Acquisitions

12 Months Ended

Dec. 31, 2024

ACQUISITIONS

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s Consolidated Financial Statements. This goodwill arises because the purchase prices for these businesses exceeds the fair value of acquired identifiable net assets due to the purchase prices reflecting a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sources. In the months after closing, as the Company obtains additional information about the acquired assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. The fair values of acquired intangibles are determined based on estimates and assumptions that are deemed reasonable by the Company. Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with its 2024 acquisitions and is also in the process of obtaining valuations of certain acquisition-related assets and liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocations, if any, prior to completion of the measurement periods, as required.

The following briefly describes the Company’s acquisition activity for the three years ended December 31, 2024.

During 2024, the Company acquired three businesses for total consideration of $558 million in cash, net of cash acquired. The businesses acquired complement existing units of the Company’s Life Sciences segment. The Company preliminarily recorded an aggregate of $305 million of goodwill related to these acquisitions.

On December 6, 2023, the Company acquired Abcam plc (“Abcam”) for a cash purchase price of approximately $5.6 billion (the “Abcam Acquisition”). Abcam is a leading global supplier of protein consumables, including highly validated antibodies, reagents, biomarkers and assays to address targets in biological pathways that are critical for advancing drug discovery, life sciences research and diagnostics. Abcam is now part of the Company’s Life Sciences segment. Abcam generated revenues of approximately £362 million in 2022. The acquisition of Abcam has provided and is expected to provide the Company additional sales and earnings opportunities in the proteomics sector. The Company financed the Abcam Acquisition using cash on hand. The Company recorded approximately $3.9 billion of goodwill related to the Abcam Acquisition.

During 2022, the Company acquired seven businesses for total consideration of $582 million in cash, net of cash acquired. The businesses acquired complement existing units of each of the Company’s three segments. The Company recorded an aggregate of $389 million of goodwill related to these acquisitions.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition ($ in millions):


	2024		2023		2022
Trade accounts receivable	$	15	$	86	$	4
Inventories	1		94		7
Property, plant and equipment	13		158		9
Goodwill	305		3,851		389
Other intangible assets, primarily developed technology, trade names and customer relationships	419		2,146		200
Trade accounts payable	(2)		(32)		(1)

Deferred tax liabilities	(59)		(519)		(10)
Other assets and liabilities, net	16		(49)		(16)
Net assets acquired	708		5,735		582
Less: noncash consideration	(150)		(125)		—
Net cash consideration	$	558	$	5,610	$	582

The noncash consideration of $150 million and $125 million related to a 2024 and a 2023 acquisition, respectively, and were the result of the Company’s preexisting investments in acquired businesses.

Transaction-related costs for the Abcam Acquisition were $27 million for the year ended December 31, 2023. The Company’s earnings for 2024 and 2023 also reflect the pretax impact of $25 million and $68 million, respectively, of non-recurring acquisition date fair value adjustments to inventory in both periods and the settlement of pre-acquisition share-based payment awards in 2023, both related to the Abcam Acquisition. Transaction-related costs and acquisition-related fair value adjustments attributable to other acquisitions were not material for the years ended December 31, 2024, 2023 or 2022.

Pro Forma Financial Information (Unaudited)

The unaudited pro forma information for the periods set forth below gives effect to the 2024 and 2023 acquisitions as if they had occurred as of the beginning of the comparable prior annual reporting period, including the results from operations for the acquired business as well as the impact of assumed financing of the transaction and the impact of the purchase price allocation (including the amortization of acquired intangible assets). The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions except per share amounts):


	2024		2023
Sales	$	23,933	$	24,427
Net earnings from continuing operations	3,892		4,138
Diluted net earnings per common share from continuing operations(a)	5.28		5.54

(a) Diluted net earnings from continuing operations for 2023 is calculated by taking net earnings from continuing operations and excluding the anti-dilutive MCPS dividends.

The 2024 unaudited pro forma net earnings from continuing operations set forth above were adjusted to exclude the pretax impact of a $25 million nonrecurring acquisition date fair value adjustment to inventory. The 2023 unaudited pro forma net earnings from continuing operations were adjusted to exclude the pretax impact of $68 million of nonrecurring acquisition date fair value adjustments to inventory and the settlement of pre-acquisition share-based payment awards related to the Abcam Acquisition. In addition, acquisition-related transaction costs of $27 million pretax for the year ended December 31, 2023 associated with the Abcam Acquisition were excluded from pro forma net earnings from continuing operations.