ACQUISITIONS

All of the below acquisitions, with the exception of the Vedants equity transaction, have been accounted for under the acquisition method of accounting, and the related assets acquired and liabilities assumed were recorded at fair value as of the acquisition date. The effects of all of the acquisitions described below were included in the Consolidated Financial Statements prospectively from the date of acquisition. Unless otherwise indicated, acquisition costs incurred were immaterial and were recorded in administration expense.

Pending Acquisitions

Naturwohl Pharma GmbH

On July 22, 2015, we announced that we agreed to acquire Naturwohl Pharma, GmbH with its leading German dietary supplement brand, Yokebe. Our acquisition of the brand continues to build on our BCH segment's leading OTC product portfolio and European commercial infrastructure. The transaction has been unanimously approved by the Boards of Directors of Perrigo and Naturwohl Pharma and is expected to close in the third calendar quarter, pending German regulatory approval and the satisfaction of customary closing conditions. These assets will be purchased through an all-cash transaction valued at €130.0 million ($145.2 million).

GlaxoSmithKline Consumer Healthcare

On June 2, 2015, we announced that we had entered into an agreement to acquire a portfolio of well-established OTC brands from GlaxoSmithKline Consumer Healthcare (“GSK”), in connection with GSK’s commitments to the European Commission and other regulators to divest these businesses in the context of the formation of a consumer health joint venture between GSK and Novartis International AG (“Novartis”). The acquisition of this portfolio builds upon the global platform we established through the Omega acquisition to help us expand our share in the European OTC market. These assets will be purchased through an all-cash transaction valued at €200.0 million ($223.4 million). The transaction is expected to close in the third calendar quarter.

Fiscal Year 2015 Acquisitions

Gelcaps Exportadora de Mexico, S.A. de C.V.

On May 12, 2015, we acquired 100% of Gelcaps Exportadora de Mexico, S.A. de C.V. ("Gelcaps"), the Mexican operations of Durham, North Carolina-based Patheon Inc. for $35.8 million in cash. The acquisition adds softgel manufacturing technology to our supply chain capabilities and broadens our presence, product portfolio and customer network in Mexico. Operating results attributable to Gelcaps are included in the CHC segment. The intangible assets acquired included a trademark with a 25 year useful life and customer relationships with a 20 year useful life. We utilized the relief from royalty method for valuing the trademark and the multi-period excess earnings method for valuing the customer relationships.

Based on valuation estimates utilizing the comparative sales method, a step-up in the value of inventory of $0.6 million was recorded in the opening balance sheet, which will be charged to cost of goods sold by the end of next quarter. In addition, property, plant and equipment were written up by $0.9 million to their estimated fair market value based on a valuation method that included both the cost and market approaches. This additional step-up in value is being depreciated over the estimated remaining useful lives of the assets. The goodwill recorded is not deductible for tax purposes.

Omega Pharma Invest N.V.

On March 30, 2015, we completed our acquisition of Omega, a limited liability company incorporated under the laws of Belgium. Omega was a leading European OTC company, and we expect it to provide us several key benefits, including advancing our growth strategy outside the U.S. by providing access across a larger global platform with critical mass in key European countries, establishing commercial infrastructure in the high-barrier to entry European OTC marketplace, strengthening our product portfolio while enhancing scale and distribution, enhancing our financial profile, and expanding our international management capabilities.

We purchased 95.77% of the issued and outstanding share capital of Omega (685,348,257 shares) from Alychlo N.V. (“Alychlo”) and Holdco I BE N.V. (“Holdco” and, together with Alychlo, the “Sellers”), limited liability companies incorporated under the laws of Belgium under the terms of the Share Purchase Agreement dated November 6, 2014 (the "Share Purchase Agreement"). Omega holds the remaining 30,243,983 shares as treasury shares.

The acquisition was a cash and stock transaction made up of the following consideration (in millions except per share data):



Perrigo ordinary shares issued	5.4
Perrigo share price at transaction close on March 30, 2015	$	167.64
Total value of Perrigo ordinary shares issued	$	904.9
Cash consideration	2,078.3
Total consideration	$	2,983.2

The cash consideration shown in the above table was financed by a combination of debt and equity. We issued $1.6 billion of debt as described in Note 8, and issued 6.8 million ordinary shares, which raised $999.3 million net of issuance costs.

The Sellers have agreed to indemnify us for certain potential future losses. The Sellers’ indemnification and other obligations to us under the Share Purchase Agreement are secured up to €248.0 million ($277.0 million). Under the terms of the Share Purchase Agreement, Alychlo and its affiliates are subject to a three-year non-compete in Europe, and the Sellers are subject to a two-year non-solicit, in each case subject to certain exceptions. The Share Purchase Agreement contains other customary representations, warranties, and covenants of the parties thereto.

The operating results attributable to Omega are included in the BCH segment. We incurred costs in connection with the Omega acquisition related to general transaction costs (legal, banking and other professional fees), financing fees, and debt extinguishment. The amounts recorded were not allocated to a reporting segment. The table below details the acquisition costs, as well as losses on hedging activities associated with the acquisition purchase price, and where they were recorded (in millions):



	Fiscal Year
Line item	2015
Administration	$	29.7
Interest expense, net	23.7
Other expense, net	324.0
Loss on extinguishment of debt	9.6
Total acquisition-related costs	$	387.0

See Note 7 for further details on losses on Omega-related hedging activities shown above in Other expense, net, and Note 8 for details on the loss on extinguishment of debt.

We acquired the following intangible assets: indefinite-lived trademarks and brands; definite-lived trademarks and trade names with useful lives ranging from 8 to 20 years; customer relationships and distribution networks with useful lives ranging from 7 to 21 years; and developed product technology with useful lives ranging from 4 to 13 years. We also recorded goodwill, which is not deductible for tax purposes and represents the value we assigned to the expected synergies described above. We utilized the multi-period excess earnings method for the indefinite-lived trademarks and brands, the definite-lived brands, and customer relationships and distribution networks. We utilized the relief from royalty method for the developed product technology and definite-lived trade names.

Based on valuation estimates utilizing the comparative sales method, a step-up in the value of inventory of $15.1 million was recorded in the opening balance sheet and was charged to cost of goods sold during the fourth quarter of fiscal year 2015. In addition, property, plant and equipment were written up $41.5 million to their estimated fair market value based on a valuation method that included both the cost and market approaches. This additional step-up in value is being depreciated over the estimated remaining useful lives of the assets. Additionally, the fair value of the debt assumed on the date of acquisition exceeded par value by $101.9 million, which was recorded as part of the carrying value of the underlying debt and will be amortized as a reduction of interest expense over the remaining terms of the respective debt instruments. For more information on the debt we assumed from Omega and our subsequent payments on the debt, see Note 8.

Lumara Health, Inc.

On October 31, 2014, we acquired a portfolio of women's healthcare products from Lumara Health, Inc., ("Lumara") a privately-held, Chesterfield, Missouri-based specialty pharmaceutical company, for cash consideration of $83.0 million. The acquisition of this portfolio further expanded our women's healthcare product offerings. Operating results attributable to the acquired Lumara products are included in the Rx Pharmaceuticals segment. The intangible assets acquired consisted of three product formulations with useful lives ranging from 8 to 12 years. The assets were valued utilizing the multi-period excess earnings method.

Purchase Price Allocation of Fiscal Year 2015 Acquisitions

The measurement period related to the Lumara acquisition is now closed. As a result, the Lumara opening balance sheet is final. The Omega and Gelcaps opening balance sheets are still preliminary and are based on valuation information, estimates and assumptions available at June 27, 2015. As we finalize the fair value estimates of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. Tax accounts as well as certain tangible and intangible assets have not yet been finalized. Fair value estimates are based on a complex series of judgments about future events and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets and liabilities assumed, as well as asset lives, can materially impact our results of operations. As we continue to arrange and obtain the information to finalize our purchase accounting assessment. We expect that there will be changes in the valuation of assets acquired and liabilities assumed, that may have a material impact on our results of operations and financial position.

The below table indicates the purchase price allocation for our fiscal year 2015 acquisitions (in millions):



	Omega *		All Other ^(1)*
Total purchase consideration	$	2,983.2	$	118.8
Assets acquired:
Cash and cash equivalents	$	14.7	$	4.6
Accounts receivable	264.7		11.4
Inventories	214.4		8.7
Current net deferred tax assets	6.4		0.6
Prepaid expenses and other current assets	39.2		2.7
Property and equipment	121.2		6.1
Goodwill	1,513.1		4.8
Intangible assets:
Trademarks, trade names and brands	2,427.2		4.4
Customer relationships and distribution networks	1,342.7		6.6
Formulations	—		82.0
Developed product technology	32.7		—
Other intangible assets	3,802.6		93.0
Other non-current assets	2.4		0.4
Total assets	5,978.7		132.3
Liabilities assumed:
Accounts payable	243.1		4.6
Short-term debt	24.6		—
Accrued liabilities	44.5		5.5
Payroll and related taxes	51.3		—
Accrued customer programs	39.8		—
Long-term debt	1,471.0		—
Non-current net deferred income tax liabilities	1,038.7		3.3
Other non-current liabilities	82.5		0.1
Total liabilities	2,995.5		13.5
Net assets acquired	$	2,983.2	$	118.8


⁽¹⁾	Includes opening balance sheets for the Gelcaps acquisition and Lumara product acquisition.


*	Omega and Gelcaps opening balance sheets are preliminary.

Fiscal Year 2014 Acquisitions

Aspen Global Inc.

On February 28, 2014, we acquired a basket of value-brand OTC products sold in Australia and New Zealand from Aspen Global Inc. ("Aspen"). The acquisition of this product portfolio broadened our product offering in Australia and New Zealand and furthered our strategy to expand the CHC portfolio internationally. Operating results attributable to the acquired Aspen products are included in the CHC segment.

The intangible assets acquired consisted of trademarks and trade names, customer relationships, and non-compete agreements. Customer relationships were assigned a 15-year useful life. Trademarks and trade names were assigned a 25-year useful life and non-compete agreements were assigned a 5-year useful life. Goodwill is deductible for tax purposes.

Fera Pharmaceuticals, LLC

On February 18, 2014, we acquired a distribution and license agreement for the marketing and sale of Methazolomide from Fera Pharmaceuticals, LLC ("Fera"), a privately-held specialty pharmaceutical company. The acquisition of this agreement further expanded our ophthalmic offerings. Operating results attributable to this agreement are included in the Rx Pharmaceuticals segment. The intangible asset acquired was assigned a 15-year useful life.

Elan Corporation, plc

On December 18, 2013, we acquired Elan, which led to our new corporate structure headquartered in Dublin, Ireland. We have utilized this new structure to continue to grow in our core markets and further expand outside of the U.S. The acquisition also provided us with our Tysabri^®royalty stream, enhancing our operating cash flows and diversifying our revenues, and recurring annual operational synergies, related cost reductions, and tax savings. Certain of these synergies resulted from the elimination of redundant public company costs while optimizing back-office support. The jurisdictional mix of income and the new corporate structure are expected to provide tax benefits to the worldwide structure.

The acquisition was a cash and stock transaction as follows (in millions except per share data):



Elan shares outstanding as of December 18, 2013	515.7
Exchange ratio per share	0.07636
Total Perrigo shares issued to Elan shareholders	39.4
Perrigo per share value at transaction close on December 18, 2013	$	155.34
Total value of Perrigo shares issued to Elan shareholders	$	6,117.2
Cash consideration paid at $6.25 per Elan share	3,223.2
Cash consideration paid for vested Elan stock options and share awards	111.5
Total consideration	$	9,451.9

In addition, we paid cash consideration of $16.1 million to the Elan stock option and share award holders for the unvested portion of their awards. This amount was charged to earnings during fiscal year 2014.

At the completion of the transaction, the holder of each Elan ordinary share and each Elan American Depositary Share received $6.25 in cash and 0.07636 of a Perrigo ordinary share. As a result of the transaction, based on the number of outstanding shares of Perrigo and Elan as of December 18, 2013, former Perrigo and Elan shareholders held approximately 71% and 29%, respectively, of Perrigo's ordinary shares immediately after giving effect to the acquisition.

The operating results for Elan are included in the Specialty Sciences segment. During fiscal year 2014, we incurred and expensed acquisition-related costs, which were not allocated to a reporting segment. The costs related primarily to general transaction costs (legal, banking and other professional fees), financing fees, and debt extinguishment. See Note 8 for further details on the loss on extinguishment of debt.

The table below details these transaction costs and where they were recorded (in millions):



	Fiscal Year
Line item	2014
Administration expense	$	108.9
Interest, net	10.0
Other expense, net	0.2
Loss on extinguishment of debt	165.8
Total acquisition-related costs	$	284.9

We acquired two definite-lived intangible assets in the acquisition, both of which are exclusive technology agreements:

Tysabri^®: We are entitled to royalty payments from Biogen Idec Inc. ("Biogen") based on its Tysabri^® revenues in all indications and geographies. The royalty was 12% for the 12-month period ended May 1, 2014. Subsequent to May 1, 2014, we are entitled to 18% royalty payments on annual sales up to $2.0 billion and 25% royalty payments on annual sales above $2.0 billion. The asset was assigned a value of $5.8 billion and a useful life of 20 years.

Prialt^®: We are also entitled to royalty payments based on Prialt^® revenues. The royalty rates range from 7% to 17.5% based on specific levels of annual U.S. sales. The asset was assigned a value of $11.0 million and a useful life of 10 years.

Additionally, we recorded $2.3 billion of goodwill which represents the expected synergies of the combined company, as described above. The goodwill is not deductible for tax purposes. The following table reflects the allocation by reportable segment (in millions):



Segment	Goodwill
CHC	$	1,287.4
Rx Pharmaceuticals	845.1
Specialty Sciences	200.6
Total	$	2,333.1

Purchase Price Allocation of Fiscal Year 2014 Acquisitions

The purchase price allocations for all fiscal year 2014 acquisitions are now final. We finalized the purchase price allocation for Elan during fiscal year 2015. Since June 28, 2014, revisions included a $13.0 million decrease in net tax-related liabilities, resulting in a corresponding decrease in goodwill.

The below table indicates the purchase price allocationfor our fiscal year 2014 acquisitions (in millions):



	Elan		All Other ⁽¹⁾
Purchase price paid	$	9,451.9	$	71.0
Contingent consideration	—		0.8
Total purchase consideration	$	9,451.9	$	71.8
Assets acquired:
Cash and cash equivalents	$	1,807.3	$	—
Investment securities	100.0		—
Accounts receivable	44.2		—
Inventories	—		3.0
Prepaid expenses and other current assets	27.1		—
Property and equipment	9.2		—
Goodwill	2,333.1		4.6
Intangible assets:
Trademarks, trade names and brands	—		34.8
Customer relationships	—		9.8
Non-competition agreements	—		1.8
Distribution and license agreements	5,811.0		17.8
Other intangible assets, net	5,811.0		64.2
Other non-current assets	93.4		—
Total assets	10,225.3		71.8
Liabilities assumed:
Accounts payable	2.0		—
Accrued liabilities	120.8		—
Deferred tax liabilities	631.8		—
Other non-current liabilities	18.8		—
Total liabilities	773.4		—
Net assets acquired	$	9,451.9	$	71.8


⁽¹⁾	Includes opening balance sheet of the Aspen and Fera (Methazolomide) product acquisitions.

Vedants Drug & Fine Chemicals Private Limited

To further improve the long-term cost position of its API business, on August 6, 2009, we acquired an 85% stake in Vedants Drug & Fine Chemicals Private Limited ("Vedants"), an API manufacturing facility in India, for $11.5 million in cash. We purchased the remaining 15% stake in Vedants during fiscal year 2014 for $7.2 million in cash. The transaction was accounted for as an equity transaction and resulted in the elimination of the noncontrolling interest.

Actual and Pro Forma Impact of Fiscal Year 2015 and 2014 Acquisitions

Our Consolidated Financial Statements include operating results from the Omega, Gelcaps, and Elan acquisitions, and the Lumara, Aspen, and Fera (Methazolomide) product acquisitions, from the date of each acquisition through June 27, 2015. Net sales and operating income attributable to the Omega, Gelcaps, and Lumara acquisitions included in our fiscal year 2015 financial statements totaled $418.2 million and $18.9 million, respectively. Net sales and operating loss attributable to the Elan, Aspen, and Fera (Methazolomide) acquisitions included in our fiscal 2014 financial statements totaled $168.5 million and $53.9 million, respectively.

The following unaudited pro forma information gives effect to the Omega, Gelcaps, and Elan acquisitions, and Lumara, Aspen, and Fera (Methazolomide) product acquisitions, as if the acquisitions had occurred on June 30, 2013 and had been included in our Results of Operations for fiscal years 2015 and 2014 (in millions):



(Unaudited)	Fiscal 2015		Fiscal 2014
Net sales	$	5,671.3	$	5,816.3
Net income	$	122.5	$	212.8

The historical consolidated financial information of Perrigo, Omega, Gelcaps, and Elan, and the acquired Lumara, Aspen, and Fera assets, has been adjusted in the pro forma information to give effect to pro forma events that are (1) directly attributable to the transactions, (2) factually supportable and (3) expected to have a continuing impact on combined results. In order to reflect the occurrence of the acquisitions on June 30, 2013 as required, the unaudited pro forma results include adjustments to reflect the incremental amortization expense to be incurred based on the current preliminary values of each acquisition's identifiable intangible and tangible assets, along with the reclassification of acquisition-related costs from the period ended June 27, 2015 to the period ended June 28, 2014. The unaudited pro forma results do not reflect future events that have occurred or may occur after the acquisitions, including but not limited to, the anticipated realization of ongoing savings from operating synergies and tax savings in subsequent periods.

The decline in the Euro relative to the U.S. dollar negatively impacted fiscal year 2015 pro forma net sales attributed to Omega. If the Euro to U.S. dollar exchange rate had remained constant from fiscal year 2014 to fiscal year 2015, pro forma net sales attributed to Omega would have increased in fiscal year 2015 by an estimated $189.3 million.

Fiscal Year 2013 Acquisitions

Fera Pharmaceuticals, LLC

On June 17, 2013, we acquired an ophthalmic sterile ointment and solution product portfolio from Fera. The acquisition of this product portfolio expanded our ophthalmic offerings and position within the Rx extended topical space. Operating results attributable to this agreement are included in the Rx Pharmaceuticals segment. The intangible assets were assigned a 15-year useful life. Goodwill is deductible for tax purposes.

Velcera, Inc.

On April 1, 2013, we completed the acquisition of 100% of the shares of privately-held Velcera, Inc. ("Velcera"). Velcera, through its FidoPharm subsidiary, was a leading companion pet health product company committed to providing consumers with best-in-class companion pet health products that contain the same active ingredients as branded veterinary products, but at a significantly lower cost. FidoPharm products, including the PetArmor^® flea and tick products, are available at major retailers nationwide, offering consumers the benefits of convenience and cost savings to ensure the highest quality care for their pets. The acquisition helped establish our animal health category as described below. The operating results for Velcera are included in the CHC segment.

The intangible assets acquired consisted of a distribution and license agreement, customer relationships, trade name and trademarks, and non-compete agreements. The distribution and license agreement was assigned a 10-year useful life. The customer relationships were assigned a 20-year useful life, the trademarks and trade names were assigned a 25-year useful life, and the non-compete agreements were assigned a 3-year useful life. Goodwill is not deductible for tax purposes.

Rosemont Pharmaceuticals Ltd.

On February 11, 2013, we acquired 100% of the shares of privately-held Rosemont Pharmaceuticals Ltd. ("Rosemont"). Based in Leeds, U.K., Rosemont was a specialty and generic prescription pharmaceutical company focused on the manufacturing and marketing of oral liquid formulations. The acquisition expanded our Rx product offering into the U.K. and Europe. The operating results for Rosemont are included in the Rx Pharmaceuticals segment.

The intangible assets acquired consisted of developed product technology, IPR&D, trademarks and trade names, distribution and license agreements, and non-compete agreements. The developed product technology has a useful life of 7 years. IPR&D is considered to have an indefinite life until such time as the research is completed (at which time it becomes a definite-lived intangible asset) or is determined to have no future use (at which time it is impaired). The distribution and license agreements were assigned a 14-year useful life and the non-compete agreements were assigned a 3-year useful life. Goodwill is not deductible for tax purposes.

Cobrek Pharmaceuticals, Inc.

On December 28, 2012, we acquired the remaining 81.5% interest of Cobrek Pharmaceuticals, Inc. ("Cobrek"), a privately-held drug development company, for $42.0 million in cash. In May 2008, we acquired the initial 18.5% minority stake in Cobrek for $12.6 million in conjunction with entering into a product development collaborative agreement focused on generic pharmaceutical foam dosage form products. As of the acquisition date, the partnership had successfully yielded two commercialized foam-based products and had an additional two U.S. Food and Drug Administration ("FDA") approved foam-based products, both of which were launched during fiscal year 2013. Cobrek derived its earnings stream primarily from exclusive technology agreements, which were assigned useful lives of 12 years. The Cobrek acquisition further strengthened our position in foam-based technologies for existing and future U.S. Rx products. Goodwill is not deductible for tax purposes.

Sergeant's Pet Care Products, Inc.

On October 1, 2012, we completed the acquisition of substantially all of the assets of privately-held Sergeant's. Sergeant's was a leading supplier of animal health products, including flea and tick remedies, health and well-being products, natural and formulated treats, and consumable products. The acquisition expanded our CHC product portfolio into the animal health category.

The intangible assets acquired include developed product technology, trademarks and trade names, favorable supply agreements, customer relationships, and non-compete agreements. The developed product technology was assigned a 10-year useful life; trademarks and trade names have an indefinite useful life; the favorable supply agreements were assigned a 7-year useful life; customer relationships were assigned a 20-year useful life; and non-compete agreements were assigned useful lives ranging from one to three years. Goodwill is not deductible for tax purposes.

At the time of the acquisition, a step-up in the value of inventory of $7.7 million was recorded in the opening balance sheet as assets acquired based on valuation estimates and was charged to cost of sales during fiscal year 2013 as the acquired inventory was sold. In addition, property, plant and equipment were written up by $6.1 million to their estimated fair market value based on a valuation method that included both the cost and market approaches. This additional step-up in value is being depreciated over the estimated remaining useful lives of the assets.

Purchase Price Allocation of Fiscal Year 2013 Acquisitions

The purchase price allocations for all of our fiscal year 2013 acquisitions are final.
The below table indicates the final purchase price allocation for fiscal year 2013 acquisitions (in millions):



	Sergeant's		Rosemont		Velcera		All Other ⁽¹⁾
Purchase price paid	$	285.0	$	282.9	$	175.1	$	139.9
Contingent consideration	—		—		—		22.2
Total purchase consideration	$	285.0	$	282.9	$	175.1	$	162.1

Assets acquired:
Cash and cash equivalents	$	—	$	2.1	$	18.9	$	—
Accounts receivable	19.7		10.6		6.3		—
Inventories	37.7		9.6		9.7		1.3
Property and equipment	25.4		13.1		0.6		—
Goodwill	80.2		147.0		62.5		18.1
Intangible assets:
Developed product technology	66.1		114.6		—		158.1
Distribution and license agreements	1.3		3.6		116.0		—
Customer relationships	10.0		—		8.7		—
Trademarks, trade names and brands	33.0		17.3		7.6		—
Non-competition agreements	—		1.5		3.0		—
IPR&D	—		11.2		—		—
Favorable supply agreement	25.0		—		—		—
Intangible assets	135.4		148.2		135.3		158.1
Deferred tax assets	1.5		0.2		7.9		3.6
Other non-current assets	3.0		0.8		0.4		0.3
Total assets	302.9		331.6		241.6		181.4
Liabilities assumed:
Accounts payable	13.7		2.6		6.5		—
Accrued liabilities	4.2		7.6		4.8		0.5
Deferred tax liabilities	—		36.0		48.2		18.8
Other non-current liabilities	—		2.5		7.0		—
Total liabilities	17.9		48.7		66.5		19.3
Net assets acquired	$	285.0	$	282.9	$	175.1	$	162.1


⁽¹⁾	Includes opening balance sheet of the Cobrek acquisition and Fera product acquisition.

We have completed our obligation under the contingent portion of the Fera purchase price shown above as of June 27, 2015. Payments towards the contingent consideration totaled $18.3 million in fiscal year 2015 and $6.7 million in fiscal year 2014. The difference between the initial contingent consideration recorded as part of the purchase price and the payments represents the change in the fair value of the contingent consideration, which was recorded to Other expense, net each quarter.