
Note 2.	Acquisitions

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable assets, resulting in goodwill, due to expectations of the synergies that will be realized by combining the businesses. These synergies include the elimination of redundant facilities, functions and staffing; use of the company’s existing commercial infrastructure to expand sales of the acquired businesses’ products; and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

Acquisitions have been accounted for using the purchase method of accounting, and the acquired companies’ results have been included in the accompanying financial statements from their respective dates of acquisition. Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

2016

In May 2016, the company signed an agreement to acquire, within the Analytical Instruments segment, FEI Company, a North America-based provider of high-performance electron microscopy, for approximately $4.2 billion in cash. The acquisition will strengthen the company's analytical instrument portfolio with the addition of high-end electron microscopes. Revenues of FEI were $930 million in 2015. The transaction, which is expected to close by the end of 2016, is subject to the approval of the FEI shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals. The company has committed debt financing for the acquisition (Note 9) although it intends to replace part of the committed financing with long-term debt prior to completing the acquisition and to use such borrowings and cash on hand to fund the transaction.

On March 31, 2016, the company acquired, within the Life Sciences Solutions segment, Affymetrix, Inc., a North America-based provider of cellular and genetic analysis products, for a total purchase price of $1.34 billion, net of cash acquired, including the assumption of $254 million of debt. The acquisition expands the company's existing portfolio of antibodies and assays for flow cytometry and single-cell biology applications. Revenues of Affymetrix were $360 million in 2015. The purchase price exceeded the fair value of the identifiable net assets and, accordingly, $702 million was allocated to goodwill, none of which is tax deductible.

In addition, in 2016, the company acquired, within the Analytical Instruments segment, a provider of X-ray diffraction solutions for material science and industrial applications and, within the Life Sciences Solutions segment, selected assets of an existing channel partner, for an aggregate purchase price of $5 million.

During 2016, the company made contingent purchase price payments totaling $1 million for acquisitions completed prior to 2016. The contingent purchase price payments were contractually due to the sellers upon achievement of certain performance criteria at the acquired businesses.

The components of the purchase price and net assets acquired for 2016 acquisitions are as follows:



(In millions)	Affymetrix			Other			Total

Purchase Price
Cash paid	$	1,105.9		$	4.2		$	1,110.1
Debt assumed	254.2			0.6			254.8
Purchase price payable	59.5			0.1			59.6
Cash acquired	(77.8		)	(0.1		)	(77.9		)

	$	1,341.8		$	4.8		$	1,346.6

Net Assets Acquired
Current assets	$	160.6		$	1.1		$	161.7
Property, plant and equipment	19.3			—			19.3
Definite-lived intangible assets:
Customer relationships	413.2			1.7			414.9
Product technology	232.7			0.7			233.4
Tradenames and other	41.6			—			41.6
Indefinite-lived intangible assets:
In-process research and development	11.0			—			11.0
Goodwill	702.0			3.0			705.0
Other assets	7.8			0.1			7.9
Liabilities assumed	(246.4		)	(1.8		)	(248.2		)

	$	1,341.8		$	4.8		$	1,346.6

The weighted-average amortization periods for definite-lived intangible assets acquired in 2016 are 15 years for customer relationships, 9 years for product technology and 9 years for tradenames and other. The weighted average amortization period for all definite-lived intangible assets acquired in 2016 is 12 years.

The company recorded a deferred tax liability of $156 million in the acquisition accounting related to the outside basis difference of the Affymetrix Singapore operations as the company does not intend to permanently reinvest the pre-acquisition Singapore earnings.

The company's results would not have been materially different had the 2016 acquisitions occurred at the beginning of 2015.