3M 2008 Annual Report Download - page 63

57
Asset (Liability) 2007 2006
(Millions) Impact Impact
Accounts receivable ..................................................... $ 69 $ 76
Inventory....................................................................... 79 55
Other current assets..................................................... 5 8
Property, plant, and equipment — net ......................... 68 65
Purchased intangible assets ........................................ 131 282
Purchased goodwill ...................................................... 326 536
In-process R&D ............................................................ 1 95
Accounts payable and other current liabilities, net of
other assets .............................................................. (115 ) (152 )
Deferred tax liability...................................................... (12 ) (77 )
Net assets acquired...................................................... $ 552 $ 888
Supplemental information:
Cash paid ..................................................................... $ 546 $ 962
Less: Cash acquired..................................................... 7 74
Cash paid, net of cash acquired................................... $ 539 $ 888
Non-cash (3M shares at fair value) .............................. 13 —
Net assets acquired...................................................... $ 552 $ 888
During the 12 months ended December 31, 2006, 3M completed 19 business combinations for a total purchase price
of $888 million, net of cash acquired. Purchased identifiable intangible assets of $282 million for these acquisitions
will be amortized on a straight-line basis over lives ranging from 1 to 17 years (weighted-average life of 9 years).
The largest of these acquisitions was the August 2006 purchase of 100 percent of the outstanding shares of Security
Printing and Systems Limited (Safety, Security and Protection Services Business) from authentos GmbH, Germany.
The acquired company is a producer of finished, personalized passports and secure cards.
In October 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Brontes
Technologies Inc. (Brontes), a Lexington, Massachusetts-based developer of proprietary 3-D imaging technology for
dental and orthodontic applications, for $95 million in cash. Brontes was a “development stage enterprise” that did
not yet have revenues from its principal operations and the technology acquired did not have any alternative future
use. This transaction resulted in a 2006 charge of $95 million, reflecting the write-off of acquired in-process research
and development costs, which are recognized as research, development and related expenses in the Consolidated
Statement of Income.
The 17 additional business combinations are summarized as follows:
1) In January 2006, 3M (Consumer and Office Business) purchased 100 percent of the outstanding common shares
of Interchemall Dom., a provider of household cleaning products based in Poland.
2) In March 2006, 3M (Industrial and Transportation Business) purchased certain assets of General Industrial
Diamond Company Inc., a U.S. operation. The acquired company is a manufacturer of superabrasive grinding
wheels, dressing tools and machines used to dimension and finish hard-to-grind materials in the industrial and
commercial markets.
3) In April 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of OMNII Oral
Pharmaceuticals, a provider of differentiated preventive dental products, solutions and support for dental
professionals.
4) In April 2006, 3M (Health Care Business) purchased certain assets of ClozeX Medical LLC, a provider of unique
skin closure devices to treat lacerations and close surgical incisions. The agreement gives 3M exclusive worldwide
rights for the manufacturing and distribution of ClozeX Wound Closures.
5) In June 2006, 3M (Health Care Business) purchased 100 percent of the outstanding shares of SBG (Software und
Beratung im Gesundheitswesen) GmbH, a Berlin-based developer of software for managing diagnosis-related
information in hospitals.
6) In June 2006, 3M (Safety, Security and Protection Services Business) purchased certain assets of POMP Medical
and Occupational Health Products LLC, a Porto Alegre, Brazil-based provider of earplugs, eyewear and hand cream.
7) In July 2006, 3M (Industrial and Transportation Business) purchased certain assets of Pinnacle Distribution
Concepts Inc., a leading transportation management system (TMS) provider specializing in the delivery of Web-
based, “on-demand” solutions.