
Note 2.	Acquisitions

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable assets, resulting in goodwill, due to expectations of the synergies that will be realized by combining the businesses. These synergies include the elimination of redundant facilities, functions and staffing; use of the company’s existing commercial infrastructure to expand sales of the acquired businesses’ products; and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

Acquisitions have been accounted for using the purchase method of accounting, and the acquired companies’ results have been included in the accompanying financial statements from their respective dates of acquisition. Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

2017

On March 2, 2017, the company acquired, within the Analytical Instruments segment, Core Informatics, a North America-based provider of cloud-based platforms supporting scientific data management, for a total purchase price of $94 million, net of cash acquired. The acquisition enhanced the company's existing informatics solutions. Revenues of Core Informatics were approximately $10 million in 2016. The purchase price exceeded the fair market value of the identifiable net assets and, accordingly, $63 million was allocated to goodwill, $50 million of which is tax deductible.

On February 14, 2017, the company acquired, within the Life Sciences Solutions segment, Finesse Solutions, Inc., a North America-based developer of scalable control automation systems and software for bioproduction, for a total purchase price of $220 million, net of cash acquired. The acquisition expanded the company's bioproduction offerings. Revenues of Finesse Solutions were approximately $50 million in 2016. The purchase price exceeded the fair market value of the identifiable net assets and, accordingly, $127 million was allocated to goodwill, none of which is tax deductible.

The components of the purchase price and net assets acquired for 2017 acquisitions are as follows:



(In millions)	Core Informatics			Finesse Solutions			Total

Purchase Price
Cash paid	$	89.2		$	222.6		$	311.8
Debt assumed	—			—			—
Purchase price payable	14.6			—			14.6
Cash acquired	(10.1		)	(2.2		)	(12.3		)

	$	93.7		$	220.4		$	314.1

Net Assets Acquired
Current assets	$	2.0		$	21.6		$	23.6
Property, plant and equipment	0.2			1.6			1.8
Definite-lived intangible assets:
Customer relationships	6.3			67.7			74.0
Product technology	29.1			32.0			61.1
Tradenames and other	2.7			9.0			11.7
Indefinite-lived intangible assets:
In-process research and development	—			1.6			1.6
Goodwill	62.6			127.4			190.0
Other assets	0.1			0.3			0.4
Liabilities assumed	(9.3		)	(40.8		)	(50.1		)

	$	93.7		$	220.4		$	314.1

The weighted-average amortization periods for definite-lived intangible assets acquired in 2017 are 12 years for customer relationships, 10 years for product technology and 8 years for tradenames and other. The weighted average amortization period for all definite-lived intangible assets acquired in 2017 is 11 years.

The preliminary allocation of the purchase price for the 2017 acquisitions was based on estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization of the valuation of the acquired intangible assets in the second quarter of 2017.

Unaudited Pro Forma Information

Had the 2016 acquisitions of FEI Company and Affymetrix, Inc. been completed as of the beginning of 2015, the company’s pro forma results for 2016 would have been as follows:



(In millions except per share amounts)	Three Months Ended April 2, 2016

Revenues	$	4,605.0

Net Income	$	376.8

Earnings per Share:
Basic	$	0.95
Diluted	$	0.95

These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisitions occurred on the date indicated or that may result in the future.

The company’s results would not have been materially different from its pro forma results had the company’s other 2016 or 2017 acquisitions occurred at the beginning of 2015 or 2016, respectively.

Revenues of the FEI and Affymetrix acquisitions in the first three months of 2017 were $265 million and $78 million, respectively. Operating loss of the FEI acquisition totaled $17 million in the first three months of 2017 primarily due to acquisition-related and restructuring costs related to synergy planning. The Affymetrix acquisition has been integrated with other parts of the Life Sciences Solutions business and it is not practical to determine its separate operating results beginning in 2017.