Business Combination

9 Months Ended

Oct. 03, 2015

Business Combinations [Abstract]

Business Combination

BUSINESS COMBINATION

On October 8, 2015, the Company acquired all of the outstanding shares of Thoratec for approximately $3.3 billion in total purchase consideration, net of cash acquired. Thoratec is headquartered in Pleasanton, California and develops, manufactures and markets proprietary medical devices used for mechanical circulatory support for the treatment of heart failure patients. Under the terms of the agreement, each outstanding Thoratec share was converted into the right to receive $63.50 per share in cash. During the third quarter of 2015, the Company recognized direct transaction costs of $5 million in selling, general and administrative expense in the Company's Condensed Consolidated Statements of Earnings.

Due to the limited time since the acquisition date, the preliminary acquisition valuation for the business combination, including the fair value of the individual components of non-cash consideration, is incomplete at this time. As a result, the Company is unable to provide pro forma disclosures and the amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed under the acquisition method of accounting.

The Company expects to recognize goodwill as a result of the Thoratec acquisition, which will not be deductible for income tax purposes. The goodwill will largely be attributable to strategic opportunities for growing the Company's portfolio of products treating heart failure by offering more comprehensive therapy options across the care continuum. Synergies are also expected to arise upon the integration of Thoratec, the benefits of utilizing the existing workforce, technology innovation and cross-selling opportunities.