Business Combinations

12 Months Ended

Oct. 02, 2015

Business Combinations [Abstract]

Business Combinations

BUSINESS COMBINATIONS

Business Combinations in Fiscal Year 2015

In September 2015, the Company purchased certain assets comprising a business from a sole proprietor for treatment planning software tools that will enhance both planning efficiency and treatment plan quality and allow oncologists to quickly adjust their intended dose distributions ahead of the treatment planning process. Through the acquisition, the Company also entered into a consulting agreement with the sole proprietor. The acquired assets were integrated into the Company's Oncology Systems reporting unit. The Company paid a total of $27.0 million for all of the assets in cash. The following table summarizes the purchase price allocation:

(In millions)	Fair Value
Finite-lived intangible assets with a weighted average useful life of 8.3 years	$	8.3
Indefinite-lived intangible assets — IPR&D	8.8
Goodwill	9.9
Net assets acquired	$	27.0

Claymount

In August 2015, the Company acquired Claymount Investments B.V. (“Claymount”), a Netherlands-based supplier of components and subsystems for X-ray imaging equipment manufacturers. The Company integrated Claymount into its X-ray imaging tubes and flat panel products reporting unit to enhance its ability to support a continuing industry-wide transition from analog to digital X-ray imaging. Total purchase price of the acquisition of $58.0 million was paid in cash. The following table summarizes the purchase price allocation:

(In millions)	Fair Value
Net tangible assets (1)	$	11.3
Finite-lived intangible assets with a weighted average useful life of 6.0 years	16.2
Goodwill	30.5
Net assets acquired	$	58.0

⁽¹⁾  Includes $1.9 million in cash and cash equivalents.

MeVis

In April 2015, the Company completed the acquisition of 73.5% of the then outstanding shares of MeVis, a public company based in Bremen, Germany that provides image processing software and services for cancer screening, using $25.5 million in cash. The acquisition of MeVis was integrated into the Company's X-ray tubes and flat panel products reporting unit. The following table summarizes the purchase price allocation:

(In millions)	Fair Value
Net tangible assets (1)	$	21.7
Finite-lived intangible assets with a weighted average useful life of 5.4 years	5.8
Goodwill	8.2
Fair value of net assets	35.7
Less: Noncontrolling interests(2)	10.2
Net assets acquired	$	25.5

⁽¹⁾  Includes $13.9 million cash and cash equivalents.

⁽²⁾  Fair value was determined using the market price of the shares of MeVis as of the acquisition date.

In August 2015, the Company, through one of its German subsidiaries, entered into a domination and profit and loss transfer agreement (the “DPLTA”) with MeVis. Subsequent to fiscal year 2015, in October 2015, the DPLTA became effective upon its registration at the local court of Bremen, Germany. Under the DPLTA, MeVis subordinates its management to the Company and undertakes to transfer all of its annual profits and losses to the Company. In return, the DPLTA grants the noncontrolling shareholders of MeVis: (1) an annual recurring net compensation of €0.95 per MeVis share starting from January 1, 2015 and (2) a put right for their MeVis shares at €19.77 per MeVis share. As of October 2, 2015, noncontrolling shareholders together held approximately 482,000 shares of MeVis, representing 26.5% of the outstanding shares.

Business Combinations in Fiscal Year 2014

Transpire

In July 2014, the Company closed the acquisition of certain assets and liabilities of Transpire, Inc. (“Transpire”), a privately-held developer of software solutions for accurately and rapidly predicting the macroscopic behavior of radiation. The Company’s Oncology Systems reporting unit integrated Transpire’s dose calculation software to improve its image guidance tools and deliver high-precision radiotherapy for the treatment of cancer. The Company’s Security and inspection products reporting unit is using certain other Transpire software to provide comprehensive solutions for customers that integrate the Company’s high-energy X-ray technology into systems for cargo screening, industrial inspection and non-destructive testing. The acquisition was accounted for as a business combination. Total purchase price of the acquisition of $19.3 million consisted of $16.0 million in cash and $3.3 million of earn-out consideration measured at fair value. The following table summarizes the purchase price allocation:

(In millions)	Fair Value
Net assumed liabilities	$	(0.1	)
Finite-lived intangible assets with a weighted average useful life of 6.1 years (1)	8.7
Indefinite-lived intangible assets — IPR&D	2.0
Goodwill (2)	8.7
Net assets acquired	$	19.3

⁽¹⁾  $6.0 million was allocated to the Company’s Oncology Systems reporting unit and $2.7 million to the Company’s Security and inspection products reporting unit.

⁽²⁾  $5.9 million was allocated to the Company's Oncology Systems reporting unit and $2.8 million to the Company's Security and inspection products reporting unit.

Velocity

In April 2014, the Company closed the acquisition of certain assets of Velocity Medical Solutions LLC (“Velocity”), a privately-held Atlanta-based developer of specialized software for cancer clinics. The Velocity software aggregates unstructured treatment and imaging data from diverse systems to give a more comprehensive view of a patient's diagnostic imaging and treatment history and help clinicians make more informed treatment decisions. The acquired assets of Velocity were integrated into the Company’s Oncology Systems reporting unit. The total purchase price of the acquisition of $19.9 million consisted of $17.0 million in cash (of which $2.6 million was held back) and $2.9 million of earn-out consideration measured at fair value. The following table summarizes the purchase price allocation:

(In millions)	Fair Value
Net assumed liabilities	$	(0.5	)
Finite-lived intangible assets with a weighted average useful life of 6.1 years	10.6
Goodwill	9.8
Net assets acquired	$	19.9

Other information

All acquisitions listed above were accounted for as business combinations. Total transaction costs related to the Company’s acquisitions incurred during fiscal years 2015 and 2014 were $3.3 million and $0.7 million, respectively. These transaction costs were expensed as incurred in selling, general and administrative expenses in the Consolidated Statements of Earnings.

The Company’s purchase price allocation for acquisitions completed during fiscal year 2015 are preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred.

The goodwill generated from the Company’s acquisitions completed is primarily attributable to expected synergies. The goodwill is deductible for income tax purposes for all acquisitions except MeVis and Claymount. The Consolidated Financial Statements include the operating results of each acquisition from the date of acquisition. Pro forma results of operations for the acquisitions completed during the fiscal years presented have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company’s financial results.