LabCorp 2015 Annual Report Download - page 96

Index
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
January 30, 2015, the Company issued $2,900.0 in debt securities, consisting of $500.0 aggregate principal amount of 2.625% Senior Notes due 2020,
$500.0 aggregate principal amount of 3.20% Senior Notes due 2022, $1,000.0 aggregate principal amount of 3.60% Senior Notes due 2025 and $900.0
aggregate principal amount of 4.70% Senior Notes due 2045 (together, the Acquisition Notes). The Company also entered into a $1,000.0 term loan facility
which was advanced in full on February 19, 2015. The term loan credit facility will mature five years after the closing date of the Acquisition and may be
prepaid without penalty.
The Company has continued to finalize its purchase price allocation during the measurement period and obtained new fair value information related to
the assets acquired and liabilities assumed of Covance, including the related lives of acquired assets. The facts and circumstances that existed at the date of
acquisition, if known, would have affected the measurement of the amounts recognized at that date. In accordance with ASC 805, Business Combinations,
measurement period adjustments are not included in current earnings, but recognized as of the date of the acquisition with a corresponding adjustment to
goodwill resulting from the change in preliminary amounts. As a result, the Company adjusted the preliminary allocation of the purchase price initially
recorded at the Acquisition Date to reflect these measurement period adjustments. While the purchase price allocation is substantially complete, it is still
preliminary and subject to change. The areas of the purchase price that are not yet finalized relate primarily to the impact of finalizing deferred taxes and the
final allocation of goodwill to the various foreign and domestic subsidiaries of Covance. Accordingly, adjustments may be made as additional information is
obtained about the facts and circumstances that existed at the valuation date. The purchase price allocation and related push down to subsidiaries will be
finalized in the first quarter of 2016. The impact of any such changes will be reflected in the opening balance sheet and the comparative periods will be
revised to include the effect of the measurement period adjustments as if they had been completed on the Acquisition Date in accordance with ASC 805. Any
adjustments impacting amounts allocable to international location as finalized will impact currency translation and therefore comprehensive income for the
comparative periods as well.
The valuation of acquired assets and assumed liabilities at the date of Acquisition include the following:

Stock consideration
$ 1,762.5
Cash consideration
4,388.2
$ 6,150.7






Cash and cash equivalents
$ 780.8
$ —
$ 780.8
Accounts receivable
334.8
—
334.8
Unbilled services
138.7
—
138.7
Inventories
51.9
—
51.9
Prepaid expenses and other
261.4
86.5
347.9
Deferred income taxes
34.4
61.1
95.5
Property, plant and equipment
844.2
174.0
1,018.2
Goodwill
3,176.1
(135.9)
3,040.2
Customer relationships
1,917.2
(86.9)
1,830.3
Trade names and trademarks
289.4
(18.9)
270.5
Land use right
4.9
(4.9)
—
Technology
—
74.5
74.5
Favorable leases
—
5.5
5.5
Other assets
15.2
(3.2)
12.0
Total assets acquired
7,849.0
151.8
8,000.8
Accounts payable
190.8
—
190.8
Accrued expenses and other
280.8
—
280.8
Unearned revenue
168.0
—
168.0
Deferred income taxes
730.2
122.3
852.5
Senior Notes
250.0
—
250.0
Other liabilities
78.5
29.5
108
Total liabilities acquired
1,698.3
151.8
1,850.1
Net assets acquired
$ 6,150.7
$ —
$ 6,150.7
The amortization periods for intangible assets acquired are 28 years for customer relationships, 15 years for trade names and trademarks, 10 years for
technology, and 8 years for favorable leases. The Company recorded certain measurement period
F-16