Acquisitions

During 2017, the Company completed several acquisitions; the largest of which were Vascular Solutions, Inc. ("Vascular Solutions") and NeoTract, Inc. ("NeoTract"), which are summarized below. The fair value of the consideration transferred for the 2017 acquisitions was $2.0 billion.

Vascular Solutions

On February 17, 2017, the Company acquired Vascular Solutions, a medical device company that developed and marketed products for use in minimally invasive coronary and peripheral vascular procedures. The aggregate consideration paid by the Company in connection with the acquisition was $975.5 million.

NeoTract

On October 2, 2017, the Company acquired NeoTract, a medical device company that developed and commercialized the UroLift System, a minimally invasive medical device for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. The fair value of consideration transferred by the Company was $975.2 million, which included initial payments of $725.6 million in cash less a favorable working capital adjustment of $1.4 million (payment for which remains outstanding as of April 1, 2018) and $251.0 million in estimated fair value of contingent consideration related to revenue-based milestones. The contingent consideration liability represents the estimated fair value of the Company’s obligations, under the acquisition agreement, to make additional payments of up to $375 million in the aggregate if specified sales goals through the end of 2020 are achieved. Financial information of NeoTract is primarily presented within the Interventional Urology North America operating segment, which is included in the "all other" category in the Company's presentation of segment information.

The Company is continuing to evaluate the initial purchase price allocations in connection with its acquisition of NeoTract, and further adjustments may be necessary as a result of the Company's assessment of additional information related to the fair values of the assets acquired and liabilities assumed, primarily deferred tax liabilities, certain intangible assets and goodwill.

Pro forma combined financial information

The following unaudited pro forma combined financial information for the three months ended April 2, 2017 gives effect to the Vascular Solutions and NeoTract acquisitions as if they had occurred on January 1, 2016. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company.



	Three Months Ended
	April 2, 2017
	(Dollars and shares in thousands, except per share)
Net revenue	$	533,318
Net income	$	37,108
Basic earnings per common share:
Net income	$	0.83
Diluted earnings per common share:
Net income	$	0.80
Weighted average common shares outstanding:
Basic	44,893
Diluted	46,615

The unaudited pro forma combined financial information presented above includes the accounting effects of the Vascular Solutions and NeoTract acquisitions, including, to the extent applicable, amortization charges from acquired intangible assets; adjustments for depreciation of property, plant and equipment; interest expense; the revaluation of inventory; and the related tax effects. The unaudited pro forma financial information also includes non-recurring charges specifically related to the Vascular Solutions and NeoTract acquisitions.