Acquisitions and Other Strategic Transactions

12 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Acquisitions and Other Strategic Transactions

3.ACQUISITIONS AND OTHER STRATEGIC TRANSACTIONS

2021 Acquisitions

During September 2021, we paid $2.7 million to acquire series A preferred shares of Fluidx Medical Technology, Inc. ("Fluidx"), owner of certain technology proposed to be used in the development of embolic and adhesive agents for use in arterial, venous, vascular graft and cardiovascular applications inside and outside the heart and related appendages. We had previously purchased $2 million of participating preferred shares during 2019. Our investment has been recorded as an equity investment accounted for at cost and reflected within other assets in the accompanying consolidated balance sheets because we are not able to exercise significant influence over the operations of Fluidx. Our total current investment in Fluidx represents an ownership of 15.0% of the outstanding stock.

2020 Acquisitions

On November 6, 2020, we entered into a unit purchase agreement to acquire KA Medical, LLC (“KA Medical”). Subject to the terms and conditions of the unit purchase agreement, we paid $14.6 million in cash, net of cash acquired, including adjustments for working capital and deferred payments of $4 million. KA Medical developed the Micro Plug Set, a self-expanding nitinol vascular occlusion device, which is FDA-cleared and CE marked. We accounted for this acquisition as a business combination. The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material for the years ended December 31, 2021 and 2020. Acquisition-related costs associated with the KA Medical acquisition, which were included in selling, general and administrative expenses, were not material. During the fourth quarter of 2021, certain immaterial measurement period adjustments were recorded to our purchase price allocation. The purchase price was allocated as follows (in thousands):

Assets Acquired
Trade receivables	$	24
Other receivables		13
Inventories		211
Property and equipment		298
Other long-term assets		10
Intangible assets
Developed technology		6,000
Goodwill		8,570
Total assets acquired		15,126
Liabilities Assumed
Trade payables		(31)
Accrued expenses		(507)
Total liabilities assumed		(538)
Total net assets acquired	$	14,588

We are amortizing the developed technology intangible asset acquired from KA Medical over 17 years. The goodwill consists largely of the synergies expected from combining operations and is expected to be deductible for income tax purposes. We do not deem the pro forma effects to our consolidated results of operations of the KA Medical acquisition to be material.

2019 Acquisitions

On October 11, 2019, we entered into a subscription and shareholders’ agreement to acquire 3,900 ordinary shares and 1,365 C ordinary shares of Selio Medical Limited ("Selio"), an option to purchase all ordinary shares in Selio throughout a 45-day period commencing from the date Selio receives FDA Section 510(k) approval of a medical device it is currently developing, and an option to purchase all remaining shares on the third anniversary date of the agreement if we elect to purchase all ordinary shares. The shares of stock we acquired, which represent an ownership interest of 19.5%, have been recorded as an equity investment accounted for at cost because we are not able to exercise significant influence over the operations of Selio. The investment and purchase option of $2.6 million are reflected within other assets in the accompanying consolidated balance sheets. In addition, we have loans to Selio of $2.5 million, reflected within other assets, including funding of an additional loan commitment of €2 million during the year ended December 31, 2021. Amounts outstanding under the loans accrue interest at a rate of 5% per annum. All amounts outstanding under the loans become due and payable at the first anniversary of the expiration of our option to purchase all ordinary shares.

On August 1, 2019, we entered into a share purchase agreement to acquire Fibrovein Holdings Limited, which is the owner of 100% of the capital stock of STD Pharmaceutical Products Limited, a UK private company engaged in the manufacture, distribution and sale of pharmaceutical sclerotherapy products (“STD Pharmaceutical”). The purchase consideration consisted of an upfront payment of $13.7 million, net of cash acquired. We also recorded a contingent consideration

liability of $934,000 related to royalties potentially payable pursuant to the terms of the share purchase agreement. We accounted for this acquisition as a business combination.

On June 14, 2019, we consummated an acquisition transaction contemplated by a merger agreement to acquire Brightwater Medical, Inc. ("Brightwater"). The purchase consideration consisted of an upfront payment of $35 million plus an immaterial working capital adjustment, net of cash acquired, with potential earn-out payments of up to an additional $5 million for achievement of CE certification with respect to the ConvertX®, a single-use device used to replace a series of devices and procedures used to treat severe obstructions of the ureter, and up to an additional $10 million for the achievement of sales milestones specified in the merger agreement. The ConvertX device is designed to be implanted once and converted from a nephroureteral catheter to a nephroureteral stent without requiring sedation or local anesthesia. Brightwater recently received FDA clearance for the ConvertX biliary stent device. We accounted for this acquisition as a business combination.

The following table summarizes the purchase price allocation and other disclosures for acquisitions accounted for as business combinations during the year ended December 31, 2019 (in thousands). During the year ended December 31, 2020, certain non-significant measurement period adjustments were recorded to our purchase price allocation for the assets acquired from Brightwater, including reassessment of tax assets and liabilities.

	STD Pharmaceutical		Brightwater
Assets Acquired
Trade receivables	$	277	$	55
Inventories		843		349
Prepaid expenses and other current assets		49		—
Property and equipment		—		409
Other long-term assets		—		30
Intangible assets
Developed technology		10,428		31,960
Customer lists		—		83
Trademarks		—		250
Goodwill		4,975		17,607
Total assets acquired		16,572		50,743
Liabilities Assumed
Trade payables		(53)		(58)
Accrued expenses		(29)		(261)
Other long-term obligations		—		(1,522)
Deferred income tax liabilities		(1,890)		(4,263)
Total liabilities assumed		(1,972)		(6,104)
Total net assets acquired	$	14,600	$	44,639
Amortization Period of Intangible Assets
Developed technology		12 years		13 years
Customer lists (on an accelerated basis)		—		1 year
Trademarks		—		5 years
Weighted Average		12 years		12.9 years

The sales and results of operations related to the STD Pharmaceutical and Brightwater acquisitions have been included in our cardiovascular segment and were not material for the years ended December 31, 2021, 2020 and 2019. It is not practical to separately report earnings related to these acquisitions, as we cannot split out sales costs related solely to the products acquired, principally because our sales representatives sell multiple products within our cardiovascular business segment. Acquisition costs related to the STD Pharmaceutical and Brightwater acquisitions, which were included in selling, general and administrative expenses, were not material. Goodwill related to these acquisitions arises principally from synergies and economies of scale anticipated upon consolidation of operations and is not expected to be deductible for income tax

purposes. We do not deem the pro forma effects to our consolidated results of operations of the STD Pharmaceutical and Brightwater acquisitions to be material.