
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

On September 19, 2016, the company acquired, within the Analytical Instruments segment, FEI Company, a North America-based provider of high-performance electron microscopy, for a total purchase price of $4.08 billion, net of cash acquired. The acquisition strengthens the company's analytical instrument portfolio with the addition of high-end electron microscopes. Revenues of FEI were $930 million in 2015. The purchase price exceeded the fair value of the identifiable net assets and, accordingly, $2.06 billion was allocated to goodwill, approximately $65 million of which is tax deductible.

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. Additionally, the acquisition expands the company's genetic analysis portfolio through the addition of microarrays. 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)	FEI			Affymetrix			Other			Total

Purchase Price
Cash paid	$	4,432.8		$	1,162.2		$	4.2		$	5,599.2
Debt assumed	—			254.2			0.6			254.8
Purchase price payable	18.4			3.3			0.1			21.8
Cash acquired	(369.1		)	(77.9		)	(0.1		)	(447.1		)

	$	4,082.1		$	1,341.8		$	4.8		$	5,428.7

Net Assets Acquired
Current assets	$	625.6		$	160.6		$	1.1		$	787.3
Property, plant and equipment	162.6			19.3			—			181.9
Definite-lived intangible assets:
Customer relationships	1,051.1			413.2			1.7			1,466.0
Product technology	739.8			232.7			0.7			973.2
Tradenames and other	130.0			41.6			—			171.6
Indefinite-lived intangible assets:
In-process research and development	104.7			11.0			—			115.7
Goodwill	2,057.3			702.1			3.1			2,762.5
Other assets	56.5			7.8			0.1			64.4
Liabilities assumed	(845.5		)	(246.5		)	(1.9		)	(1,093.9		)

	$	4,082.1		$	1,341.8		$	4.8		$	5,428.7

The weighted-average amortization periods for definite-lived intangible assets acquired in 2016 are 16 years for customer relationships, 8 years for product technology and 8 years for tradenames and other. The weighted average amortization period for all definite-lived intangible assets acquired in 2016 is 13 years.

The preliminary allocation of the purchase price for the 2016 acquisitions was based on estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization of the valuation of the acquired intangible assets in the fourth quarter of 2016. 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.

Revenues of FEI in the third quarter of 2016 subsequent to the date of acquisition were approximately $100 million. Operating profits were not material due to acquisition-related charges.