Acquisitions (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The purchase price was allocated as follows (in thousands):



Assets Acquired
Inventories	$	2,455
Property and equipment	290
Intangibles
Developed technology	12,100
Trademarks	700
Customers Lists	400
Goodwill	2,555

Total assets acquired	$	18,500

The following table summarizes the purchase price allocated to the net assets acquired (in thousands):



Net Assets Acquired
Inventories	$	979
Property and equipment	58
Intangibles
Developed technology	5,400
Customer list	200
Goodwill	203

Total net assets acquired	$	6,840

The following table summarizes the aggregate purchase price allocated to the assets acquired from ITL (in thousands):



Assets Acquired
Trade receivables	$	1,287
Other receivables	56
Inventories	1,808
Prepaid expenses and other assets	65
Property and equipment	1,053
Intangibles
Customer lists	5,940
Goodwill	3,945
Total assets acquired	14,154

Liabilities Assumed
Trade payables	(216		)
Accrued expenses	(747		)
Deferred tax liabilities	(1,901		)
Total liabilities assumed	(2,864		)

Total net assets acquired	$	11,290

The following table summarizes the aggregate purchase price (including contingent royalty payment liabilities) allocated to the assets acquired from Laurane (in thousands):



Net Assets Acquired
Inventories	$	594
Intangibles
Developed technology	14,920
Customer list	120
Goodwill	6,366

Total net assets acquired	$	22,000

The following table summarizes the purchase price allocated to the net assets acquired and liabilities assumed (in thousands):



Net Assets Acquired
Intangibles
Developed technology	$	7,800
In-process technology	920
Goodwill	4,281
Deferred tax liabilities	(3,101		)

Total net assets acquired	$	9,900

The purchase price was preliminarily allocated a follows (in thousands):



Net Assets Acquired
Inventories	$	971
Intangibles
Developed technology	4,840
Customer list	120
Trademarks	400
Goodwill	938

Total net assets acquired	$	7,269

The following table summarizes the purchase price allocated to the net tangible and intangible assets acquired and liabilities assumed (in thousands):



	Assets Acquired
	Cash and cash equivalents	$	1,436
	Trade receivables	8,351
	Inventories	11,222
	Prepaid expenses and other assets	1,275
	Income tax refund receivables	165
	Property and equipment	2,319
	Deferred income tax assets	202
	Intangibles
	Developed technology	2,200
	Customer lists	1,500
	Trademarks	900
	Total assets acquired	29,570

	Liabilities Assumed
	Trade payables	(2,414		)
	Accrued expenses	(5,083		)
	Deferred income tax liabilities	(934		)
	Total liabilities assumed	(8,431		)

	Total net assets acquired	21,139
	Gain on bargain purchase ⁽¹⁾	(11,039		)
	Total purchase price	$	10,100

⁽¹⁾	The total fair value of the net assets acquired from Argon exceeded the purchase price, resulting in a gain on bargain purchase which was recorded within other income (expense) in our consolidated statements of income. We believe the reason for the gain on bargain purchase was a result of the divestiture of a non-strategic, slow-growth critical care business for Argon. It is our understanding that the divestiture allows Argon to focus on its higher growth interventional portfolio. A reduction of $1.2 million was recorded since the bargain purchase gain was first presented in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, resulting from our ongoing activities, including reassessment of the assets acquired and liabilities assumed. The purchase price allocation for this acquisition is now final.

The purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed, based on estimated fair values, as follows (in thousands):



Assets Acquired
Trade receivables	$	4,054
Other receivables	6
Inventories	8,585
Prepaid expenses and other assets	630
Property and equipment	1,630
Other long-term assets	145
Intangibles
Developed technology	67,600
Customer lists	2,400
Trademarks	4,400
Goodwill	24,818
Total assets acquired	114,268

Liabilities Assumed
Trade payables	(1,790		)
Accrued expenses	(5,298		)
Deferred income tax liabilities - current	(701		)
Deferred income tax liabilities - noncurrent	(10,844		)
Total liabilities assumed	(18,633		)

Net assets acquired, net of cash received of $1,327	$	95,635

The purchase price was allocated as follows (in thousands):



Assets Acquired
Trade receivables	$	958
Inventories	2,157
Prepaid expenses and other assets	85
Property and equipment	1,472
Intangibles
Developed technology	21,100
Customer lists	700
Trademarks	2,900
Goodwill	8,989
Total assets acquired	38,361

Liabilities Assumed
Trade payables	(338		)
Accrued expenses	(23		)
Total liabilities assumed	(361		)

Net assets acquired	$	38,000

The following table summarizes the preliminary purchase price allocated to the assets acquired from BD (in thousands):



		Preliminary Allocation		Adjustments ⁽¹⁾			Revised Allocation
	Inventories	$	6,039	$	(235	)	$	5,804
	Property and equipment	581		167			748
	Intangibles
	Developed technology	79,900		(5,900		)	74,000
	Customer list	3,500		700			4,200
	Trademarks	4,700		200			4,900
	Goodwill	5,387		5,226			10,613

	Total net assets acquired	$	100,107	$	158		$	100,265

(1)	Under U.S. GAAP, measurement period adjustments are recognized on a prospective basis in the period of change, instead of restating prior periods. There was no impact to reported earnings in connection with these measurement period adjustments for the periods presented. Amounts represent adjustments to the preliminary purchase price allocation first presented in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 resulting from a final working capital adjustment and our ongoing activities with respect to finalizing asset valuations for this acquisition.

Business Acquisition, Pro Forma Information

The following table summarizes our consolidated results of operations for the six-month period ended June 30, 2017, as well as unaudited pro forma consolidated results of operations as though the acquisition of the Argon critical care division had occurred on January 1, 2016 (in thousands, except per common share amounts):



	Six Months Ended
	June 30, 2017
	As Reported		Pro Forma
Net sales	$	357,618	$	360,378
Net income	24,286		12,444
Earnings per common share:
Basic	$	0.51	$	0.26
Diluted	$	0.50	$	0.26

* The pro forma results for the three-month periods ended June 30, 2018 and 2017 and the six-month period ended June 30, 2018 are not included in the table above because the operating results for the Argon critical care division acquisition were included in our consolidated statements of income for these periods.