Business Acqusition

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Business Acquisition

Business Acquisition

On January 4, 2016, we acquired all of the stock of SurgiQuest, Inc. ("SurgiQuest") for $257.7 million in cash (based on an aggregate purchase price of $265 million as adjusted pursuant to the merger agreement governing the acquisition). SurgiQuest developed, manufactured and marketed the AirSeal^® System, the first integrated access management technology for use in laparoscopic and robotic procedures. This proprietary and differentiated access system is complementary to our current general surgery offering. The acquisition was funded through a combination of cash on hand and long-term borrowings.

The following table summarizes the fair values of the assets acquired and liabilities assumed as a result of the SurgiQuest acquisition.

Cash	$	1,305
Accounts receivable	10,032
Inventory	4,267
Other current assets	728
Current assets acquired	16,332
Property, plant & equipment	3,332
Goodwill	136,687
Customer and distributor relationships	76,420
Developed technology	49,600
Trademarks and tradenames	4,780
Other non-current assets	1,553
Total assets acquired	$	288,704
Accounts payable	$	5,012
Other current liabilities	6,004
Current liabilities assumed	11,016
Deferred income taxes	19,505
Other long-term liabilities	454
Total liabilities assumed	30,975
Net assets acquired	$	257,729

The goodwill recorded as part of the acquisition primarily represents revenue synergies, as well as operating efficiencies and cost savings. Goodwill deductible for tax purposes is $11.5 million. The weighted amortization period for intangibles acquired is 20 years. Customer and distributor relationships, developed technology and trademarks and tradenames are being amortized over a weighted average life of 22, 17 and 23 years, respectively.

The unaudited pro forma information for the years ended December 31, 2016 and 2015, assuming SurgiQuest occurred as of January 1, 2015 are presented below. This information has been prepared for comparative purposes only and does not purport to be indicative of the results of operations which actually would have resulted had the SurgiQuest acquisition occurred on the dates indicated, or which may result in the future.

	December 31,
	2016		2015
Net sales	$	763,520	$	768,726
Net income	29,153		(9,673		)

These pro forma results include certain adjustments, primarily due to increases in amortization expense due to fair value adjustments of intangible assets, increases in interest expense due to additional borrowings incurred to finance the acquisition, and acquisition related costs including transaction costs such as legal, accounting, valuation and other professional services as well as integration costs such as severance and retention.

Acquisition related costs included in the determination of pro forma net income for the year ended December 31, 2015 totaled $20.6 million. Such amounts are excluded from the determination of pro forma net income for the year ended December 31, 2016.

Net sales associated with SurgiQuest of $68.4 million have been recorded in the consolidated statement of comprehensive income for the year ended December 31, 2016. It is impracticable to determine the earnings recorded in the consolidated statement of comprehensive income associated with the SurgiQuest acquisition for the year ended December 31, 2016 as these amounts are not separately measured.