On February 3, 2020, the Company, through a wholly owned subsidiary, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Wittenstein SE (“Wittenstein”), a privately-held German-based company, to acquire assets associated with the FITBONE intramedullary lengthening system for limb lengthening of the femur and tibia bones. Under the terms of the Purchase Agreement, as consideration for the acquired assets, the Company paid $18.0 million in cash consideration and entered into a Contract Manufacturing and Supply Agreement (“CMSA”) with Wittenstein. The Company has accounted for this acquisition as a business combination. The acquisition was completed on March 26, 2020.

The following table summarizes the final fair values of assets acquired and liabilities assumed at the acquisition date. The Company’s purchase accounting was completed in the fourth quarter of 2020.

(U.S. Dollars, in thousands)	Acquisition Date Fair Value		Balance Sheet Classification	Assigned Useful Life
Assets acquired
Inventories	$	528	Inventories
Developed technology		4,500	Intangible assets, net	8 years
Customer relationships		800	Intangible assets, net	15 years
Trade name		600	Intangible assets, net	15 years
In-process research and development ("IPR&D")		300	Intangible assets, net	Indefinite
Total identifiable assets acquired		6,728
Goodwill		11,272
Total fair value of consideration transferred	$	18,000

The Company recorded goodwill of $11.3 million in connection with the acquisition, of which $11.1 million was assigned to the Global Extremities reporting segment and $0.2 million was assigned to the Global Spine reporting segment. Specifically, goodwill includes synergies associated with the purchase of the acquired assets and is expected to be deductible for tax purposes.

The IPR&D intangible asset is considered an indefinite-lived asset until the completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition, this asset is not amortized but, instead,

is subject to impairment review and testing provisions. Upon completion of the IPR&D project, the Company will determine the useful life of the asset and begin amortization.

The Company also entered into a CMSA with Wittenstein for an initial term of up to two years to manufacture the FITBONE product line. The Company is accounting for the CMSA as a finance lease. See Note 9 for further discussion of the recognized finance lease.

The Company recorded $0.4 million and $0.6 million of acquisition related costs during the years ended December 31, 2020 and 2019, respectively. These costs are included in the consolidated statements of operations within general and administrative expenses. Additionally, The Company’s results of operations included net sales of $1.9 million related to the FITBONE product line for the year ended December 31, 2020. The Company did not recognize any revenues related to the FITBONE product line for the year ended December 31, 2019.

In July 2020, the Company, through a wholly owned subsidiary, entered into an agreement to acquire certain assets of a medical device distributor. The Company agreed to pay consideration of up to $7.6 million in accordance with the parties’ agreement.

The following table summarizes the fair values of assets acquired and of consideration paid:

(U.S. Dollars, in thousands)	Fair Value		Balance Sheet Classification	Assigned Useful Life
Fair Value of Consideration Transferred
Cash paid or payable	$	7,200
Contingent consideration		375
Total fair value of consideration transferred	$	7,575

Fair value of assets acquired
Customer relationships	$	7,340	Intangible assets, net	5 years
Assembled workforce		235	Intangible assets, net	5 years
Total fair value of assets acquired	$	7,575

In April 2018, the Company completed the acquisition of Spinal Kinetics Inc. (“Spinal Kinetics”), a privately held developer and manufacturer of artificial cervical and lumbar discs for $45.0 million in net cash, plus potential milestone payments of up to $60.0 million in cash. The total fair value of consideration transferred was $76.6 million. Goodwill attributable to the Spinal Kinetics acquisitions was assigned to the Global Spine reporting segment and is not deductible for tax purposes.

In January 2019, the Company acquired certain assets of Options Medical, LLC (“Options Medical”), a medical device distributor based in Florida. Under the terms of the acquisition, the parties agreed to terminate an existing exclusive sales representative agreement, employees of Options Medical became employees of the Company, and the Company acquired all customer lists and customer information related to the sale of the Company’s products. As consideration for the assets acquired, the Company paid $6.4 million.

(U.S. Dollars, in thousands)	Spinal Kinetics		Assigned Useful Life	Options Medical		Assigned Useful Life
Assets acquired
Cash and cash equivalents	$	6,785		$	—
Restricted cash		30			—
Accounts receivable		1,705			—
Inventories		8,175			—
Prepaid expenses and other current assets		315			—
Property, plant and equipment		2,285			—
Other long-term assets		320			175
Intangible assets
Customer relationships		—	N/A		5,832	10 years
Developed technology		12,400	10 years		—	N/A
In-process research and development		26,800	Indefinite		—	N/A
Tradename		100	2 years		—	N/A
Assembled workforce		—	N/A		568	5 years
Deferred income taxes		3,594			—
Total identifiable assets acquired	$	62,509		$	6,575

Liabilities assumed
Accounts payable	$	351		$	—
Other current liabilities		2,869			69
Other long-term liabilities		301			106
Total liabilities assumed		3,521			175
Goodwill		17,612			—
Total fair value of consideration transferred	$	76,600		$	6,400