, the amounts we incurred for the earlier phases of the Plan included $1.5 million for Organizational Alignment and $0.5 million for IT Transformation.

Integration of Business Acquisitions

During the third quarter of 2019, we initiated activities to integrate recent asset and business acquisitions into our operations, and where appropriate, re-align our organization accordingly. We expect to incur up to $17.0 million of costs, primarily for employee retention, severance and benefits and lease termination costs. In the three months ended March 31, 2020, we have incurred $0.1 million of costs included in “Selling and general expenses” and plan-to-date, we have incurred $9.2 million of expense primarily for employee retention, severance and benefits. We expect the integration of our acquisitions will be substantially complete by the end of 2020.

Restructuring Liability

We have a liability for employee retention, severance and benefits associated with our restructuring activities, which is summarized below (in millions):


	Accrual
Balance, December 31, 2019	$	8.5
Charges and adjustments, net	0.2
Payments	(0.1)
Balance, March 31, 2020	$	8.6