ACQUISITIONS

All of the below acquisitions have been accounted for under the acquisition method of accounting based on our analysis of the acquired inputs and processes, and the related assets acquired and liabilities assumed were recorded at fair value as of the acquisition date.

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. For those acquisitions for which the purchase price allocation is preliminary, we will continue to refine the allocation during the measurement period. As we obtain the information to finalize our purchase accounting assessments, it is reasonably possible 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 effects of all of the acquisitions described below were included in the Condensed Consolidated Financial Statements prospectively from the date of each acquisition. Unless otherwise indicated, acquisition costs incurred were immaterial and were recorded in Administration expense.

Current Period Acquisitions

Naturwohl Pharma GmbH

On September 15, 2015, we completed our acquisition of 100% of Naturwohl Pharma GmbH ("Naturwohl"), a Munich, Germany-based nutritional business known for its leading German dietary supplement brand, Yokebe. The acquisition builds on our BCH segment's leading OTC product portfolio and European commercial infrastructure. The assets were purchased through an all-cash transaction valued at €133.5 million ($150.4 million). Operating results attributable to Naturwohl are included in the BCH segment. The intangible assets acquired included a trademark with a 15-year useful life, customer relationships with a 15-year useful life, non-compete agreements with a three-year useful life, and a licensing agreement with a three-year useful life. We utilized the relief from royalty method for valuing the trademark, the multi-period excess earnings method for valuing the customer relationships, the lost income method for valuing the non-compete agreements, and the with or without approach for the licensing agreement. The with or without approach estimates the fair value of an asset by comparing the value of the business, inclusive of the asset, to the hypothetical value of the same business excluding the asset. The goodwill acquired is not deductible for tax purposes.

ScarAway^®

On August 28, 2015, we acquired ScarAway^®, a leading U.S. OTC scar management brand portfolio comprised of five products, from Enaltus, LLC, for $27.0 million in cash. This acquisition serves as our entry into the branded OTC business in the U.S. Operating results attributable to ScarAway^®are included in the CHC segment. The intangible assets acquired included a trademark with a 25-year useful life, non-compete agreements with a four-year useful life and customer relationships with a 15-year useful life. We utilized the relief from royalty method for valuing the trademark, the multi-period excess earnings method for valuing the customer relationships, and the lost income method for valuing the non-compete agreements. The goodwill acquired is deductible for tax purposes.

GlaxoSmithKline Consumer Healthcare

On August 28, 2015, we completed the acquisition of a portfolio of well-established OTC brands from GlaxoSmithKline Consumer Healthcare (“GSK”). This acquisition further leverages our European market share and expands our product offerings. The assets were purchased through an all-cash transaction valued at €200.0 million ($223.6 million). Operating results attributable to GSK are included in the BCH segment. The intangible assets acquired included trademarks with 25-year useful lives and customer relationships with a 15-year useful life. We utilized the relief from royalty method for valuing the trademarks and the multi-period excess earnings method for valuing the customer relationships. The goodwill acquired is deductible for tax purposes.

Other Product Acquisitions

We also acquired two OTC product portfolios totaling €7.9 million ($8.7 million) during the three months ended September 26, 2015, which are included in the BCH segment.

Purchase Price Allocation of Current Period Acquisitions

The Naturwohl, ScarAway^®, and GSK opening balance sheets are still preliminary and are based on valuation information, estimates, and assumptions available at September 26, 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.

The below table indicates the purchase price allocation for our current period acquisitions (in millions):



	Naturwohl*		ScarAway^®*		GSK*
Total purchase consideration	$	150.4	$	27.0	$	223.6
Assets acquired:
Cash and cash equivalents	$	4.6	$	—	$	—
Accounts receivable	3.3		0.9		—
Inventories	1.7		—		—
Prepaid expenses and other current assets	—		0.1		—
Goodwill	63.5		4.9		48.7
Intangible assets:
Trademarks, trade names, and brands	51.8		11.6		132.4
Customer relationships and distribution networks	33.8		9.0		42.5
Non-competition agreements	0.3		0.5		—
Distribution and license agreements	21.4		—		—
Other intangible assets	107.3		21.1		174.9
Total assets	180.4		27.0		223.6
Liabilities assumed:
Accounts payable	2.8		—		—
Accrued liabilities	0.9		—		—
Current net deferred income tax liabilities	0.9		—		—
Non-current net deferred income tax liabilities	25.4		—		—
Total liabilities	30.0		—		—
Net assets acquired	$	150.4	$	27.0	$	223.6


*	Opening balance sheets are preliminary.

Prior Period 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 $36.4 million in cash. The purchase price was adjusted during the three months ended September 26, 2015 to account for a working capital adjustment with the seller. The acquisition added softgel manufacturing technology to our supply chain capabilities and broadened 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 was charged to cost of goods sold during the three months ended September 26, 2015. 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 is providing 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 and 6.8 million ordinary shares, which raised $999.3 million net of issuance costs.

The Sellers 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 the fiscal year ended June 27, 2015 (in millions):



Line item	June 27, 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

The $324.0 million loss recorded in Other expense, net, consisted of losses from hedging Omega's euro-denominated purchase price due to changes in the euro-to-U.S. dollar exchange rates. These losses were economically offset at closing in the final settlement of the euro-denominated purchase price.

We acquired the following intangible assets: indefinite-lived brands, a definite-lived trade name with an eight-year useful life, definite-lived brands with a 19-year useful life, a distribution network with a 21-year useful life, and developed product technology with useful lives ranging from four 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 brands, the definite-lived brands, and distribution network. We utilized the relief from royalty method for the developed product technology and definite-lived trade name.

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 three months ended June 27, 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 during the three months ended June 27, 2015. This 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 segment. The intangible assets acquired consisted of three product formulations with useful lives ranging from eight to 12 years. The assets were valued utilizing the multi-period excess earnings method.

Purchase Price Allocation of Prior Period Acquisitions

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 September 26, 2015.

Since the initial valuation, revisions to the Omega allocation have included: a $98.0 million increase in indefinite-lived brands and an $18.4 million increase in definite-lived intangible assets (trade names, brands, and distribution networks) due to refinements in underlying valuation assumptions; a $7.4 million reduction in inventory due to additional analysis related to the fair value of inventory and obsolescence reserves; a $9.6 million increase in property, plant, and equipment due to the completion of additional tangible asset valuations; and an increase in the net deferred tax liabilities of $31.6 million due to the valuation update. These revisions resulted in an $87.0 million reduction in goodwill. The purchase price allocation is still open for verification of the intangible assets valuation, related deferred taxes, and the resulting effects on the value of goodwill.

The Gelcaps purchase price allocation is open for verification of the intangible assets valuation, tax accounts, and any resulting effects on the value of goodwill.

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



	Gelcaps*		Omega*		Lumara
Total purchase consideration	$	36.4	$	2,983.2	$	83.0
Assets acquired:
Cash and cash equivalents	$	4.6	$	14.7	$	—
Accounts receivable	8.5		264.7		2.9
Inventories	7.2		207.1		1.5
Current net deferred tax assets	0.6		7.6		—
Prepaid expenses and other current assets	2.3		39.2		0.4
Property and equipment	6.0		130.8		0.1
Goodwill	4.6		1,426.1		—
Intangible assets:
Trademarks, trade names and brands	4.4		2,492.6		—
Customer relationships and distribution networks	6.6		1,393.9		—
Formulations	—		—		82.0
Developed product technology	—		32.6		—
Other intangible assets	11.0		3,919.1		82.0
Other non-current assets	0.4		2.4		—
Total assets	45.2		6,011.7		86.9
Liabilities assumed:
Accounts payable	3.4		243.1		—
Short-term debt	—		24.6		—
Accrued liabilities	1.6		44.5		3.9
Payroll and related taxes	—		51.3		—
Accrued customer programs	—		39.8		—
Long-term debt	—		1,471.0		—
Non-current net deferred income tax liabilities	3.7		1,071.7		—
Other non-current liabilities	0.1		82.5		—
Total liabilities	8.8		3,028.5		3.9
Net assets acquired	$	36.4	$	2,983.2	$	83.0


*	Opening balance sheets are preliminary.