ACQUISITIONS

For a description of the Company’s acquisition activity for the year ended December 31, 2013, reference is made to the financial statements as of and for the year ended December 31, 2013 and Note 2 thereto included in the Company’s 2013 Annual Report on Form 10-K.

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2014 and 2013 acquisitions and is also in the process of obtaining valuations of acquired intangible assets and certain acquisition related liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required. The Company evaluated whether any adjustments to the prior periods' purchase price allocations were material and concluded no retrospective adjustment to prior period financial statements was required.

During the first nine months of 2014, the Company acquired fifteen businesses for total consideration of $635 million in cash, net of cash acquired. The businesses acquired complement existing units of the Life Sciences & Diagnostics, Environmental, Dental and Test & Measurement segments. The aggregate annual sales of these fifteen businesses at the time of their respective acquisitions, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were $250 million. The Company preliminarily recorded an aggregate of $323 million of goodwill related to these acquisitions.

In September 2014, the Company and Nobel Biocare Holding AG ("Nobel Biocare") entered into a definitive agreement pursuant to which the Company is making a cash tender offer to acquire all of the outstanding shares of common stock of Nobel Biocare for CHF 17.10 per share (to be followed if necessary by a second step cash-out merger at the offer price), for an aggregate purchase price of approximately CHF 2.0 billion (approximately $2.1 billion based on exchange rates as of September 26, 2014) including debt assumed and net of cash acquired. The offer is subject to customary conditions, including tender of 67% of the outstanding shares into the offer, receipt of applicable regulatory approvals and the absence of a material adverse change with respect to Nobel Biocare. The Company expects to complete the offer in the fourth quarter of 2014 or first quarter of 2015.

Headquartered in Zurich, Switzerland, Nobel Biocare is a world leader in the field of innovative implant-based dental restorations with a portfolio of solutions which include dental implant systems, high-precision individualized prosthetics, biomaterials and digital diagnostics, treatment planning and guided surgery. Nobel Biocare had revenues of €567 million in 2013 (approximately $780 million based on exchange rates as of December 31, 2013), and would become part of the Company's Dental segment. As of October 15, 2014, the Company owned approximately 17 million shares, or 14%, of Nobel Biocare.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the nine months ended September 26, 2014 ($ in millions):



Trade accounts receivable	$	43.3
Inventories	56.1
Property, plant and equipment	14.9
Goodwill	323.1
Other intangible assets, primarily customer relationships, trade names and technology	285.6
In-process research and development	61.0
Trade accounts payable	(14.6		)
Other assets and liabilities, net	(130.8		)
Assumed debt	(3.7		)
Net cash consideration	$	634.9

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the 2014 and 2013 acquisitions as if they had occurred as of January 1, 2013. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):



	Three Months Ended				Nine Months Ended
	September 26, 2014		September 27, 2013		September 26, 2014		September 27, 2013
Sales	$	4,872.1	$	4,747.1	$	14,594.3	$	14,180.2
Net earnings	680.0		594.0		1,933.2		1,899.4
Diluted net earnings per share	0.95		0.84		2.71		2.68