Acquisitions

3 Months Ended

Apr. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill, primarily due to expectations of the synergies that will be realized by combining the businesses and the benefits that will be gained from the assembled workforces. 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 services; and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products and services.

Acquisitions have been accounted for using the acquisition method of accounting, and the acquired companies’ results have been included in the accompanying financial statements from their respective dates of acquisition.

2023

On January 3, 2023, the company acquired, within the Specialty Diagnostics segment, The Binding Site Group, a U.K.-based provider of specialty diagnostic assays and instruments to improve the diagnosis and management of blood cancers and immune system disorders. The acquisition expands the segment’s portfolio with the addition of pioneering innovation in diagnostics and monitoring for multiple myeloma. The goodwill recorded as a result of this business combination is not expected to be tax deductible.

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

(In millions)	The Binding Site
Purchase price
Cash paid	$	2,416
Debt settled	307
Cash acquired	(19)
	$	2,704
Net assets acquired
Definite-lived intangible assets:
Customer relationships	$	868
Product technology	173
Tradenames	42
Goodwill	1,758
Net tangible assets	142
Deferred tax assets (liabilities)	(279)
	$	2,704

The weighted-average amortization period for definite-lived intangible assets acquired in 2023 are 18 years for customer relationships, 15 years for product technology and 15 years for tradenames. The weighted average amortization period for all definite-lived intangible assets acquired in 2023 is 17 years.

The preliminary allocation of the purchase price for the acquisition of The Binding Site is based on estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization, largely with respect to acquired intangible assets and the related deferred taxes. Measurements of these items inherently require significant estimates and assumptions.