ACQUISITIONS

In December 2013 we announced our intent to acquire Patient Safety Technologies, Inc. (PST) for an aggregate purchase price of approximately $120. PST conducts its business through its wholly owned subsidiary, SurgiCount Medical, Inc. PST’s proprietary Safety-Sponge^®System and SurgiCount 360™ compliance software help prevent Retained Foreign Objects in the operating room. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2014. The acquisition of PST is expected to enhance our product offerings within our MedSurg segment.

In December 2013 we acquired MAKO Surgical Corp. (MAKO) for an aggregate purchase price of approximately $1,679. The acquisition of MAKO, combined with our strong history in joint reconstruction, capital equipment (operating room integration and surgical navigation) and surgical instruments, will help further advance the growth of robotic assisted surgery. Our combined expertise offers the potential to simplify joint reconstruction procedures, reduce variability and enhance the surgeon and patient experience. The acquisition of MAKO enhances our product offerings within our Reconstructive segment. Intangible assets acquired with MAKO will be amortized over a weighted-average life of 9 years, except for the trade name that is deemed to have an indefinite life. IPRD is considered to be an indefinite-lived intangible asset until such time as the research is completed (at which time it becomes a determinable-lived intangible asset) or determined to have no future use (at which time it is impaired).

In March 2013 we acquired Trauson Holdings Company Limited (Trauson) for a total consideration of $751. The acquisition of Trauson enhances our product offerings, primarily within our Reconstructive segment, broadens our presence in China and enables us to expand into the fast growing value segment of the emerging markets. Intangible assets acquired with Trauson will be amortized over a weighted-average life of 15 years, except for the trade name that is deemed to have an indefinite life. IPRD is considered to be an indefinite-lived intangible asset until such time as the research is completed (at which time it becomes a determinable-lived intangible asset) or determined to have no future use (at which time it is impaired).

The purchase price allocations for the MAKO and Trauson acquisitions were based upon preliminary valuations, and our estimates and assumptions are subject to change within the measurement period as the valuations are finalized. Management is currently in the process of verifying data and finalizing information related to the MAKO valuation and recording of identifiable intangible assets, deferred income taxes and the corresponding effect on the value of goodwill. For the Trauson acquisition, the measurement period has been completed; revisions to our original estimates include an increase to customer relationship intangible assets of $40, an increase to liabilities of $14, and a reduction to goodwill of $31.

In November 2012 we acquired Surpass Medical, Ltd. (Surpass) for $100, with an additional $35 to be paid upon the completion of certain milestones. Surpass develops and commercializes next-generation flow diversion stent technology to treat brain aneurysms using a unique mesh design and delivery system. The acquisition of Surpass enhances our product offerings within our Neurotechnology and Spine segment. Intangible assets acquired with Surpass will be amortized over a weighted-average life of 15 years. IPRD is considered to be an indefinite-lived intangible asset until such time as the research is completed (at which time it becomes a determinable-lived intangible asset) or determined to have no future use (at which time it is impaired). The measurement period for Surpass was completed in the fourth quarter of 2013; revisions to our original estimates include a reduction to developed technology of $18, a reduction to IPRD of $26, and an increase to goodwill of $27.

The effects of all the acquisitions described above are included in our Consolidated Financial Statements prospectively from the date of acquisition. Pro forma consolidated results of operations for the years ended December 31, 2013 and 2012 would not differ significantly as a result of these acquisitions.

The allocation of the purchase price to the acquired net assets of the acquisitions described above are as follows:



	2013			2013			2012
	MAKO			Trauson			Surpass
Purchase price paid	$	1,679		$	751		$	100
Contingent consideration	—			—			33
Total purchase consideration	$	1,679		$	751		$	133

Tangible assets acquired:
Inventory	50			43			2
Other assets	174			163			1
Liabilities	(277		)	(87		)	(28		)
Identifiable intangible assets:
Customer relationship	91			112			—
Trade name	24			34			—
Developed technology	231			31			45
In-process research & development	169			5			19

Goodwill	1,217			450			94
	$	1,679		$	751		$	133