Global Med Acquisition

On March 31, 2010 the Company completed its cash tender offer for the shares of Global Med Technologies, Inc. (“Global Med”). The total acquisition cost for the shares and outstanding warrants of Global Med was approximately $60.4 million.

Goodwill was determined by comparing the purchase price with the fair value of the assets and liabilities acquired. The carrying value of the related goodwill has been adjusted to reflect the final purchase price allocation. At April 2, 2011, goodwill recorded after our final purchase price allocation was $39.6 million and is not tax deductible. Global Med has an in-place workforce with extensive knowledge and experience in the development and support of blood management software. The acquisition was a unique strategic fit for the Company given our global presence and customer relationships in blood management.

Purchase Price Allocation

The following chart summarizes the final purchase price allocation:


	(In thousands)

Goodwill	$	39,554
Intangible assets subject to amortization		39,920
Trade accounts receivable		6,848
Other assets		7,639
Deferred taxes		(10,928	)
Notes payable		(7,701	)
Deferred revenue		(7,180	)
Other liabilities		(7,725	)

Total	$	60,427

After the April 3, 2010 financial statements were issued, we received new information related to the fair value of the assets and liabilities acquired. After considering this new information, we estimated the carrying amount of certain assets and liabilities acquired to finalize our purchase price allocation. The impact of these adjustments resulted in a change in the value attributed to goodwill as follows:


	•	Increase of $14.0 million in intangible assets which resulted in a decrease in goodwill

	•	Increase of $5.9 million in net deferred tax liabilities resulting in an increase to goodwill

	•	$0.1 million decrease in trade accounts receivable resulting in an increase in goodwill

	•	$1.1 million increase in other assets resulting in a decrease in goodwill

	•	$0.9 million decrease in deferred revenue which resulted in a decrease to goodwill

	•	$0.6 million decrease in accounts payable and other liabilities resulting in an decrease to goodwill

The net effect of these estimated changes resulted in a corresponding net decrease to goodwill of $10.6 million. These estimated changes are reflected accordingly in the purchase price allocation table above.

Accordingly, amortization expense recorded reflects these revised fair value estimates and the final purchase price allocation.

SEBRA Acquisition

On September 4, 2009, Haemonetics acquired the assets of the blood collection and processing business unit (“SEBRA”) of Engineering and Research Associates, Inc., a leading provider of blood and medical manufacturing technologies. SEBRA products, which include tubing sealers, blood shakers, sterile connection systems, mobile lounges and ancillary products used in blood collection and processing, complement Haemonetics’ portfolio and add depth to Haemonetics’ blood center and plasma product lines. The purchase price of $12.8 million was allocated to core technology of $2.0 million, customer relationships of $4.6 million, trade name intangible of $0.4 million, trade accounts receivables of $1.0 million, inventory of $1.1 million, and goodwill of $3.7 million.

Neoteric Acquisition

On April 16, 2009, Haemonetics acquired the outstanding shares of Neoteric. Neoteric is a medical information management company that markets a full end-to-end suite of products to track, allocate, release, and dispense hospital blood units while controlling inventory and recording the disposition of blood. The acquisition strategically broadened Haemonetics’ blood management solutions. The purchase price was $6.6 million plus contingent consideration of $5.0 million was allocated to other intangible assets of $5.0 million, deferred tax liabilities of $1.6 million, and goodwill of $8.2 million.

The contingent consideration is based upon estimated annual revenue growth for the three years following the acquisition, at established profitability thresholds, and is not limited. Using projected revenues for fiscal years 2010, 2011, and 2012, an analysis was performed that probability weighted three performance outcomes for the noted years. The performance outcomes are then discounted using a discount rate commensurate with the risks associated with Neoteric to arrive at the fair value of the contingent consideration. The Company is required to reassess the fair value of contingent consideration on a periodic basis. During fiscal year 2011 and 2010, the Company reassessed the fair value of the contingent consideration as performance outcomes for these years were not met, which resulted in a reduction in the estimated liability. The ending liability balance was $2.3 million and $4.1 million at April 2, 2011 and April 3, 2010, respectively.

Altivation Software Acquisition

On March 27, 2009, the Company acquired Altivation Software (“Altivation”) for approximately $3.5 million in cash plus contingent consideration based upon future operating performance. Altivation is a provider of blood drive and resource management software for blood collectors. The purchase price was principally allocated to intangible assets including goodwill. The results of the Altivation operations are included in our consolidated results for periods after the acquisition date.

Medicell Limited Acquisition

On April 4, 2008, the Company acquired Medicell Limited (“Medicell”) for approximately $2.5 million in cash plus contingent consideration based upon future operating performance. Medicell was the exclusive distributor in the United Kingdom for the Haemoscope product line since 1998. The purchase price was principally allocated to intangible assets including goodwill. The results of the Medicell operations are included in our consolidated results for periods after the acquisition date.