Acquisitions

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisitions

4.   Acquisitions. On August 1, 2019, we entered into a share purchase agreement to acquire Fibrovein Holdings Limited, which is the owner of 100% of the capital stock of STD Pharmaceutical Products Limited, a UK private company engaged in the manufacture, distribution and sale of pharmaceutical sclerotherapy products (“STD Pharmaceutical”). The purchase consideration consisted of an upfront payment of approximately $13.7 million, net of cash acquired. We also recorded a contingent consideration liability of approximately $934,000 related to royalties potentially payable pursuant to the terms of the share purchase agreement. We accounted for this acquisition as a business combination. The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material. Acquisition-related costs associated with the STD Pharmaceutical acquisition, which were included in selling, general and administrative expenses, were not material. The following table summarizes the purchase price allocated to the net assets acquired as follows (in thousands):

Assets Acquired
Trade receivables	$	277
Inventories		843
Prepaid expenses and other assets		49
Intangible assets
Developed technology		10,428
Goodwill		4,975
Total assets acquired		16,572
Liabilities Assumed
Trade payables		(53)
Accrued expenses		(29)
Deferred income tax liabilities		(1,890)
Total liabilities assumed		(1,972)
Total net assets acquired	$	14,600

We are amortizing the developed technology intangible asset acquired in the STD Pharmaceutical acquisition over 12 years. The goodwill consists largely of the synergies we hope to achieve from combining operations and is not expected to be deductible for income tax purposes.

On June 14, 2019, we consummated an acquisition transaction contemplated by a merger agreement to acquire Brightwater Medical, Inc. ("Brightwater"). The purchase consideration consisted of an upfront payment of $35 million plus a final working capital adjustment of approximately $39,000, net of cash acquired, with potential earn-out payments of up to an additional $5 million for achievement of CE certification with respect to the Brightwater ConvertX®, a single-use device used to replace a series of devices and procedures used to treat severe obstructions of the ureter, and up to an additional $10 million for the achievement of sales milestones specified in the merger agreement. The ConvertX device is designed to be implanted once and converted from a nephroureteral catheter to a nephroureteral stent without requiring sedation or local anesthesia. Earlier this year, Brightwater received FDA clearance for the ConvertX biliary stent device. We accounted for this acquisition as a business combination. The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material. Acquisition-related costs

associated with the Brightwater acquisition, which were included in selling, general and administrative expenses, were not material. The following table summarizes the purchase price allocated to the net assets acquired as follows (in thousands):

Assets Acquired
Trade receivables	$	55
Inventories		349
Property and equipment		409
Other long-term assets		30
Intangible assets
Developed technology		31,960
Customer lists		83
Trademarks		250
Goodwill		17,607
Total assets acquired		50,743
Liabilities Assumed
Trade payables		(58)
Accrued expenses		(261)
Other long-term obligations		(1,522)
Deferred income tax liabilities		(4,263)
Total liabilities assumed		(6,104)
Total net assets acquired	$	44,639

We are amortizing the developed technology intangible asset acquired in the Brightwater acquisition over 13 years, the related trademarks over five years and the customer list on an accelerated basis over one year. The total weighted-average amortization period for these acquired intangible assets is approximately 12.9 years. The goodwill consists largely of the synergies and economies of scale we hope to achieve from combining the acquired assets and operations with our historical operations and is not expected to be deductible for income tax purposes.

The pro forma impact of these acquisitions was not significant, either individually or in the aggregate, on our financial results for the three and nine-month periods ended September 30, 2019. Operating results attributable to the STD Pharmaceutical and Brightwater acquisitions were included in our consolidated statements of income (loss) for the three and nine-month periods ended September 30, 2020.