Acquisition of Spinal Kinetics, Inc. (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Fair Value of Consideration Transferred

The fair value of the consideration transferred was $76.6 million, which consisted of the following:

(U.S. Dollars, in thousands)	As of April 30, 2018		Adjustments		As of December 31, 2018
Fair value of consideration transferred
Cash paid	$	50,564	$	545	$	51,109
Contingent consideration		25,491		—		25,491
Total fair value of consideration transferred	$	76,055	$	545	$	76,600

Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. The final determination is subject to completion of the Company’s valuation of the acquired deferred income taxes and tax attributes, including net operating loss carryforwards, which is expected to be completed within one year from the Acquisition Date.

(U.S. Dollars, in thousands)	As of April 30, 2018		Adjustments			As of December 31, 2018		Assigned Useful Life
Assets acquired
Cash and cash equivalents	$	6,785	$	—		$	6,785
Restricted cash		30		—			30
Accounts receivable		1,705		—			1,705
Inventories		8,175		—			8,175
Prepaid expenses and other current assets		315		—			315
Property, plant and equipment		2,285		—			2,285
Other long-term assets		320		—			320
Developed technology		12,400		—			12,400	10 years
In-process research and development ("IPR&D")		26,800		—			26,800	Indefinite
Tradename		100		—			100	2 years
Deferred income taxes		3,483		(1,109	)		2,374
Total identifiable assets acquired	$	62,398	$	(1,109	)	$	61,289

Liabilities assumed
Accounts payable	$	351	$	—		$	351
Other current liabilities		2,873		—			2,873
Other long-term liabilities		301		—			301
Total liabilities assumed		3,525		—			3,525
Goodwill		17,182		1,654			18,836
Total fair value of consideration transferred	$	76,055	$	545		$	76,600

Summary of Unaudited Pro forma Results

The following table presents the unaudited pro forma results for the years ended December 31, 2018 and 2017,

(U.S. Dollars, in thousands)	2018		2017
	(unaudited)		(unaudited)
Net sales	$	457,960	$	448,277
Net income (loss) from continuing operations		16,157		(1,492	)